<PAGE>
                                                                    EXHIBIT 10.1



                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                     ASHFORD HOSPITALITY LIMITED PARTNERSHIP

                             DATED: AUGUST 29, 2003

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       PAGE
<S>                                                                                                    <C>
ARTICLE I DEFINED TERMS..................................................................................1

ARTICLE II PARTNERSHIP CONTINUATION; ADMISSION OF LIMITED PARTNERS; NAME; PLACE OF
BUSINESS AND REGISTERED AGENT............................................................................8
   Section 2.1       CONTINUATION........................................................................8
   Section 2.2       CERTIFICATE OF LIMITED PARTNERSHIP; OTHER FILINGS...................................9
   Section 2.3       ADDITIONAL LIMITED PARTNERS.........................................................9
   Section 2.4       NAME, OFFICE AND REGISTERED AGENT...................................................9

ARTICLE III BUSINESS AND TERM OF PARTNERSHIP.............................................................9
   Section 3.1       BUSINESS............................................................................9
   Section 3.2       TERM................................................................................9

ARTICLE IV CAPITAL CONTRIBUTIONS........................................................................10
   Section 4.1       GENERAL PARTNER....................................................................10
   Section 4.2       LIMITED PARTNERS...................................................................10
   Section 4.3       ADDITIONAL CAPITAL CONTRIBUTIONS AND
                     ISSUANCES OF ADDITIONAL PARTNERSHIP INTERESTS......................................10
   Section 4.4       ADDITIONAL FUNDING.................................................................12
   Section 4.5       INTEREST...........................................................................12
   Section 4.6       RETURN OF CAPITAL..................................................................12
   Section 4.7       PERCENTAGE INTEREST................................................................12

ARTICLE V PROFITS, LOSSES AND ACCOUNTING................................................................12
   Section 5.1       ALLOCATION OF PROFITS AND LOSSES...................................................12
   Section 5.2       ACCOUNTING.........................................................................13
   Section 5.3       PARTNERS' CAPITAL ACCOUNTS.........................................................14
   Section 5.4       SECTION 754 ELECTIONS..............................................................15

ARTICLE VI POWERS, DUTIES, LIABILITIES, COMPENSATION AND VOTING OF GENERAL PARTNER......................15
   Section 6.1       POWERS OF GENERAL PARTNER..........................................................15
   Section 6.2       DELEGATION OF AUTHORITY............................................................18
   Section 6.3       DUTIES OF GENERAL PARTNER..........................................................18
   Section 6.4       LIABILITIES OF GENERAL PARTNER; INDEMNIFICATION....................................19
   Section 6.5       COMPENSATION OF GENERAL PARTNER;
                     REIMBURSEMENT......................................................................22
   Section 6.6       RELIANCE ON ACT OF GENERAL PARTNER.................................................22
   Section 6.7       OUTSIDE SERVICES; DEALINGS WITH AFFILIATES;
                     OUTSIDE ACTIVITIES.................................................................22
   Section 6.8       ADDITIONAL LOANS TO THE PARTNERSHIP................................................23
   Section 6.9       CONTRIBUTION OF ASSETS.............................................................23
</TABLE>




                                        i
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<TABLE>
<S>                                                                                                    <C>
ARTICLE VII RIGHTS, PROHIBITIONS AND REPRESENTATIONS WITH RESPECT TO LIMITED PARTNERS...................24
   Section 7.1       RIGHTS OF LIMITED PARTNERS.........................................................24
   Section 7.2       PROHIBITIONS WITH RESPECT TO THE LIMITED PARTNERS..................................25
   Section 7.3       OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER OR AFFILIATE.............25
   Section 7.4       REDEMPTION RIGHT...................................................................25
   Section 7.5       WARRANTIES AND REPRESENTATIONS OF THE LIMITED PARTNERS.............................28
   Section 7.6       INDEMNIFICATION BY LIMITED PARTNERS................................................28
   Section 7.7       NOTICE OF SALE OR REFINANCING......................................................28
   Section 7.8       BASIS ANALYSIS AND LIMITED PARTNER GUARANTEES......................................29

ARTICLE VIII DISTRIBUTIONS AND PAYMENTS TO PARTNERS.....................................................29
   Section 8.1       DISTRIBUTIONS OF CASH FLOW.........................................................29
   Section 8.2       REIT DISTRIBUTION REQUIREMENTS.....................................................30
   Section 8.3       NO RIGHT TO DISTRIBUTIONS IN KIND..................................................30
   Section 8.4       DISPOSITION PROCEEDS...............................................................30
   Section 8.5       WITHDRAWALS........................................................................30

ARTICLE IX TRANSFERS OF INTERESTS.......................................................................30
   Section 9.1       GENERAL PARTNER....................................................................30
   Section 9.2       ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER............................31
   Section 9.3       EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A GENERAL PARTNER........32
   Section 9.4       REMOVAL OF A GENERAL PARTNER.......................................................33
   Section 9.5       RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS..........................33
   Section 9.6       ADMISSION OF SUBSTITUTE LIMITED PARTNER............................................34
   Section 9.7       RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.......................................35
   Section 9.8       EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A LIMITED PARTNER......36
   Section 9.9       JOINT OWNERSHIP OF INTERESTS.......................................................36
   Section 9.10      TRANSFEREES........................................................................37
   Section 9.11      ABSOLUTE RESTRICTION...............................................................37
   Section 9.12      INVESTMENT REPRESENTATION..........................................................37

ARTICLE X TERMINATION OF THE PARTNERSHIP................................................................37
   Section 10.1      TERMINATION........................................................................37
   Section 10.2      PAYMENT OF DEBTS...................................................................37
   Section 10.3      DEBTS TO PARTNERS..................................................................38
   Section 10.4      REMAINING DISTRIBUTION.............................................................38
   Section 10.5      RESERVE............................................................................38
   Section 10.6      FINAL ACCOUNTING...................................................................38
</TABLE>



                                       ii
<PAGE>

<TABLE>
<S>                                                                                                    <C>
ARTICLE XI AMENDMENTS...................................................................................38
   Section 11.1      AUTHORITY TO AMEND.................................................................38
   Section 11.2      NOTICE OF AMENDMENTS...............................................................39

ARTICLE XII POWER OF ATTORNEY...........................................................................39
   Section 12.1      POWER..............................................................................39
   Section 12.2      SURVIVAL OF POWER..................................................................40

ARTICLE XIII CONSENTS, APPROVALS, VOTING AND MEETINGS...................................................40
   Section 13.1      METHOD OF GIVING CONSENT OR APPROVAL...............................................40
   Section 13.2      MEETINGS OF LIMITED PARTNERS.......................................................41
   Section 13.3      OPINION............................................................................41
   Section 13.4      SUBMISSIONS TO PARTNERS............................................................41

ARTICLE XIV MISCELLANEOUS...............................................................................41
   Section 14.1      GOVERNING LAW......................................................................41
   Section 14.2      AGREEMENT FOR FURTHER EXECUTION....................................................41
   Section 14.3      ENTIRE AGREEMENT...................................................................42
   Section 14.4      SEVERABILITY.......................................................................42
   Section 14.5      NOTICES............................................................................42
   Section 14.6      TITLES AND CAPTIONS................................................................42
   Section 14.7      COUNTERPARTS.......................................................................42
   Section 14.8      PRONOUNS...........................................................................42
   Section 14.9      SURVIVAL OF RIGHTS.................................................................42
</TABLE>

EXHIBIT A - List of Partners and Initial Contributed Assets
EXHIBIT B - Federal Income Tax Matters
EXHIBIT C - Notice of Exercise of Redemption Right




                                      iii
<PAGE>
                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                     ASHFORD HOSPITALITY LIMITED PARTNERSHIP

                                    RECITALS:

         Ashford Hospitality Limited Partnership (the "Partnership") was formed
as a limited partnership under the laws of the State of Delaware by the filing
of a Certificate of Limited Partnership with the Secretary of State of Delaware
on May 13, 2003.

         The General Partner and the Original Limited Partner entered into the
Agreement of Limited Partnership as of August 18, 2003, and the General Partner
and the Limited Partners now desire to amend such agreement.

         NOW, THEREFORE, in consideration of the foregoing, of the mutual
covenants between the parties hereto, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

                                   ARTICLE I
                                  DEFINED TERMS

Whenever used in this Agreement, the following terms shall have the meanings
respectively assigned to them in this Article I, unless otherwise expressly
provided herein or unless the context otherwise requires:

         "Act" shall mean the Delaware Revised Uniform Limited Partnership Act,
6 Del C. Section 17-101, et. seq., as amended, supplemented or restated from
time to time, and any successor to such statute.

         "Additional Funds" has the meaning set forth in Section 4.4 hereof.

         "Additional Limited Partner" shall mean a Person admitted to this
Partnership as a Limited Partner pursuant to and in accordance with Section
2.3(b) of this Agreement.

         "Additional Securities" means any additional REIT Shares (other than
REIT Shares issued in connection with a redemption pursuant to Section 7.4
hereof) or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase REIT Shares, as set forth in
Section 4.3(a)(ii).

         "Affiliate" of another Person shall mean (a) any Person directly or
indirectly owning, controlling or holding with power to vote ten percent (10%)
or more of the outstanding voting securities of such other Person; (b) any
Person ten percent (10%) or more of whose outstanding voting securities are
directly or indirectly owned, controlled or held with power to vote by such
other Person; (c) any Person directly or indirectly



                                       1
<PAGE>

controlling, controlled by, or under common control with, such other Person; (d)
any officer, director, member or partner of such other Person; and (e) if such
other Person is an officer, director, member or partner in a company, the
company for which such Person acts in any such capacity.

         "Agreed Value" shall mean the fair market value of Contributed Property
as agreed to by the contributing partner and the Partnership, using such
reasonable method of valuation as they may adopt.

         "Agreement" shall mean this Amended and Restated Agreement of Limited
Partnership of Ashford Hospitality Limited Partnership, as amended from time to
time.

         "Articles of Organization" means the Certificate of Formation of the
General Partner filed with the Secretary of State of the State of Delaware, as
amended or restated from time to time.

         "Ashford OP Limited Partner, LLC" means Ashford OP Limited Partner,
LLC, a Delaware limited liability company.

         "Bankruptcy Code" shall mean the United States Bankruptcy Code, as
amended, 11 U.S.C. ss.ss. 101 ET SEQ., and as hereafter amended from time to
time.

         "Business Day" shall mean any day when the New York Stock Exchange is
open for trading.

         "Capital Account" shall mean, as to any Partner, the account
established and maintained for such Partner pursuant to Section 5.3 hereof.

         "Capital Contribution" shall mean the amount in cash or the Agreed
Value of Contributed Property contributed by each Partner (or his original
predecessor in interest) to the capital of the Partnership for his interest in
the Partnership.

         "Cash Amount" means an amount of cash per Common Partnership Unit equal
to the Value on the Valuation Date of the REIT Common Shares Amount.

          "Cash Flow" shall mean the excess of cash revenues actually received
by the Partnership in respect of Partnership operations for any period, and the
amount of any reduction in reserves of the Partnership, over Operating Expenses
for such period. Cash Flow shall not include Disposition Proceeds.

          "Code" shall mean the Internal Revenue Code of 1986, as amended, and
as hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code at the date hereof and any
succeeding provision of the Code.

         "Commission" shall mean the U.S. Securities and Exchange Commission.



                                       2
<PAGE>

         "Common Partnership Interest" shall mean an ownership interest in the
Partnership, other than a Preferred Partnership Interest, and includes any and
all benefits to which the holder of such an ownership interest may be entitled
as provided in this Agreement or the Act, together with all obligations of such
Person to comply with the terms and provisions of this Agreement and the Act.

         "Common Partnership Unit" shall mean a fractional, undivided share of
the Common Partnership Interests of all Partners issued hereunder. At all times
there shall be maintained an equivalency of Common Partnership Units and REIT
Common Shares, except as otherwise provided herein.

         "Common Percentage Interest" shall mean the percentage ownership
interest in the Common Partnership Units of each Partner, as determined by
dividing the Common Partnership Units owned by a Partner by the total number of
Common Partnership Units then outstanding.

         "Company" means Ashford Hospitality Trust, Inc., a Maryland
corporation.

         "Contributed Property" shall mean a Partner's interest in property or
other consideration (excluding services and cash) contributed to the Partnership
by such Partner.

         "Conversion Factor" shall mean 1.0; provided, however, that in the
event the Company (i) declares or pays a dividend on its outstanding REIT Common
Shares in REIT Common Shares or makes a distribution to all holders of its
outstanding REIT Common Shares in REIT Common Shares, (ii) subdivides its
outstanding REIT Common Shares, or (iii) combines its outstanding REIT Common
Shares into a smaller number of REIT Common Shares, the Conversion Factor shall
be adjusted by multiplying the Conversion Factor by a fraction, the numerator of
which shall be the number of REIT Common Shares issued and outstanding on the
record date for such dividend, distribution, subdivision or combination
(assuming for such purposes that such dividend, distribution, subdivision or
combination has occurred as of such time), and the denominator of which shall be
the actual number of REIT Common Shares (determined without the above
assumption) issued and outstanding on the record date for such dividend,
distribution, subdivision or combination. Any adjustment to the Conversion
Factor shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event; PROVIDED, HOWEVER, that
if the General Partner receives a Notice of Redemption after the record date,
but prior to the effective date of such dividend, distribution, subdivision or
combination, the Conversion Factor shall be determined as if the General Partner
had received the Notice of Redemption immediately prior to the record date for
such dividend, distribution, subdivision or combination.

         "Disposition Proceeds" shall mean the excess of the proceeds received
by the Partnership from the sale, exchange or other disposition of all or
substantially all of the Partnership's Property less any expenses incurred or
paid by the Partnership in connection with such transaction.



                                       3
<PAGE>

         "Event of Bankruptcy" shall mean as to any Person the filing of a
petition for relief as to such Person as debtor or bankrupt under the Bankruptcy
Code or similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within ninety (90) days of the
filing thereof); insolvency of such Person as finally determined by a court of
competent jurisdiction; filing by such Person of a petition or application to
accomplish the same or for the appointment of a receiver or a trustee for such
Person or a substantial part of such Person's assets; commencement of any
proceedings relating to such Person as a debtor under any other reorganization,
arrangement, insolvency, adjustment of debt or liquidation law of any
jurisdiction, whether now in existence or hereinafter in effect, either by such
Person or by another, but if such proceeding is commenced by another, only if
such Person indicates his approval of such proceeding, or such proceeding is
contested by such Person and has not been finally dismissed within ninety (90)
days.

         "General Partner" shall mean Ashford OP General Partner, LLC and any
Person who becomes a substitute or additional General Partner as provided
herein, and any of their successors as General Partner.

         "General Partnership Interest" shall mean the ownership interest of a
General Partner in the Partnership, provided that the General Partner shall have
no interest in profits or losses of the Partnership with respect to its General
Partnership Interest.

         "Government Obligations" shall mean securities that are (i) direct
obligations of the United States of America, for the payment of which its full
faith and credit is pledged, or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, that are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust as custodian with respect to any
such obligation held by such custodian for the account of the holder of a
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of interest on or principal of
the Government Obligation evidenced by such depository receipt.

         "Hotels" means the hotel properties owned by the Partnership, directly
or through any other entity, from time to time.

         "Indemnitee" shall mean (i) any Person made a party to a proceeding by
reason of his or her status as (A) the General Partner or (B) a director,
officer, employee or agent of the Partnership or the General Partner, and (ii)
such other Persons (including Affiliates of the General Partner or the
Partnership) as the General Partner may designate from time to time (whether
before or after the event giving rise to potential liability), in its sole and
absolute discretion.



                                       4
<PAGE>

         "Initial Contributed Assets" shall mean those properties and asset
management and consulting agreements identified as Initial Contributed Assets on
Exhibit A hereto.

         "IRS" shall mean the Internal Revenue Service.

         "Limited Partner" shall mean any Person named as a Limited Partner on
Exhibit A attached hereto and any Person who becomes a Substitute Limited
Partner pursuant to Section 9.6 hereof or an Additional Limited Partner pursuant
to Section 2.3(b) hereof, in such Person's capacity as a Limited Partner in the
Partnership.

         "Limited Partnership Interest" shall mean the ownership interest of a
Limited Partner in the Partnership at any particular time, including the right
of such Limited Partner to any and all benefits to which such Limited Partner
may be entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of the Act.

         "Notice of Redemption" shall mean the Notice of Exercise of Redemption
Right substantially in the form attached as Exhibit C hereto.

         "Offering" shall mean the offer and sale by the Company and the
purchase by the Underwriters (as defined in the Prospectus) of REIT Common
Shares for sale to the public, consummated August 29, 2003.

         "Operating Expenses" shall mean (i) all administrative and operating
costs and expenses incurred by the Partnership, (ii) those administrative costs
and expenses of the General Partner, including any salaries or other payments to
directors, officers or employees of the General Partner, and any accounting and
legal expense of the General Partner, which expenses, the Partners have agreed,
are expenses of the Partnership and not the General Partner, and (iii) to the
extent not included in clause (ii) above, REIT Expenses; PROVIDED, HOWEVER, that
Operating Expenses shall not include any administrative costs and expenses
incurred by the General Partner that are attributable to Properties or
partnership interests in a Subsidiary that are owned by the General Partner or
the Company directly.

         "Original Limited Partner" shall mean Ashford OP Limited Partner, LLC.

         "Partner" shall mean the General Partner or any Limited Partner.

         "Partnership" shall mean Ashford Hospitality Limited Partnership, a
Delaware limited partnership.

         "Partnership Interest" shall mean an ownership interest in the
Partnership and includes any and all benefits to which the holder of such an
ownership interest may be entitled as provided in this Agreement or the Act,
together with all obligations of such Person to comply with the terms and
provisions of this Agreement and the Act.

         "Partnership Record Date" shall mean the record date established by the
General Partner for the distribution of Cash Flow pursuant to Section 8.1
hereof, which record




                                       5
<PAGE>

date shall be the same as the record date established by the General Partner for
a distribution to its member of some or all of its portion of such distribution.

         "Partnership Unit" means a Common Partnership Unit, a Preferred
Partnership Unit or an other fractional, undivided share of the Partnership
Interests that the General Partner has authorized pursuant to this Agreement.
The Partnership Units of the Partners shall be set forth on Exhibit A, as may be
amended from time to time.

         "Person" shall mean any individual, partnership, corporation, limited
liability company, trust or other entity.

         "Preferred Partnership Interest" shall mean an ownership interest in
the Partnership, having a preference in payment of distributions or on
liquidation, and includes any and all benefits to which the holder of such an
ownership interest may be entitled as provided in this Agreement or the Act,
together with all obligations of such Person to comply with the terms and
provisions of this Agreement and the Act.

         "Preferred Partnership Unit" shall mean a fractional, undivided share
of the Preferred Partnership Interests of all Partners issued hereunder.

         "Preferred Percentage Interest" shall mean the percentage ownership
interest in the Preferred Partnership Units of each Partner, as determined by
dividing the Preferred Partnership Units owned by a Partner by the total number
of Preferred Partnership Units then outstanding.

         "Preferred Return" shall mean any payment made or to be made on any
Preferred Partnership Unit corresponding to any dividend paid or to be paid on
any preferred shares issued by the Company, in accordance with Section 4.3
hereof.

         "Property" shall mean any hotel property or other investment in which
the Partnership holds an ownership interest.

         "Prospectus" shall mean the final prospectus, dated August 26, 2003,
delivered to purchasers of REIT Shares in the Offering.

         "Public Offering Price" shall mean the price for REIT shares set forth
in the Prospectus.

         "Redeeming Partner" shall have the meaning provided in Section 7.4(a)
hereof.

         "Redemption Right" shall have the meaning provided in Section 7.4(a)
hereof.

         "REIT" shall mean a real estate investment trust under Sections 856
through 860, inclusive, of the Code.

         "REIT Common Share" shall mean a share of the common shares of the
Company.



                                       6
<PAGE>

         "REIT Common Shares Amount" shall mean a whole number of REIT Common
Shares equal to the product of the number of Common Partnership Units offered
for redemption by a Redeeming Partner, multiplied by the Conversion Factor in
effect on the Specified Redemption Date (rounded down to the nearest whole
number in the event such product is not a whole number); provided, however, that
in the event the Company at any time issues to all holders of REIT Common Shares
rights, options, warrants or convertible or exchangeable securities entitling
the shareholders to subscribe for or purchase REIT Common Shares, or any other
securities or property (collectively, the "Rights"), which Rights have not
expired pursuant to their terms, then the REIT Common Shares Amount thereafter
shall also include such Rights that a holder of that number of REIT Common
Shares would be entitled to receive.

         "REIT Expenses" means (i) costs and expenses relating to the formation
and continuity of existence of the Company and any Subsidiaries thereof (which
Subsidiaries shall, for purposes hereof, be included within the definition of
Company), including taxes, fees and assessments associated therewith, any and
all costs, expenses or fees payable to any director, officer, or employee of the
Company, (ii) costs and expenses relating to the public offering and
registration of securities or private offering of securities by the Company and
all statements, reports, fees and expenses incidental thereto, including
underwriting discounts and selling commissions applicable to any such offering
of securities, (iii) costs and expenses associated with the preparation and
filing of any periodic reports by the Company under federal, state or local laws
or regulations, including filings with the Commission, (iv) costs and expenses
associated with compliance by the Company with laws, rules and regulations
promulgated by any regulatory body, including the Commission, and (v) all other
operating or administrative costs of the Company, including, without limitation,
insurance premiums, and legal, accounting and directors' fees, incurred in the
ordinary course of its business on behalf of or in connection with the
Partnership.

         "REIT Preferred Share" shall mean a share of the preferred shares of
the Company.

         "REIT Share" shall mean a REIT Common Share or a REIT Preferred Share.

         "Specified Redemption Date" shall mean, with respect to a given
Partner, the tenth (10th) Business Day after receipt by the General Partner of a
Notice of Redemption, provided that no Specified Redemption Date may occur
before one year after the closing of the Offering.

         "Subsidiary" shall mean, with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting equity
securities, or (ii) the outstanding equity interests, are owned, directly or
indirectly, by such Person.

         "Substitute General Partner" has the meaning set forth in Section 9.2.

         "Substitute Limited Partner" shall mean any Person admitted to the
Partnership as a Limited Partner pursuant to Section 9.6 hereof.



                                       7
<PAGE>

         "Surviving Partner" has the meaning set forth in Section 9.1(c) hereof.

         "Transaction" has the meaning set forth in Section 9.1(b) hereof.

         "Transfer" has the meaning set forth in Section 9.5(a) hereof.

         "Valuation Date" shall mean the date of receipt by the General Partner
of a Notice of Redemption or, if such date is not a Business Day, the first
Business Day thereafter.

         "Value" shall mean, with respect to a REIT Common Share, the average of
the daily market price for the ten (10) consecutive trading days immediately
preceding the Valuation Date. The market price for each such trading day shall
be: (i) if the REIT Common Shares are listed or admitted to trading on any
securities exchange or the NASDAQ National Market System, the closing price,
regular way, on such day, or if no such sale takes place on such day, the
average of the closing bid and asked prices on such day; (ii) if the REIT Common
Shares are not listed or admitted to trading on any securities exchange or the
NASDAQ National Market System, the last reported sale price on such day or, if
no sale takes place on such day, the average of the closing bid and asked prices
on such day, as reported by a reliable quotation source designated by the
General Partner; or (iii) if the REIT Common Shares are not listed or admitted
to trading on any securities exchange or the NASDAQ National Market System and
no such last reported sale price or closing bid and asked prices are available,
the average of the reported high bid and low asked prices on such day, as
reported by a reliable quotation source designated by the General Partner, or if
there shall be no bid and asked prices on such day, the average of the high bid
and low asked prices, as so reported, on the most recent day (not more than ten
(10) days prior to the date in question) for which prices have been so reported;
provided, however, that if there are no bid and asked prices reported during the
ten (10) days prior to the date in question, the Value of the REIT Common Shares
shall be determined by the General Partner acting in good faith on the basis of
such quotations and other information as it considers, in its reasonable
judgment, appropriate. In the event the REIT Common Shares Amount includes
rights that a holder of REIT Common Shares would be entitled to receive, and the
General Partner acting in good faith determines that the value of such rights is
not reflected in the Value of the REIT Common Shares determined as aforesaid,
then the Value of such rights shall be determined by the General Partner acting
in good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate.

                                   ARTICLE II
            PARTNERSHIP CONTINUATION; ADMISSION OF LIMITED PARTNERS;
                  NAME; PLACE OF BUSINESS AND REGISTERED AGENT

         Section 2.1 CONTINUATION. The Partners hereby agree to continue the
Partnership pursuant to the provisions of the Act and upon the terms and
conditions set forth in this Agreement. Except as expressly provided herein, the
rights and obligations of the Partners and the administration and termination of
the Partnership shall be governed by the Act. The Partnership Interest of each
Partner shall be personal property for all purposes.



                                       8
<PAGE>

         Section 2.2 CERTIFICATE OF LIMITED PARTNERSHIP; OTHER FILINGS. The
General Partner shall prepare (or caused to be prepared), execute, acknowledge,
record and file at the expense of the Partnership, a Certificate of Limited
Partnership and all requisite fictitious name statements and notices in such
places and jurisdictions as may be required by the Act or necessary to cause the
Partnership to be treated as a limited partnership under, and otherwise to
comply with, the laws of each state or other jurisdiction in which the
Partnership conducts business.

         Section 2.3 ADDITIONAL LIMITED PARTNERS. The General Partner shall in
timely fashion amend this Agreement and, if required by the Act, the Certificate
of Limited Partnership filed for record to reflect the admission pursuant to the
terms of this Agreement of a Person as a Limited Partner.

         Section 2.4 NAME, OFFICE AND REGISTERED AGENT. The name of the
Partnership shall be Ashford Hospitality Limited Partnership The principal place
of business of the Partnership shall be at 14180 Dallas Parkway, 9th Floor,
Dallas, Texas 75254. The General Partner may at any time change the location of
such office, provided the General Partner gives notice to the Partners of any
such change. The name and address of the Partnership's statutory agent for
service of process on the Partnership in Texas is Ashford OP General Partner
LLC, 14180 Dallas Parkway, 9th Floor, Dallas, Texas 75254. The name and address
of the Partnership's statutory agent for service of process on the Partnership
in Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400,
Wilmington, Delaware 19808.

                                   ARTICLE III
                        BUSINESS AND TERM OF PARTNERSHIP

         Section 3.1 BUSINESS. The purpose and nature of the business of the
Partnership is to conduct any business that may lawfully be conducted by a
limited partnership organized pursuant to the Act; provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
Company at all times to be qualified as a REIT under the Code, unless the board
of directors of the Company determines to cease to qualify as a REIT. To
consummate the foregoing and to carry out the obligations of the Partnership in
connection therewith or incidental thereto, the General Partner shall have the
authority, in accordance with and subject to the limitations set forth elsewhere
in this Agreement, to make, enter into, perform and carry out any arrangements,
contracts or agreements of every kind for any lawful purpose, without limit as
to amount or otherwise, with any corporation, association, partnership, limited
liability company, firm, trustee, syndicate, individual or any political or
governmental division, subdivision or agency, domestic or foreign, and generally
to make and perform agreements and contracts of every kind and description and
to do any and all things necessary or incidental to the foregoing for the
protection and enhancement of the assets of the Partnership.

         Section 3.2 TERM. The Partnership as herein constituted shall continue
until December 31, 2053, unless earlier dissolved or terminated pursuant to law
or the provisions of this Agreement.



                                       9
<PAGE>

                                   ARTICLE IV
                              CAPITAL CONTRIBUTIONS

         Section 4.1 GENERAL PARTNER. The General Partner has not contributed,
and shall not be required to contribute, cash or other assets to the capital of
the Partnership.

         Section 4.2 LIMITED PARTNERS. The Limited Partners have contributed
their respective ownership interests in the Initial Contributed Assets to the
capital of the Partnership. The Agreed Values of the Limited Partners'
proportionate ownership interests in the Initial Contributed Assets are set
forth on Exhibit A attached hereto.

         Section 4.3 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF
ADDITIONAL PARTNERSHIP INTERESTS. Except as provided in this Section 4.3 or in
Section 4.4, the Partners shall have no preemptive or other right or obligation
to make any additional Capital Contributions or loans to the Partnership. The
General Partner or Ashford OP Limited Partner, LLC may contribute additional
capital or property to the Partnership, from time to time, and receive
additional Partnership Interests in respect thereof, in the manner contemplated
in this Section 4.3.

                  (a)      ISSUANCES OF ADDITIONAL PARTNERSHIP INTERESTS.

                           (i) GENERAL. The General Partner is hereby authorized
                  to cause the Partnership to issue such additional Partnership
                  Interests in the form of Common Partnership Units and
                  Preferred Partnership Units for any Partnership purpose at any
                  time or from time to time, to the Partners or to other Persons
                  for such consideration and on such terms and conditions as
                  shall be established by the General Partner in its sole and
                  absolute discretion, all without the approval of any of the
                  Limited Partners. Any additional Partnership Interest issued
                  thereby may be issued 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, powers and duties, including rights, powers
                  and duties senior to Limited Partnership Interests, all as
                  shall be determined by the General Partner in its sole and
                  absolute discretion and without the approval of any Limited
                  Partner, subject to Delaware law, including, without
                  limitation, (i) the allocations of items of Partnership
                  income, gain, loss, deduction and credit to each such class or
                  series of Partnership Interests; (ii) the right of each such
                  class or series of Partnership Interests to share in
                  Partnership distributions; (iii) the rights of each class or
                  series of Partnership Interests upon dissolution and
                  liquidation of the Partnership and (iv) the right to vote;
                  PROVIDED, HOWEVER, that no additional Partnership Interests
                  shall be issued to the General Partner or Ashford OP Limited
                  Partner, LLC unless:

                           (ii) (1) (A) The additional Partnership Interests are
                  issued in connection with an issuance of REIT Shares of or
                  other interests in the



                                       10
<PAGE>

                  Company, all such that the economic interests are
                  substantially similar to the designations, preferences and
                  other rights of the additional Partnership Interests issued to
                  the General Partner or Ashford OP Limited Partner, LLC by the
                  Partnership in accordance with this Section 4.3 and (B) the
                  Company shall make, directly or through one or more
                  Affiliates, a Capital Contribution to the Partnership in an
                  amount equal to the proceeds raised or other property received
                  by the Company, directly or through one or more Affiliates, in
                  connection with the issuance of such shares or other interests
                  in the Company, (2) the additional Partnership Interests are
                  issued in exchange for property owned by the Company, the
                  General Partner or Ashford OP Limited Partner, LLC, as the
                  case may be, with a fair market value, as determined by the
                  General Partner, in good faith, equal to the value of the
                  Partnership Interests, or (3) the additional Partnership
                  Interests are issued to all Partners in proportion to their
                  respective Common Percentage Interests or Preferred Percentage
                  Interests, as applicable.

Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Common Partnership Units or Preferred Partnership
Units for less than fair market value, so long as the General Partner concludes
in good faith that such issuance is in the best interests of the Company and the
Partnership.

                  (b) UPON ISSUANCE OF ADDITIONAL SECURITIES. After the
         Offering, the Company shall not issue any additional REIT Shares (other
         than REIT Shares issued in connection with a redemption pursuant to
         Section 7.4 hereof) or rights, options, warrants or convertible or
         exchangeable securities containing the right to subscribe for or
         purchase REIT Shares (collectively, "Additional Securities") other than
         to all holders of REIT Shares, unless (A) the General Partner shall
         cause the Partnership to issue to the Company or its Affiliates,
         Partnership Interests or rights, options, warrants or convertible or
         exchangeable securities of the Partnership having designations,
         preferences and other rights, all such that the economic interests are
         substantially similar to those of the Additional Securities, and (B)
         the Company contributes, directly or through one or more Affiliates,
         the proceeds or other property received from the issuance of such
         Additional Securities and from any exercise of rights contained in such
         Additional Securities to the Partnership.

Without limiting the foregoing, the Company may issue Additional Securities for
less than fair market value, and as a result the General Partner is expressly
authorized to cause the Partnership to issue to the Company or its Affiliates
corresponding Partnership Interests, so long as (x) the Company concludes in
good faith that such issuance is in the best interests of the Company and the
Partnership, and (y) the Company, directly or through one or more Affiliates,
contributes all proceeds or other property received from such issuance to the
Partnership. For example, in the event the Company issues REIT Common Shares for
a cash purchase price and contributes, directly or through one or more
Affiliates, all of the proceeds of such issuance to the Partnership as required
hereunder, the Company or its Affiliates shall be issued a number of additional
Common




                                       11
<PAGE>

Partnership Units equal to the product of (A) the number of such REIT Common
Shares issued by the Company, the proceeds of which were so contributed,
multiplied by (B) a fraction, the numerator of which is 100%, and the
denominator of which is the Conversion Factor in effect on the date of such
contribution.

                  (c) CERTAIN DEEMED CONTRIBUTIONS OF PROCEEDS OF ISSUANCE OF
         REIT SHARES. In connection with any and all issuances of REIT Shares,
         the Company, directly or through one or more Affiliates, shall
         contribute all of the proceeds raised in connection with such issuance
         to the Partnership as Capital Contributions, PROVIDED THAT if the
         proceeds actually received and contributed by the Company or its
         Affiliates are less than the gross proceeds of such issuance as a
         result of any underwriter's discount or other expenses paid or incurred
         in connection with such issuance, then the Company, directly or through
         one or more Affiliates, shall be deemed to have made Capital
         Contributions to the Partnership in the aggregate amount of the gross
         proceeds of such issuance and the Partnership shall be deemed
         simultaneously to have paid such offering expenses in connection with
         the required issuance of additional Partnership Units to the Company or
         its Affiliates for such Capital Contributions pursuant to Section
         4.3(a) hereof.

         Section 4.4 ADDITIONAL FUNDING. If the General Partner determines that
it is in the best interests of the Partnership to provide for additional
Partnership funds ("Additional Funds") for any Partnership purpose, the General
Partner may (i) cause the Partnership to obtain such funds from outside
borrowings, or (ii) elect to have the General Partner provide such Additional
Funds to the Partnership through loans or otherwise.

         Section 4.5 INTEREST. No interest shall be paid on the Capital
Contribution of any Partner.

         Section 4.6 RETURN OF CAPITAL. Except as expressly provided in this
Agreement, no Partner shall be entitled to demand or receive the return of his
Capital Contribution.

         Section 4.7 PERCENTAGE INTEREST. If the number of outstanding Common
Partnership Units increases or decreases during a taxable year, the General
Partner shall adjust each holder of Common Partnership Units' Percentage
Interest, as reflected on Exhibit A, to a percentage equal to the number of
Common Partnership Units held by such Partner divided by the aggregate number of
outstanding Common Partnership Units.

                                   ARTICLE V
                         PROFITS, LOSSES AND ACCOUNTING

         Section 5.1 ALLOCATION OF PROFITS AND LOSSES. Except as otherwise
provided herein or in Exhibit B, profits earned and losses incurred by the
Partnership shall be allocated among the Partners as follows:



                                       12
<PAGE>

                  (a) Profits for each year shall be allocated among the
         Partners, and shall be credited to the respective Capital Accounts of
         the Partners, in the following order and priority:

                           (i) First, to the Partners to the extent of losses,
                  in the proportions and in the reverse order in which losses
                  were allocated to them pursuant to Section 5.1(b), until the
                  cumulative amounts allocated to each Partner pursuant to this
                  Section 5.1(a)(i) are equal to the cumulative losses so
                  allocated to such Partner; and

                           (ii) Second, any remaining profits shall be allocated
                  to the holders of Common Partnership Units in accordance with
                  their Common Percentage Interests.

                  (b) Losses for each year shall be allocated among the
         Partners, and shall be debited to the respective Capital Accounts of
         the Partners, in the following order and priority:

                           (i) First, to the holders of Common Partnership Units
                  pro rata in accordance with, and to the extent of, the
                  positive balances in their Adjusted Capital Account Balances
                  (as defined in Exhibit B hereto) attributable to Common
                  Partnership Units; and

                           (ii) Thereafter any remaining losses will be
                  allocated to the holders of Common Partnership Units in
                  accordance with their Common Percentage Interests.

                  (c) In the event that the Partnership issues additional
         Partnership Units pursuant to the provisions of this Agreement, the
         General Partner is hereby authorized to make revisions to this Section
         5.1 as it determines are necessary or desirable to reflect the terms of
         the issuance of such additional Partnership Units, including, without
         limitation, making preferential allocations to certain classes of
         Partnership Units.

         Section 5.2 ACCOUNTING.

                  (a) The books of the Partnership shall be kept on the accrual
         basis and in accordance with generally accepted accounting principles
         consistently applied.

                  (b) The fiscal year of the Partnership shall be the calendar
         year.

                  (c) The terms "profits" and "losses," as used herein, shall
         mean all items of income, gain, expense or loss as determined utilizing
         federal income tax accounting principles and shall also include each
         Partner's share of income described in Section 705(a)(1)(B) of the
         Code, any expenditures described in Section 705(a)(2)(B) of the Code,
         any expenditures described in Section 709(a) of the Code which are not
         deducted or amortized in accordance with Section 709(b)




                                       13
<PAGE>

         of the Code, losses not deductible pursuant to Sections 267(a) and
         707(b) of the Code and adjustments made pursuant to Exhibit B attached
         hereto.

                  (d) The General Partner shall be the Tax Matters Partner of
         the Partnership within the meaning of Section 6231(a)(7) of the Code.
         As Tax Matters Partner, the General Partner shall have the right and
         obligation to take all actions authorized and required, respectively,
         by the Code for the Tax Matters Partner. The General Partner shall have
         the right to retain professional assistance in respect of any audit of
         the Partnership by the IRS, and all out-of-pocket expenses and fees
         incurred by the General Partner on behalf of the Partnership as Tax
         Matters Partner shall constitute Operating Expenses of the Partnership.
         In the event the General Partner receives notice of a final Partnership
         adjustment under Section 6223(a)(2) of the Code, the General Partner
         shall either (i) file a court petition for judicial review of such
         final adjustment within the period provided under Section 6226(a) of
         the Code, a copy of which petition shall be mailed to each Limited
         Partner on the date such petition is filed, or (ii) mail a written
         notice to each Limited Partner, within such period, that describes the
         General Partner's reasons for determining not to file such a petition.

                  (e) Except as specifically provided herein, all elections
         required or permitted to be made by the Partnership under the Code
         shall be made by the General Partner in its sole discretion.

                  (f) Any Partner shall have the right to a private audit of the
         books and records of the Partnership, provided such audit is made at
         the expense of the Partner desiring it, and it is made during normal
         business hours.

         Section 5.3 PARTNERS' CAPITAL ACCOUNTS.

                  (a) There shall be maintained a Capital Account for each
         Partner in accordance with this Section 5.3 and the principles set
         forth in Exhibit B attached hereto and made a part hereof. The amount
         of cash and the Agreed Value of property contributed to the Partnership
         by each Partner, net of liabilities assumed by the Partnership or
         securing property contributed by such Partner, shall be credited to its
         Capital Account, and from time to time, but not less often than
         annually, the share of each Partner in profits, losses and fair market
         value of distributions shall be credited or charged to its Capital
         Account. The determination of Partners' Capital Accounts, and any
         adjustments thereto, shall be made consistent with tax accounting and
         other principles set forth in Section 704(b) of the Code and applicable
         regulations thereunder and Exhibit B attached hereto.

                  (b) Except as otherwise specifically provided herein or in a
         guarantee of a Partnership liability, signed by a Limited Partner, no
         Limited Partner shall be required to make any further contribution to
         the capital of the Partnership to restore a loss, to discharge any
         liability of the Partnership or for any other purpose, nor shall any
         Limited Partner personally be liable for any liabilities of




                                       14
<PAGE>

         the Partnership or of the General Partner except as provided by law or
         this Agreement. All Limited Partners hereby waive their right of
         contribution which they may have against other Partners in respect of
         any payments made by them under any guarantee of Partnership debt.

                  (c) Immediately following the transfer of any Partnership
         Interest, the Capital Account of the transferee Partner shall be equal
         to the Capital Account of the transferor Partner attributable to the
         transferred interest, and such Capital Account shall not be adjusted to
         reflect any basis adjustment under Section 743 of the Code.

                  (d) For purposes of computing the amount of any item of
         income, gain, deduction or loss to be reflected in the Partners'
         Capital Accounts, the determination, recognition and classification of
         any such item shall be the same as its determination, recognition and
         classification for federal income tax purposes, taking into account any
         adjustments required pursuant to Section 704(b) of the Code and the
         applicable regulations thereunder as more fully described in Exhibit B
         attached hereto.

         Section 5.4 SECTION 754 ELECTIONS. The General Partner shall elect,
pursuant to Section 754 of the Code, to adjust the basis of the Partnership's
assets for all transfers of Partnership Interests if such election would benefit
any Partner or the Partnership.

                                   ARTICLE VI
     POWERS, DUTIES, LIABILITIES, COMPENSATION AND VOTING OF GENERAL PARTNER

         Section 6.1 POWERS OF GENERAL PARTNER. Notwithstanding any provision of
this Agreement to the contrary, the General Partner's discretion and authority
are subject to the limitations imposed by law, and by the General Partner's
Articles of Organization and operating agreement. Subject to the foregoing and
to other limitations imposed by this Agreement, the General Partner shall have
full, complete and exclusive discretion to manage and control the business and
affairs of the Partnership and make all decisions affecting the business and
assets of the Partnership. Without limiting the generality of the foregoing (but
subject to the restrictions specifically contained in this Agreement), the
General Partner shall have the power and authority to take the following actions
on behalf of the Partnership:

                  (a) to acquire, purchase, own, manage, operate, lease and
         dispose of any real property and any other property or assets that the
         General Partner determines are necessary or appropriate or in the best
         interests of conducting the business of the Partnership in each case
         not inconsistent with the Company's qualification as a REIT;

                  (b) to construct buildings and make other improvements
         (including renovations) on or to the properties owned or leased by the
         Partnership;



                                       15
<PAGE>

                  (c) to borrow money for the Partnership, issue evidences of
         indebtedness in connection therewith, refinance, guarantee, increase
         the amount of, modify, amend or change the terms of, or extend the time
         for the payment of, any indebtedness or obligation of or to the
         Partnership, and secure such indebtedness by mortgage, deed of trust,
         pledge or other lien on the Partnership's assets;

                  (d) to pay, either directly or by reimbursement, for all
         Operating Expenses to third parties or to the General Partner (as set
         forth in this Agreement);

                  (e) to lease all or any portion of any of the Partnership's
         assets, whether or not the terms of such leases extend beyond the
         termination date of the Partnership and whether or not any portion of
         the Partnership's assets so leased are to be occupied by the lessee,
         or, in turn, subleased in whole or in part to others, for such
         consideration and on such terms as the General Partner may determine;

                  (f) to prosecute, defend, arbitrate, or compromise any and all
         claims or liabilities in favor of or against the Partnership, on such
         terms and in such manner as the General Partner may reasonably
         determine, and similarly to prosecute, settle or defend litigation with
         respect to the Partners, the Partnership, or the Partnership's assets;
         provided, however, that the General Partner may not, without the
         consent of all of the Partners, confess a judgment against the
         Partnership;

                  (g) to file applications, communicate, and otherwise deal with
         any and all governmental agencies having jurisdiction over, or in any
         way affecting, the Partnership's assets or any other aspect of the
         Partnership business;

                  (h) to make or revoke any election permitted or required of
         the Partnership by any taxing authority;

                  (i) to maintain such insurance coverage for public liability,
         fire and casualty, and any and all other insurance for the protection
         of the Partnership, for the conservation of Partnership assets, or for
         any other purpose convenient or beneficial to the Partnership, in such
         amounts and such types as the General Partner shall determine from time
         to time;

                  (j) to determine whether or not to apply any insurance
         proceeds for any Property to the restoration of such Property or to
         distribute the same;

                  (k) to retain providers of services of any kind or nature in
         connection with the Partnership business and to pay therefor such
         reasonable remuneration as the General Partner may deem proper;

                  (l) to negotiate and conclude agreements on behalf of the
         Partnership with respect to any of the rights, powers and authority
         conferred upon the General Partner, including, without limitation,
         management agreements, franchise




                                       16
<PAGE>

         agreements, agreements with federal, state or local liquor licensing
         agencies and agreements with operators of restaurants and bars;

                  (m) to maintain accurate accounting records and to file
         promptly all federal, state and local income tax returns on behalf of
         the Partnership;

                  (n) to form or acquire an interest in, and contribute property
         to, any further limited or general partnerships, joint ventures or
         other relationships that it deems desirable (including, without
         limitation, the acquisition of interests in, and the contributions of
         property to, its Subsidiaries and any other Person in which it has an
         equity interest from time to time);

                  (o) to distribute Partnership cash or other Partnership assets
         in accordance with this Agreement;

                  (p) to establish Partnership reserves for working capital,
         capital expenditures, contingent liabilities or any other valid
         Partnership purpose;

                  (q) to authorize, issue, sell, redeem or otherwise purchase
         any Partnership Interests or any securities (including secured and
         unsecured debt obligations of the Partnership, debt obligations of the
         Partnership convertible into any class or series of Partnership
         Interests, or options, rights, warrants or appreciation rights relating
         to any Partnership Interests) of the Partnership;

                  (r) subject to the provisions of Section 9.1, to merge,
         consolidate or combine the Partnership with or into another Person (to
         the extent permitted by applicable law);

                  (s) to do any and all acts and things necessary or prudent to
         ensure that the Partnership will not be classified as a "publicly
         traded partnership" for purposes of Section 7704 of the Code;

                  (t) to issue additional Partnership Interests pursuant to
         Section 4.3 hereof;

                  (u) to pay cash to redeem Partnership Units held by a Limited
         Partner in connection with a Limited Partner's exercise of its
         Redemption Right under Section 7.4 hereof;

                  (v) to amend and restate Exhibit A hereto to reflect
         accurately at all times the Capital Contributions, Common Percentage
         Interests and Preferred Percentage Interests of the Partners as the
         same are adjusted from time to time to the extent necessary to reflect
         redemptions, Capital Contributions, the issuance of Partnership Units,
         the admission of any Additional Limited Partner or any Substitute
         Limited Partner or otherwise, which amendment and restatement,
         notwithstanding anything in this Agreement to the contrary, shall not
         be deemed an amendment to this Agreement, as long as the matter or
         event being reflected in Exhibit A hereto otherwise is authorized by
         this Agreement;



                                       17
<PAGE>

                  (w) to take whatever action the General Partner deems
         appropriate to maintain the economic equivalency of Common Partnership
         Units and REIT Common Shares and Preferred Partnership Units and REIT
         Preferred Shares, respectively; and

                  (x) to take such other action, execute, acknowledge, swear to
         or deliver such other documents and instruments, and perform any and
         all other acts the General Partner deems necessary or appropriate for
         the formation, continuation and conduct of the business and affairs of
         the Partnership (including, without limitation, all actions consistent
         with qualification of the Company as a REIT) and to possess and enjoy
         all of the rights and powers of a general partner as provided by the
         Act.

Each of the Limited Partners agrees that the General Partner is authorized to
execute, deliver and perform the above-mentioned agreements and transactions on
behalf of the Partnership without any further act, approval or vote of the
Partners, notwithstanding any other provisions of this Agreement (except as
provided in this Section 6.1(r), Section 9.1 or Article XI), the Act or any
applicable law, rule or regulation to the fullest extent permitted under the Act
or other applicable law, rule or regulation. The execution, delivery or
performance by the General Partner or the Partnership of any agreement
authorized or permitted under this Agreement shall not constitute a breach by
the General Partner of any duty that the General Partner may owe the Partnership
or the Limited Partners or any other persons under this Agreement or of any duty
stated or implied by law or equity.

Except as otherwise provided herein, 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 authorize or require the
General Partner, in its capacity as such, to expend its individual funds for
payment to third parties or to undertake any individual liability or obligation
on behalf of the Partnership.

         Section 6.2 DELEGATION OF AUTHORITY. The General Partner may delegate
any or all of its powers, rights and obligations hereunder, and may appoint,
employ, contract or otherwise deal with any Person for the transaction of the
business of the Partnership, which Person may, under supervision of the General
Partner, perform any acts or services for the Partnership as the General Partner
may approve.

         Section 6.3 DUTIES OF GENERAL PARTNER.

                  (a) The General Partner, subject to the limitations contained
         elsewhere in this Agreement, shall manage or cause to be managed the
         affairs of the Partnership in a prudent and businesslike manner and
         shall devote sufficient time and effort to the Partnership affairs.

                  (b) In carrying out its obligations, the General Partner
         shall:



                                       18
<PAGE>

                           (i) Render annual reports to all Partners with
                  respect to the operations of the Partnership;

                           (ii) On or before March 31st of every year, mail to
                  all persons who were Partners at any time during the
                  Partnership's prior fiscal year an annual report of the
                  Partnership, including all necessary tax information, and any
                  other information regarding the Partnership and its operations
                  during the prior fiscal year deemed by the General Partner to
                  be material;

                           (iii) Maintain complete and accurate records of all
                  business conducted by the Partnership and complete and
                  accurate books of account (containing such information as
                  shall be necessary to record allocations and distributions),
                  and make such records and books of account available for
                  inspection and audit by any Partner or such Partner's duly
                  authorized representative (at the sole expense of such
                  Partner) during regular business hours and at the principal
                  office of the Partnership; and

                           (iv) Cause to be filed such certificates and do such
                  other acts as may be required by law to qualify and maintain
                  the Partnership as a limited partnership under the laws of the
                  State of Delaware.

                  (c) The General Partner shall take such actions as it deems
         necessary to maintain the economic equivalency of Common Partnership
         Units and REIT Common Shares and Preferred Partnership Units and REIT
         Preferred Shares, respectively, required by this Agreement.

         Section 6.4 LIABILITIES OF GENERAL PARTNER; INDEMNIFICATION.

                  (a) The General Partner shall not be liable for the return of
         all or any part of the Capital Contributions of the Limited Partners.
         Any returns shall be made solely from the assets of the Partnership
         according to the terms of this Agreement.

                  (b) Notwithstanding anything to the contrary set forth in this
         Agreement, none of the General Partner or the Company nor any of their
         officers, directors, agents or employees shall be liable or accountable
         in damages or otherwise to the Partnership, any Partners or any
         assignees, or any of their successors or assigns, for any losses
         sustained, liabilities incurred or benefits not derived as a result of
         errors in judgment or mistakes of fact or law or any act or omission if
         the General Partner acted in good faith. The General Partner shall not
         be responsible for any misconduct or negligence on the part on any
         agent appointed by it in good faith pursuant to Section 6.2 hereof. The
         Limited Partners expressly acknowledge that the General Partner is
         acting on behalf of the Partnership, the General Partner, the General
         Partner's members and the Company's shareholders collectively, and that
         the General Partner is under no obligation to consider the separate
         interests of the Limited Partners (including, without limitation, the
         tax consequences to Limited Partners or their assignees) in




                                       19
<PAGE>

         deciding whether to cause the Partnership to take (or decline to take)
         any actions. In the event of a conflict between the interests of the
         members of the General Partner or shareholders of the Company on one
         hand and the Limited Partners on the other, the General Partner shall
         endeavor in good faith to resolve the conflict in a manner not adverse
         to either the shareholders of the Company or the Limited Partners;
         provided, however, that for so long as the Company owns a controlling
         interest, directly or indirectly, in the Partnership, any such conflict
         that cannot be resolved in a manner not adverse to either the
         shareholders of the Company or the Limited Partners shall be resolved
         in favor of the shareholders of the Company. 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 has acted in
         good faith.

                  (c) The Partnership shall indemnify an Indemnitee to the
         fullest extent permitted by law and save and hold it harmless from and
         against, and in respect of, any and all losses, claims, damages,
         liabilities (joint or several), expenses (including legal fees and
         expenses), judgments, fines, settlements, and other amounts arising
         from any and all claims, demands, actions, suits or proceedings, civil,
         criminal, administrative or investigative, that relate to the
         operations of the Partnership as set forth in this Agreement in which
         any Indemnitee may be involved, or is threatened to be involved, as a
         party or otherwise; provided, however, that this indemnification shall
         not apply if: (A) the act or omission of the Indemnitee was material to
         the matter giving rise to the proceeding and either was committed in
         bad faith or was the result of active and deliberate dishonesty; (B)
         the Indemnitee actually received an improper personal benefit in money,
         property or services; or (C) in the case of any criminal proceeding,
         the Indemnitee had reasonable cause to believe that the act or omission
         was unlawful. 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
         6.4(c). The termination of any proceeding by conviction or upon a plea
         of nolo contendere or its equivalent, or an entry of an order of
         probation prior to judgment, creates a rebuttable presumption that the
         Indemnitee acted in a manner contrary to that specified in this Section
         6.4(c). Any indemnification pursuant to this Section 6.4 shall be made
         only out of the assets of the Partnership, and any insurance proceeds
         from the liability policy covering the General Partner and any
         Indemnitee.

                  (d) The Partnership may reimburse an Indemnitee for reasonable
         expenses incurred by an Indemnitee who is a party to a proceeding 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
         6.4 has been met, and (ii) a written undertaking by or on behalf of the
         Indemnitee to repay the amount if it shall ultimately be determined
         that the standard of conduct has not been met.



                                       20
<PAGE>

                  (e) The indemnification provided by this Section 6.4 shall be
         in addition to any other rights to which an Indemnitee or any other
         Person may be entitled under any agreement, pursuant to any vote of the
         Partners, as a matter of law or otherwise, and shall continue as to an
         Indemnitee who has ceased to serve in such capacity.

                  (f) The Partnership may purchase and maintain insurance on
         behalf of the Indemnitees, and such other Persons as the General
         Partner shall determine, 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.

                  (g) For purposes of this Section 6.4, the Partnership shall be
         deemed to have requested an Indemnitee to serve as fiduciary of an
         employee benefit plan whenever the performance by the Indemnitee of its
         duties to the Partnership also imposes duties on, or otherwise involves
         services by, the Indemnitee 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 6.4; 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 the Indemnitee 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.

                  (h) In no event may an Indemnitee subject the Limited Partners
         to personal liability by reason of the indemnification provisions set
         forth in this Agreement.

                  (i) An Indemnitee shall not be denied indemnification in whole
         or in part under this Section 6.4 because the Indemnitee had an
         interest in the transaction with respect to which the indemnification
         applies if the transaction was otherwise permitted by the terms of this
         Agreement.

                  (j) Any amendment, modification or repeal of this Section 6.4
         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 Limited Partners under this Section 6.4 as in
         effect immediately prior to such amendment, modification or repeal with
         respect to matters occurring, in whole or in part, prior to such
         amendment, modification or repeal, regardless of when claims relating
         to such matters may arise or be asserted. The provisions of this
         Section 6.4 are for the benefit of the Indemnitees, their heirs,
         successors, assigns and administrators and shall not be deemed to
         create any rights for the benefit of any other Persons.

                  (k) Notwithstanding any other provisions of this Agreement or
         the Act, any action of the General Partner on behalf of the Partnership
         or any decision of the General Partner to refrain from acting on behalf
         of the Partnership,




                                       21
<PAGE>

         undertaken in the good faith belief that such action or omission is
         necessary or advisable in order (i) to protect the ability of the
         Company to continue to qualify as a REIT, or (ii) to prevent the
         Company from incurring any taxes under Section 857 or Section 4981 of
         the Code, is expressly authorized under this Agreement and is deemed
         approved by all of the Limited Partners. Further, any provision of this
         Agreement that might jeopardize the Company's REIT status shall be (i)
         void and of no effect, or (ii) reformed, as necessary, to avoid the
         Company's loss of REIT status.

         Section 6.5 COMPENSATION OF GENERAL PARTNER; REIMBURSEMENT. The General
Partner, as such, shall not receive any compensation for services rendered to
the Partnership. Notwithstanding the preceding sentence, the General Partner
shall be entitled, in accordance with the provisions of Section 6.7 below, to
pay reasonable compensation to its Affiliates and other entities in which it may
be associated for services performed. 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 REIT Expenses.

         Section 6.6 RELIANCE ON ACT OF GENERAL PARTNER. No financial
institution or any other person, firm or corporation dealing with the General
Partner or the Partnership shall be required to ascertain whether the General
Partner is acting in accordance with this Agreement, but such financial
institution or such other person, firm or corporation shall be protected in
relying solely upon the assurance of and the execution of any instrument or
instruments by the General Partner.

         Section 6.7 OUTSIDE SERVICES; DEALINGS WITH AFFILIATES; OUTSIDE
ACTIVITIES.

                  (a) Notwithstanding any provision of this Article VI to the
         contrary, the General Partner may employ such agents, accountants,
         attorneys and others as it shall deem advisable, including its
         directors, officers, shareholders, and its Affiliates and entities with
         which the General Partner, any Limited Partner or their respective
         Affiliates may be associated, the Company's directors, officers and
         shareholders, and may pay them reasonable compensation from Partnership
         funds for services performed, which compensation shall be reasonably
         believed by the General Partner to be comparable to and competitive
         with fees charged by unrelated Persons who render comparable services
         which could reasonably be made available to the Partnership. The
         General Partner shall not be liable for the neglect, omission or
         wrongdoing of any such Person so long as it appointed such Person in
         good faith.

                  (b) The Partnership may lend or contribute to its Subsidiaries
         or other Persons in which it has an equity investment Partnership funds
         on terms and conditions established in the sole and absolute discretion
         of the General Partner. The foregoing authority shall not create any
         right or benefit in favor of any Subsidiary or any other Person.



                                       22
<PAGE>

                  (c) The Partnership may transfer assets to joint ventures,
         other partnerships, corporations or other business entities in which it
         is or thereby becomes a participant upon such terms and subject to such
         conditions as are consistent with this Agreement and applicable law.

                  (d) Except as expressly permitted by this Agreement, neither
         the General Partner nor any of its Affiliates nor any Limited Partner
         shall sell, transfer or convey any property to, or purchase any
         property from, the Partnership, directly or indirectly, except pursuant
         to transactions that are on terms that are fair and reasonable to the
         Partnership.

                  (e) Subject to the Articles of Organization and any agreements
         entered into by the General Partner or its Affiliates with the
         Partnership or a Subsidiary, any officer, director, employee, agent,
         trustee, Affiliate or shareholder of the General Partner shall be
         entitled to and may have business interests and engage in business
         activities in addition to those relating to the Partnership, including
         business interests and activities substantially similar or identical to
         those of the Partnership. Neither the Partnership nor any of the
         Limited Partners shall have any rights by virtue of this Agreement in
         any business ventures of such person.

                  (f) In the event the Company exercises its rights under its
         Articles of Incorporation to redeem REIT Common Shares, then the
         General Partner shall cause the Partnership to purchase from the
         Company a number of Common Partnership Units determined based on the
         application of the Conversion Factor on the same terms as those on
         which the Company redeemed such REIT Common Shares.

         Section 6.8 ADDITIONAL LOANS TO THE PARTNERSHIP. If additional funds
are required by the Partnership for any purpose relating to the business of the
Partnership or for any of its obligations, expenses, costs, or expenditures,
including operating deficits, the Partnership may borrow such funds as are
needed from time to time from any Person (including, without limitation, the
General Partner or any Affiliate of the General Partner; provided, however, that
the terms of any loan from the General Partner or any Affiliate of the General
Partner shall be substantially equivalent to the terms that could be obtained
from a third party on an arm's-length basis) on such terms as the General
Partner and such other Person may agree.

         Section 6.9 CONTRIBUTION OF ASSETS. The Company, directly or through
one or more of its Affiliates, shall contribute to the capital of the
Partnership from time to time each asset it owns from time to time during the
existence of the Partnership, but it is not required to so contribute:

                  (a) its interests in the General Partner or Ashford OP Limited
         Partner, LLC;

                  (b) its direct or indirect interest in any entity in a chain
         of entities of which the Company is the sole beneficial owner, so long
         as all of the assets or



                                       23
<PAGE>

         other ownership interests in the entity in that chain furthest removed
         from the General Partner are contributed directly or indirectly to the
         Partnership; or

                  (c) any equity interest in any entity of which the Company is
         the sole beneficial owner that is created or used solely by the General
         Partner in connection with any borrowing transaction in whole or in
         part for the benefit of the Partnership.

                                  ARTICLE VII
            RIGHTS, PROHIBITIONS AND REPRESENTATIONS WITH RESPECT TO
                                LIMITED PARTNERS

         Section 7.1 RIGHTS OF LIMITED PARTNERS.

                  (a) The Partnership may engage the Limited Partners or persons
         or firms associated with them for specific purposes and may otherwise
         deal with such Partners on terms and for compensation to be agreed upon
         by any such Partner and the Partnership; provided, however, that no
         Limited Partner shall be entitled to participate in the management or
         control of the business of the Partnership.

                  (b) Each Limited Partner shall be entitled to have the
         Partnership books kept at the principal place of business of the
         Partnership and at all times, during reasonable business hours and at
         such Partner's sole expense, shall be entitled to inspect and copy any
         of them and have on demand true and full information of all things
         affecting the Partnership and a formal accounting of Partnership
         affairs whenever circumstances render it just and reasonable; provided,
         however, for such period of time as the General Partner determines in
         its sole and absolute discretion to be reasonable, the General Partner
         may keep confidential from the Limited Partners any information that
         (i) the General Partner 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
         (ii) the Partnership or the General Partner is required by law or by
         agreements with unaffiliated third parties to keep confidential.

                  (c) No Limited Partner shall be liable for any debts,
         liabilities, contracts or obligations of the Partnership. A Limited
         Partner shall be liable to the Partnership only to make payments of its
         Capital Contribution, if any, as and when due hereunder. After its
         Capital Contribution is fully paid, no Limited Partner shall, except as
         otherwise required by the Act, be required to make any further Capital
         Contributions or other payments or lend any funds to the Partnership.



                                       24
<PAGE>

         Section 7.2 PROHIBITIONS WITH RESPECT TO THE LIMITED PARTNERS. No
Limited Partner shall have the right:

                  (a) To take part in the control or management of the
         Partnership business, to transact business for or on behalf of the
         Partnership or to sign for or to bind the Partnership, such powers
         being vested solely in the General Partner as set forth herein;

                  (b) To have such Partner's Capital Contributions repaid except
         to the extent provided in this Agreement;

                  (c) To require partition of Partnership property or to compel
         any sale or appraisement of Partnership assets or sale of a deceased
         Partner's interests therein, notwithstanding any provisions of law to
         the contrary; or

                  (d) To sell or assign all or any portion of such Partner's
         Limited Partnership Interest in the Partnership or to constitute the
         vendee or assignee thereunder a Substitute Limited Partner, except as
         provided in Article IX hereof.

         Section 7.3 OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER
OR AFFILIATE. No Limited Partner shall at any time, either directly or
indirectly, own any shares or other interest in the General Partner or in any
Affiliate thereof if such ownership by itself or in conjunction with other
shares or other interests owned by other Limited Partners would, in the opinion
of counsel for the Partnership, jeopardize the classification of the Partnership
as a partnership or the Company as a REIT for federal income tax purposes. The
General Partner shall be entitled to make such reasonable inquiry of the Limited
Partners as is required to establish compliance by the Limited Partners with the
provisions of this Section 7.3 and the Limited Partners shall promptly and fully
respond to such inquiries.

         Section 7.4 REDEMPTION RIGHT.

                  (a) Subject to Section 7.4(b) and Section 7.4(c), and the
         provisions of any agreements between the Partnership and one or more
         Limited Partners, each Limited Partner, other than Ashford OP Limited
         Partner, LLC, shall have the right (the "Redemption Right") to require
         the Partnership to redeem on a Specified Redemption Date all or a
         portion of the Common Partnership Units held by such Limited Partner at
         a redemption price equal to and in the form of the Cash Amount to be
         paid by the Partnership. The Partnership shall have up to one (1) year
         (the "Payout Period") following exercise of a Redemption Right to pay
         the Cash Amount to the Limited Partner who is exercising the redemption
         right (the "Redeeming Partner"). From and after the Specified
         Redemption Date, the Cash Amount (or portion thereof) due and payable
         to a Redeeming Partner with respect to such Redeeming Partner's
         exercise of its Redemption Right shall bear interest at the rate equal
         to the lower of (i) the Company's annual dividend rate on REIT Common
         Shares for the prior twelve (12) month period, or (ii) eight percent
         (8%) per annum, until the Cash Amount (or portion thereof) shall be
         paid in full by the Partnership. The Redemption Right shall be
         exercised pursuant to a Notice of Redemption delivered to the
         Partnership (with a copy to the General Partner) by the Redeeming
         Partner. A Limited Partner may not exercise the Redemption




                                       25
<PAGE>

         Right for less than one thousand (1,000) Common Partnership Units or,
         if such Limited Partner holds less than one thousand (1,000) Common
         Partnership Units, all of the Common Partnership Units held by such
         Partner. Neither the Redeeming Partner nor any permitted or purported
         assignee of any Limited Partner shall have any right with respect to
         any Common Partnership Units so redeemed to receive any distributions
         paid after the Specified Redemption Date. Neither the Redeeming Partner
         nor any permitted or purported assignee of any Limited Partner shall
         have any right, with respect to any Common Partnership Units so
         redeemed, to receive any distributions paid after the Specified
         Redemption Date. Each Redeeming Partner agrees to provide such
         representations and related indemnities regarding good and unencumbered
         title, and to execute such documents, as the General Partner may
         reasonably require in connection with any redemption.

                  (b) Notwithstanding the provisions of Section 7.4(a), in the
         event a Limited Partner elects to exercise the Redemption Right, the
         General Partner at the direction of the Company, directly or indirectly
         through one or more Affiliates, may, in its sole and absolute
         discretion, elect to assume directly and satisfy a Redemption Right by
         paying to the Redeeming Partner either (i) the Cash Amount, as provided
         for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as
         elected by the General Partner, as directed by the Company (in its sole
         and absolute discretion), on the Specified Redemption Date, provided
         that the Company may defer payment of the Cash Amount until the end of
         the Payout Period described in Section 7.4(a) (in which case the Cash
         Amount shall bear interest as described in Section 7.4(a)), and
         provided, further, that the Company may, if it has elected so to defer
         payment of the Cash Amount, further elect at any time before the end of
         the Payout Period to pay all or any portion of the unpaid Cash Amount
         with REIT Common Shares having a Value equal to such portion of the
         Cash Amount plus any accrued but unpaid interest thereon. On any such
         election, the Company, directly or indirectly through one or more
         Affiliates, shall acquire the Common Partnership Units offered for
         redemption by the Redeeming Partner and shall be treated for all
         purposes of this Agreement as the owner of such Common Partnership
         Units. Unless the General Partner, as directed by the Company (in its
         sole and absolute discretion) shall exercise its right to assume
         directly and satisfy the Redemption Right, neither the General Partner
         nor the Company itself shall have any obligation to the Redeeming
         Partner or to the Partnership with respect to the Redeeming Partner's
         exercise of the Redemption Right. In the event the General Partner, as
         directed by the Company shall exercise its right to satisfy the
         Redemption Right in the manner described in the first sentence of this
         Section 7.4(b), the Partnership shall have no obligation to pay any
         amount to the Redeeming Partner with respect to such Redeeming
         Partner's exercise of the Redemption Right, and each of the Redeeming
         Partner, the Partnership, and the Company shall treat the transaction
         between the Company and the Redeeming Partner for federal income tax
         purposes as a sale of the Redeeming Partner's Common Partnership Units
         to the Company or its Affiliates. Each Redeeming Partner agrees to
         provide such representations and related indemnities regarding good
         title, and to execute such documents, as the Company



                                       26
<PAGE>

         may reasonably require in connection with the issuance of REIT Common
         Shares upon exercise of the Redemption Right. If the Redemption Right
         is satisfied by the delivery of REIT Common Shares, the Redeeming
         Partner shall be deemed to become a holder of REIT Common Shares as of
         the close of business on the Specified Redemption Date or on such later
         date permitted by this Section 7.4(b) that the Company delivers REIT
         Common Shares in satisfaction of a deferred payment of the Cash Amount,
         as the case may be.

Notwithstanding anything to the contrary in Section 7.4(a) or this Section
7.4(b), and in addition to the right of the Company to deliver REIT Common
Shares in satisfaction of a deferred payment of the Cash Amount, as provided
above, should the General Partner, as directed by the Company elect to satisfy a
Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount,
and it is necessary to obtain Company shareholder approval in order for it to
issue sufficient REIT Common Shares to satisfy such Redemption Right in full,
then the Company shall have one hundred twenty (120) days beyond the Specified
Redemption Date in which to obtain such shareholder approval and to pay the REIT
Common Shares Amount, and the redemption date shall be required to occur by the
earliest of: (i) ten (10) days after shareholder approval of the issuance of the
REIT Common Shares has been obtained, if it is obtained; (ii) the date on which
the General Partner, as directed by the Company elects to pay such Redeeming
Partner the Cash Amount; or (iii) one hundred and thirty (130) days after such
Common Partnership Units are presented for redemption. If such shareholder
approval is not obtained, the Partnership shall pay to the Redeeming Partner the
Cash Amount no later than the end of what the Payout Period would have been had
the General Partner, as directed by the Company not elected to pay the REIT
Common Share Amount upon the redemption, together with interest on such Cash
Amount as specified in Section 7.4(a) hereof.

                  (c) Notwithstanding the provisions of Section 7.4(a) and
         Section 7.4(b), a Limited Partner shall not be entitled to receive REIT
         Common Shares if the delivery of REIT Common Shares to such Partner on
         the Specified Redemption Date (or such later date permitted by Section
         7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would
         be prohibited under the Articles of Incorporation of the Company, as
         amended or restated from time to time. Without limiting the effect of
         the preceding sentence, no Person shall be permitted to receive REIT
         Common Shares if as a result of, and after giving effect to, such
         exercise any Person would Beneficially Own (as defined in the Articles
         of Incorporation of the Company, as amended or restated from time to
         time) more than 9.8% of the total number of issued and outstanding REIT
         Common Shares, unless waived by the board of directors of the Company
         in its sole discretion. To the extent any attempted redemption for REIT
         Common Shares would be a violation of this Section 7.4(c), it shall be
         null and void ab initio. The Cash Amount shall be paid in such
         instances, in accordance with the terms set forth in Section 7.4(a) or
         7.4(b).

                  (d) Each Limited Partner covenants and agrees with the General
         Partner that all Common Partnership Units delivered for redemption
         shall be




                                       27
<PAGE>

         delivered to the Partnership, the Company or its Affiliates, as the
         case may be, free and clear of all liens and, notwithstanding anything
         herein contained to the contrary, neither the General Partner, the
         Company (nor any of its Affiliates) nor the Partnership shall be under
         any obligation to acquire Common Partnership Units which are or may be
         subject to any liens. Each Limited Partner further agrees that, in the
         event any state or local property transfer tax is payable as a result
         of the transfer of its Common Partnership Units to the General Partner,
         Partnership or the Company, such Limited Partner shall assume and pay
         such transfer tax.

                  (e) REIT Common Shares issued pursuant to Section 7.4(b) may
         contain such legends regarding restrictions on transfer as the Company
         in good faith determines to be necessary or advisable in order to (1)
         comply with restrictions on transfer under the Securities Act and
         applicable state securities laws and (2) protect the ability of the
         Company to continue to qualify as a REIT.

         Section 7.5 WARRANTIES AND REPRESENTATIONS OF THE LIMITED PARTNERS.
Each Limited Partner contributing Initial Contributed Assets hereby warrants and
represents to and for the benefit of the General Partner and the Partnership
that, as of August 29, 2003 such Limited Partner owned good, valid and
marketable title to the ownership interests in the Initial Contributed Assets
being contributed to the capital of the Partnership by such Limited Partner (the
"Ownership Interests") and that such Ownership Interests were free and clear of
all mortgages, pledges, liens, security interests, encumbrances and restrictions
of any nature whatsoever. Each Limited Partner further warrants and represents
to and for the benefit of the General Partner and the Partnership that such
Limited Partner had all necessary power and authority to transfer the Ownership
Interests to the Partnership without the consent or authorization of, or notice
to, any third party, except those third parties from whom such consents or
authorizations were obtained.

         Section 7.6 INDEMNIFICATION BY LIMITED PARTNERS. Each Limited Partner
contributing Initial Contributed Assets hereby agrees to indemnify the General
Partner and the Partnership and hold the General Partner, its officers and
directors and the Partnership and its partners and each of their respective
representatives, successors and assigns harmless from and against any and all
claims, demands, losses, liabilities, damages and expenses (including reasonable
attorneys' fees) arising out of or in connection with (i) the inaccuracy of the
warranties and representations made by such Limited Partner under Section 7.5
above, or (ii) the ownership of the Ownership Interests by such Limited Partner
and any activities, obligations or liabilities of, or related to, the Initial
Contributed Assets to which such Ownership Interest relates for all periods
prior to the date of this Agreement.

         Section 7.7 NOTICE OF SALE OR REFINANCING. The General Partner shall
notify the Limited Partners no less than thirty (30) days prior to any sale,
refinancing, reduction (other than scheduled periodic amortization of principal)
of debt or other event that will reduce the amount of any nonrecourse
liabilities of the Partnership that a Limited Partner may include in the tax
basis of his or its Partnership Interests.



                                       28
<PAGE>

         Section 7.8 BASIS ANALYSIS AND LIMITED PARTNER GUARANTEES.

                  (a) Upon the request of any Limited Partner but subject to the
         General Partner's agreement, which may be withheld in the General
         Partner's sole discretion, the General Partner may, prior to the end of
         each calendar year, beginning in 2003, cause accountants to prepare and
         provide to the Limited Partners a study analyzing each refinancing,
         reduction (other than scheduled periodic amortization of principal) of
         debt or other event that occurred during that year that reduced the
         amount of any nonrecourse liabilities of the Partnership that a Limited
         Partner may include in the tax basis of its Partnership Interests.

                  (b) Upon the request of the General Partner, or upon a Limited
         Partner's own election but subject to the General Partner's agreement,
         which may be withheld in the General Partner's sole discretion, a
         Limited Partner (the "Initiating Limited Partner") from time to time,
         may, but shall not be required to, guarantee or otherwise provide
         credit support for Partnership indebtedness as such Limited Partner may
         elect; provided, however, that the Limited Partner shall be entitled to
         take such action only if the General Partner determines that any such
         action would not have a material adverse effect on the tax position of
         the General Partner. All Partners are entitled to notice of any such
         guarantee or credit support, and shall have the right to provide
         guarantees or credit support on the same terms and conditions as the
         Initiating Limited Partner does, and all Limited Partners interested in
         providing such guarantee or credit support shall cooperate with the
         General Partner and each other in considering any guarantee or credit
         support proposal, and the General Partner will cooperate in permitting
         or obtaining any consents for such guarantees or credit support.

                                  ARTICLE VIII
                     DISTRIBUTIONS AND PAYMENTS TO PARTNERS

         Section 8.1 DISTRIBUTIONS OF CASH FLOW.

                  (a) The General Partner shall cause the Partnership to
         distribute on a quarterly basis such portion of the Cash Flow of the
         Partnership as the General Partner shall determine in its sole
         discretion. Except as provided in Section 10.4, such distributions
         shall be made to the Partners who are Partners on the applicable record
         date in accordance with their respective Common Percentage Interests.
         In the event the Partnership issues additional Partnership Units
         pursuant to the provisions of this Agreement, the General Partner is
         hereby authorized to make such revisions to this Article 8 as it
         determines are necessary or desirable to reflect the issuance of such
         additional Partnership units, including without limitation, making
         preferential distributions to certain classes of Partnership Units.

                  (b) In no event may a Partner receive a distribution of Cash
         Flow with respect to a Partnership Unit if such Partner is entitled to
         receive a dividend out of



                                       29
<PAGE>

         the Company's share of such Cash Flow with respect to a REIT Share for
         which all or part of such Partnership Unit has been exchanged.

         Section 8.2 REIT DISTRIBUTION REQUIREMENTS. Unless the General Partner
determines that such a distribution would not be in the best interests of the
Partnership, the General Partner shall cause the Partnership to distribute
sufficient amounts to enable the Company (i) to meet its distribution
requirement for qualification as a REIT as set forth in Section 857(a)(1) of the
Code, and (ii) to avoid the excise tax imposed by Section 4981 of the Code.

         Section 8.3 NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner shall be
entitled to demand property other than cash in connection with any distribution
by the Partnership.

         Section 8.4 DISPOSITION PROCEEDS. Disposition Proceeds (less reasonable
reserves set aside by the General Partner for reasonably anticipated expenses or
needs of the Partnership) shall be distributed to the holders of Common
Partnership Interests in accordance with their respective Common Percentage
Interests in the Partnership.

         Section 8.5 WITHDRAWALS. No Partner shall be entitled to make
withdrawals from its Capital Account, or withdraw as a Limited Partner, except
as expressly provided herein.

                                   ARTICLE IX
                             TRANSFERS OF INTERESTS

         Section 9.1 GENERAL PARTNER.

                  (a) Other than to an Affiliate of the General Partner, the
         General Partner may not transfer any of its General Partnership
         Interest or Limited Partnership Interests or withdraw as General
         Partner except as provided in Section 9.1(b) or in connection with a
         transaction described in Section 9.1(c).

                  (b) Except as otherwise provided in Section 6.7 or Section
         9.1(c), the General Partner, the Company or their Subsidiaries shall
         not engage in any merger, consolidation or other combination with or
         into another Person or in any sale of all or substantially all of its
         assets, or any reclassification, or recapitalization or change of
         outstanding REIT Common Shares (other than a change in par value, or
         from par value to no par value, or as a result of a subdivision or
         combination as described in the definition of "Conversion Factor")
         (each of the foregoing being herein referred to as a "Transaction"),
         unless the Transaction also includes a merger of the Partnership or
         sale of substantially all of the assets of the Partnership or other
         transaction as a result of which all Limited Partners will receive for
         each Common Partnership Unit an amount of cash, securities or other
         property equal to the product of the Conversion Factor and the greatest
         amount of cash, securities or other property paid to a holder of one
         REIT Common Share in consideration of one REIT Common Share as a result
         of the




                                       30
<PAGE>

         Transaction; provided, however, that if, in connection with the
         Transaction, a purchase, tender or exchange offer shall have been made
         to and accepted by the holders of more than fifty percent (50%) of the
         outstanding REIT Common Shares, the holders of Common Partnership Units
         shall receive the greatest amount of cash, securities or other property
         which a Limited Partner would have received had it exercised the
         Redemption Right and the General Partner at the direction of the
         Company had exercised its election to satisfy the Redemption Right by
         the issuance of REIT Common Shares immediately prior to the expiration
         of such purchase, tender or exchange offer.

                  (c) Notwithstanding Section 9.1(b), the General Partner, the
         Company or their Subsidiaries may merge into or consolidate with
         another entity if immediately after such merger or consolidation (i)
         substantially all of the assets of the successor or surviving entity
         (the "Surviving Partner"), other than Partnership Units held by the
         General Partner, the Company or their Subsidiaries, are contributed to
         the Partnership as a Capital Contribution in exchange for Partnership
         Units with a fair market value equal to the value of the assets so
         contributed as determined by the Surviving Partner in good faith and
         (ii) the Surviving Partner or one of its Subsidiaries expressly agrees
         to assume all obligations of the General Partner hereunder. Upon such
         contribution and assumption, the Surviving Partner shall have the right
         and duty to amend this Agreement as set forth in this Section 9.1(c).
         The Surviving Partner shall in good faith arrive at a new method for
         the calculation of the Cash Amount and Conversion Factor for a Common
         Partnership Unit after any such merger or consolidation so as to
         approximate the existing method for such calculation as closely as
         reasonably possible. Such calculation shall take into account, among
         other things, the kind and amount of securities, cash and other
         property that was receivable upon such merger or consolidation by a
         holder of REIT Shares or options, warrants or other rights relating
         thereto, and which a holder of Common Partnership Units could have
         acquired had such Common Partnership Units been redeemed immediately
         prior to such merger or consolidation. Such amendment to this Agreement
         shall provide for adjustment to such method of calculation, which shall
         be as nearly equivalent as may be practicable to the adjustments
         provided for with respect to the Conversion Factor. The above
         provisions of this Section 9.1(c) shall similarly apply to successive
         mergers or consolidations permitted hereunder.

         Section 9.2 ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER. A
Person shall be admitted as a Substitute or Additional General Partner of the
Partnership only if the transaction giving rise to such substitution or
admission is otherwise permitted under this Agreement and the following terms
and conditions are satisfied:

                  (a) the Person to be admitted as a Substitute or Additional
         General Partner shall have accepted and agreed to be bound by all the
         terms and provisions of this Agreement by executing a counterpart
         thereof and such other documents or instruments as may be required or
         appropriate in order to effect the admission of such Person as a
         General Partner, and a certificate evidencing the




                                       31
<PAGE>

         admission of such Person as a General Partner shall have been filed for
         recordation and all other actions required by the Act in connection
         with such admission shall have been performed;

                  (b) if the Person to be admitted as a Substitute or Additional
         General Partner is a corporation or a partnership, it shall have
         provided the Partnership with evidence satisfactory to counsel for the
         Partnership of such Person's authority to become a General Partner and
         to be bound by the terms and provisions of this Agreement; and

                  (c) counsel for the Partnership shall have rendered an opinion
         (relying on such opinions from counsel of the state or any other
         jurisdiction as may be necessary) that the admission of the Person to
         be admitted as a Substitute or Additional General Partner is in
         conformity with the Act and that none of the actions taken in
         connection with the admission of such Person as a Substitute or
         Additional General Partner will cause the termination of the
         Partnership under Section 708 of the Code, or will cause it to be
         classified as other than a partnership for federal income tax purposes,
         or will result in the loss of any Limited Partner's limited liability
         status.

         Section 9.3 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A
GENERAL PARTNER.

                  (a) Upon the occurrence of an Event of Bankruptcy as to a
         General Partner (and its automatic removal pursuant to Section 9.4(a)
         hereof) or the withdrawal or dissolution of a General Partner (except
         that, if a General Partner is on the date of such occurrence a
         partnership, the withdrawal, death, dissolution, Event of Bankruptcy as
         to or removal of a partner in such partnership shall be deemed not to
         be a dissolution of such General Partner if the business of such
         General Partner is continued within ninety (90) days by the remaining
         general partners or all remaining members of such partnership), the
         Partnership shall be dissolved and terminated unless the Partnership is
         continued pursuant to Section 9.3(b).

                  (b) Following the occurrence of an Event of Bankruptcy as to a
         General Partner or the withdrawal or dissolution of a General Partner
         (except that, if a General Partner is on the date of such occurrence a
         partnership, the withdrawal, death, dissolution, Event of Bankruptcy as
         to or removal of a partner in such partnership shall be deemed not be a
         dissolution of such General Partner if the business of such General
         Partner is continued within ninety (90) days by all remaining general
         partners or all remaining members of such partnership), persons holding
         at least a majority of the Limited Partnership interests, within ninety
         (90) days after such occurrence, may elect to continue the business of
         the Partnership for the balance of the term specified in Section 3.2 by
         selecting, subject to Section 9.2 and any other applicable provisions
         of this Agreement, a Substitute General Partner by majority consent of
         the Limited Partners. If the Limited Partners elect to reconstitute the
         Partnership and admit a Substitute



                                       32
<PAGE>

         General Partner, the relationship between the Partners and any Person
         who has acquired an interest of a Partner in the Partnership shall be
         governed by this Agreement.

         Section 9.4 REMOVAL OF A GENERAL PARTNER.

                  (a) Upon the occurrence of an Event of Bankruptcy as to, or
         the dissolution of, a General Partner, such General Partner shall be
         deemed to be removed automatically; provided, however, that if a
         General Partner is on the date of such occurrence a partnership, the
         withdrawal, death, dissolution, Event of Bankruptcy as to or removal of
         a partner in such partnership shall be deemed not to be a dissolution
         of the General Partner if the business of such General Partner is
         continued within ninety (90) days by the remaining general partners or
         all remaining members of such Partnership.

                  (b) If a General Partner has been removed pursuant to this
         Section 9.4(a) and the Partnership is not continued pursuant to Section
         9.3(b), the partnership shall be dissolved.

                  (c) A General Partner may not be removed by the Limited
         Partners with or without cause.

         Section 9.5 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS.

                  (a) Except as otherwise provided in this Article IX, no
         Limited Partner may offer, sell, assign, hypothecate, pledge or
         otherwise transfer its Limited Partnership Interest, in whole or in
         part, whether voluntarily or by operation of law or at judicial sale or
         otherwise (collectively, a "Transfer"), without the written consent of
         the General Partner, which consent may be withheld in the sole and
         absolute discretion of the General Partner; provided, however, the
         consent required by this Section 9.5(a) shall not be required in the
         event of a Transfer on or after the first anniversary of the date of
         this Agreement by a Limited Partner that was a limited partner as of
         the date of this Agreement to any of its partners. The General Partner
         may require, as a condition of any Transfer, that the transferor assume
         all costs incurred by the Partnership in connection therewith.

                  (b) No Limited Partner may effect a Transfer of its Limited
         Partnership Interest if, (i) in the opinion of legal counsel for the
         Partnership, such proposed Transfer would require the registration of
         the Limited Partnership Interest under the Securities Act of 1933, as
         amended, or would otherwise violate any applicable federal or state
         securities or "Blue Sky" law (including investment suitability
         standards) or (ii) the assignee is not an Accredited Investor within
         the meaning of Rule 501 of the Securities Act of 1933, as amended.

                  (c) No Transfer by a Limited Partner of its Partnership Units
         may be made to any Person if (i) in the opinion of legal counsel for
         the Partnership, the Transfer would result in the Partnership's being
         treated as an association taxable




                                       33
<PAGE>

         as a corporation (other than a qualified REIT subsidiary within the
         meaning of Section 856(i) of the Code), (ii) such transfer 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, (iii) the Transfer would create a risk that
         the Company would not be taxed as a REIT for federal income tax
         purposes or (iv) assuming the Partnership Units subject to the Transfer
         were redeemed for REIT Shares, the redemption would create a risk that
         the Company would not be taxed as a REIT for federal income tax
         purposes.

                  (d) Section 9.5(a) shall not prevent any donative Transfer by
         an individual Limited Partner to his immediate family members or any
         trust in which the individual or his immediate family members own,
         collectively, one hundred percent (100%) of the beneficial interests,
         provided that the transferor assumes all costs of the Partnership in
         connection therewith and any such transferee shall not have the rights
         of a Substitute Limited Partner (unless and until admitted as a
         Substitute Limited Partner pursuant to this Section 9.5 and Section 9.6
         of this Agreement).

                  (e) Any Transfer in contravention of any of the provisions of
         this Article IX shall be void and ineffectual and shall not be binding
         upon, or recognized by, the Partnership.

         Section 9.6 ADMISSION OF SUBSTITUTE LIMITED PARTNER.

                  (a) Subject to the other provisions of this Article IX
         (including, without limitation, the provisions of Section 9.5(a)
         regarding consent of the General Partner), an assignee of the Limited
         Partnership Interest of a Limited Partner (including, without
         limitation, any purchaser, transferee, donee, or other recipient of any
         disposition of such Limited Partnership Interest) shall be deemed
         admitted as a Limited Partner of the Partnership only upon the
         satisfactory completion of the following:

                           (i) the assignee has obtained the prior written
                  consent of the General Partner as to its admission as a
                  Substitute Limited Partner, which consent may be given or
                  denied in the exercise of the General Partner's sole and
                  absolute discretion; provided, however, that this Section
                  9.6(a)(i) shall not apply in the case of assignee resulting
                  from a Transfer by a Limited Partner that was a partner as of
                  the date of this Agreement to any of its partners;

                           (ii) the assignee shall have accepted and agreed to
                  be bound by the terms and provisions of this Agreement by
                  executing a counterpart or an amendment thereof, including a
                  revised Exhibit A, and such other documents or instruments as
                  the General Partner may require in order to effect the
                  admission of such Person as a Limited Partner;



                                       34
<PAGE>

                           (iii) to the extent required, an amended certificate
                  of limited partnership evidencing the admission of such Person
                  as a Limited Partner shall have been signed, acknowledged and
                  filed for record in accordance with the Act;

                           (iv) the assignee shall have delivered a letter
                  containing the representation and warranty set forth in
                  Section 9.12 and the agreement set forth in Section 9.12;

                           (v) if the assignee is a corporation, partnership or
                  trust, the assignee shall have provided the General Partner
                  with evidence satisfactory to counsel for the Partnership of
                  the assignee's authority to become a Limited Partner under the
                  terms and provisions of this Agreement;

                           (vi) the assignee shall have executed a power of
                  attorney containing the terms and provisions set forth in
                  Article XII; and

                           (vii) the assignee shall have paid all reasonable
                  legal fees of the Partnership and the General Partner and all
                  filing and publication costs incurred in connection with its
                  substitution as a Limited Partner.

                  (b) For the purpose of allocating profits and losses and
         distributing cash received by the Partnership, a Substitute Limited
         Partner shall be treated as having become, and appearing in the records
         of the Partnership as, a Partner upon the filing of the certificate
         described in Section 9.6(a)(ii) or, if no such filing is required, the
         later of the date specified in the transfer documents, or the date on
         which the General Partner has received all necessary instruments of
         transfer and substitution.

                  (c) The General Partner shall as promptly as practicable take
         all action required to effectuate the admission of the Person seeking
         to become a Substitute Limited Partner, including preparing the
         documentation required by this Section and making all official filings
         and publications.

         Section 9.7 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.

                  (a) Subject to the provisions of Sections 9.5 and 9.6 hereof,
         except as required by operation of law, the Partnership shall not be
         obligated for any purposes whatsoever to recognize the assignment by
         any Limited Partner of his Partnership Interest until the Partnership
         has received notice thereof. If the General Partner, in its sole and
         absolute discretion, does not consent (subject to the proviso in
         Section 9.6(a)(i)) to the admission of any transferee of any
         Partnership Interest as a Substitute Limited Partner in connection with
         a Transfer permitted by Section 9.5, such transferee shall be
         considered an assignee for the purposes of this Agreement. An assignee
         shall be entitled to all the rights of an assignee of a limited
         partnership interest under the Act, including the right to receive
         distributions attributable to the Partnership Units assigned, but such




                                       35
<PAGE>

         assignee shall not be entitled to effect a consent or vote or effect a
         Redemption Right with respect to such Partnership Units on any matter
         presented to the Limited Partners for approval (such right to consent
         or vote or effect a Redemption Right, to the extent provided in this
         Agreement or under the Act, fully remaining with the transferor Limited
         Partner).

                  (b) Any Person who is the assignee of all or any portion of a
         Limited Partner's Limited Partnership Interest, but does not become a
         Substitute Limited Partner and desires to make a further assignment of
         such Limited Partnership Interest, shall be subject to all of the
         provisions of this Article IX to the same extent and in the same manner
         as any Limited Partner desiring to make an assignment of its Limited
         Partnership Interest.

         Section 9.8 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF
A LIMITED PARTNER. The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death of a Limited Partner or a final adjudication that a Limited
Partner is incompetent (which term shall include, but not be limited to,
insanity) shall not cause the termination or dissolution of the Partnership, and
the business of the Partnership shall continue. If an order for relief in a
bankruptcy proceeding is entered against an individual Limited Partner, the
trustee or receiver of his estate or, if he dies, his executor, administrator or
trustee, or, if he is finally adjudicated incompetent, his committee, guardian
or conservator, shall have the rights of such Limited Partner for the purpose of
settling or managing his estate property and such power as the bankrupt,
deceased or incompetent Limited Partner possessed to assign all or any part of
his Partnership Interest and to join with the assignee in satisfying conditions
precedent to the admission of the assignee as a Substitute Limited Partner.

         Section 9.9 JOINT OWNERSHIP OF INTERESTS. A Partnership Interest may be
acquired by two (2) individuals as joint tenants with right of survivorship (but
not as tenants in common), provided that such individuals either are married or
are related and share the same home as tenants in common. The written consent or
vote of both owners of any such jointly held Partnership Interest shall be
required to constitute the action of the owners of such Partnership Interest;
provided, however, that the written consent of only one (1) joint owner will be
required if the Partnership has been provided with evidence satisfactory to
counsel for the Partnership that the actions of a single joint owner can bind
both owners under the applicable laws of the state of residence of such joint
owners. Upon the death of one (1) owner of a Partnership Interest held in a
joint tenancy with a right of survivorship, the Partnership Interest shall
become owned solely by the survivor as a Limited Partner and not as an assignee.
The Partnership need not recognize the death of one (1) of the owners of a
jointly held Partnership Interest until it shall have received notice of such
death. Upon notice to the General Partner from either owner that the tenancy
satisfying the first sentence of this Section 9.9 has been destroyed, the
General Partner shall cause the Partnership Interest to be divided into two (2)
equal Partnership Interests, which shall thereafter be owned separately by each
of the former owners.



                                       36
<PAGE>

         Section 9.10 TRANSFEREES. Any Partnership Interests owned by the
Partners and transferred pursuant to this Article IX shall be and remain subject
to all of the provisions of this Agreement.

         Section 9.11 ABSOLUTE RESTRICTION. Notwithstanding any provision of
this Agreement to the contrary, the sale or exchange of any interest in the
Partnership will not be permitted if the interest sought to be sold or
exchanged, when added to the total of all other interests sold or exchanged
within the period of twelve (12) consecutive months ending with the proposed
date of the sale or exchange, would result in the termination of the Partnership
under Section 708 of the Code, if such termination would materially and
adversely affect the Partnership or any Partner.

         Section 9.12 INVESTMENT REPRESENTATION. Each Limited Partner hereby
represents and warrants to the General Partner and to the Partnership that the
acquisition of his Partnership Interest is made as a principal for his account
for investment purposes only and not with a view to the resale or distribution
of such Partnership Interest. Each Limited Partner agrees that he will not sell,
assign or otherwise transfer his Partnership Interest or any fraction thereof,
whether voluntarily or by operation of law or at judicial sale or otherwise, to
any Person who does not similarly represent and warrant and similarly agree not
to sell, assign or transfer such Partnership Interest or fraction thereof to any
Person who does not similarly represent, warrant and agree.

                                   ARTICLE X
                         TERMINATION OF THE PARTNERSHIP

         Section 10.1 TERMINATION. The Partnership shall be dissolved upon (i)
an Event of Bankruptcy as to the General Partner or the dissolution or
withdrawal of the General Partner (unless within ninety (90) days thereafter
Limited Partners holding more than fifty percent (50%) of the Limited
Partnership Interests in the Partnership elect to continue the Partnership and
to elect one or more persons to serve as the General Partner or General Partners
of the Partnership), (ii) ninety (90) days following the sale of all or
substantially all of the Partnership's assets (provided that if the Partnership
receives an installment obligation as consideration for such sale or other
disposition, the Partnership shall continue, unless sooner dissolved under the
provisions of this Agreement, until such time as such obligation is paid in
full), (iii) the expiration of the term specified in Section 3.2, (iv) the
redemption of all Limited Partnership Interests (other than any of such
interests held by the General Partner or Ashford OP Limited Partner, LLC), or
(v) the election by the General Partner (but only in accordance with and as
permitted by applicable law) that the Partnership should be dissolved. Upon
dissolution of the Partnership (unless the business of the Partnership is
continued as set forth above), the General Partner (or its trustee, receiver,
successor or legal representative) shall proceed with the winding up of the
Partnership, and its assets shall be applied and distributed as herein provided.

         Section 10.2 PAYMENT OF DEBTS. The assets shall first be applied to the
payment of the liabilities of the Partnership (other than any loans or advances
that may



                                       37
<PAGE>

have been made by Partners to the Partnership) and the expenses of liquidation.
A reasonable time shall be allowed for the orderly liquidation of the assets of
the Partnership and the discharge of liabilities to creditors so as to enable
the General Partner to minimize any losses resulting from liquidation.

         Section 10.3 DEBTS TO PARTNERS. The remaining assets shall next be
applied to the repayment of any loans made by any Partner to the Partnership.

         Section 10.4 REMAINING DISTRIBUTION. The remaining assets shall then be
distributed to the Partners in accordance with their positive Capital Account
balances, determined after taking into account all Capital Account adjustments
for all prior periods and the Partnership taxable year during which the
liquidation occurs.

         Section 10.5 RESERVE. Notwithstanding the provisions of Sections 10.3
and 10.4, the General Partner may retain such amount as it deems necessary as a
reserve for any contingent liabilities or obligations of the Partnership, which
reserve, after the passage of a reasonable period of time, shall be distributed
pursuant to the provisions of this Article X.

         Section 10.6 FINAL ACCOUNTING. Each of the Partners shall be furnished
with a statement examined by the Partnership's independent accountants, which
shall set forth the assets and liabilities of the Partnership as of the date of
the complete liquidation. Upon the compliance by the General Partner with the
foregoing distribution plan, the Limited Partners shall cease to be such, and
the General Partner, as the sole remaining Partner of the Partnership, shall
execute and cause to be filed a Certificate of Cancellation of the Partnership
and any and all other documents necessary with respect to termination and
cancellation of the Partnership.

                                   ARTICLE XI
                                   AMENDMENTS

         Section 11.1 AUTHORITY TO AMEND.

                  (a) This Agreement may be amended by the General Partner
         without the approval of any other Partner if such amendment (i) is
         solely for the purpose of clarification or is of an inconsequential
         nature and (ii) does not change the substance hereof and the
         Partnership has obtained an opinion of counsel to that effect.

                  (b) This Agreement may be amended by the General Partner
         without the approval of any other Partner if such amendment is to
         reflect the admission, substitution or withdrawal of Limited Partners;
         to reflect the issuance of additional Partnership Interests or to amend
         the calculation of the Cash Amount and the Conversion Factor pursuant
         to a transaction described in Section 9.1(c).

                  (c) This Agreement may be amended by the General Partner
         without the approval of any other Partner if such amendment is, in the
         opinion of counsel for the Partnership, necessary or appropriate to
         satisfy requirements of the Code




                                       38
<PAGE>

         with respect to partnerships or REITs or of any federal or state
         securities laws or regulations. Any amendment made pursuant to this
         Section 11.1(c) may be made effective as of the date of this Agreement.

                  (d) Notwithstanding any contrary provision of this Agreement,
         any amendment to this Agreement or other act which would (i) adversely
         affect the limited liabilities of the Limited Partners, (ii) impose on
         the Limited Partners any obligation to make additional Capital
         Contributions to the Partnership, (iii) change the method of allocation
         of profit and loss as provided in Article V or the distribution
         provisions of Articles VIII and X hereof, (iv) seek to impose personal
         liability on the Limited Partners, or (v) affect the operation of the
         Conversion Factor of the Redemption Right shall require the consent and
         approval of Limited Partners holding more than sixty-six and two-thirds
         percent (66 2/3%) of the Common Percentage Interests of the Limited
         Partners.

                  (e) Except as otherwise specifically provided in this Section
         11.1, amendments to this Agreement shall require the approval of the
         General Partner and Limited Partners holding more than fifty percent
         (50%) of the Common Percentage Interests of the Limited Partners.

         Section 11.2 NOTICE OF AMENDMENTS. A copy of any amendment to be
approved by the Partners pursuant to Sections 11.1(d) or 11.1(e) shall be mailed
in advance to such Partners. Partners shall be notified as to the substance of
any amendment pursuant to Sections 11.1(a), (b) or (c), and upon request shall
be furnished a copy thereof.

                                  ARTICLE XII
                                POWER OF ATTORNEY

         Section 12.1 POWER. Each of the Limited Partners irrevocably
constitutes and appoints the General Partner as such Limited Partner's true and
lawful attorney in such Limited Partner's name, place and stead to make,
execute, swear to, acknowledge, deliver and file:

                  (a) Any certificates or other instruments which may be
         required to be filed by the Partnership under the laws of the State of
         Delaware or of any other state or jurisdiction in which the General
         Partner shall deem it advisable to file;

                  (b) Any documents, certificates or other instruments,
         including, but not limited to, (i) any and all amendments and
         modifications of this Agreement or of the instruments described in
         Section 12.1(a) which may be required or deemed desirable by the
         General Partner to effectuate the provisions of any part of this
         Agreement, (ii) all instruments relating to the admission, withdrawal,
         removal or substitution of any Partner, and (iii) by way of extension
         and not limitation, to do all such other things as shall be necessary
         to continue and to carry on the business of the Partnership; and



                                       39
<PAGE>

                  (c) All documents, certificates or other instruments that may
         be required to effectuate the dissolution and termination of the
         Partnership, to the extent such dissolution and termination is
         authorized hereby. The power of attorney granted hereby shall not
         constitute a waiver of, or be used to avoid, the rights of the Partners
         to approve certain amendments to this Agreement pursuant to Sections
         11.1(d) and 11.1(e) or be used in any other manner inconsistent with
         the status of the Partnership as a limited partnership or inconsistent
         with the provisions of this Agreement. Each such Limited Partner hereby
         agrees to be bound by any representation made by the General Partner,
         acting in good faith pursuant to such power of attorney; and each such
         Limited Partner hereby waives any and all defenses which may be
         available to contest, negate or disaffirm the action of the General
         Partner taken in good faith under such power of attorney.

         Section 12.2 SURVIVAL OF POWER. It is expressly intended by each of the
Partners that the foregoing power of attorney is coupled with an interest, is
irrevocable and shall survive the death, incompetence, dissolution, liquidation
or adjudication of insanity or bankruptcy or insolvency of each such Partner.
The foregoing power of attorney shall survive the delivery of an assignment by
any of the Partners of such Partner's entire interest in the Partnership, except
that where an assignee of such entire interest has become a substitute Limited
Partner, then the foregoing power of attorney of the assignor Partner shall
survive the delivery of such assignment for the sole purpose of enabling the
General Partner to execute, acknowledge and file any and all instruments
necessary to effectuate such substitution.

                                  ARTICLE XIII
                    CONSENTS, APPROVALS, VOTING AND MEETINGS

         Section 13.1 METHOD OF GIVING CONSENT OR APPROVAL. Any consent or
approval required by this Agreement may be given as follows:

                  (a) by a written consent given by the consenting Partner and
         received by the General Partner at or prior to the doing of the act or
         thing for which the consent is solicited, provided that such consent
         shall not have been nullified by:

                           (i) Notice to the General Partner of such
                  nullification by the consenting Partner prior to the doing of
                  any act or thing, the doing of which is not subject to
                  approval at a meeting called pursuant to Section 13.2, or

                           (ii) Notice to the General Partner of such
                  nullification by the consenting Partner prior to the time of
                  any meeting called pursuant to Section 13.2 to consider the
                  doing of such act or thing, or

                           (iii) The negative vote by such consenting Partner at
                  any meeting called pursuant to Section 13.2 to consider the
                  doing of such act or thing;



                                       40
<PAGE>

                  (b) by the affirmative vote by the consenting Partner for the
         doing of the act or thing for which the consent is solicited at any
         meeting called pursuant to Section 13.2 to consider the doing of such
         act or thing; or

                  (c) by the failure of the Partner to respond or object to a
         request from the General Partner for such Partner's consent within
         thirty (30) days from its receipt of such request (or such shorter
         period of time as the General Partner may indicate in such request in
         order to ensure that the General Partner has sufficient time to
         respond, if required, to any third party with respect to the subject
         matter of such request).

         Section 13.2 MEETINGS OF LIMITED PARTNERS. Any matter requiring the
consent or vote of all or any of the Partners may be considered at a meeting of
the Partners held not less than five (5) nor more than sixty (60) days after
notice thereof shall have been given by the General Partner to all Partners.
Such notice (i) may be given by the General Partner, in its discretion, at any
time, or (ii) shall be given by the General Partner within fifteen (15) days
after receipt from Limited Partners holding more than fifty percent (50%) of the
Common Percentage Interests of the Limited Partners of a request for such
meeting.

         Section 13.3 OPINION. Except for Consents obtained pursuant to Sections
13.1 or 13.2, no Limited Partner shall exercise any consent or voting rights
unless either (a) at the time of the giving of consent or casting of any vote by
the Partners hereunder, counsel for the Partnership or counsel employed by the
Limited Partners shall have delivered to the Partnership an opinion satisfactory
to the Partners to the effect that such conduct (i) is permitted by the Act,
(ii) will not impair the limited liability of the Limited Partners, and (iii)
will not adversely affect the classification of the Partnership as a partnership
for federal income tax purposes, or (b) irrespective of the delivery or
nondelivery of such opinion of counsel, Limited Partners holding more than
seventy-five percent (75%) of the Common Percentage Interests of the Limited
Partners determine to exercise their consent or voting rights.

         Section 13.4 SUBMISSIONS TO PARTNERS. The General Partner shall give
the Partners notice of any proposal or other matter required by any provision of
this Agreement, or by law, to be submitted for consideration and approval of the
Partners. Such notice shall include any information required by the relevant
provision or by law.

                                  ARTICLE XIV
                                  MISCELLANEOUS

         Section 14.1 GOVERNING LAW. The Partnership and this Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware.

         Section 14.2 AGREEMENT FOR FURTHER EXECUTION. At any time or times upon
the request of the General Partner, the Limited Partners hereby agree to sign,
swear to, acknowledge and deliver all further documents and certificates
required by the laws of Delaware, or any other jurisdiction in which the
Partnership does, or proposes to




                                       41
<PAGE>

do, business, or which may be reasonable, necessary, appropriate or desirable to
carry out the provisions of this Agreement or the Act. This Section 14.2 shall
not prejudice or affect the rights of the Limited Partners to approve certain
amendments to this Agreement pursuant to Sections 11.1(d) and 11.1(e).

         Section 14.3 ENTIRE AGREEMENT. This Agreement and the exhibits attached
hereto contain the entire understanding among the parties and supersede any
prior understandings or agreements among them respecting the within subject
matter. There are no representations, agreements, arrangements or
understandings, oral or written, between or among the parties hereto relating to
the subject matter of this Agreement which are not fully expressed herein.

         Section 14.4 SEVERABILITY. This Agreement is intended to be performed
in accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations of the jurisdictions in which the Partnership
does business. If any provision of this Agreement, or the application thereof to
any person or circumstance, shall, for any reason and to any extent, be invalid
or unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby, but
rather shall be enforced to the greatest extent permitted by law.

         Section 14.5 NOTICES. Notices to Partners or to the Partnership shall
be deemed to have been given when personally delivered or mailed, by prepaid
registered or certified mail, addressed as set forth in Exhibit A attached
hereto, unless a notice of change of address has previously been given in
writing by the addressee to the addressor, in which case such notice shall be
addressed to the address set forth in such notice of change of address.

         Section 14.6 TITLES AND CAPTIONS. All titles and captions are for
convenience only, do not form a substantive part of this Agreement, and shall
not restrict or enlarge any substantive provisions of this Agreement.

         Section 14.7 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each one of which shall constitute an original executed copy of
this Agreement.

         Section 14.8 PRONOUNS. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or persons may require.

         Section 14.9 SURVIVAL OF RIGHTS. Subject to the provisions hereof
limiting transfers, this Agreement shall be binding upon and inure to the
benefit of the Partners and the Partnership and their respective legal
representatives, successors, transferees and assigns.





                                       42
<PAGE>

IN WITNESS WHEREOF, the parties have hereunto set their hands as of the day and
year first above written.

                              GENERAL PARTNER:


                              Ashford OP General Partner LLC,
                              a Delaware limited liability company


                              By: /s/ MONTGOMERY J. BENNETT
                                 ----------------------------------------------
                                 Montgomery J. Bennett, President



                              LIMITED PARTNERS:


                              ASHFORD OP LIMITED PARTNER, LLC,
                              a Delaware limited liability company


                              By: /s/ MONTGOMERY J. BENNETT
                                 ----------------------------------------------
                                 Montgomery J. Bennett, President


                              REMINGTON SUITES AUSTIN, L.P.,
                              a Delaware limited partnership

                              By:  REMINGTON SUITES AUSTIN, INC.,
                                   a Delaware corporation, its General Partner


                                   By: /S/ DAVID A. BROOKS
                                      -----------------------------------------
                                       David A. Brooks, Vice President



                              REMINGTON SUITES DALLAS, L.P.,
                              a Delaware limited partnership

                              By:  REMINGTON SUITES DALLAS, INC.,
                                   a Delaware corporation, its General Partner


                                   By:  /s/ DAVID A. BROOKS
                                      -----------------------------------------
                                      David A. Brooks, Vice President


<PAGE>

                              REMINGTON SUITES DULLES, L.P.,
                              a Delaware limited partnership

                              By:  REMINGTON SUITES DULLES, INC.,
                                   a Delaware corporation, its General Partner


                                   By:  /s/ DAVID A. BROOKS
                                      -----------------------------------------
                                      David A. Brooks, Vice President



                              REMINGTON SUITES LAS VEGAS, L.P.,
                              a Delaware limited partnership

                              By:  REMINGTON SUITES LAS VEGAS,        INC.,
                                   a Delaware corporation, its General Partner


                                   By: /s/ DAVID A. BROOKS
                                      -----------------------------------------
                                      David A. Brooks, Vice President



                              CHICAGO ILLINOIS HOTEL LIMITED PARTNERSHIP,
                              a Delaware limited partnership

                              By:  ILLINOIS HOTEL II CORP.,
                                   a Delaware corporation, its General Partner


                                   By: /s/ DAVID A. BROOKS
                                      -----------------------------------------
                                      David A. Brooks, Vice President



                              ASHFORD FINANCIAL CORPORATION,
                              a Texas corporation


                                   By: /s/ DAVID KIMICHIK
                                      -----------------------------------------
                                      David Kimichik, President



<PAGE>

The undersigned has executed this Agreement not as a Partner of the Partnership
but to agree to the provisions of this Agreement imposing obligations on,
granting rights to, the Company.


                              ASHFORD HOSPITALITY TRUST, INC.


                              By: /s/ MONTGOMERY J. BENNETT
                                 ----------------------------------------
                                 Montgomery J. Bennett, President




<PAGE>

                                    EXHIBIT A

                     LIST OF PARTNERS AND CONTRIBUTED ASSETS

                              AS OF AUGUST 29, 2003

<TABLE>
<CAPTION>
                                                                                              AGREED VALUE     COMMON      COMMON
                                                                                             OF CONTRIBUTED PARTNERSHIP  PERCENTAGE
                                          INITIAL CONTRIBUTED ASSET        CASH CONTRIBUTION     ASSET         UNITS      INTEREST
<S>                              <C>                                       <C>               <C>              <C>        <C>
PARTNERS:

GENERAL PARTNER:
  Ashford OP General Partner LLC  None                                           None             N/A          None         None

LIMITED PARTNERS:
  Ashford OP Limited Partner LLC       Cash, Holtsville property, services
                                          Public shares 22,336,478 @ $9.00   $201,028,302     $201,028,302   22,336,478
                                  Friends & family shares 163,522 @ $.8.37      1,368,679        1,368,679      163,522
                                             Bennett shares 500,000@ $8.37      4,185,000        4,185,000      500,000
                                         Holtsville shares 216,634 @ $9.00                       1,949,706      216,634
                                         Underwriter shares 65,024 @ $9.00                         585,216       65,024
                                            Director shares 25,000 @ $9.00                         225,000       25,000
                                           Employee shares 650,300 @ $9.00                       5,852,700      650,300
                                                                           ----------------------------------------------
                                                                             $206,581,981     $215,194,603   23,956,958   80.8950%
  Remington Suites Austin, L.P.       Embassy Suites Austin                    None            $ 8,673,750      963,750    3.2543%
                                      9505 Stonelake Blvd.
                                      Austin, TX

  Remington Suites Dallas, L.P.       Embassy Suites Dallas                    None            $ 5,956,875      661,875    2.2349%
                                      14021 Noel Road
                                      Dallas, TX

  Remington Suites Dulles, L.P.       Embassy Suites Dulles                    None           $ 12,076,875    1,341,875    4.5311%
                                      2339 Centreville Road
                                      Herndon, VA

  Remington Suites Las Vegas, L.P.    Embassy Suites Las Vegas                 None           $ 13,008,753    1,445,417    4.8807%
                                      4315 Swenson Street
                                      Las Vegas, NV


  Chicago Illinois Hotel Limited      Radisson Hotel Covington                 None            $ 1,980,000      220,000    0.7429%
        Partnership                   668 West Fifth Street
                                      Covington, KY

  Ashford Financial Corporation       Asset Management and Consulting          None            $ 9,225,000    1,025,000    3.4611%
                                      Agreements*
</TABLE>



<PAGE>

         * There are eight Asset Management and Consulting Agreements, each
between Ashford Financial Corporation and a hotel management company. Under
these eight agreements, Ashford Financial Corporation provides asset management
and consulting services to 27 hotels managed under contract with the eight
management companies. Each of the Asset Management and Consulting Agreements is
described below:

<TABLE>
<CAPTION>
                                                                   EXPIRATION DATE OF
                            MANAGER                               MANAGEMENT AGREEMENT(1)         PROPERTY
<S>                                                               <C>                        <C>
              Remington Hospitality, Inc                           October 26, 2020          Alexandria Sheraton
                                                                   October 11, 2009          Annapolis Historic
                                                                   October 26, 2020          Beverly Hills Ramada
                                                                   June 3, 2011              Coral Gables Holiday Inn
                                                                   October 26, 2020          Ft. Worth Radisson
                                                                   May 31, 2011              Key West -- Crowne Plaza
                                                                   October 26, 2020          Woburn Radisson

              Remington Indianapolis Employers Corporation         October 26, 2020          Indy Airport -- Radisson
                                                                   October 26, 2020          Indy Circle -- Radisson

              Remington Milford Hotel Employers  Corporation       April 26, 2008            Hyannis Ramada

              Remington Suites Hotel Corporation                   October 25, 2020          Houston Embassy
</TABLE>



--------

(1)  These expiration dates represent the initial expiration dates without
     giving effect to any extensions.


<PAGE>


<TABLE>
<CAPTION>
                                                                   EXPIRATION DATE OF
                            MANAGER                               MANAGEMENT AGREEMENT(1)         PROPERTY
<S>                                                               <C>                       <C>
              Remington Employers Corporation
                                                                    May 6, 2009             Commack Howard Johnson
                                                                    October 6, 2008         Dallas Best Western
                                                                    March 3, 2008           Falmouth Square Inn
                                                                    March 1, 2009           Gull Wings Suites
                                                                    October 26, 2020        Milford Radisson
                                                                    March 17, 2008          Rockland Radisson
                                                                    May 16, 2009            Saddlebrook Radisson
                                                                    September 1, 2009       St. Petersburg Hilton
                                                                    November 30, 2007       Warner Robins Ramada
                                                                    May 13, 2009            Westbury Howard Johnson
                                                                    May 2, 2009             Woburn Four Points

              Remington Employers Management Corporation            May 31, 2010            West Palm Beach Embassy Suites
                                                                    July 13, 2008           Minnetonka Sheraton
                                                                    October 26, 2020        Nassau Bay Hilton

              Remington Orlando Management Corporation              January 31, 2008        Sheraton Orlando

              Remington Ventura Employers Corporation               December 31, 2008       Ventura Marriott
</TABLE>


<PAGE>


                                    EXHIBIT B

                           FEDERAL INCOME TAX MATTERS

For purposes of interpreting and implementing Article V of the Partnership
Agreement, the following rules shall apply and shall be treated as part of the
terms of the Partnership Agreement:

A.  SPECIAL ALLOCATION PROVISIONS.

         1. For purposes of determining the amount of gain or loss to be
allocated pursuant to Article V of the Partnership Agreement, any basis
adjustments permitted pursuant to Section 743 of the Code shall be disregarded.

         2. When Partnership Interests are transferred during any taxable year,
the General Partner intends to allocate Partnership income, loss, deductions and
credits using the closing of the books method.

         3. Notwithstanding any other provision of the Partnership Agreement, to
the extent required by law, income, gain, loss and deduction attributable to
property contributed to the Partnership by a Partner shall be shared among the
Partners so as to take into account any variation between the basis of the
property and the fair market value of the property at the time of contribution
in accordance with the requirements of Section 704(c) of the Code and the
applicable regulations thereunder as more fully described in Part B hereof.
Treasury regulations under Section 704(c) of the Code allow partnerships to use
any reasonable method for accounting for Book-Tax Differences for contributions
of property so that a contributing partner receives the tax benefits and burdens
of any built-in gain or loss associated with contributed property. The Operating
Partnership shall account for Book-Tax Differences using a method specifically
approved in the regulations, the traditional method. An allocation of remaining
built-in gain under Section 704(c) will be made when Section 704(c) property is
sold.

         4. Notwithstanding any other provision of the Partnership Agreement, in
the event the Partnership is entitled to a deduction for interest imputed under
any provision of the Code on any loan or advance from a Partner (whether such
interest is currently deducted, capitalized or amortized), such deduction shall
be allocated solely to such Partner.

         5. Notwithstanding any provision of the Partnership Agreement to the
contrary, to the extent any payments in the nature of fees made to a Partner or
reimbursements of expenses to any Partner are finally determined by the Internal
Revenue Service to be distributions to a Partner for federal income tax
purposes, there will be a gross income allocation to such Partner in the amount
of such distribution.

         6. (a) Notwithstanding any provision of the Partnership Agreement to
the contrary and subject to the exceptions set forth in Section
1.704-2(f)(2)-(5) of the Treasury Regulations, if there is a net decrease in
Partnership Minimum Gain during any Partnership fiscal year, each Partner shall
be specially allocated items of Partnership




<PAGE>

income and gain for such year (and, if necessary, subsequent years) in an amount
equal to such Partner's share of the net decrease in Partnership Minimum Gain
determined in accordance with Section 1.704-2(g)(2) of the Treasury Regulations.
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant thereto.
The items to be so allocated shall be determined in accordance with Section
1.704-2(f) of the Treasury Regulations. This paragraph 6(a) is intended to
comply with the minimum gain chargeback requirement in such Section of the
Treasury Regulations and shall be interpreted consistently therewith. To the
extent permitted by such Section of the Treasury Regulations and for purposes of
this paragraph 6(a) only, each Partner's Adjusted Capital Account Balance shall
be determined prior to any other allocations pursuant to Article V of the
Partnership Agreement with respect to such fiscal year and without regard to any
net decrease in Partner Minimum Gain during such fiscal year.

         (b) Notwithstanding any provision of the Partnership Agreement to the
contrary, except paragraph 6(a) of this Exhibit and subject to the exceptions
set forth in Section 1.704-2(i)(4) of the Treasury Regulations, if there is a
net decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership
fiscal year, each Partner who has a share of the Partner Nonrecourse Debt
Minimum Gain, determined in accordance with Section 1.704-2(i)(3) of the
Treasury Regulations, shall be specially allocated items of Partnership income
and gain for such year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Nonrecourse Debt Minimum
Gain, determined in accordance with Section 1.704-2(i)(5) of the Treasury
Regulations. Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Section 1.704-2(i)(4) of the Treasury Regulations. This paragraph 6(b) is
intended to comply with the minimum gain chargeback requirement in such Section
of the Treasury Regulations and shall be interpreted consistently therewith.
Solely for purposes of this paragraph 6(b), each Partner's Adjusted Capital
Account Balance shall be determined prior to any other allocations pursuant to
Article V of the Partnership Agreement with respect to such fiscal year, other
than allocations pursuant to paragraph 6(a) hereof.

         7. Notwithstanding any provision of the Partnership Agreement to the
contrary, in the event any Partners unexpectedly receive any adjustments,
allocations or distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6),
items of Partnership income and gain shall be specially allocated to such
Partners in an amount and manner sufficient to eliminate the deficits in their
Adjusted Capital Account Balances created by such adjustments, allocations or
distributions as quickly as possible.

         8. No loss shall be allocated to any Partner to the extent that such
allocation would result in a deficit in its Adjusted Capital Account Balance
while any other Partner continues to have a positive Adjusted Capital Account
Balance; in such event, losses shall first be allocated to any Partners with
positive


<PAGE>

Adjusted Capital Account Balances, and in proportion to such balances, to the
extent necessary to reduce their positive Adjusted Capital Account Balances to
zero. Any excess shall be allocated to the General Partner.

         9. Any special allocations of items pursuant to this Part A shall be
taken into account in computing subsequent allocations so that the net amount of
any items so allocated and the profits, losses and all other items allocated to
each such Partner pursuant to Article V of the Partnership Agreement shall, to
the extent possible, be equal to the net amount that would have been allocated
to each such Partner pursuant to the provisions of Article V of the Partnership
Agreement if such special allocations had not occurred.

         10. Notwithstanding any provision of the Partnership Agreement to the
contrary, Nonrecourse Deductions for any fiscal year or other period shall be
specially allocated to the Partners in the manner and in accordance with the
percentages set forth in Section 5.1 of the Partnership Agreement.

         11. Notwithstanding any provision of the Partnership Agreement to the
contrary, any Partner Nonrecourse Deduction for any fiscal year or other period
shall be specially allocated to the Partner who bears the economic risk of loss
with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable in accordance with Section 1.704-2(i) of the
Treasury Regulations.

B.  CAPITAL ACCOUNT ADJUSTMENTS AND 704(c) TAX ALLOCATIONS.

         1. For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' Capital Accounts, the
determination, recognition and classification of any such item shall be the same
as its determination, recognition and classification for federal income tax
purposes; provided, however, that:

         (a) Any income, gain or loss attributable to the taxable disposition of
any property shall be determined by the Partnership as if the adjusted basis of
such property as of such date of disposition was equal in amount to (i) the
Agreed Value in the case of the Initial Contributed Assets or other contributed
properties, or (ii) the Carrying Value with respect to property subsequently
purchased.

         (b) The computation of all items of income, gain, loss and deduction
shall be made by the Partnership and, as to those items described in Section
705(a)(1)(B) or Section 705(a)(2)(B) of the Code, without regard to the fact
that such items are not includable in gross income or are neither currently
deductible nor capitalizable for federal income tax purposes.

         2. A transferee of a Partnership Interest will succeed to the Capital
Account relating to the Partnership Interest transferred.

         3. Upon an issuance of additional Partnership Interests, the Capital
Accounts of all Partners (and the Agreed Values of all Partnership properties)
shall, immediately prior to such issuance, be adjusted (consistent with the
provisions hereof) upward or downward to reflect any unrealized gain or
unrealized loss attributable to each Partnership property


<PAGE>

(as if such unrealized gain or unrealized loss had been recognized upon an
actual sale of such property at the fair market value thereof, immediately prior
to such issuance, and had been allocated to the Partners, at such time, pursuant
to Article V of the Partnership Agreement). In determining such unrealized gain
or unrealized loss attributable to the properties, the fair market value of
Partnership properties shall be determined by the General Partner using such
reasonable methods of valuation as it may adopt.

         4. Immediately prior to the distribution of any Partnership property in
liquidation of the Partnership, the Capital Accounts of all Partners shall be
adjusted (consistent with the provisions hereof and Section 704 of the Code)
upward or downward to reflect any unrealized gain or unrealized loss
attributable to the Partnership property (as if such unrealized gain or
unrealized loss had been recognized upon an actual sale of each such property,
immediately prior to such distribution, and had been allocated to the Partners,
at such time, pursuant to Article V of the Partnership Agreement). In
determining such unrealized gain or unrealized loss attributable to property,
the fair market value of Partnership property shall be determined by the General
Partner using such reasonable methods of valuation as it may adopt.

         5. In accordance with Section 704(c) of the Code and the regulations
thereunder, income, gain, loss and deduction with respect to any property shall,
solely for tax purposes, and not for Capital Account purposes, be allocated
among the Partners so as to take account of any variation between the adjusted
basis of such property to the Partnership for federal income tax purposes.

         6. In the event the Agreed Value of any Partnership asset is adjusted
as described in paragraph 3 above, subsequent allocations of income, gain, loss
and deduction with respect to such asset shall take account of any variation
between the adjusted basis of such asset for federal income tax purposes and its
Agreed Value in the same manner as under Section 704(c) of the Code and the
regulations thereunder.

         7. Any elections or other decisions relating to such allocations shall
be made by the General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement.

         C. DEFINITIONS. For the purposes of this Exhibit, the following terms
shall have the meanings indicated unless the context clearly indicates
otherwise:

         "ADJUSTED CAPITAL ACCOUNT BALANCE": means the balance in the Capital
Account of a Partner as of the end of the relevant fiscal year of the
Partnership, after giving effect to the following: (i) credit to such Capital
Account any amounts the Partner is obligated to restore, pursuant to the terms
of this Agreement or otherwise, or is deemed obligated to restore pursuant to
the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the
Treasury Regulations, and (ii) debit to such capital account the items described
in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Treasury Regulations.


<PAGE>

         "AGREED VALUE": means the net fair market value of Contributed Property
as agreed to by the Contributing Partner and the Partnership (or other property
subsequently adjusted to reflect contributions), using such reasonable method of
valuation as they may adopt.

         "CARRYING VALUE": means the adjusted basis of such property for federal
income tax purposes as of the time of determination.

         "NONRECOURSE DEDUCTIONS": shall have the meaning set forth in Section
1.704-2(b)(1) of the Treasury Regulations. The amount of Nonrecourse Deductions
for a Partnership fiscal year equals the excess, if any, of the net increase, if
any, in the amount of Partnership Minimum Gain during that fiscal year over the
aggregate amount of any distributions during that fiscal year of proceeds of a
Nonrecourse Liability, that are allocable to an increase in Partnership Minimum
Gain, determined according to the provisions of Section 1.704-2(c) of the
Treasury Regulations.

         "NONRECOURSE LIABILITY": shall have the meaning set forth in Section
1.704-2(b)(3) of the Treasury Regulations.

         "PARTNER NONRECOURSE DEBT MINIMUM GAIN": means an amount, with respect
to each Partner Nonrecourse Debt, determined in accordance with Section
1.704-2(i) of the Treasury Regulations.

         "PARTNER NONRECOURSE DEBT": shall have the meaning set forth in Section
1.704-2(b)(4) of the Treasury Regulations.

         "PARTNER NONRECOURSE DEDUCTIONS": shall have the meaning set forth in
Section 1.704-2(i)(2) of the Treasury Regulations. For any Partnership taxable
year, the amount of Partner Nonrecourse Deductions with respect to a Partner
Nonrecourse Debt equal the net increase during the year, if any, in the amount
of Partner Nonrecourse Debt Minimum Gain reduced (but not below zero) by
proceeds of the liability that are both attributable to the liability and
allocable to an increase in the Partner Nonrecourse Debt Minimum Gain.

         "PARTNERSHIP AGREEMENT": shall mean this Amended and Restated Limited
Partnership Agreement of Ashford Hospitality Limited Partnership.

         "PARTNERSHIP MINIMUM GAIN": shall have the meaning set forth in
Sections 1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations.

For purposes of this Exhibit, all other capitalized terms will have the same
definition as in the Partnership Agreement.





<PAGE>

                                    EXHIBIT C

                     NOTICE OF EXERCISE OF REDEMPTION RIGHT

The undersigned hereby irrevocably (i) presents for redemption _________
Partnership Units (as defined in the Partnership Agreement defined below) in
Ashford Hospitality Limited Partnership, in accordance with the terms of the
Agreement of Limited Partnership of Ashford Hospitality Limited Partnership (the
"Partnership Agreement"), and the Redemption Right (as defined in the
Partnership Agreement) referred to therein, (ii) surrenders such Partnership
Units and all right, title and interest therein, and (iii) directs that the Cash
Amount or REIT Shares (both as defined in the Partnership Agreement) deliverable
upon exercise of the Redemption Right be delivered to the address specified
below, and if REIT Shares are to be delivered, such REIT Shares be registered or
placed in the name(s) and at the addresses specified below.

Dated:
       ----------------------------------------------
Name of Limited Partner:

-----------------------------------------------------
(Signature of Limited Partner)

-----------------------------------------------------
(Street Address)

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

-----------------------------------------------------
(City  State  Zip Code)


IF REIT Shares are to be issued, issue to:

-----------------------------------------------------
(Name)

-----------------------------------------------------
(Social Security or Identifying Number)