Document:

<PAGE>   1
                                                                    Exhibit 10.1

                                                                       Exhibit-E

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                             CGLH-IHC FUND I, L.P.

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<S>      <C>                                                                                                     <C>
1.1      Formation................................................................................................1
1.2      Name.....................................................................................................1
1.3      Term.....................................................................................................2
1.4      Registered Office and Principal Office of Partnership; Addresses of Partners.............................2
1.5      Ownership................................................................................................2
1.6      Title to Partnership Property............................................................................2
1.7      Limits of Partnership....................................................................................3
2.1      Definitions..............................................................................................3
3.1      Purposes and Scope......................................................................................12
4.1      Capital Contributions; Initial Capital Contributions....................................................13
4.2      Tier 1 Capital Contributions............................................................................13
4.3      Additional Capital Contributions........................................................................15
4.4      Capital Accounts........................................................................................17
4.5      Negative Capital Accounts...............................................................................20
4.6      Interest................................................................................................20
4.7      No Withdrawal...........................................................................................20
4.8      Loans from Partners.....................................................................................20
5.1      Allocations of Profits and Losses.......................................................................20
5.2      Special Allocations of Profits and Losses...............................................................21
5.3      Curative Allocations....................................................................................22
5.4      Tax Allocations:  Code Section 704(c)...................................................................22
5.5      Other Allocation Rules..................................................................................23
5.6      Depreciation Recapture..................................................................................23
6.1      Distributions...........................................................................................23
6.2      Payments Not Deemed Distributions.......................................................................25
6.3      Withheld Amounts........................................................................................25
7.1      Designation and Authority of Managing General Partner and General Partner...............................26
7.2      Major Decisions.........................................................................................27
7.3      Certificate of Limited Partnership......................................................................28
7.4      Compensation and Reimbursement of Managing General Partner and General Partner..........................28
7.5      Partnership Funds.......................................................................................28
7.6      Return of Capital.......................................................................................28
7.7      Duties..................................................................................................29
7.8      Transactions with Affiliates............................................................................29
7.9      Outside Activities......................................................................................29
7.10     Resolution of Conflicts of Interest.....................................................................29
7.11     Indemnification.........................................................................................29
7.12     Liability of Managing General Partner and the General Partner...........................................30
7.13     Reliance by Managing General Partner and the General Partner............................................30
7.14     Insurance...............................................................................................31
7.15     Acquisition of Real Property; Investment Banking; Financing.............................................31
7.16     Management of the Real Property.........................................................................32
8.1      Limitation of Liability.................................................................................33
8.2      Management of Business..................................................................................33
8.3      Outside Activities......................................................................................33
8.4      Return of Capital.......................................................................................34
</TABLE>

                                       i
<PAGE>   3

<TABLE>
<S>      <C>                                                                                                     <C>
9.1      Records and Accounting..................................................................................34
9.2      Fiscal Year.............................................................................................34
9.3      Reports.................................................................................................34
10.1     Preparation of Tax Returns..............................................................................35
10.2     Tax Elections...........................................................................................35
10.3     Tax Controversies.......................................................................................35
10.4     Organizational Expenses.................................................................................36
10.5     Taxation as a Partnership...............................................................................36
11.1     Transfer Restrictions...................................................................................36
11.2     Transfers by Managing General Partner...................................................................36
11.3     Transfers by General Partner............................................................................37
11.4     Transfer of Interests of Limited Partner................................................................37
11.5     Additional Limitations on Transfers of Limited Partnership Interests....................................37
11.6     Distributions and Allocations in Respect of Transferred Partnership Interests...........................37
11.7     Admission of Substitute or Successor Partners...........................................................38
11.8     Buy-Sell Provision......................................................................................39
11.9     Right to Require Sale...................................................................................40
11.10    Tag-Along Right.........................................................................................40
11.11    Reduction of Undistributed Class B Capital..............................................................42
11.12    Optional Redemption.....................................................................................42
12.1     Events of Withdrawal....................................................................................44
12.2     Removal.................................................................................................45
13.1     Dissolution.............................................................................................46
13.2     Continuation of the Partnership.........................................................................46
13.3     Liquidation.............................................................................................47
13.4     Distribution in Kind....................................................................................48
13.5     Cancellation of Certificate of Limited Partnership......................................................48
13.6     Return of Capital.......................................................................................48
13.7     Certain Terminations....................................................................................48
14.1     Amendment Procedures....................................................................................49
14.2     Action without a Meeting................................................................................49
15.1     Addresses and Notices...................................................................................49
15.2     Titles and Captions.....................................................................................50
15.3     Pronouns and Plurals....................................................................................50
15.4     Further Action..........................................................................................50
15.5     Binding Effect..........................................................................................50
15.6     Integration.............................................................................................50
15.7     Creditors...............................................................................................50
15.8     Waiver..................................................................................................50
15.9     Counterparts............................................................................................50
15.10    Applicable Law..........................................................................................50
15.11    Invalidity of Provisions................................................................................51
15.12    Confidentiality.........................................................................................51
15.13    Representations and Warranties of IHC...................................................................52
15.14    Representations and Warranties of CGLH..................................................................52
15.15    Conditions to Effectiveness of this Agreement...........................................................53
15.16    Third Party Beneficiaries...............................................................................53
</TABLE>

                                       ii
<PAGE>   4

                                    EXHIBITS

Exhibit A - Partners and Percentage Interests
Exhibit B - Description of Property to be Contributed by the Partners
Exhibit C - Market Rate Fees
Exhibit D - Form of Property Management Agreement
Exhibit E - Form of Asset Management Agreement
Exhibit F - Joint Venture Required (Consolidated) Reporting and Analysis
Exhibit G - Executives' Percentage Interests Upon Termination For Cause

                                      iii
<PAGE>   5

                                                               S&B DRAFT 8/31/00

THE PARTNERSHIP INTERESTS REPRESENTED BY THIS LIMITED PARTNERSHIP AGREEMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY STATE
SECURITIES ACTS IN RELIANCE UPON EXEMPTIONS UNDER THOSE ACTS. THE SALE OR OTHER
DISPOSITION OF THE PARTNERSHIP INTERESTS IS PROHIBITED UNLESS SUCH SALE OR
DISPOSITION IS MADE IN COMPLIANCE WITH ALL SUCH APPLICABLE ACTS. ADDITIONAL
RESTRICTIONS ON TRANSFER OF THE PARTNERSHIP INTERESTS ARE SET FORTH IN THIS
AGREEMENT.

                                   AGREEMENT

                                       OF

                              LIMITED PARTNERSHIP

                                       OF

                             CGLH-IHC FUND I, L.P.

                  THIS AGREEMENT OF LIMITED PARTNERSHIP is entered into as of
_________ ___, 2000 (the "Effective Date"), by and between CGLH PARTNERS III LP,
a Delaware limited partnership ("CGLH GP"), as the Managing General Partner, and
INTERSTATE INVESTMENT CORPORATION, a Delaware corporation ("IHC GP"), as the
General Partner, and CGLH PARTNERS IV LP, a Delaware limited partnership ("CGLH
LP"), INTERSTATE PROPERTY PARTNERSHIP, L.P., a Delaware limited partnership
("IHC LP"), J. William Richardson, an individual ("Richardson") and Thomas F.
Hewitt, an individual ("Hewitt") as the Limited Partners.

                  Certain terms used in this Agreement are defined in Article II
hereof.

                                    ARTICLE I

                             ORGANIZATIONAL MATTERS

         1.1 FORMATION.

                  The Partners hereby form the Partnership as a limited
partnership pursuant to the Delaware Act, and subject to the provisions of this
Agreement. The rights and obligations of the Partners and the administration and
termination of the Partnership shall be governed by the Delaware Act, except as
expressly provided herein.

         1.2 NAME.

                  The name of the Partnership shall be, and the business of the
Partnership shall be conducted under the name of, CGLH-IHC Fund I, L.P. The
Managing General Partner in its sole discretion may change the name of the
Partnership at any time and from time to time and shall provide the other
Partners with written notice of such name change within 20 days after such name
change.

<PAGE>   6

         1.3 TERM.

                  The Partnership shall commence on the Commencement Date and
shall continue in existence until the close of Partnership business on the
seventh anniversary of the Effective Date, or until the earlier termination of
the Partnership in accordance with the provisions of Section 13.1(b) of this
Agreement or unless extended by a vote or consent of Partners holding at least
51% of the Partnership Interests at the time such extension is sought; provided,
however, that after the occurrence of an event of dissolution pursuant to
Section 13.1(b), the continuation or wind-up of the Partnership shall be
governed by Article XIII hereof and the Partnership shall not have the ability
to extend the term of the Partnership pursuant to this sentence of Section 1.3.
Any and all actions taken by the Managing General Partner prior to the
Commencement Date in connection with the formation of the Partnership or that
are consistent with, or in furtherance of, the purpose of the Partnership are
hereby approved, confirmed and ratified as acts of the Company.

         1.4 REGISTERED OFFICE AND PRINCIPAL OFFICE OF PARTNERSHIP; ADDRESSES OF
             PARTNERS.

                  (a) Partnership Offices. The registered office of the
         Partnership in the State of Delaware shall be 1013 Centre Road,
         Wilmington, New Castle County, Delaware 19805-1297, and its registered
         agent for service of process on the Partnership at such registered
         office shall be Corporation Service Company, or such other registered
         office or registered agent as the Managing General Partner may from
         time to time designate, on notice to the other Partners. The
         Partnership shall direct its registered agent to provide copies of any
         process served on it as registered agent of the Partnership to both the
         Managing General Partner and the General Partner at their respective
         addresses provided pursuant to Section 1.4(b) hereof. The principal
         office of the Partnership shall be 3 World Financial Center, New York,
         New York 10285, New York or such other place as the Managing General
         Partner may from time to time designate, on notice to the other
         Partners. The Partnership may maintain offices at such other place or
         places as the Managing General Partner deems advisable.

                  (b) Addresses of Partners. The address of each of the Partners
         shall be the address of such Partner appearing on the signature pages
         to this Agreement. A Partner may change its address at any time by
         giving all of the other Partners ten-(10) days' prior written notice of
         such change in address.

         1.5 OWNERSHIP.

                  The interest of each Partner in the Partnership shall be
personal property for all purposes. All property and interests in property, real
or personal, owned by the Partnership shall be deemed owned by the Partnership
as an entity, and no Partner, individually, shall have any ownership of such
property or interest except by having an ownership interest in the Partnership
as a Partner. Each of the Partners irrevocably waives, during the term of the
Partnership and during any period of its liquidation following any dissolution,
any right that it may have to maintain any action for partition with respect to
any of the assets of the Partnership. No interest of any Partner in the
Partnership shall be evidenced by a certificate.

         1.6 TITLE TO PARTNERSHIP PROPERTY.

                  It is the desire and intention that legal title to all
property of the Partnership shall be held and conveyed in the name of the
Partnership.

                                       2
<PAGE>   7

         1.7 LIMITS OF PARTNERSHIP.

                  The relationship between the parties hereto shall be limited
to the business of the Partnership in accordance with the terms of this
Agreement. Such relationship shall be construed and deemed to be a limited
partnership for the sole and limited purpose of such business. Except as
otherwise provided for or contemplated in this Agreement, nothing herein shall
be construed to create a partnership between the Partners or to authorize any
Partner to act as general agent for the other Partner.

                                   ARTICLE II

                                  DEFINITIONS

         2.1 DEFINITIONS.

                  Unless otherwise clearly indicated to the contrary in this
Agreement, the following definitions shall apply to the terms used in this
Agreement, which definitions shall be applicable equally to the singular and
plural of the terms defined:

         "Acceptance" has the meaning set forth in Section 11.10 of this
Agreement.

         "Adjusted Capital Account" means, with respect to any Partner, a
special account maintained for such Partner, the balance of which shall equal
such Partner's Capital Account balance, increased by the amount (if any) of: (i)
such Partner's share of the Partnership Minimum Gain and Partner Minimum Gain,
plus (ii) all other amounts such Partner is unconditionally obligated to
contribute to the capital of the Partnership.

         "Adjusted Capital Account Deficit" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Adjusted Capital Account.

         "Affiliate" means, as to any Person, a Person that directly or
indirectly Controls, is Controlled by, or is under common Control with, such
Person.

         "Aggregate Net Profit Allocation" means with respect to any Partner for
any Fiscal Year or other fiscal period, an amount, which in no event shall be
below zero, equal to the excess of (i) the cumulative amount of Profits
allocated to such Partner with respect to all prior Fiscal Years or fiscal
periods and the current Fiscal Year or fiscal period, over (ii) the sum of (a)
the cumulative amount of Losses allocated to such Partner with respect to all
prior Fiscal Years or fiscal periods and the current Fiscal Year or fiscal
period, plus (b) the cumulative amount of Nonrecourse Deductions allocated to
such Partner with respect to all prior Fiscal Years and fiscal periods.

         "Agreement" means this Agreement of Limited Partnership, as it may be
amended, supplemented, or restated from time to time.

         "Available Cash" means, as of any date, all cash funds of the
Partnership on hand after: (a) payment of all Partnership costs and expenses
that are due and payable (including, without limitation, debt service payments
and any reserve requirements under property management agreements) as of such
date; (b) provision for payment of all Partnership costs and expenses that are
anticipated to become due and payable (including, without limitation, debt
service payments and any reserve requirements under property management
agreements) within 30 days following the date on which Available Cash is being
determined; and (c) provision for adequate reserves (including, without
limitation, working capital,

                                       3
<PAGE>   8

capital and other reserves), which reserves (and the amounts thereof) shall be
established by the Managing General Partner in its sole and absolute discretion.

         "Beneficially Own" with respect to any securities means having
"beneficial ownership" of such securities (as determined pursuant to Rule 13d-3
under the Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing.

         "Book Depreciation" has the meaning set forth in Section 4.4(b)(v) of
this Agreement.

         "Book Value" has the meaning set forth in Section 4.4(c) of this
Agreement.

         "Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States or the
State of New York shall not be regarded as a Business Day.

         "Buying Partner" has the meaning set forth in Section 11.8 of this
Agreement.

         "Buy-Sell Date" means (i) the second anniversary of the Effective Date,
if the Partnership, at any one time prior to such date, had assets with an
aggregate Value of at least $200,000,000.00 or (ii) the third anniversary of the
Effective Date, if the Partnership, at any one time prior to such date, had
assets with an aggregate Value of at least $150,000,000.00.

         "Buy-Sell Notice" has the meaning set forth in Section 11.8 of this
Agreement.

         "Capital Account" means the capital account maintained for a Partner
pursuant to Section 4.4(a) of this Agreement.

         "Capital Contribution" means any cash or other property contributed by
a Partner to the Partnership pursuant to the provisions of this Agreement.

         "Capital Event" means: (i) the sale or other disposition of a Hotel and
its other, related assets held by the Partnership, a Controlled Entity or a
non-Controlled Entity, (ii) the refinancing of any indebtedness of the
Partnership, a Controlled Entity or a non-Controlled Entity or (iii) any sale or
other disposition (other than in the ordinary course of business) of an interest
in a Controlled or Non-Controlled Entity.

         "Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing person.

         "Certificate" means the Certificate of Limited Partnership filed with
the Secretary of State of Delaware pursuant to Section 7.3 of this Agreement, as
such Certificate may be amended or restated from time to time.

         "CGLH" means, collectively, CGLH GP and CGLH LP.

         "CGLH GP" has the meaning set forth in the Preamble of this Agreement.

         "CGLH LP" has the meaning set forth in the Preamble of this Agreement.

                                       4
<PAGE>   9

         "Change in Control" means, with respect to the Corporation and for the
purposes of Section 11.9 only, any of the following:

                  (a) the acquisition by any individual, entity or group (within
         the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, a
         "Group"), other than the Corporation, or any of its wholly owned
         Subsidiaries or any Investor or Excluded Group, of Beneficial Ownership
         of 35% or more of the combined voting power or economic interests of
         the then-outstanding Voting Securities (a "Control Interest");
         provided, however, that (i) any transfer of Notes or shares of Series B
         Preferred Stock or other securities from any Investor or Excluded Group
         will not result in a Change in Control unless such transfer is pursuant
         to a Reorganization Transaction, merger proposal or tender offer in
         respect of the Corporation which has been approved by (or participated
         in by) the Board of Directors of the Corporation or by a majority of
         the Voting Securities, and (ii) in no event shall the conversion of any
         or all of the Notes in accordance with the terms of this Note
         constitute a Change in Control; or

                  (b) there is a change in a majority of the members of the
         Board within 12 months of an "election contest" (as defined in Rule 14a
         pursuant to the Exchange Act) relating to the election of persons not
         recommended by the Board of Directors at the time of the first public
         announcements of such election contest and in which a Person not an
         Affiliate of the Investor or any Related Person obtained valid proxies
         or consents to effect such change; or

                  (c) the approval by the stockholders of the Corporation of a
         reorganization, merger or consolidation, in each case, with respect to
         which all or substantially all of the individuals and entities who were
         the respective beneficial owners of the Voting Securities immediately
         prior to such reorganization, merger or consolidation do not, following
         such reorganization, merger or consolidation, Beneficially Own more
         than 50% of the combined voting power of the then-outstanding Voting
         Securities resulting from such reorganization, merger or consolidation;

                  (d) the sale or other disposition of assets representing 50%
         or more of the assets of the Corporation in one transaction or series
         of related transactions; or

                  (e) except as otherwise permitted under this Agreement, the
         disposition by the Corporation of any of its interest in the
         Partnership to a third party that is not a Subsidiary of the
         Corporation (other than a disposition to CGLH Partners I LP, a Delaware
         limited partnership, and CGLH Partners II LP, a Delaware limited
         partnership, or their Affiliates);

         provided, that the occurrence of any event identified in subparagraphs
(a) through (e) above that would otherwise be treated as a Change in Control
shall not constitute a Change in Control hereunder if the Required Holders, by
vote duly taken, shall so determine. "Required Holders" means the holders of
Notes or shares of Series B Preferred Stock representing a majority of the
combined (i) aggregate principal amount of the Notes Outstanding and (ii)
aggregate stated amount of the Series B Preferred Stock outstanding, on the
record date for such vote or, if no such record date is established, on the date
any written consent of such holders is solicited, in each case excluding Notes
or shares of Series B Preferred Stock then owned by the Corporation or any of
its Affiliates. For the purposes of this definition, "Affiliate" shall have the
meaning set forth in Rule 12b-2 promulgated by the Securities and Exchange
Commission under the Exchange Act. "Excluded Group" means any Group in which (A)
the Voting Securities either Beneficially Owned by such Group after the
applicable acquisition or Beneficially Owned by such Group and being transferred
by such Group, as the case may be, multiplied by (B) the percentage of the
Investor's interest in the Beneficial Ownership of such Group, represent a

                                       5
<PAGE>   10

Control Interest. "Outstanding" means when used with reference to the Notes at a
particular time, all Notes theretofore issued as provided in the Securities
Purchase Agreement dated as of August [___], 2000 between the Corporation and
the Investors, except (i) Notes theretofore reported as lost, stolen, damaged or
destroyed, or surrendered for transfer, exchange or replacement, in respect to
which replacement Notes have been issued, (ii) Notes theretofore paid in full,
and (iii) Notes theretofore canceled by the Corporation, except that, for the
purpose of determining whether Holders of the requisite principal amount of
Notes have made or concurred in any waiver, consent, approval, notice or other
communication under this Agreement, Notes registered in the name of, or
Beneficially Owned by, the Company or any Subsidiary of any thereof, shall not
be deemed to be outstanding. "Holder" means, at any time of reference, a Person
in whose name a Note is registered in the Note Register at such time.

         "Class A Capital Contributions" means those Capital Contributions
designated as "Class A" on Exhibit B to this Agreement, as such Exhibit may be
amended from time to time in accordance with this Agreement.

         "Class A Preference Amount" means, beginning on the Effective Date, for
each Fiscal Year of the Partnership, with respect to a Partner, an aggregate
amount equal to fifteen (15%) percent per annum multiplied by the average
weighted daily outstanding balance of such Partner's Undistributed Class A
Capital during such period, which Class A Preference Amount shall be cumulative,
compounded annually and prorated for any partial Fiscal Year or Fiscal Year
shorter than a calendar year.

         "Class B Capital Contributions" means those Capital Contributions
designated as "Class B" on Exhibit B to this Agreement, as such Exhibit may be
amended from time to time in accordance with this Agreement.

         "Class B Preference Amount" means, beginning on the Effective Date, for
each Fiscal Year of the Partnership, with respect to a Partner, an aggregate
amount equal to fifteen (15%) percent per annum multiplied by the average
weighted daily outstanding balance of such Partner's Undistributed Class B
Capital during such period, which Class B Preference Amount shall be cumulative,
compounded annually and prorated for any partial Fiscal Year or Fiscal Year
shorter than a calendar year.

         "Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time.

         "Commencement Date" means the date of the filing of the Certificate by
the Managing General Partner.

         "Control" shall be used for the purposes of the definition of
"Affiliate," "Controlled Entity," and Section 11.1 hereof only, and shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities or interests, by contract or otherwise.

         "Controlled Entity" means a Person Controlled by the Partnership.

         "Corporation" means Interstate Hotels Corporation, a Maryland
corporation.

         "CPI" has the meaning set forth in Section 7.1 of this Agreement.

         "Delaware Act" means the Delaware Revised Uniform Limited Partnership
Act, Chapter 17 of Title 6 of the Delaware Code, as it may be amended from time
to time, and any successor to such Delaware Act.

         "Distribution Date" means, (i) with respect to each of the first three
Fiscal Year quarters in a Fiscal Year, the date that is 30 days following the
General Partner's delivery to the Managing General

                                       6
<PAGE>   11

Partner of the monthly financial statements pursuant to Section 9.3 of this
Agreement for the last month in such Fiscal Year quarter, and (ii) with respect
to last Fiscal Year quarter in a Fiscal Year, the date that is 30 days following
the General Partner's delivery to the Managing General Partner of the annual
financial statements pursuant to Section 9.3 of this Agreement for such Fiscal
Year.

         "Effective Date" has the meaning set forth in the Preamble of this
Agreement.

         "Event of Bankruptcy" means, with respect to any Partner or the
Partnership, any of the following acts or events:

                  (a) making an assignment for the benefit of creditors;

                  (b) filing a voluntary petition in bankruptcy;

                  (c) becoming the subject of an order for relief or being
         declared insolvent or bankrupt in any federal or state bankruptcy or
         insolvency proceeding;

                  (d) filing a petition or answer seeking a reorganization,
         arrangement, composition, readjustment, liquidation, dissolution, or
         similar relief under any statute, law or regulation;

                  (e) filing an answer or other pleading admitting or failing to
         contest the material allegations of a petition filed against it in a
         proceeding of the type described in parts (a) through (d) of this
         definition;

                  (f) making an admission in writing of an inability to pay
         debts as they mature;

                  (g) giving notice to any governmental body that insolvency has
         occurred, that insolvency is pending, or that operations have been
         suspended;

                  (h) seeking, consenting to, or acquiescing in the appointment
         of a trustee, receiver, or liquidator of all or any substantial part of
         its properties; or

                  (i) the expiration of 90 days after the date of the
         commencement of a proceeding against such Person seeking
         reorganization, arrangement, composition, readjustment, liquidation,
         dissolution, or similar relief under any statute, law, or regulation if
         the proceeding has not been previously dismissed, or the expiration of
         60 days after the date of the appointment, without such Person's
         consent or acquiescence, of a trustee, receiver, or liquidator of such
         Person or of all or any substantial part of such Person's properties,
         if the appointment has not previously been vacated or stayed, or the
         expiration of 60 days after the date of expiration of a stay, if the
         appointment has not been previously vacated.

         "Event of Withdrawal" has the meaning set forth in Section 12.1 of the
Agreement.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Executive Tag-Along Interest" has the meaning set forth in Section
11.10 of this Agreement.

         "Executive Employment Agreements" means the Amended and Restated
Agreement between Hewitt and the Corporation dated as of August [31], 2000 and
the Amended and Restated Agreement between Richardson and the Corporation dated
as of August [31], 2000, in each case as in effect on the Effective Date, and
"Executive Employment Agreement" means one of the foregoing agreements.

         "Executives" means Richardson and Hewitt and "Executive" means
Richardson or Hewitt.

                                       7
<PAGE>   12

         "Financial Institution" has the meaning set forth in Section 7.15 of
this Agreement.

         "Fiscal Year" has the meaning set forth in Section 9.2 of this
Agreement.

         "General Partner" means IHC GP, in its capacity as the general partner
of the Partnership, and/or its permitted successors or assigns in accordance
with the terms of this Agreement.

         "Grace Period" has the meaning set forth in Section 4.3 of this
Agreement.

         "Hotel" means a hotel, motel, inn or other lodging facility and, if
applicable, the real property on which it is located.

         "IHC" means, collectively, IHC GP and IHC LP.

         "IHC GP" has the meaning set forth in the Preamble of this Agreement.

         "IHC LP" has the meaning set forth in the Preamble of this Agreement.

         "IHC Tag-Along Interest" has the meaning set forth in Section 11.10 of
this Agreement.

         "Investment Banking Firm" has the meaning set forth in Section 11.9 of
this Agreement.

         "Investment Banking Services" has the meaning set forth in Section 7.15
of this Agreement.

         "Investors" means the following investors in the Corporation: CGLH
Partners I LP and CGLH Partners II LP, and all of their respective successors
and assigns, by operation of law or otherwise.

         "Lehman Brothers" has the meaning set forth in Section 7.15 of this
Agreement.

         "Limited Partner" means CGLH LP, IHC LP, Richardson, Hewitt and any
other Person who has been admitted as a limited partner of the Partnership in
accordance with the terms of this Agreement.

         "Liquidator" has the meaning set forth in Section 13.3(a) of this
Agreement.

         "Losses" has the meaning set forth in Section 4.4(b) of this Agreement.

         "Major Decision" has the meaning set forth in Section 7.2 of this
Agreement.

         "Majority Interest" means the owners of more than 51% of the Percentage
Interests of the Limited Partners.

         "Managing General Partner" means CGLH GP in its capacity as the
managing general partner of the Partnership, and/or its permitted successors or
assigns in accordance with the terms of this Agreement.

         "Manager" has the meaning set forth in Section 7.16 of this Agreement.

         "Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(b)(1) of the Regulations.

         "Note" means the subordinated convertible note or notes having an
aggregate principal amount of $25,000,000, convertible into shares of Class A
Common Stock, par value $.01, of the Corporation, subject to certain
limitations.

                                       8
<PAGE>   13

         "Notice" has the meaning set forth in Section 7.15 of this Agreement.

         "Notice Period" has the meaning set forth in Section 11.10 of this
Agreement.

         "Offering Partner" has the meaning set forth in Section 11.8 of this
Agreement.

         "Partner" means a Managing General Partner, a General Partner or a
Limited Partner.

         "Partner Minimum Gain" means partner nonrecourse debt minimum gain as
determined under the rules of Section 1.704-2(i) of the Regulations.

         "Partner Nonrecourse Deduction" has the meaning set forth in Section
1.704-2(i)(1) and (2) of the Regulations.

         "Partnership" means the limited partnership formed by the filing of the
Certificate with the Secretary of State of Delaware and established pursuant to
this Agreement.

         "Partnership Interest" means the interest acquired by a Partner in the
Partnership including, without limitation, such Partner's right: (a) to an
allocable share of the Profits, Losses, and other income, gains, losses,
deductions, and credits of the Partnership; (b) to a distributive share of the
assets of the Partnership; (c) if a Limited Partner (other than an Executive),
to vote on those matters described in this Agreement; and (d) (i) if the
Managing General Partner, to manage and operate the business of the Partnership,
(ii) if the General Partner, to manage and operate the business of the
Partnership as and to the extent such power and authority are expressly granted
herein or by the Managing General Partner in writing.

         "Partnership Minimum Gain" has the meaning set forth in Section
1.704-2(d) of the Regulations.

         "Percentage Interest" means, as to a Partner, the ratio, expressed as a
percentage, of Class A Capital Contributions and Tier 2 Capital Contributions
actually contributed to the Partnership by such Partner to all Class A Capital
Contributions and Tier 2 Capital Contributions actually contributed to the
Partnership by all Partners; provided, however, that, subject to the provisions
of this Agreement, including, without limitation, Sections 4.3, 11.12 and 11.13
and Exhibit G hereof, the Percentage Interest of an Executive shall be the
applicable percentage interest stated on Exhibit A hereto for such Executive.
Exhibit A shall be amended from time to time in accordance with this Agreement;
provided, that, in conjunction with Class A Capital Contributions made by the
Partners (other than the Executives) as of a given date, the Executives shall be
deemed to have made, as of such date, Class A Capital Contributions pro rata in
proportion to their respective Percentage Interests set forth in Exhibit A
hereto, subject to the provisions of Section 11.13 and Exhibit G hereof.

         "Preference Amount" means a Class A Preference Amount, or a Class B
Preference Amount or both.

         "Person" means an individual, corporation, general or limited
partnership, limited liability company, government entity, joint venture,
estate, trust, association or organization or other entity of any kind or
nature.

         "Profits" has the meaning set forth in Section 4.4(b) of this
Agreement.

         "Purchase Price" has the meaning set forth in Section 11.9 of this
Agreement.

         "Put Date" has the meaning set forth in Section 11.9 of this Agreement.

         "Receiving Partner" has the meaning set forth in Section 11.8 of this
Agreement.

                                       9
<PAGE>   14

         "Redemption Closing Date" has the meaning ascribed to it in Section
11.12 hereof

         "Redemption Interest" has the meaning ascribed to it in Section 11.12
hereof.

         "Redemption Notice" has the meaning ascribed to it in Section 11.12
hereof.

         "Redemption Price" has the meaning ascribed to it in Section 11.12
hereof.

         "Regulations" means the Department of Treasury Regulations promulgated
under the Code, as amended and in effect (including corresponding provisions of
succeeding regulations).

         "Regulatory Allocations" has the meaning set forth in Section 5.3 of
this Agreement.

         "Related Person" means, with respect to any Person, (A) any Affiliate
of such Person, (B) any investment manager, investment advisor or partner of
such Person or an Affiliate of such Person, and (C) any investment fund,
investment account or investment entity whose investment manager, investment
advisor or general partner is such Person or a Related Person of such Person.
For purposes of this definition, Person shall also include "Group" as such term
is defined in the definition of "Change in Control".

         "Response Period" has the meaning set forth in Section 11.8 of this
Agreement.

         "Sale" has the meaning set forth in Section 11.10 of this Agreement.

         "Sale Notice" has the meaning set forth in Section 11.10 of this
Agreement.

         "Securities Act" means the Securities Act of 1933, as amended, and any
successor to such statute.

         "Selling Partner" has the meaning set forth in Section 11.8 of this
Agreement.

         "Series B Preferred Stock" means Series B Convertible Preferred Stock,
par value $.01 per share, of the Corporation having an aggregate stated amount
of $5,000,000.00, convertible into shares of Class A Common Stock, par value
$.01, of the Corporation, subject to certain limitations.

         "Stated Value" has the meaning set forth in Section 11.8 of this
Agreement.

         "Subsidiary" of any Person means any corporation, partnership, limited
liability company or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly, by
such Person.

         "Tier 1 Capital Contributions" has the meaning set forth in Section 4.1
of this Agreement.

         "Tier 2 Capital Contributions" has the meaning set forth in Section 4.3
of this Agreement.

         "Total Voting Power" means the total combined Voting Power, on a fully
diluted basis, of all the Voting Securities then outstanding.

         "Tier 1 Capital Call Notice Period" has the meaning set forth in
Section 4.2 of this Agreement.

         "Tier 2 Capital Call Notice Period" has the meaning set forth in
Section 4.3 of this Agreement.

                                       10
<PAGE>   15

         "Transfer" has the meaning set forth in Section 11.1 of this Agreement.

         "Undistributed Class A Capital" means, with respect to the Class A
Capital Contributions of a Partner and as of a given date, the aggregate amount
of such Partner's Class A Capital Contributions actually made as of such date,
reduced by all prior distributions to such Partner pursuant to Section
6.1(b)(ii)(C)(2). With respect to an Executive, his Undistributed Class A
Capital, as of a given date, shall be an amount equal to the product of: (i)
such Executive's then Percentage Interest (determined without regard to any
dilution in such Percentage Interest on account of such Executive's failure to
make a Tier 2 Capital Contribution); multiplied by (ii) the total amount of
Undistributed Class A Capital of all of the Partners other than Executives at
such time.

         "Undistributed Class A Preference Amount" means, with respect to the
Class A Preference Amount of a Partner and as of a given date, the aggregate
amount of such Partner's Class A Preference Amount as of such date, reduced by
all prior distributions to such Partner pursuant to Section 6.1(b)(i)(B) and
Section 6.1(b)(ii)(B). The calculation and recalculation of the Undistributed
Class A Preference Amount for each Partner shall be made (a) prior to the time
any distributions are made pursuant to Section 6.1 if such distributions are
made at a time other than on the last day of a Fiscal Year of the Partnership,
(b) as of the last day of each Fiscal Year of the Partnership and (c) prior to
any Sale pursuant to Section 11.10. With respect to an Executive, his
Undistributed Class A Preference Amount, as of a given date, shall be an amount
equal to the product of: (i) such Executive's then Percentage Interest
(determined without regard to any dilution in such Percentage Interest on
account of such Executive's failure to make a Tier 2 Capital Contribution);
multiplied by (ii) the total amount of Undistributed Class A Preference Amounts
of all of the Partners other than Executives at such time.

         "Undistributed Class B Capital" means, with respect to the Class B
Capital Contributions of a Partner and as of a given date, the aggregate amount
of such Partner's Class B Capital Contributions actually made as of such date,
reduced by all prior distributions to such Partner pursuant to Section
6.1(b)(ii)(C)(1) and Section 11.10.

         "Undistributed Class B Preference Amount" means, with respect to the
Class B Preference Amount of a Partner and as of a given date, the aggregate
amount of such Partner's Class B Preference Amount as of such date, reduced by
all prior distributions to such Partner pursuant to Section 6.1(b)(i)(A) and
Section 6.1(b)(ii)(A). The calculation and recalculation of the Undistributed
Class B Preference Amount for each Partner shall be made (a) prior to the time
any distributions are made pursuant to Section 6.1 if such distributions are
made at a time other than on the last day of a Fiscal Year of the Partnership
and (b) as of the last day of each Fiscal Year of the Partnership.

         "Undistributed Tier 2 Capital" means, with respect to the Tier 2
Capital Contributions of a Partner and as of a given date, the aggregate amount
of such Partner's Tier 2 Capital Contributions actually made as of such date,
reduced by all prior distributions to such Partner pursuant to Section
6.1(b)(ii)(D).

         "Value" means, for purposes of Section 7.15(a) and (d) and the
definition of "Buy-Sell Date", with respect to the value of the assets of the
Partnership, the sum of: (i) the aggregate gross purchase prices paid by the
Partnership (including, without limitation, through Partnership capital, debt
and equity financing or otherwise) for interests in Hotels and other, related
assets and the Partnership's aggregate gross capital contributions to Controlled
Entities and non-Controlled Entities for the acquisition of interests in Hotels
and other, related assets (or for interests in other Controlled Entities and
non-Controlled Entities for the acquisition of interests in Hotels and other,
related assets); and (ii) the aggregate gross capital expenditures in respect of
such Hotels and other, related assets.

         "Vesting Date" means any of Vesting Date 1, Vesting Date 2 or Vesting
Date 3.

                                       11
<PAGE>   16

         "Vesting Date 1" means the first anniversary of the "Commencement
Date", as such term is defined in each of the Executive Employment Agreements;
provided, however, that with respect to Richardson's Executive Employment
Agreement, if Richardson terminates his employment with the Corporation without
Good Reason (as such term is defined in such Executive's Executive Employment
Agreement), Vesting Date 1 with respect to his Percentage Interests shall be the
date that is nine calendar months following the "Commencement Date" as such term
is defined in Richardson's Executive Employment Agreement.

         "Vesting Date 2" means the second anniversary of the "Commencement
Date", as such term is defined in each of the Executive Employment Agreements.

         "Vesting Date 3" means the third anniversary of the "Commencement
Date", as such term is defined in each of the Executive Employment Agreements.

         "Voting Securities" means (i) any securities entitled, or which may be
entitled, to vote generally in the election of directors of the Corporation,
(ii) any securities, including the Note and the Series B Preferred Stock,
convertible or exercisable into or exchangeable for such securities (whether or
not the right to convert, exercise or exchange is subject to the passage of time
or contingencies or both), or (iii) any direct or indirect rights or options to
acquire any such securities; provided, that unexercised options granted pursuant
to any employment benefit or similar plan and rights issued pursuant to any
shareholder rights plan shall be deemed not to be Voting Securities.

                                   ARTICLE III

                                     PURPOSE

         3.1 PURPOSES AND SCOPE.

                  The purposes of the Partnership are expressly limited to: (a)
the acquisition, holding, ownership, operation, maintenance, improvement,
development, sale, exchange, lease, and other uses and dispositions of Hotels
and other, related assets, and the incurring of indebtedness or similar
obligations, including, without limitation, under secured or unsecured credit
facilities of every kind and nature, in connection therewith; (b) forming, and
owning equity securities or interests in, and/or acting as a general partner,
limited partner, managing member, member and/or equity holder of, Controlled
Entities or non-Controlled Entities that acquire, hold, own, operate, maintain,
improve, develop, sell, exchange, lease, and otherwise use or dispose of Hotels
and other, related assets, and the incurring of indebtedness or similar
obligations including, without limitation, under secured or unsecured credit
facilities of every kind and nature, in connection with the ownership of such
equity securities or interests; (c) forming, and owning equity securities or
interests in, and/or acting as a general partner, limited partner, managing
member, member and/or equity holder of, Controlled Entities or non-Controlled
Entities that own the equity securities or interests in, and/or act as a general
partner, limited partner, managing member, member and/or equity holder of,
Persons that acquire, hold, own, operate, maintain, improve, develop, sell,
exchange, lease, and otherwise use or dispose of Hotels and other, related
assets, and the incurring of indebtedness or similar obligations including,
without limitation, under secured or unsecured credit facilities of every kind
and nature, in connection with the ownership of such equity securities or
interests; and (d) the transacting of any and all lawful business for which the
Partnership may be organized under Delaware law that is incident, necessary and
appropriate to accomplish any of the foregoing.

                                       12
<PAGE>   17

                                   ARTICLE IV

         CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; PARTNERSHIP INTERESTS

         4.1 CAPITAL CONTRIBUTIONS; INITIAL CAPITAL CONTRIBUTIONS.

                  (a) Each Partner shall be required to contribute to the
         Partnership in cash, payable from time to time in accordance with
         Section 4.2 hereof, an amount equal to the sum of the amounts of Class
         A Capital Contributions and Class B Capital Contributions listed on
         Exhibit B hereto opposite such Partner's name under the headings,
         "Class A Capital Contribution" and "Class B Capital Contribution". All
         such capital contributions by all of the Partners are hereinafter
         sometimes collectively referred to as "Tier 1 Capital Contributions".
         To the extent that a Partner receives a return of capital in respect of
         any Class A Capital Contribution or Class B Capital Contribution on or
         before the fifth anniversary of the Effective Date, such returned
         capital shall be subject to subsequent capital call with respect to
         such class of capital, on the terms provided in Section 4.2, provided,
         that the Partners or their Affiliates shall not be obligated to
         maintain liquid reserves in amounts equal to such returned capital for
         subsequent re-contribution. Nothing herein shall require the
         Partnership to make such subsequent capital call before electing to
         make a capital call for Tier 2 Capital Contributions, as provided in
         Section 4.3 below.

                  (b) On the Effective Date, the Partners shall make initial
         capital contributions to the Partnership, in cash, pro rata in
         proportion to their Tier 1 Capital Contributions obligations, as
         determined by the Managing General Partner and a Majority Interest, but
         not to exceed amounts reasonably necessary for the initial
         capitalization of the Partnership. Such initial capital contributions
         shall be credited against the Partners' respective Tier 1 Capital
         Contributions obligations.

         4.2 TIER 1 CAPITAL CONTRIBUTIONS.

                  (a) The Managing General Partner and a Majority Interest shall
         determine, from time to time, the capital needs of the Partnership.
         Upon such determination, the Managing General Partner shall give
         written notice to each Partner (a "Tier 1 Capital Call Notice"). The
         Partners shall make Tier 1 Capital Contributions to the Partnership,
         pro rata in proportion to their respective Tier 1 Capital Contributions
         obligations. Capital constituting all or a portion of IHC LP's Tier 1
         Capital Contributions shall be allocated as follows: (i) 53.02% as a
         Class A Capital Contribution and (ii) 46.98% as a Class B Capital
         Contribution, consistent with Exhibit B attached hereto. Each Partner
         shall have five (5) days from the date such Tier 1 Capital Call Notice
         is given to contribute to the Partnership its required amount of
         additional capital constituting all or a portion of its respective Tier
         1 Capital Contributions obligations. Each Partner shall receive a
         credit to its Capital Account in the amount of any such capital that it
         contributes to the Partnership.

                  (b) If a Partner does not timely contribute its required
         portion of the Tier 1 Capital Contributions when and in such amounts as
         required pursuant to subsection (a) hereof, that Partner shall be in
         default under this Agreement. The Managing General Partner or those
         non-defaulting Partners that hold a majority of the Percentage
         Interests held by all non-defaulting Partners may exercise any one or
         more of the following remedies, all of which are cumulative, and may be
         exercised concurrently (provided, however, that if more than one remedy
         is exercised, the non-defaulting Partners may not be compensated or
         obtain relief in the aggregate in excess of the actual portion of the
         Tier 1 Capital Contribution that the defaulting Partner has

                                       13
<PAGE>   18

         failed to contribute, together with reimbursement for related expenses
         as and to the extent expressly permitted hereunder):

                           (i) One or more of the non-defaulting Partners may
                  advance funds to the Partnership to cover those amounts which
                  the defaulting Partner fails to contribute. Amounts that a
                  non-defaulting Partner(s) so advances on behalf of the
                  defaulting Partner shall become a fully-recourse loan due and
                  owing from the defaulting Partner to such non-defaulting
                  Partner(s) and shall bear interest at the lesser of the
                  maximum lawful rate and the rate of fifteen percent (15%) per
                  annum, payable monthly. All cash distributions otherwise
                  distributable to the defaulting Partner under this Agreement
                  shall instead be paid to the non-defaulting Partner(s) making
                  such advances until such advances and interest thereon are
                  paid in full. Any such advances shall be due and payable by
                  the defaulting Partner one (1) year from the date that such
                  advance was made, with any amounts repaid applied first to
                  interest and thereafter to principal. Effective upon a
                  Partner's becoming a defaulting Partner, such defaulting
                  Partner grants to the non-defaulting Partner(s) that advances
                  funds under this Section a security interest in such
                  defaulting Partner's right to its allocable share of Profits
                  and Losses, and its distributive share of the assets, of the
                  Partnership, to secure its obligation to repay such advances
                  and agrees to execute and deliver a promissory note evidencing
                  such obligations in form and substance as provided in this
                  clause (i) and reasonably acceptable to the Managing General
                  Partner, together with a security agreement in a form
                  reasonably acceptable to the Managing General Partner and such
                  UCC-1 financing statements and other documents as such
                  non-defaulting Partner(s) may reasonably request. If the
                  defaulting Partner shall fail to make its monthly payments of
                  interest or pay the loan in full when due, the defaulting
                  Partner shall lose, until such time as the default Partner
                  cures the default: (i) its voting and approval rights under
                  the Delaware Act, the Certificate and this Agreement and (ii)
                  its ability, if any, to participate in the management and
                  operations of the Partnership. In addition, the defaulting
                  Partner shall have no right to receive any distributions from
                  the Partnership until the non-defaulting Partners have first
                  received distributions in an amount equal to the additional
                  capital contributed by each non-defaulting Partner to the
                  Partnership (pursuant to the capital call as to which the
                  defaulting Partner defaulted) plus a cumulative,
                  non-compounded return thereon at the lesser of the maximum
                  lawful rate and the rate of fifteen percent (15%) per annum.

                           (ii) The then existing Percentage Interests of the
                  Partners (other than the Executives) shall be proportionately
                  adjusted to reflect the failure of the defaulting Partner to
                  contribute its required capital to the Partnership.

                           (iii) One or more of the non-defaulting Partners that
                  hold a majority of the Percentage Interests held by all
                  non-defaulting Partners may with the consent of the Managing
                  General Partner dissolve the Partnership, in which event the
                  Partnership shall be wound-up, liquidated and terminated
                  pursuant to Article XIII hereof.

                           (iv) The Partnership or one or more of the
                  non-defaulting Partners (other than the Executives) may
                  purchase the defaulting Partner's entire Partnership Interest
                  in accordance with the same terms and conditions as those set
                  forth in Section 11.8 hereof except that the purchase price
                  shall be an amount equal to eighty percent (80%) of the
                  amounts the Selling Partner would have received under Section
                  11.8(a)(iii) hereof based upon a Stated Value determined in
                  good faith; provided, that, the defaulting Partner shall not
                  have the rights of a Receiving Partner under Section
                  11.8(a)(ii) and shall be deemed to have accepted the offer of
                  purchase.

                           (v) One or more of the non-defaulting Partners may
                  contribute the capital that the defaulting Partner failed to
                  so contribute and such defaulting Partner shall have

                                       14
<PAGE>   19

                  no right to receive any distributions from the Partnership
                  until the non-defaulting Partners have first received
                  distributions in an amount equal to the additional capital
                  contributed by each non-defaulting Partner to the Partnership,
                  in addition to any preferred return (and the priority of such
                  return) that may have been earned or payable with respect
                  thereto as if such contribution had been made by the
                  defaulting Partner.

                  (c) Each Partner acknowledges and agrees that (i) a default by
         any Partner in making Tier 1 Capital Contributions will result in the
         Partnership's and the non-defaulting Partners' incurring certain costs
         and other damages in an amount that would be extremely difficult or
         impractical to ascertain, and (ii) the remedies described herein bear a
         reasonable relationship to the damages which the Partners estimate may
         be suffered by the Partnership and the non-defaulting Partners by
         reason of the failure of a defaulting Partner to make any such required
         capital contribution and the exercise of any or all of the above
         described remedies is not unreasonable under the circumstances existing
         as of the date hereof.

                  (d) The exercise by the Managing General Partner or
         non-defaulting Partners, as applicable, of one or more remedies
         provided in this Section shall not be a waiver or limitation of the
         right to pursue any one or more remedies available hereunder or at law
         or equity with respect to any subsequent default.

                  (e) For the period commencing when a Partner does not timely
         contribute its required portion of Tier 1 Capital Contributions until
         such time as such loan is paid in full, any Preferences otherwise
         accruing to the defaulting Partner under this Agreement shall not be
         compounded (but shall accrue as aforesaid).

         4.3 ADDITIONAL CAPITAL CONTRIBUTIONS.

                  This Section relates only to required capital contributions IN
ADDITION TO Tier 1 Capital Contributions. The sole purpose of the Tier 2 Capital
Contributions is to provide the Partnership with additional capital necessary to
operate the Hotels and other, related assets (and any other property) acquired
by the Partnership (using Tier 1 Capital Contributions) and Tier 2 Capital
Contributions are expressly not intended for the acquisition of interests in
Hotels and other, related assets (and any other property). The consent of all
Partners shall be required for the Partnership to make a Tier 2 Capital
Contribution capital call to pay for capital expenditures with respect to a
Hotel and its other, related assets to the extent that such capital expenditure
exceed those required by the licensor or franchisor under such Hotel's license
agreement or franchise agreement. This Section is not intended, and shall not be
construed, as having any effect on the Partnership's use of Tier 1 Capital
Contributions, the Partners' obligations to make Tier 1 Capital Contributions
and the Partnership's and the Partners' remedies with respect to any failure to
make the Tier 1 Capital Contributions. To the extent that a Partner receives a
return of capital in respect of any Tier 2 Capital Contribution on or before the
fifth anniversary of the Effective Date, such returned capital shall be subject
to subsequent capital call, on the terms provided in this Section 4.3, provided,
that the Partners or their Affiliates shall not be obligated to maintain liquid
reserves in amounts equal to such returned capital for subsequent
re-contribution. For the avoidance of doubt, the Executives shall be required to
make Tier 2 Capital Contributions in accordance with the provision of this
Section 4.3.

                  (a) The Partners shall contribute additional capital to the
         Partnership as described in the first paragraph of this Section 4.3, in
         proportion to their respective Percentage Interests ("Tier 2 Capital
         Contributions") and in such amounts and at such times as required by
         the Managing General Partner with the consent of a Majority Interest.
         Upon such determination, the Managing General Partner shall give
         written notice thereof to each Partner (the "Tier 2 Capital Call
         Notice"). Each Partner shall have twenty (20) days from the date the
         Tier 2 Capital Call Notice is given (the "Tier 2 Capital Call Notice
         Period") to contribute its required Tier 2 Capital

                                       15
<PAGE>   20

         Contribution to the Partnership; provided, however, if the stated
         reason for the capital call is to cure a default under any obligation
         of the Partnership, the Tier 2 Capital Call Notice Period may be such
         lesser time as indicated in the Tier 2 Capital Call Notice. Each
         Partner shall receive a credit to its Capital Account in the amount of
         the Tier 2 Capital Contribution that it contributes to the Partnership.

                  (b) If a Partner does not timely contribute additional capital
         when and in such amounts as required pursuant to subsection (a) hereof,
         that Partner shall be in default under this Agreement. In such event,
         the Managing General Partner shall send the defaulting Partner written
         notice of such default, giving the defaulting Partner twenty (20) days
         from the date such notice is given (the "Grace Period") to contribute
         the entire amount of its required Tier 2 Capital Contribution;
         provided, however, that if the stated reason for the capital call is to
         cure a default under any obligation of the Partnership, there shall be
         no Grace Period. If the defaulting Partner does not contribute its
         required Tier 2 Capital Contribution to the Partnership within the Tier
         2 Capital Call Notice Period or within the Grace Period, if applicable,
         the Managing General Partner or those non-defaulting Partners that hold
         a majority of the Percentage Interests held by all non-defaulting
         Partners may exercise any one or more of the following remedies, all of
         which are cumulative, and may be exercised concurrently (provided,
         however, that if more than one remedy is exercised, the non-defaulting
         Partners may not be compensated or obtain relief in the aggregate in
         excess of the actual portion of the Tier 2 Capital Contribution that
         the defaulting Partner has failed to contribute, together with
         reimbursement for related expenses as and to the extent expressly
         permitted hereunder):

                           (i) One or more of the non-defaulting Partners (other
                  than the Executives) may advance funds to the Partnership to
                  cover those amounts which the defaulting Partner fails to
                  contribute. Amounts that a non-defaulting Partner(s) so
                  advances on behalf of the defaulting Partner shall become a
                  loan due and owing from the defaulting Partner to such
                  non-defaulting Partner(s) and shall bear interest at the
                  lesser of the maximum lawful rate and the rate of fifteen
                  percent (15%) per annum, payable monthly. Such loan shall be
                  recourse only to the Partnership Interests of the defaulting
                  Partner. All cash distributions otherwise distributable to the
                  defaulting Partner under this Agreement shall instead be paid
                  to the non-defaulting Partner(s) making such advances until
                  such advances and interest thereon are paid in full. Any such
                  advances shall be due and payable by the defaulting Partner
                  one (1) year from the date that such advance was made, with
                  any amounts repaid applied first to interest and thereafter to
                  principal. Effective upon a Partner's becoming a defaulting
                  Partner, such defaulting Partner grants to the non-defaulting
                  Partner(s) that advance funds under this Section a security
                  interest in such defaulting Partner's right to its allocable
                  share of Profits and Losses, and its distributive share of the
                  assets, of the Partnership, to secure its obligation to repay
                  such advances and agrees to execute and deliver a promissory
                  note evidencing such obligations in form and substance as
                  provided in this clause (i) and reasonably acceptable to the
                  Managing General Partner, together with a security agreement
                  in a form reasonably acceptable to the Managing General
                  Partner and such UCC-1 financing statements and other
                  documents as such non-defaulting Partner(s) may reasonably
                  request. If the defaulting Partner shall fail to make its
                  monthly payments of interest or pay the loan in full when due,
                  the defaulting Partner shall lose, until such time as the
                  default Partner cures the default: (i) its voting and approval
                  rights under the Delaware Act, the Certificate and this
                  Agreement and (ii) its ability, if any, to participate in the
                  management and operations of the Partnership. In addition, the
                  defaulting Partner shall have no right to receive any
                  distributions from the Partnership until the non-defaulting
                  Partner(s) have first received distributions in an amount
                  equal to the additional capital contributed by each
                  non-defaulting Partner(s) to the Partnership (pursuant to the
                  capital call as to which the defaulting Partner defaulted)
                  plus a cumulative, non-compounded

                                       16
<PAGE>   21

                  return thereon at the lesser of the maximum lawful rate and
                  the rate of fifteen percent (15%) per annum.

                           (ii) The then existing Percentage Interests shall be
                  proportionately adjusted to reflect the failure of the
                  defaulting Partner to contribute its required additional
                  capital to the Partnership.

                           (iii) One or more of the non-defaulting Partners
                  (other than the Executives) may contribute the capital that
                  the defaulting Partner failed to so contribute and the
                  defaulting Partner shall have no right to receive any
                  distributions from the Partnership until the non-defaulting
                  Partners have first received distributions in an amount equal
                  to the additional capital contributed by each non-defaulting
                  Partner to the Partnership plus a cumulative, non-compounded
                  return thereon at the lesser of the maximum lawful rate and
                  the rate of fifteen percent (15%) per annum as if such
                  contribution had been made by the defaulting Partner.

                  (c) In addition to any of the remedies set forth in Section
         4.3(b) hereof, if IHC GP or IHC LP defaults on its obligation to make a
         Tier 2 Capital Contribution pursuant to a Tier 2 Capital Call Notice,
         then the Partnership shall have the right to terminate the property
         management agreement(s) covering the Hotel or Hotels for which the
         additional Tier 2 Capital Contribution was required. The defaulting IHC
         GP or IHC LP, and not the Partnership, shall be liable for termination
         payments in connection with such termination and the defaulting IHC GP
         or IHC LP shall indemnify and hold harmless the Partnership and the
         non-IHC Partners against any liability or obligation with respect to
         such payments.

                  (d) Each Partner acknowledges and agrees that (i) a default by
         any Partner in making a required capital contribution will result in
         the Partnership's and the non-defaulting Partners' incurring certain
         costs and other damages in an amount that would be extremely difficult
         or impractical to ascertain, and (ii) the remedies described herein
         bear a reasonable relationship to the damages which the Partners
         estimate may be suffered by the Partnership and the non-defaulting
         Partners by reason of the failure of a defaulting Partner to make any
         required additional capital contribution and the exercise of any or all
         of the above described remedies is not unreasonable under the
         circumstances existing as of the date hereof.

                  (e) The exercise by the Managing General Partner or
         non-defaulting Partners, as applicable, of one or more remedies
         provided in this Section shall not be a waiver or limitation of the
         right to pursue any one or more remedies available hereunder or at law
         or equity with respect to any subsequent default.

                  (f) For the period commencing when a Partner does not timely
         contribute its required portion of the Tier 2 Capital Contributions
         until such time as such loan is paid in full, any Preferences otherwise
         accruing to the defaulting Partner under this Agreement shall not be
         compounded (but shall accrue as aforesaid).

         4.4 CAPITAL ACCOUNTS.

                  (a) Maintenance Rules. The Partnership shall maintain for each
         Partner a separate Capital Account in accordance with this Section 4.4.
         Each Capital Account shall be maintained in accordance with the
         following provisions:

                           (i) Such Capital Account shall be increased by the
                  cash amount or Book Value of any property contributed by such
                  Partner to the Partnership pursuant to this Agreement, such
                  Partner's allocable share of Profits and any items in the
                  nature of income or gains which are specially allocated to
                  such Partner pursuant to Section 5.2 and

                                       17
<PAGE>   22

                  Section 5.3 hereof, and the amount of any Partnership
                  liabilities assumed by such Partner or which are secured by
                  any property distributed to such Partner.

                           (ii) Such Capital Account shall be decreased by the
                  cash amount or Book Value of any property distributed to such
                  Partner pursuant to this Agreement (except as payment with
                  respect to a loan), such Partner's allocable share of Losses
                  and any items in the nature of deductions or losses which are
                  specially allocated to such Partner pursuant to Section 5.2
                  and Section 5.3 hereof, and the amount of any liabilities of
                  the Partner assumed by the Partnership or which are secured by
                  any property contributed by such Partner to the Partnership.

                           (iii) In the event any interest in the Partnership is
                  transferred in accordance with the terms of this Agreement,
                  the transferee shall succeed to the Capital Account of the
                  transferor to the extent that it relates to the transferred
                  interest.

                           (iv) In determining the amount of any liability for
                  purposes of Sections 4.4(a)(i) and (ii) hereof, there shall be
                  taken into account Code Section 752(c) and any other
                  applicable provisions of the Code and Regulations.

                           (v) The Capital Accounts of each Partner shall be
                  adjusted as provided in Regulations Section
                  1.704-1(b)(2)(iv)(j) to take into account any required basis
                  adjustments with respect to Code Section 38 property.

         The foregoing provisions and the other provisions of this Agreement
         relating to the maintenance of Capital Accounts are intended to comply
         with Section 1.704-1(b) of the Regulations and shall be interpreted and
         applied in a manner consistent with such Regulations. If the Managing
         General Partner determines that it is prudent to modify the manner in
         which the Capital Accounts, or any increases or decreases to the
         Capital Accounts, are computed in order to comply with such
         Regulations, the Managing General Partner may authorize such
         modifications, provided that it is not likely to have a material effect
         on the amounts otherwise distributable to any Person.

                  (b) Definition of Profits and Losses. "Profits" and "Losses"
         mean, for each fiscal year or other period, an amount equal to the
         Partnership's taxable income or loss for such year or period,
         determined in accordance with Code Section 703(a) (for this purpose,
         all items of income, gain, loss or deduction required to be stated
         separately pursuant to Code Section 703(a)(1) shall be included in
         taxable income or loss), with the following adjustments:

                           (i) Income of the Partnership that is exempt from
                  federal income tax and not otherwise taken into account in
                  computing Profits and Losses pursuant to this Section 4.4(b)
                  shall be added to such taxable income or loss.

                           (ii) Any expenditures of the Partnership described in
                  Code Section 705(a)(2)(B), or treated as Code Section
                  705(a)(2)(B) expenditures pursuant to Section
                  1.704-1(b)(2)(iv)(i) of the Regulations, and not otherwise
                  taken into account in computing Profits and Losses pursuant to
                  this Section 4.4(b), shall be subtracted from such taxable
                  income or loss.

                           (iii) If the Book Value of any partnership asset is
                  adjusted pursuant to Sections 4.4(c)(ii) through (c)(iv), the
                  amount of such adjustment shall be taken into account as gain
                  or loss from the disposition of such asset for purposes of
                  computing Profits and Losses.

                                       18
<PAGE>   23

                           (iv) Gain or loss resulting from any disposition of
                  property with respect to which gain or loss is recognized for
                  federal income tax purposes shall be computed by reference to
                  the Book Value of the property disposed of, notwithstanding
                  that the adjusted tax basis of such property differs from its
                  Book Value.

                           (v) In lieu of the deduction for depreciation, cost
                  recovery or amortization taken into account in computing such
                  taxable income or loss, there shall be taken into account Book
                  Depreciation as defined in this Section 4.4(b)(v). Except as
                  may otherwise be provided in the Regulations, "Book
                  Depreciation" for any asset means for any fiscal year or other
                  period an amount that bears the same ratio to the Book Value
                  of that asset at the beginning of such fiscal year or other
                  period as the federal income tax depreciation, amortization or
                  other cost recovery deduction allowable for that asset for
                  such year or other period bears to the adjusted tax basis of
                  that asset at the beginning of such year or other period. If
                  the federal income tax depreciation, amortization or other
                  cost recovery deduction allowable for any asset for such year
                  or other period is zero, then Book Depreciation for that asset
                  shall be determined with reference to such beginning Book
                  Value using any reasonable method selected by the Managing
                  General Partner.

                           (vi) Notwithstanding any other provision of this
                  Section 4.4(b), any items that are specially allocated
                  pursuant to Section 5.2 or Section 5.3 shall not be taken into
                  account in computing Profits and Losses.

                  (c) Definition of Book Value. "Book Value" means for any asset
         the asset's adjusted basis for federal income tax purposes, except as
         follows:

                           (i) The initial Book Value of any asset contributed
                  by a Partner to the Partnership shall be the gross fair market
                  value of such asset, as determined by the Managing General
                  Partner in its reasonable discretion.

                           (ii) The Book Values of all Partnership assets shall
                  be adjusted to equal their respective gross fair market
                  values, as determined by the Managing General Partner in its
                  reasonable discretion, as of the following times: (A) on the
                  acquisition of an additional interest in the Partnership by
                  any new or existing Partner in exchange for more than a de
                  minimis capital contribution if the Managing General Partner
                  reasonably determines that such adjustment is necessary or
                  appropriate to reflect the relative economic interests of the
                  Partners in the Partnership; (B) on the distribution by the
                  Partnership to a Partner of more than a de minimis amount of
                  Partnership property as consideration for an interest in the
                  Partnership if the Managing General Partner reasonably
                  determines that such adjustment is necessary or appropriate to
                  reflect the relative economic interests of the Partners in the
                  Partnership; and (C) on the liquidation of the Partnership
                  within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
                  Regulations.

                           (iii) The Book Value of any Partnership asset
                  distributed to any Partner shall be the gross fair market
                  value of such asset on the date of distribution.

                           (iv) The Book Values of Partnership assets shall be
                  increased (or decreased) to reflect any adjustment to the
                  adjusted basis of such assets pursuant to Code Section 734(b)
                  or Code Section 743(b), but only to the extent that such
                  adjustments are taken into account in determining Capital
                  Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the
                  Regulations and Section 5.2(d) hereof; provided, however, that
                  Book Values shall not be adjusted pursuant to this Section
                  4.4(c)(iv) to the extent the Managing General Partner
                  determines that an adjustment pursuant to Section 4.4(c)(ii)
                  is necessary or

                                       19
<PAGE>   24

                  appropriate in connection with a transaction that would
                  otherwise result in an adjustment pursuant to this Section
                  4.4(c)(iv).

                           (v) If the Book Value of an asset has been determined
                  or adjusted pursuant to Section 4.4(c)(i), 4.4(c)(ii), or
                  4.4(c)(iv) hereof, such Book Value shall thereafter be
                  adjusted by the Book Depreciation taken into account with
                  respect to such asset for purposes of computing Profits and
                  Losses.

         4.5 NEGATIVE CAPITAL ACCOUNTS.

                  If any Partner has a deficit balance in its Capital Account,
such Partner shall have no obligation to restore such negative balance or to
make any Capital Contribution to the Partnership by reason thereof, and such
negative balance shall not be considered an asset of the Partnership or of any
Partner.

         4.6 INTEREST.

                  No interest shall be paid by the Partnership on Capital
Contributions or on balances in Capital Accounts. Nothing in this Section 4.6 is
intended to limit payments of Class A Preference Amounts and Class B Preference
Amounts to Partners as provided hereunder or on payments or contributions made
by non-defaulting Partners pursuant to Sections 4.2 and 4.3 hereof.

         4.7 NO WITHDRAWAL.

                  No Partner shall be entitled to withdraw any part of its
Capital Contributions or its Capital Account or to receive any distribution from
the Partnership, except as provided in Section 6.1, Section 11.10 and Article
XIII of this Agreement.

         4.8 LOANS FROM PARTNERS.

                  A Partner may advance funds to the Partnership upon the
request of the Partnership with the consent of all of the Partners as to the
terms thereof. Nothing in this Section 4.8 shall require the consent of all of
the Partners to the Partnership's incurring indebtedness or similar obligations,
including, without limitation, under secured and unsecured credit facilities of
every kind or nature, with an Affiliate of a Partner, or otherwise, where such
consent is not required under Section 7.2(a)(vi).

                                    ARTICLE V

                                   ALLOCATIONS

         5.1 ALLOCATIONS OF PROFITS AND LOSSES.

                  Profits, Losses and items thereof of the Partnership for each
Fiscal Year (or other fiscal period) shall be allocated to the Partners in such
manner that:

                  (a) the Adjusted Capital Account balances of all Partners with
         positive Adjusted Capital Account balances (after crediting or debiting
         Capital Accounts for Profits, Losses, items thereof, and allocations to
         Capital Accounts pursuant to all other provisions of this Article V for
         such Fiscal Year or other fiscal period) will correspond as closely as
         possible to the distributions that would result if an amount equal to
         the sum of (X) plus (Y) were distributed in accordance with Section
         13.3(d)(iii) at the end of such Fiscal Year or other fiscal period
         where (X) equals the aggregate of the Adjusted Capital Account balances
         of all Partners with positive Adjusted

                                       20
<PAGE>   25

         Capital Account balances and (Y) equals the aggregate amount that would
         be required to be contributed by the Partners with negative Adjusted
         Capital Account balances (as determined pursuant to Section (b) below
         and without duplication for amounts taken into account under clause
         (ii) of the definition of Adjusted Capital Account). Allocations shall
         be made as if the Executives' respective interests in the Partnership
         were not subject to forfeiture pursuant to Section 11.13 hereof.
         Notwithstanding the foregoing, an Executive shall only be allocated
         Profits that are not attributable to a Capital Event only to the extent
         that such Profits reflect such Executive's entitlement to greater
         current or future distribution of Available Cash; and

                  (b) the Adjusted Capital Account balances of all Partners with
         negative Adjusted Capital Account balances (after crediting or debiting
         Capital Accounts for Profits, Losses, items thereof, and allocations
         pursuant to all other provisions of this Article V for such Fiscal Year
         or other fiscal period) will correspond as closely as possible to the
         manner in which economic responsibility for any such negative balances
         in connection with a liquidation of the Partnership at the end of such
         Fiscal Year or other fiscal period would be borne by the Partners under
         the terms of the Agreement or any collateral agreement.

                  (c) Limitation on Loss Allocations. The Losses allocated
         pursuant to Section 5.1(b) hereof and the next sentence of this Section
         5.1(c) to any Partner for any Fiscal Year shall not exceed the maximum
         amount of Losses that may be allocated to such Partner without causing
         such Partner to have an Adjusted Capital Account Deficit at the end of
         such Fiscal Year. All Losses in excess of the limitation in this
         Section 5.1(c) shall be allocated solely to the other Partners in
         proportion to their respective Percentage Interests. If no other
         Partner may receive an additional allocation of Losses pursuant to the
         preceding sentence of this Section 5.1(c), such additional Losses not
         allocated pursuant to Section 5.1(b) of this Agreement or the preceding
         sentence shall be allocated solely to the Managing General Partner.

         5.2 SPECIAL ALLOCATIONS OF PROFITS AND LOSSES.

                  (a) Minimum Gain Chargeback--Partnership Nonrecourse
         Liabilities. If there is a net decrease in Partnership Minimum Gain
         during any Partnership taxable year, certain items of income and gain
         shall be allocated (on a gross basis) to the Partners in the amounts
         and manner described in Section 1.704-2(f) and (j)(2)(i) and (iii) of
         the Regulations, subject to the exemptions set forth in Section
         1.704-2(f)(2), (3), (4) and (5) of the Regulations. This Section 5.2(a)
         is intended to comply with the minimum gain chargeback requirement (set
         forth in Section 1.704-2(f) of the Regulations) relating to Partnership
         nonrecourse liabilities (as defined in Section 1.704-2(b)(3) of the
         Regulations) and shall be so interpreted.

                  (b) Minimum Gain Chargeback--Partner Nonrecourse Debt. If
         there is a net decrease in Partner Minimum Gain during any Partnership
         taxable year, certain items of income and gain shall be allocated (on a
         gross basis) as quickly as possible to those Partners that had a share
         of the Partner Minimum Gain (determined pursuant to Section
         1.704-2(i)(5) of the Regulations) in the amounts and manner described
         in Section 1.704-2(i)(4), (j)(2)(ii) and (iii) of the Regulations. This
         Section 5.2(b) is intended to comply with the minimum gain chargeback
         requirement (set forth in Section 1.704-2(i)(4) of the Regulations)
         relating to partner nonrecourse debt (as defined in Section
         1.704-2(b)(4) of the Regulations) and shall be so interpreted.

                  (c) Qualified Income Offset. If, after applying Section 5.2(a)
         and Section 5.2(b), any Partner has an Adjusted Capital Account
         Deficit, items of Partnership income and gain shall be specially
         allocated (on a gross basis) to each such Partner in an amount and
         manner sufficient to eliminate the Adjusted Capital Account Deficit of
         such Partner as quickly as possible. This Section 5.2(c) is intended to
         comply with the "qualified income offset" requirement set forth in
         Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be so
         interpreted.

                                       21
<PAGE>   26

                  (d) Basis Adjustments. To the extent an adjustment to the tax
         basis of any Partnership asset pursuant to Section 734(b) or 743(b) of
         the Code is required, pursuant to Section 1.704-1(b)(2)(iv)(m) of the
         Regulations, to be taken into account in determining Capital Accounts,
         the amount of such adjustment to the Capital Accounts shall be treated
         as an item of gain (if the adjustment increases the basis of the asset)
         or loss (if the adjustment decreases such basis), and such gain or loss
         shall be specially allocated to the Partners in a manner consistent
         with the manner in which their Capital Accounts are required to be
         adjusted pursuant to such Section of the Regulations.

                  (e) Nonrecourse Deductions. Nonrecourse Deductions for any
         Fiscal Year or other fiscal period shall be allocated: (i) first, among
         the Partners up to an amount equal to the sum of the Aggregate Net
         Profit Allocations for all of the Partners in proportion to their
         respective Aggregate Net Profit Allocations, and (ii) thereafter, among
         the Partners in proportion to their Percentage Interests.

                  (f) Partner Nonrecourse Deductions. Partner Nonrecourse
         Deductions shall be allocated pursuant to Section 1.704-2(b)(4) and
         (i)(1) of the Regulations to the Partner who bears the economic risk of
         loss with respect to the deductions.

         5.3 CURATIVE ALLOCATIONS.

                  The allocations set forth in Section 5.1(c) and Section 5.2(a)
through Section 5.2(f) hereof (the "Regulatory Allocations") are intended to
comply with certain requirements of the Regulations. It is the intent of the
Partners that, to the extent possible, all Regulatory Allocations shall be
offset either with other Regulatory Allocations or with special allocations of
other items of Partnership income, gain, loss, or deduction pursuant to this
Section 5.3. Therefore, notwithstanding any other provisions of this Article V
(other than the Regulatory Allocations), the Managing General Partner shall make
such offsetting special allocations of Partnership income, gain, loss, or
deduction in whatever manner it determines appropriate so that, after such
offsetting allocations are made, each Partner's Capital Account balance is, to
the extent possible, equal to the Capital Account balance such Partner would
have had if the Regulatory Allocations were not part of the Agreement and all
Partnership items were allocated pursuant to Section 5.1(a) and (b) hereof. In
exercising its discretion under this Section 5.3, the Managing General Partner
shall take into account future Regulatory Allocations under Sections 5.2(a) and
5.2(b) that, although not yet made, are likely to offset other Regulatory
Allocations previously made under Sections 5.2(e) and 5.2(f).

         5.4 TAX ALLOCATIONS: CODE SECTION 704(C).

                  (a) In accordance with Code Section 704(c) and the Regulations
         thereunder, income, gain, loss and deduction with respect to any
         property contributed to the capital of the Partnership shall, solely
         for tax 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 and its initial Book Value
         (computed in accordance with Section 4.4(c)(i) hereof).

                  (b) If the Book Value of any Partnership asset is adjusted
         pursuant to Section 4.4(c)(ii) hereof, subsequent allocations of
         income, gain, loss and deduction with respect to such asset shall,
         solely for tax purposes, take account of any variation between the
         adjusted basis of such asset for federal income tax purposes and its
         Book Value in the same manner as under Code Section 704(c) and the
         Regulations thereunder.

                  (c) Any elections or other decisions relating to allocations
         made pursuant to this Section 5.4 shall be made by the Managing General
         Partner in any manner that reasonably

                                       22
<PAGE>   27

         reflects the purpose and intention of the Agreement. Allocations
         pursuant to this Section 5.4 are solely for purposes of federal, state,
         and local taxes and shall not affect or in any way be taken into
         account in computing any Partner's Capital Account, or share of
         Profits, Losses, and other items or distributions pursuant to any
         provision of this Agreement.

         5.5 OTHER ALLOCATION RULES.

                  (a) For purposes of determining the Profits, Losses, or any
         other item allocable to any period, Profits, Losses, and any such other
         item shall be determined on a daily, monthly, or other basis, as
         determined by the Managing General Partner using any permissible method
         under Section 706 of the Code and the Regulations thereunder.

                  (b) For federal income tax purposes, every item of income,
         gain, loss, and deduction shall be allocated among the Partners in
         accordance with the allocations under Sections 5.1, 5.2, 5.3 and 5.4 of
         this Agreement.

                  (c) The Partners are aware of the income tax consequences of
         the allocations made by this Article V and hereby agree to be bound by
         the provisions of this Article V in reporting their shares of
         Partnership income and loss for income tax purposes.

                  (d) It is intended that the allocations in Sections 5.1, 5.2,
         5.3 and 5.4 of this Agreement effect an allocation for federal income
         tax purposes consistent with Section 704 of the Code and comply with
         any limitations or restrictions therein.

                  (e) The Partners agree that their Percentage Interests
         represent their respective interests in Partnership profits for
         purposes of allocating excess nonrecourse liabilities (as defined in
         Section 1.752-3(a)(3) of the Regulations) pursuant to Section
         1.752-3(a)(3) of the Regulations.

         5.6 DEPRECIATION RECAPTURE.

                  Pursuant to Regulations Section 1.1245-1(e), to the extent the
Partnership recognizes gain as a result of sale, exchange or other disposition
of Partnership assets which is taxable as ordinary income under Code Section
1245 or Code Section 1250, such ordinary income shall be allocated among the
Partners in the same proportion as the depreciation giving rise to such ordinary
income was allocable among the Partners. In no event, however, shall any Partner
be allocated to ordinary income hereunder in excess of the amount of gain
allocated to the Partner under this Agreement. Any ordinary income that is not
allocated to a Partner due to the gain limitation described in the previous
sentence shall be allocated among those Partners whose shares of total gain on
the sale, exchange or other disposition of the property exceed their respective
shares of depreciation from those Partnership assets being disposed of, in
proportion to their relative shares of the total allocable gain.

                                   ARTICLE VI

                                  DISTRIBUTIONS

         6.1 DISTRIBUTIONS.

                  (a) The Managing General Partner shall review the
         Partnership's accounts at the end of each calendar quarter to determine
         whether distributions are appropriate. On each Distribution Date
         (commencing with the second Fiscal Year quarter following the Effective
         Date hereof or, in the Managing General Partner's sole discretion, the
         first Fiscal Year quarter

                                       23
<PAGE>   28

         following the Effective Date hereof), the Managing General Partner
         shall make such distributions of, and to the extent of, Available Cash
         calculated as of the end of such Fiscal Year quarter, in accordance
         with Section 6.1(b) hereof.

                  (b) The distributions under this Section 6.1 are subject,
         first, to any and all of the Partnership's obligations to lenders,
         indebtedness or other obligations, including, without limitation, under
         secured or unsecured credit facilities of every kind and nature (which
         may include, among other things, additional interest obligations, exit
         fees, equity kickers and similar obligations or payments) and, second,
         to the applicability of Sections 4.2(b), 4.2(c), 4.3(b), 4.3(c), 13.3
         or 13.4. Subject to the immediately preceding sentence, distributions
         of Available Cash shall be made to the Partners in the manner set forth
         below:

                           (i) With respect to Available Cash that does not
                  constitute net proceeds from a Capital Event:

                                    (A) First, to Partners entitled to receive
                           Class B Preference Amounts, any Undistributed Class B
                           Preference Amounts, pro rata in proportion to their
                           respective Undistributed Class B Preference Amounts;

                                    (B) Second, to Partners entitled to receive
                           Class A Preference Amounts, any Undistributed Class A
                           Preference Amounts, pro rata in proportion to their
                           respective Undistributed Class A Preference Amounts;
                           and

                                    (C) Third, to Partners pro rata in
                           proportion to their respective Percentage Interests;

                           (ii) With respect to Available Cash constituting net
                  proceeds from a Capital Event:

                                    (A) First, to Partners entitled to receive
                           Class B Preference Amounts, any Undistributed Class B
                           Preference Amounts, pro rata in proportion to their
                           respective Undistributed Class B Preference Amounts;

                                    (B) Second, to Partners entitled to receive
                           Class A Preference Amounts, any Undistributed Class A
                           Preference Amounts, pro rata in proportion to their
                           respective Undistributed Class A Preference Amounts;

                                    (C) Third, (1) first, to Partners to the
                           extent of their respective Undistributed Class B
                           Capital, pro rata in proportion to the Undistributed
                           Class B Capital, if any, of all Partners, until such
                           Undistributed Class B Capital is reduced to zero, (2)
                           second, to Partners (other than the Executives) to
                           the extent of their respective Undistributed Class A
                           Capital, pro rata in proportion to the Undistributed
                           Class A Capital, if any, of all Partners (other than
                           the Executives), until such Undistributed Class A
                           Capital is reduced to zero, and (3) third, to the
                           Executives, to the extent of their respective
                           Undistributed Class A Capital, pro rata in proportion
                           to the Undistributed Class A Capital, if any, of all
                           Executives, until such Undistributed Class A Capital
                           is reduced to zero; provided, that, (x) the amount
                           available to Partners under clause (1) hereof shall
                           be equal to the lesser of (I) the amount available
                           for distribution to Partners under this subsection
                           (C) and (II) Undistributed Class B Capital as of the
                           date of the distribution (but before giving effect to
                           a such distribution) invested in the Partnership's
                           asset that is the subject of the Capital Event for
                           which the proceeds are being distributed, and (y) the
                           amount available to Partners under clauses (2)

                                       24
<PAGE>   29

                           and (3) hereof shall be the difference between the
                           amount available for distribution under this
                           subsection (C) and the amounts paid to Partners under
                           clause (1) hereof, but such amount shall not be less
                           than zero;

                                    (D) Fourth, to the Partners, to the extent
                           of their respective Undistributed Tier 2 Capital, pro
                           rata in proportion to their respective Undistributed
                           Tier 2 Capital until the Undistributed Tier 2 Capital
                           is reduced to zero; and

                                    (E) Fifth, to the Partners, pro rata in
                           proportion to their respective Percentage Interests.

                           (iii) Any incentive-based management fees payable
                  under property management agreements as described in Section
                  7.16 of this Agreement (i) shall be calculated based upon
                  Available Cash prior to any distributions pursuant to Section
                  6.1(b) and (ii) shall be paid in the first Fiscal Year quarter
                  of the following Fiscal Year (or such later date as the
                  financial statements are available for the prior Fiscal Year
                  pursuant to Article IX hereof) after any distributions
                  pursuant to Sections 6.1(b)(i)(A) and (B), or Sections
                  6.1(b)(ii)(A) and (B), as applicable, and prior to any
                  distributions pursuant to Sections 6.1(b)(i)(C), or Sections
                  6.1(b)(ii)(C), (D) or (E), as applicable; provided, however,
                  that upon a Capital Event which results in the termination of
                  a property management agreement described in Section 7.16 of
                  this Agreement, any outstanding incentive-based management
                  fees under such terminated property management agreement shall
                  be payable upon distribution of proceeds of such Capital Event
                  pursuant to Section 6.1(b)(ii) hereof.

                  (c) Class A Preference Amounts and Class B Preference Amounts
         are, by their terms, calculated on a Fiscal Year basis. Accordingly,
         Fiscal Year quarter distributions in any Fiscal Year shall be made
         based upon the Managing General Partner's reasonable calculation of
         such Preference Amounts on a quarterly basis. In the first Fiscal Year
         quarter of the following Fiscal Year (or such later date as the
         financial statements are available for the prior Fiscal Year pursuant
         to Article IX hereof) distributions for such prior Fiscal Year shall be
         adjusted as necessary in order for the Partners to receive their
         respective Preference Amounts in accordance with the terms hereof.

         6.2 PAYMENTS NOT DEEMED DISTRIBUTIONS.

                  Any amounts paid pursuant to Section 7.4, Section 7.11 or
Section 7.16(a) of this Agreement shall not be considered distributions for
purposes of this Agreement and shall be treated as deductible items for tax
purposes and for purposes of determining Profit or Loss of the Partnership.

         6.3 WITHHELD AMOUNTS.

                  (a) Notwithstanding any other provision of this Article VI to
         the contrary, each Partner hereby authorizes the Partnership to
         withhold and to pay over, or otherwise pay, any withholding or other
         taxes payable by the Partnership with respect to such Partner as a
         result of such Partner's participation in the Partnership. If and to
         the extent that the Partnership shall be required to withhold or pay
         any such taxes, such Partner shall be deemed for all purposes of this
         Agreement to have received a payment from the Partnership as of the
         time such withholding or tax is paid, which payment shall be deemed to
         be a distribution with respect to such Partner's Partnership Interest
         to the extent that the Partner (or any successor to such Partner's
         Partnership Interest) is then entitled to receive a distribution.

                                       25
<PAGE>   30

                  (b) To the extent that the aggregate of such payments to a
         Partner for any period exceeds the distributions to which such Partner
         is entitled for such period, the amount of such excess shall be
         considered a loan from the Partnership to such Partner. Such loan shall
         bear interest (which interest shall be treated as an item of income to
         the Partnership) at the lesser of the maximum rate permitted by law or
         the rate of interest per annum most recently established by Citibank,
         N.A., in New York, New York, as such bank's general reference rate of
         interest (which rate may or may not be the lowest rate of interest then
         charged by such bank), as determined hereunder from time to time, until
         discharged by such Partner by repayment, which may be made in the sole
         discretion of the Managing General Partner out of distributions to
         which such Partner would otherwise be subsequently entitled.

                  (c) Any withholdings authorized by this Section 6.3 shall be
         made at the maximum applicable statutory rate under the applicable tax
         law unless the Managing General Partner shall have received an opinion
         of counsel or other evidence satisfactory to the Managing General
         Partner to the effect that a lower rate is applicable, or that no
         withholding is applicable.

                                   ARTICLE VII

                          MANAGEMENT OF THE PARTNERSHIP

         7.1 DESIGNATION AND AUTHORITY OF MANAGING GENERAL PARTNER AND GENERAL
             PARTNER.

                  (a) The Partners hereby designate CGLH GP as the managing
         general partner of the Partnership. The Partners hereby designate IHC
         GP as the general partner of the Partnership.

                  (b) The overall management and control of the business and
         affairs of the Partnership shall be vested in the Managing General
         Partner and the Managing General Partner shall have all of the power
         and authority of a general partner of the Partnership granted under the
         Act and pursuant to this Agreement. Except as otherwise provided in
         this Agreement and subject specifically to Section 7.2, all decisions
         concerning the management of the business and affairs of the
         Partnership and its assets shall be made exclusively by the Managing
         General Partner, in accordance with the objectives and purposes of the
         Partnership set forth in Section 3.1 hereof. The Managing General
         Partner shall be authorized to execute documents and take actions on
         behalf of the Partnership, in accordance with its power and authority
         granted under the Delaware Act and pursuant to this Agreement, which
         shall be binding on the Partnership and on which third parties shall be
         entitled to rely. The General Partner shall not take part in the
         control (within the meaning of the Delaware Act) of the Partnership's
         business, transact any business in the Partnership's name, or have the
         power to sign documents for or otherwise bind the Partnership other
         than as expressly set forth in this Agreement or as directed by the
         Managing General Partner in writing, and the General Partner shall have
         only the power and authority expressly granted it pursuant to this
         Agreement or by the Managing General Partner in writing. Without
         limiting the foregoing, the General Partner hereby disclaims any power
         or authority that may be granted to a general partner of a partnership
         pursuant to the Delaware Act that is not also granted to the General
         Partner under this Agreement or by the Managing General Partner in
         writing. Any grant of power or authority to the General Partner
         pursuant to this Agreement or by the Managing General Partner is
         non-exclusive and shall not divest the Managing General Partner of any
         such power or authority. Each of the Managing General Partner and the
         General Partner shall amend or otherwise modify its organizational and
         charter documents or take such other action to satisfy or comply with
         bankruptcy-remote, special purpose entity requirements of lenders, or
         other entities extending credit, to the Partnership or its Controlled
         or Non-Controlled Entities. The Partners agree that this Agreement and
         the Certificate may be amended or otherwise modified or such other
         action taken, as necessary to satisfy or otherwise comply with

                                       26
<PAGE>   31

         bankruptcy-remote, special purpose entity requirements of lenders, or
         other entities extending credit, to the Partnership or its Controlled
         or Non-Controlled Entities.

                  (c) Without in any way limiting the provisions of Section
         7.1(b), the General Partner shall submit for approval by the Managing
         General Partner: (i) a proposed business plan within 60 days of the
         effective date of this Agreement for the current Fiscal Year; and (ii)
         thereafter, on or before November 1 of each year that this Agreement
         shall be in effect, a proposed business plan for the next succeeding
         Fiscal Year. If the General Partner shall fail timely to submit any
         such proposed business plan when due, the Managing General Partner may
         submit a business plan for the applicable Fiscal Year, and any costs
         incurred by the Managing General Partner in connection therewith shall
         be deducted from distributions to the General Partner under Section 6.1
         hereof. Simultaneously with the submission of a proposed business plan
         to the Managing General Partner, the General Partner shall distribute
         copies of the proposed business plan (marked "proposed") to the other
         Partners for informational purposes. Each such business plan shall
         contain a proposed operating budget and a proposed capital budget for
         the Hotels and other, related assets, or interests in Hotels and other,
         related assets, presently owned and managed by the Partnership, a
         strategic plan for new acquisitions of Hotels and other, related
         assets, or interests in Hotels and other, related assets, and potential
         funding sources therefor. Each such business plan shall specify
         material assumptions contained therein. Each shall be sufficiently
         detailed so as to allow for the reasonable review thereof. The General
         Partner shall not be deemed to have made any guarantee, warranty or
         representation whatsoever, other than that the General Partner used
         good faith efforts in preparing such proposed plans and diligently
         reviewed and assessed the information provided by Hotel managers, in
         connection with such plans since the Partners acknowledge that such
         plans are intended to set forth reasonable performance objectives and
         goals based upon facts and circumstances known by the General Partner
         at the time of such plans' preparation. If an annual business plan is
         not approved prior to December 31 of the immediately preceding Fiscal
         Year, the Partnership shall be managed and operated in accordance with
         the approved annual business plan for such immediately preceding Fiscal
         Year with each expense item increased (but not decreased) by the
         average Consumer Price Index for all Urban Consumers for the
         immediately preceding calendar year as reported by the U.S. Department
         of Labor Bureau of Labor Statistics ("CPI") and each revenue item
         increased (but not decreased) by Market Tract RevPAR growth percentage
         for the immediately previous 12-month period, as published by Smith
         Travel Research, but in no event less than CPI.

         7.2 MAJOR DECISIONS.

                  (a) All Major Decisions with respect to the Partnership's
         business shall require the prior written approval of all the Partners
         other than the Executives. The term "Major Decision," as used in this
         Agreement, means any decision with respect to the following matters at
         any time:

                  (i) to do any act which would make it impossible to carry on
         the ordinary business of the Partnership;

                  (ii) to possess Partnership property for other than a
         Partnership purpose or assign any rights in specific Partnership
         property for other than a Partnership purpose;

                  (iii) to change or reorganize the Partnership into any other
         legal form or materially change the purpose of the Partnership set
         forth in Section 3.1 hereof;

                  (iv) to require any Limited Partner to make any contribution
         to the capital of the Partnership not provided for hereunder (it being
         understood that additional capital contributions (including, without
         limitation, those described in Sections 4.2 and 4.3 hereof) are
         expressly provided for hereunder);

                                       27
<PAGE>   32

                  (v) except as otherwise permitted herein, to admit any Person
         as a partner of the Partnership or transfer the obligation to make
         Class B Capital Contributions or the right to receive Class B
         Preference Amounts and Undistributed Class B Preference Amounts;

                  (vi) to permit the Partnership to incur any indebtedness,
         direct or indirect, absolute or contingent; provided, however, the
         Partners agree that: (A) the incurrence by the Partnership of any
         single indebtedness to any lender (an affiliate of a Partner or
         otherwise), on market terms, and secured by an interest in property of
         the Partnership, with a loan to value ratio of not greater than
         0.85:1.00 shall not be a Major Decision, if the Partnership exercises
         commercially reasonable efforts to seek such indebtedness from more
         than one unaffiliated institution regularly engaged in the business of
         making loans secured by interests in real property; and (B) the
         incurrence by the Partnership of unsecured debt shall not be a Major
         Decision; or

                  (vii) to approve any acquisition by the Partnership of a Hotel
         or a direct or indirect interest in a Hotel.

         7.3 CERTIFICATE OF LIMITED PARTNERSHIP.

                  The Managing General Partner shall cause the Certificate to be
filed with the Secretary of State of Delaware as required by the Delaware Act
and shall cause to be filed such other certificates or documents (including,
without limitation, copies, amendments, or restatements of this Agreement) as
may be determined by the Managing General Partner to be reasonable and necessary
or appropriate for the formation, qualification, or registration and operation
of a limited partnership (or a partnership in which Limited Partners have
limited liability) in the State of Delaware and in any other state where the
Partnership may elect to do business.

         7.4 COMPENSATION AND REIMBURSEMENT OF MANAGING GENERAL PARTNER AND
             GENERAL PARTNER.

                  Neither the Managing General Partner nor the General Partner
shall be compensated for services rendered to the Partnership as managing
general partner or as general partner, as applicable, unless such compensation
has previously been approved by all of the Partners. The Managing General
Partner shall, however, be reimbursed by the Partnership for all reasonable
expenditures incurred by the Managing General Partner on the Partnership's
behalf. The General Partner shall be reimbursed by the Partnership for all
reasonable expenditures incurred by the General Partner on the Partnership's
behalf that have been approved in advance by the Managing General Partner.

         7.5 PARTNERSHIP FUNDS.

                  Subject to the terms and provisions of the management
agreements entered into by the Partnership for the management of the Hotels and
other, related assets, the funds of the Partnership shall be deposited in such
interest-bearing Partnership account or Partnership accounts as are designated
by the Managing General Partner. All withdrawals from or charges against such
accounts shall be made by the Managing General Partner or by its representative.
Funds of the Partnership may be invested as determined by the Managing General
Partner in accordance with the terms and provisions of this Agreement.

         7.6 RETURN OF CAPITAL.

                  Neither the Managing General Partner nor the General Partner
shall be entitled to the withdrawal or return of its Capital Contribution except
to the extent, if any, that distributions made

                                       28
<PAGE>   33

pursuant to this Agreement or upon termination of the Partnership may be
considered as such by law, and then only to the extent provided for in this
Agreement.

         7.7 DUTIES.

                  The Managing General Partner shall manage the Partnership and
its business and affairs in accordance with the terms of this Agreement to the
best of its ability, and shall use its good faith efforts to carry out the
business of the Partnership in the best interest of the Partnership. The
Managing General Partner shall devote itself to the business of the Partnership
to the extent that it determines is necessary for the efficient discharge of its
obligations hereunder. To the extent that the General Partner acts for and on
behalf of the partnership as expressly granted herein or by the Manager General
Partner, the General Partner shall act to the best of its ability, and shall use
its good faith efforts to carry out the business of the Partnership in the best
interest of the Partnership. The General Partner shall devote itself to its
duties to the extent that the General Partner determines is necessary for the
efficient discharge of its duties.

         7.8 TRANSACTIONS WITH AFFILIATES.

                  Subject to the provisions of Section 7.2 hereof, the terms to
the Partnership of any transaction, agreement or contract involving the
Partnership with any Affiliate of a Partner shall be competitive with the terms
of similar transactions, agreements or contracts obtained by persons in the same
business as the Partnership in arms-length agreements with unrelated parties.

         7.9 OUTSIDE ACTIVITIES.

                  The provisions regarding outside activities of the Managing
General Partner and the General Partner are set forth in Section 8.3 of this
Agreement.

         7.10 RESOLUTION OF CONFLICTS OF INTEREST.

                  Unless otherwise expressly provided in this Agreement or any
other agreement contemplated herein, whenever a conflict of interest exists or
arises between the General Partner, or any of its Affiliates, or the Managing
General Partner, or any of its Affiliates, on the one hand, and the Partnership
or any Limited Partner, on the other hand, any action taken by the Managing
General Partner or the General Partner, as the case may be, in the absence of
bad faith by such entity, and in the case of the General Partner, pursuant to an
express grant of authority under this Agreement or by the Managing General
Partner in writing, shall not constitute a breach of this Agreement or any other
agreement contemplated herein or a breach of any standard of care or duty
imposed herein or therein or under the Delaware Act or any other applicable law,
rule, or regulation unless such action would have constituted a breach of the
Agreement in the absence of such conflict of interest.

         7.11 INDEMNIFICATION.

                  (a) The Partnership shall indemnify and hold harmless the
         Managing General Partner and General Partner and any director, officer,
         employee, agent, or representative of the Managing General Partner or
         the General Partner, against all liabilities, losses, and damages
         incurred by any of them by reason of any act performed or omitted to be
         performed in the name of or on behalf of the Partnership, or in
         connection with the Partnership's business, including attorneys' fees
         and any amounts expended in the settlement of any claims or
         liabilities, losses, or damages, to the fullest extent permitted by the
         Delaware Act, provided, that in the case of the General Partner, the
         General Partner has not exceeded its power and authority granted under
         this Agreement or by the Managing General Partner in writing. The
         negative disposition of any action, suit or proceeding by judgment,
         order, settlement, conviction or upon a plea of nolo

                                       29
<PAGE>   34

         contendere, or its equivalent, shall not, of itself, create a
         presumption that the indemnified Person has engaged in gross
         negligence, fraud, willful misconduct, or a material breach of this
         Agreement.

                  (b) The Partnership shall indemnify and hold harmless the
         Limited Partners, employee, agent, or representative of the
         Partnership, any Person who is or was serving at the request of the
         Partnership or the Managing General Partner as a director, officer,
         partner, trustee, employee, agent, or representative of another
         corporation, partnership, joint venture, trust, or other enterprise, to
         the fullest extent permitted by the Delaware Act. The negative
         disposition of any action, suit or proceeding by judgment, order,
         settlement, conviction or upon a plea of nolo contendere, or its
         equivalent, shall not, of itself, create a presumption that the
         indemnified Person has engaged in gross negligence, fraud, willful
         misconduct, or a material breach of this Agreement.

                  (c) Notwithstanding anything to the contrary contained in this
         Section 7.11, an indemnified Person shall not be entitled to
         indemnification under Section 7.11 with respect to any claim, issue or
         matter in which it has engaged in gross negligence, fraud, willful
         misconduct, or a material breach of this Agreement.

                  (d) Notwithstanding any of the provisions to this Section 7.11
         to the contrary, no amount shall be paid to any indemnitee under this
         Section 7.11 until the obligations of the Partnership with respect to
         any indebtedness of the Partnership are paid or satisfied in full.
         However, if such indemnitee would otherwise be entitled to be paid
         pursuant to this Section 7.11 but for the preceding sentence, an amount
         of cash equal to the amount which would otherwise be paid to such
         indemnitee shall be held by the Partnership in an escrow account until
         such amounts may be paid to such indemnitee pursuant to this Section
         7.11 or as otherwise required to be paid to satisfy claims against the
         Partnership if there are no other available Partnership assets to pay
         such claims.

         7.12 LIABILITY OF MANAGING GENERAL PARTNER AND THE GENERAL PARTNER.

                  The Managing General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
under the Delaware Act and/or hereunder either directly or by or through its
directors, officers, employees, agents, or representatives. The General Partner
may exercise any of the powers expressly granted to it, and perform any of the
duties expressly imposed upon it, under this Agreement or by the Managing
General Partner in writing either directly or by or through its directors,
officers, employees, agents, or representatives. Neither the Managing General
Partner nor its directors, officers, employees, agents, or representatives shall
be liable to the Partnership or the Limited Partners for errors in judgment or
for any acts or omissions that do not constitute gross negligence, fraud, or
willful or wanton misconduct. Neither the General Partner nor its directors,
officers, employees, agents, or representatives shall be liable to the
Partnership or the Limited Partners for errors in judgment or for any acts or
omissions with respect to matters within its power and authority expressly
granted under this Agreement or by the Managing General Partner in writing, that
do not constitute gross negligence, fraud, or willful or wanton misconduct.

         7.13 RELIANCE BY MANAGING GENERAL PARTNER AND THE GENERAL PARTNER.

                  (a) Each of the General Partner and the Managing General
         Partner may rely and shall be protected in acting or refraining from
         acting upon any resolution, certificate, statement, instrument,
         opinion, report, notice, request, consent, order, bond, debenture, or
         other paper or document believed by it to be genuine and to have been
         signed or presented by the proper party or parties.

                                       30
<PAGE>   35

                  (b) Each of the Managing General Partner and the General
         Partner may consult with legal counsel, accountants, appraisers,
         management consultants, investment bankers, and other consultants and
         advisers selected by it, and any opinion of any such Person as to
         matters which the Managing General Partner or the General Partner, as
         the case may be, believes to be within such Person's professional or
         expert competence shall be full and complete authorization and
         protection in respect of any action taken or suffered or omitted by the
         Managing General Partner or the General Partner, as the case may be,
         hereunder in good faith and in accordance with such opinion.

         7.14 INSURANCE.

                  The General Partner, on behalf of the Partnership and at the
Partnership's cost and expense, shall, during the entire term hereof, obtain,
maintain and keep in full force and effect, such insurance coverage as the
Managing General Partner reasonably deems advisable.

         7.15 ACQUISITION OF REAL PROPERTY; INVESTMENT BANKING; FINANCING.

                  (a) The Partnership intends to acquire, directly or through
         Controlled Entities and non-Controlled Entities, Hotels and other,
         related assets or interests in Hotels and other, related assets with an
         aggregate Value of $300,000,000.00. The Partnership shall not fail in
         its purposes if the aggregate Value of such Hotels and other, related
         assets or interests in Hotels and other, related assets is less than,
         greater than or equal to, $300,000,000.00, and the power and authority
         of the Partnership and the Managing General Partner hereunder shall in
         no way be diminished or otherwise affected thereby.

                  (b) Notwithstanding any provision in this Agreement to the
         contrary, the Managing General Partner is hereby authorized, on behalf
         of the Partnership and at the Partnership's cost and expense, to enter
         into negotiations for acquisitions of Hotels and other, related assets
         and interests in Hotels and other, related assets, investigate
         potential funding sources for such acquisitions and retain an
         investment bank or similar financial institution (a "Financial
         Institution") to provide investment banking, advisory, underwriting or
         other services in connection with the acquisition or disposition of
         Hotels and/or other, related assets and interests in Hotels and other,
         related assets, and any public offering of securities of the
         Partnership or its Controlled Entities (and non-Controlled Entities) or
         any secondary offering of securities of the Partnership or its
         Controlled Entities (and non-Controlled Entities) (collectively, the
         "Investment Banking Services"). The Managing General Partner, in its
         discretion, may direct the General Partner to enter into negotiations
         for the acquisitions of Hotels and other, related assets and to
         investigate potential funding sources for such acquisitions. For the
         purposes of Section 7.2, the right to negotiate pursuant to this
         Section shall not be deemed an implied consent to the consummation of
         any proposed transaction that may be the subject of such negotiation.

                  (c) If the Partnership seeks to retain a Financial Institution
         other than Lehman Brothers Holdings Inc., or any of its affiliates or
         its subsidiaries (collectively, "Lehman Brothers"), the Partnership
         shall deliver written notice of such intended retention of another
         Financial Institution (the "Notice") to a Senior Vice President of the
         Principal Transactions Group of Lehman Brothers, setting forth the
         identity of such other Financial Institution, the nature of the
         engagement or Investment Banking Services sought and offered, a
         description (including timing) of the contemplated transaction(s), and
         the fees charged by, or payable to, such Financial Institution. For a
         period of fifteen days after the date that Lehman Brothers shall have
         received such notice, Lehman Brothers shall have the right to advise
         the Partnership that Lehman Brothers will perform such Investment
         Banking Services on the terms set forth in the Notice; provided,
         however, that if the fees to be paid such Financial Institution are
         less than the market rate fees charged for the contemplated
         transaction, the fees payable to Lehman Brothers

                                       31
<PAGE>   36

         shall be the market rate fees. The Partners agree, for the purposes of
         this Agreement, that listed on Exhibit C annexed hereto and made a part
         hereof are market rate fees for the types of transactions described
         thereon. If Lehman Brothers declines the engagement set forth in the
         Notice, the Partnership may engage (i) the Financial Institution set
         forth in the Notice on the terms set forth therein or (ii) such other
         Financial Institution to provide the Investment Banking Services set
         forth in the Notice in connection with the contemplated transaction(s)
         described therein for fees not in excess of market rate fees. Lehman
         Brothers shall be a third party beneficiary of this Section and shall
         have the right to enforce the terms of this Section to their fullest
         extent.

                  (d) For so long as CGLH GP is the Managing General Partner,
         CGLH GP shall use its good faith efforts to obtain, on behalf of the
         Partnership, equity and/or debt financing for the acquisition of Hotels
         and other, related assets, on market terms.

         7.16 MANAGEMENT OF THE REAL PROPERTY.

                  (a) The Corporation shall have the option to manage, or have
         one or more of its Affiliates manage, the Hotels and other, related
         assets owned by the Partnership or its Controlled Entities pursuant to
         one or more property management agreements, which management agreements
         shall be substantially in the form annexed hereto as Exhibit D (the
         Corporation, or one or more Affiliates in its capacity as manager, the
         "Manager"). The Partners agree that the terms of such form property
         management agreement are subject to modification in connection with the
         specific requirements and financial performance of a particular Hotel
         and its other, related assets, which modifications shall be agreed upon
         before the acquisition of such Hotel and its other, related assets. For
         the management of a Hotel and its other, related assets, Manager shall
         be entitled to receive an annual base management fee and an incentive
         based management fee, on terms and conditions provided in the property
         management agreement covering such Hotel and other, related assets. In
         addition to any other terms and conditions set forth in any such
         management agreement, any incentive based management fee shall be
         payable only after the Partners have been paid their respective Class A
         Preference Amounts and Class B Preference Amounts in accordance with
         Section 6.1(b) hereof. Each property management agreement shall provide
         that the Manager shall not have the right to receive termination
         payments or fees for the termination of a property management agreement
         upon the sale, transfer or other disposition of the subject Hotel (and
         its other, related assets) if the original acquisition of such Hotel
         (and its other, related assets) was identified by the Partnership, a
         Controlled Entity or a non-Controlled Entity, prior to the acquisition
         thereof as a short-term acquisition. In addition, each property
         management agreement shall provide that the payment of termination
         payments or fees, if any, for the termination of a property management
         agreement upon the sale, transfer or other disposition of the subject
         Hotel (and its other, related assets) may be deferred (without
         interest, premium or penalty) for one year from the termination of such
         property management agreement and, no termination payments or fees
         shall be due under the terminated property management agreement if, at
         or before the end of such one-year period, the Partnership, a
         Controlled Entity or a non-Controlled Entity enters into another
         property management agreement, in substantially the same form of
         property management agreement as the agreement being terminated, with
         such Manager or such Manager's Affiliate covering a Hotel (and its
         other, related assets), and the ratio of management fees payable under
         such other property management agreement to the Class B Capital
         Contributions invested in such Hotel (and its other, related assets) is
         equal to or greater than such ratio with respect to the terminated
         property management agreement and the related Hotel (and other, related
         assets). In addition, each property management agreement with a Manager
         shall provide that, upon the occurrence of an event described in
         Section 4.3(c), the Manager shall look to the defaulting IHC Partner
         for payment of the applicable termination payments or fees, if any.
         Nothing set forth in this Section 7.16 shall affect the rights of IHC
         GP and IHC LP under Section 7.2 of this Agreement.

                                       32
<PAGE>   37

                  (b) For so long as CGLH LP, or its affiliate, shall remain a
         partner of the Partnership, the Partnership shall retain CG Asset
         Management Company LLC as the asset manager of the Hotels and other,
         related assets pursuant to an Asset Management Agreement substantially
         in the form annexed hereto as Exhibit E.

                                  ARTICLE VIII

                   RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

         8.1 LIMITATION OF LIABILITY.

                  The Limited Partner shall have no liability under this
Agreement except as provided herein or under the Delaware Act.

         8.2 MANAGEMENT OF BUSINESS.

                  The Limited Partner shall not take part in the control (within
the meaning of the Delaware Act) of the Partnership's business, transact any
business in the Partnership's name, or have the power to sign documents for or
otherwise bind the Partnership other than as specifically set forth in this
Agreement. Notwithstanding anything stated or implied to the contrary in this
Agreement, neither of the Executives shall have any voting, consent or approval
rights as a limited partner of this Partnership or otherwise under this
Agreement, the Delaware Act or otherwise, and each of the Executives hereby
disclaims any such rights to the fullest extent permitted by law. If an
Executive shall nevertheless have voting, consent or approval rights with
respect to Partnership affairs under this Agreement, the Delaware Act or
otherwise, such Executive shall, in consideration of the rights and interests
granted hereunder, be deemed to have irrevocably appointed the Managing General
Partner, as his true and lawful proxy and attorney-in-fact, with full power of
substitution and re-substitution, to exercise any and all such rights, effective
for the term of the Partnership (including any extensions thereof and the term
of any wind-up following dissolution). Nothing herein shall preclude an
Executive from requesting an audit pursuant to Section 9.3 hereof or reviewing
the books and records of the Partnership in accordance with the terms hereof.
The Executives shall execute such further documentation as the Managing General
Partner may reasonably deem necessary to evidence such irrevocable proxies.
Notwithstanding anything contained in the Agreement to the contrary, this
Agreement shall not be amended without the consent of each Person materially and
adversely affected if such amendment would (i) convert a Limited Partner's
Partnership Interest into a General Partner's Partnership Interest, (ii) modify
the limited liability of a Limited Partner, or (iii) alter the interest of a
Partner in Profits, Losses, other items of income, gain, loss and deduction, or
any Partnership distributions, but only to the extent that such amendment has a
disproportionately larger adverse effect on such Person as compared with the
other Partners.

         8.3 OUTSIDE ACTIVITIES.

                  A Partner (including the Managing General Partner and the
General Partner) or any Affiliate thereof, and any director, officer, employee,
agent, or representative of such Partner or any Affiliate thereof, 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 in direct competition with the Partnership. Neither the Partnership
nor any of the other Partners (including the Managing General Partner and the
General Partner) shall have any rights by virtue of this Agreement in any
business ventures of a Partner, any Affiliate thereof, or any director, officer,
employee, agent, or representative of such Partner or any Affiliate thereof.

                                       33
<PAGE>   38

         8.4 RETURN OF CAPITAL.

                  The Limited Partner shall not be entitled to the withdrawal or
return of its Capital Contribution except to the extent, if any, that
distributions made pursuant to this Agreement or upon termination of the
Partnership may be considered as such by law and then only to the extent
provided for in this Agreement.

                                   ARTICLE IX

                     BOOKS, RECORDS, ACCOUNTING AND REPORTS

         9.1 RECORDS AND ACCOUNTING.

                  The Managing General Partner shall keep or cause to be kept
appropriate books and records with respect to the Partnership's business, which
shall at all times be kept at the principal office of the Partnership or such
other office as the Managing General Partner may designate for such purposes.
Any books and records maintained by the Partnership in the regular course of its
business, including books of account and records of Partnership proceedings, may
be kept on any information storage device, provided that the books and records
so kept are convertible into clearly legible written form within a reasonable
period of time. The General Partner shall at no cost to the Partnership provide
day-to-day accounting services to the Partnership and its Controlled Entities,
and shall prepare financial and other reports reasonably requested by the
Managing General Partner. The books of the Partnership shall be maintained for
financial reporting purposes on the method of accounting approved by the
Managing General Partner in its reasonable discretion.

         9.2 FISCAL YEAR.

                  The fiscal year of the Partnership shall be the calendar year
(or relevant portion thereof with respect to the first and last years of the
Partnership) (the "Fiscal Year") for tax, accounting and other purposes.

         9.3 REPORTS.

                  The General Partner shall deliver to each Partner, at the
Partnership's expense, not later than 90 days following the end of each Fiscal
Year, a balance sheet, an income statement, and an annual statement of source
and application of funds of the Partnership for such Fiscal Year. In addition to
any and all other reports and business plans required hereunder, the General
Partner shall deliver to the Managing General Partner such reports as set forth
on Exhibit F hereof. The General Partner shall deliver to the Managing General
Partner: (i) weekly reports listed on Exhibit F hereof within seven days
following the end of such weekly period; (ii) monthly reports listed on Exhibit
F hereof within 30 days following the end of such monthly period; and (iii)
annual reports listed on Exhibit F hereof within 90 days following the end of
such annual period. Such reports shall be available to Partners upon request.
Upon the request of a Majority Interest, such financial statements shall be
audited at Partnership expense by a firm of independent public accountants
selected by the Managing General Partner.

                                       34
<PAGE>   39

                                    ARTICLE X

                                   TAX MATTERS

         10.1 PREPARATION OF TAX RETURNS.

                  The General Partner, under the supervision of the Managing
General Partner, shall arrange for the preparation and timely filing of all
returns of Partnership income, gains, deductions, losses and other items
necessary for federal, state and local income tax purposes and, in connection
therewith, the Managing General Partner shall make available to the General
Partner Partnership records necessary therefor. A copy of the Partnership's
federal income tax return will be furnished to all Partners at least 15 days
before such tax return is actually filed for their review and comment (the
Managing General Partner shall consider and may incorporate reasonable comments
made by the Partners), but in no event later than 120 days after the end of each
Fiscal Year. The classification, realization and recognition of income, gains,
losses and deductions and other items shall be on the accrual method of
accounting for federal income tax purposes, as the Managing General Partner
shall determine in accordance with applicable law. The Managing General Partner
in its sole discretion may pay state and local income taxes attributable to
operations of the Partnership and treat such taxes as an expense of the
Partnership. The Managing General Partner shall promptly (i) send to each
Partner on a quarterly basis an estimate of the taxable income of such Partner,
(ii) send to each Limited Partner copies of all notices and other written
documents sent to or received from any taxing authority, (iii) consult with each
Limited Partner before making or implementing any material tax election or other
material tax decision affecting the Partnership or any Partner or the defense,
resolution or settlement of any material tax controversy described in Section
10.3 and (iv) furnish to each Limited Partner copies of each of the federal,
state and local income tax returns at least 15 days prior to the filing thereof,
and such other tax and related information it may reasonably request from time
to time.

         10.2 TAX ELECTIONS.

                  (a) Except as otherwise provided herein, the Managing General
         Partner shall determine whether to make any election available to the
         Partnership under the Code. In connection with any transfer of a
         Partnership Interest permitted under Article XI hereof, the Managing
         General Partner shall cause the Partnership at the written request of
         the transferor or transferee, on behalf of a Partnership and at the
         time and in the manner provided in Regulations Section 1.754-1(b), to
         make an election to adjust the basis of the Partnership's property in
         the manner provided in Sections 734(b) and 743(b) of the Code, and such
         transferee shall pay all costs incurred by the Partnership in
         connection therewith, including reasonable attorney's and accountant's
         fees.

                  (b) Each of the Executives shall make a timely election under
         Section 83(b) of the Code with respect to income from the Partnership.

         10.3 TAX CONTROVERSIES.

                  Subject to the provisions hereof, CGLH GP is designated the
"tax matters partner" (as defined in Section 6231 of the Code), and is
authorized and required to represent the Partnership, at the Partnership's
expense, in connection with all examinations of the Partnership's affairs by tax
authorities, including resulting administrative and judicial proceedings, and to
expend Partnership funds for professional services and costs associated
therewith. Each Partner agrees to cooperate with CGLH GP in connection with such
proceedings. Notwithstanding the above, CGLH GP shall not extend the statute of
limitations with respect to any taxable years of the Partnership without the
consent of all the Partners.

                                       35
<PAGE>   40

         10.4 ORGANIZATIONAL EXPENSES.

                  The Partnership shall elect to deduct expenses incurred in
organizing the Partnership ratably over a 60-month period as provided in Section
709 of the Code.

         10.5 TAXATION AS A PARTNERSHIP.

                  No election shall be made by the Partnership or any Partner
for the Partnership to be excluded from the application of any of the provisions
of Subchapter K, Chapter 1 of Subtitle A of the Code or from any similar
provisions of any state tax laws.

                                   ARTICLE XI

                       TRANSFERS OF PARTNERSHIP INTERESTS

         11.1 TRANSFER RESTRICTIONS.

                  (a) No Partnership Interest shall be transferred, in whole or
         in part, except in accordance with the terms and conditions set forth
         in Sections 11.2, 11.3, 11.4, 11.5, 11.6, 11.7, 11.8, 11.9 and 11.10.

                  (b) Any transfer or purported transfer of any Partnership
         Interest not made in accordance with this Article XI shall be null and
         void. An alleged transferee shall have no right to require any
         information or account of the Partnership's transactions or to inspect
         the Partnership's books. The Partnership shall be entitled to treat the
         alleged transferor of a Partnership Interest as the absolute owner
         thereof in all respects, and shall incur no liability to any alleged
         transferee for distributions to the Partner owning such Partnership
         Interest of record or for allocations of income, gain, losses,
         deductions or credits or for transmittal of reports and notices
         required to be given to holders of Partnership Interests. The term
         "transfer," when used in this Article XI with respect to a Partnership
         Interest, includes a sale, assignment, gift, pledge, encumbrance,
         hypothecation, mortgage, exchange, or any other disposition or
         transfer, whether voluntarily or by operation of law, at judicial sale
         or otherwise. Neither the Partnership nor the Managing General Partner
         shall keep a register of transfers of interests in the Partnership. A
         transfer of a Controlling interest in IHC GP and/or IHC LP, or any of
         its successors or assigns, shall be deemed a transfer by such Partner,
         or such successor or assign, of a Partnership Interest in the
         Partnership and subject to the restrictions hereof.

         11.2 TRANSFERS OF INTERESTS BY MANAGING GENERAL PARTNER.

                  The Managing General Partner may transfer all or a portion of
its Partnership Interest to any Person only after first obtaining the approval
of all of the Limited Partners other than the Executives (which approval may be
withheld in each such Limited Partner's sole and absolute discretion); provided,
however, that the consent of such Limited Partners shall not be required for a
transfer of the Managing General Partner's Partnership Interest: (a) as
collateral security for the indebtedness of an Affiliate of such Managing
General Partner; (b) to an Affiliate of the Managing General Partner, an
Affiliate of Sherwood M. Weiser, Karim Alibhai, Mahmood Khimji or an Affiliate
of, or investment fund or other vehicle sponsored by, Lehman Brothers; or (c)
pursuant to Sections 11.8, 11.9 and 11.10 of this Agreement. Any permitted
transfer by the Managing General Partner of its Partnership Interest under this
Section 11.2 shall not constitute a withdrawal of the Managing General Partner
under Article XII, Section 13.1(b), or any other provision of this Agreement. If
any such transfer is deemed to constitute a withdrawal under such provisions or
otherwise and results in the dissolution of the Partnership under this Agreement
or the laws of any jurisdiction to which the Partnership or this Agreement is
subject, the

                                       36
<PAGE>   41

Partners hereby unanimously consent to the reconstitution and continuation of
the Partnership immediately following such dissolution, pursuant to Section 13.2
of this Agreement.

         11.3 TRANSFERS OF INTERESTS BY GENERAL PARTNER.

                  The General Partner may transfer all, but not less than all,
of its Partnership Interest to any Person only after first obtaining the
approval of the Managing General Partner (which approval may be withheld in the
Managing General Partner's sole and absolute discretion); provided, however,
that the consent of the Managing General Partner shall not be required for a
transfer pursuant to Sections 11.8 and 11.10 of this Agreement. Any permitted
transfer by the General Partner of its Partnership Interest under this Section
11.2 shall not constitute a withdrawal of the General Partner under Article XII,
Section 13.1(b), or any other provision of this Agreement. If any such transfer
is deemed to constitute a withdrawal under such provisions or otherwise and
results in the dissolution of the Partnership under this Agreement or the laws
of any jurisdiction to which the Partnership or this Agreement is subject, the
Partners hereby unanimously consent to the reconstitution and continuation of
the Partnership immediately following such dissolution, pursuant to Section 13.2
of this Agreement.

         11.4 TRANSFER OF INTERESTS OF LIMITED PARTNER.

                  The Partnership Interests of IHC LP or the Executives, and any
of its successors or assigns, may not be transferred except: (a) if such
Partner, and any of its successors or assigns, is a natural person, by act of
law to his estate (for the benefit of an individual or other successor in
interest) or to the heir or legatee of such deceased individual; (b) if such
Partner, and any of its successors or assigns, is not an individual, upon the
adjudication of bankruptcy, dissolution or other cessation of its existence, to
the authorized representative thereof for the purpose of effecting the winding
up and disposition of the business of such entity; (c) to any other Person with
the prior written consent of the Managing General Partner and all of the Limited
Partners other than the Executives, which consent may be withheld in the sole
and absolute discretion of such Partners; (d) pursuant to the provisions of
Sections 11.8 and 11.10; and (e) in the case of the Executives, pursuant to
Section 11.12. Subject to the provisions of Sections 11.8, and 11.10, the
Partnership Interests of CGLH LP, and any of its successors or assigns, may be
transferred, in whole or in part, at the discretion of CGLH LP, or such
successor or assign.

         11.5 ADDITIONAL LIMITATIONS ON TRANSFERS OF LIMITED PARTNERSHIP
              INTERESTS.

                  The Managing General Partner may require, as a condition to
any transfer of a Partnership Interest of a Partner, that, in the Managing
General Partner's reasonable determination: (a) the transfer will not jeopardize
the treatment of the Partnership as a partnership not treated as a corporation
for federal income tax purposes; (b) the transfer will not result in or cause a
termination of the Partnership for federal income tax purposes; and (c) the
transfer will not violate the registration requirements of applicable securities
laws or cause any prior offer and sale of Partnership Interests to violate such
requirements. The Managing General Partner may also require the proposed
transferee to deliver to the Partnership acceptable representations and
warranties respecting its status under applicable securities laws and its
investment intent with respect to the Partnership Interest, and may require the
transferor and transferee to supply such other documentation as the Managing
General Partner may deem advisable in its sole discretion.

         11.6 DISTRIBUTIONS AND ALLOCATIONS IN RESPECT OF TRANSFERRED
              PARTNERSHIP INTERESTS.

                  If any Partnership Interest is transferred during any Fiscal
Year in compliance with the provisions of this Article XI, Profits, Losses, and
all other items attributable to the transferred interest for such period shall
be divided and allocated between the transferor and the transferee by taking
into account their varying interests during the period in accordance with Code
Section 706(d), using any

                                       37
<PAGE>   42

conventions permitted by law, selected by the Managing General Partner in its
reasonable discretion. All distributions on or before the date of such transfer
shall be made to the transferor. Solely for purposes of making such allocations
and distributions, the Partnership shall recognize such transfer not later than
the end of the calendar month during which it is given notice of such transfer,
provided that if the Partnership does not receive a notice stating the date such
Partnership Interest was transferred and such other information as the Managing
General Partner may reasonably require within 30 days after the end of the
Fiscal Year during which the transfer occurs, then all of such items shall be
allocated, and all distributions shall be made, to the person who, according to
the books and records of the Partnership, on the last day of the Fiscal Year
during which the transfer occurs, was the owner of the Partnership Interest.
Neither the Partnership nor any Partner shall incur any liability for making
allocations and distributions in accordance with the provisions of this Section
11.6, whether or not any Partner or the Partnership has knowledge of any
transfer of ownership of any Partnership Interest.

         11.7 ADMISSION OF SUBSTITUTE OR SUCCESSOR PARTNERS.

                  (a) Admission of Substitute Limited Partners. A transferee
         (which may be the heir or legatee of the Limited Partner) or assignee
         of the Limited Partner's Partnership Interest, or Person acquiring a
         Partnership Interest pursuant to any foreclosure made upon any
         permitted pledge or hypothecation of such Partnership Interest, shall
         be entitled to receive the distributive share of the Partnership's
         Profits, Losses, income, gains, losses, deductions, and credits
         attributable to such Partnership Interest. To become a substitute
         Limited Partner, such transferee, assignee, heir, or legatee must be
         acceptable to the Managing General Partner in the Managing General
         Partner's sole and absolute discretion. If acceptable to the Managing
         General Partner, such transferee, assignee, heir, or legatee shall
         execute a counterpart of this Agreement, thereby agreeing to be bound
         by the terms hereof as a Limited Partner with respect to the
         Partnership Interest so transferred. Upon admission of a substitute
         Limited Partner, such Limited Partner shall be subject to all of the
         restrictions applicable to, shall assume all of the obligations of, and
         shall attain the status of a Limited Partner under and pursuant to this
         Agreement with respect to the Partnership Interest held by such Limited
         Partner.

                  (b) Admission of Successor Managing General Partner. A
         successor Managing General Partner selected pursuant to Section 13.2 of
         this Agreement or the permitted transferee of or successor to the
         Partnership Interest of the Managing General Partner pursuant to
         Section 11.2 of this Agreement shall be admitted to the Partnership as
         the Managing General Partner, effective as of the date of the
         withdrawal or removal of the predecessor Managing General Partner or
         the date of transfer of such predecessor's Partnership Interest.

                  (c) Admission of Successor General Partner. A successor
         General Partner selected pursuant to Section 13.2 of this Agreement or
         the permitted transferee of or successor to all of the Partnership
         Interest of the General Partner pursuant to Section 11.3 of this
         Agreement shall be admitted to the Partnership as the General Partner,
         effective as of the date of the withdrawal or removal of the
         predecessor General Partner or the date of transfer of such
         predecessor's Partnership Interest.

                  (d) Action by Managing General Partner. In connection with the
         admission of any substitute Limited Partner, successor General Partner
         or successor Managing General Partner, the Managing General Partner
         shall have the authority to take all such actions as it deems necessary
         or advisable in connection therewith, including the amendment of
         Exhibit A to this Agreement and the execution and filing with
         appropriate authorities of any necessary documentation.

                                       38
<PAGE>   43

         11.8 BUY-SELL PROVISION.

                  (a) If a Partner wishes at any time after the Buy-Sell Date,
         for any reason or for no reason, to purchase the Partnership Interests
         of another Partner or other Partners (for the purposes of this Section
         11.8, the "Offering Partner"), the following procedure shall apply to
         such proposed purchase:

                           (i) The Offering Partner shall give notice (the
                  "Buy-Sell Notice") to the Partner or Partners whose
                  Partnership Interests the Offering Partner seeks to purchase
                  (individually or collectively, the "Receiving Partner")
                  specifying a gross value (i.e., without taking into account
                  liabilities) (the "Stated Value") attributable to all of the
                  assets of the Partnership. The Buy-Sell Notice must be
                  delivered with the words "Confidential/Urgent" clearly visible
                  from the exterior of the container in which the Buy-Sell
                  Notice is contained and must expressly alert the Receiving
                  Partner to the duration of the Response Period (as defined
                  below). Delivery shall be in accordance with the notice
                  provisions of this Agreement.

                           (ii) The Receiving Partner shall have the options (A)
                  to require that the Offering Partner purchase all of the
                  Partnership Interests of the Receiving Partner and the
                  Partnership Interests of its Affiliates; or (B) to elect to
                  purchase the Offering Partner's Partnership Interest and those
                  of its Affiliates. If the Receiving Partner elects to purchase
                  the Offering Partner's Partnership Interest and those of the
                  Offering Partner's Affiliates or require the purchase of all
                  of its Partnership Interests and its Affiliate's Partnership
                  Interests, the Receiving Partner shall so notify the Offering
                  Partner in writing within 30 days from the receipt of the
                  Buy-Sell Notice (the "Response Period") and, in the case of
                  the election to acquire the Offering Partner's Partnership
                  Interests and those of its Affiliates, the Partnership
                  Interests being acquired shall be those of the Offering
                  Partner and its Affiliates. The Partner purchasing the
                  Partnership Interests of other Partner(s) pursuant to this
                  Section 11.8 shall be the "Buying Partner" and the Partner(s)
                  selling Partnership Interests pursuant to this Section 11.8
                  shall be the "Selling Partner". Unless the Receiving Partner
                  responds within the Response Period that it will be the Buying
                  Partner or requiring the purchase of the Partnership Interests
                  of its Affiliates, (A) the Offering Partner will be the Buying
                  Partner, (B) the Receiving Partner will be the Selling Partner
                  and (C) the Partnership Interests being acquired shall be only
                  those set forth in the Buy-Sell Notice.

                           (iii) Within 75 days after the Buy-Sell Notice has
                  been given, the Buying Partner shall pay to the Selling
                  Partner (and, if applicable, the Selling Partner's Affiliates
                  in this Partnership), in full payment for its (and, if
                  applicable, their) interest(s) in this Partnership, the
                  amounts that such Selling Partner (and, if applicable, the
                  Selling Partner's Affiliates in this Partnership) would have
                  received if the assets of the Partnership had been sold for an
                  amount equal to the Stated Value on the date of such payment,
                  Profit, Loss, and other items of income, gain, loss or
                  deduction were allocated among the Partners in accordance with
                  this Agreement and the proceeds of such sale (net of
                  liabilities that would have been paid out of such proceeds,
                  including without limitation any amounts due to a Partner
                  (and, if applicable, the Selling Partner's Affiliates in this
                  Partnership), if such sale had actually occurred) were
                  distributed in accordance with the provisions of this
                  Agreement.

                           (v) If the Receiving Partner elects to be the Buying
                  Partner but fails to complete the transaction as described
                  above, the Offering Partner shall be entitled to be the Buying
                  Partner as described above.

                                       39
<PAGE>   44

                           (vi) The purchase price to be paid under this Section
                  11.8 shall be payable entirely in cash at the closing of the
                  sale of interests. The Selling Partner shall represent to the
                  Buying Partner that the Partnership Interests being sold are
                  free and clear of liens other than those liens in connection
                  with guaranties of the Partnership's indebtedness or otherwise
                  pursuant to Article XI hereof. Upon the Buying Partner's
                  tender of payment of the purchase price, including, without
                  limitation, by wire transfer or delivery of a certified check
                  to the Selling Member's address on the records of the
                  Partnership, the Selling Partner (and, if applicable, the
                  Selling Partner's Affiliates in this Partnership) shall be
                  deemed to have transferred its (or, if applicable, their)
                  Partnership Interest(s) and shall cease to be a Partner (or,
                  if applicable, Partners) of this Partnership (or to have any
                  economic or other interest therein).

                           (vii) Notwithstanding anything to the contrary
                  herein, an Executive may only be a Buying Partner with the
                  consent of all of the other Partners.

         11.9 RIGHT TO REQUIRE SALE.

                  (a) Upon, and for the two-year period after, the occurrence of
         a Change in Control, CGLH LP and CGLH GP shall have the right to
         require IHC to purchase all, but not less than all, of the Partnership
         Interests held by such entity(ies) for cash at the purchase price
         determined pursuant to Section 11.9(b) hereof. Such right shall be
         exercised by delivery of a written notice by CGLH LP and CGLH GP to IHC
         GP and IHC LP, respectively, that CGLH LP and CGLH GP elects to
         exercise their right under this Section 11.9. The date of such notice
         shall be the "Put Date".

                  (b) The purchase price to be paid shall be equal to the total
         amount, determined as of the Put Date, that a willing buyer would pay
         to a willing seller for CGLH LP's and CGLH GP's Partnership Interests,
         taking into account assumed liabilities, determined as a whole and in
         the context of the Partnership as a going concern in an arm's length,
         negotiated transaction without undue time constraints (the "Purchase
         Price"). In determining the Purchase Price, no discounts for lack of
         control or lack of marketability shall be applied. The Purchase Price
         shall be determined jointly by CGLH GP and CGLH LP, on the one hand,
         and IHC, on the other hand. If there is a dispute between these parties
         as to the Purchase Price (which dispute remains unresolved for 10
         Business Days), such dispute shall be submitted for final determination
         to a mutually acceptable investment banking firm of national reputation
         familiar with the valuation of companies in the hospitality and lodging
         industry ("Investment Banking Firm"). In the event that these parties
         cannot agree on a mutually acceptable Investment Banking Firm within 10
         Business Days, CGLH GP and CGLH LP, on the one hand, and IHC GP and IHC
         LP, on the other hand, shall each select one Investment Banking Firm,
         and shall cause such firms to promptly select a third Investment
         Banking Firm within five Business Days. The three Investment Banking
         Firms so selected shall, by majority vote, render their final
         determination as promptly as practicable and in any event within 20
         Business Days, which determination shall be final and binding on the
         parties. The fees and expenses of any such determination shall be borne
         by equally by CGLH GP and CGLH LP, on the one hand, and IHC GP and IHC
         LP, on the other hand.

                  (c) Upon the closing of the sale under this Section 11.9, CGLH
         LP and CGLH GP shall thereupon cease to be Partners of the Partnership
         (or to have any economic or other interest therein).

         11.10 TAG-ALONG RIGHT.

                  (a) In connection with the sale or syndication of any of CGLH
         GP's and/or CGLH LP's Partnership Interests to an unrelated third party
         (a "Sale"), IHC LP, IHC GP and the

                                       40
<PAGE>   45

         Executives shall be afforded the opportunity to participate in such
         Sale as and to the extent provided in this Agreement. At least twenty
         (20) days prior to the consummation of the Sale, CGLH shall send a
         written notice (a "Sale Notice") to IHC LP, IHC GP and the Executives
         setting forth the terms of the Sale, including the percentage of
         Partnership Interests being transferred and the purchase price offered
         by such unrelated third party. IHC LP, IHC GP and the Executives shall
         have twenty days from the date of the Sale Notice (the "Notice Period")
         within which to exercise the right to participate in the Sale. Each of
         IHC GP and IHC LP shall have the right to transfer such portion of its
         Partnership Interests as relates to its Class A Capital Contributions
         equal to the same percentage as being transferred by CGLH GP and/or
         CGLH LP (the "IHC Tag-Along Interest"). Each Executive shall have the
         right to transfer such portion of such Executive's Partnership Interest
         equal to the same percentage as being transferred by CGLH GP and/or
         CGLH LP(an "Executive Tag-Along Interest"). Neither the IHC Tag-Along
         Interest nor an Executive Tag-Along Interest shall include any
         interests or amounts related to Class B Capital Contributions,
         Undistributed Class B Capital, Class B Preference Amounts or
         Undistributed Class B Preference Amounts and no such interests or
         amounts shall be included in the consideration paid (or the calculation
         thereof) in respect of the IHC Tag-Along Interest or an Executive
         Tag-Along Interest. If IHC LP, IHC GP shall elect to participate in the
         Sale, it (or they) shall receive, as consideration therefor, the
         product of: (i) the purchase price set forth in the Sale Notice and
         (ii) the fraction, (A) the numerator of which is the IHC Tag-Along
         Interest, and (B) the denominator of which is the sum of (1) CGLH GP's
         and/or CGLH LP's Partnership Interests being transferred pursuant to
         the Sale and (2) the IHC Tag-Along Interest. If an Executive shall
         elect to participate in the Sale, he shall receive, as consideration
         therefor, the product of: (i) the purchase price set forth in the Sale
         Notice and (ii) the fraction, (A) the numerator of which is his
         Executive Tag-Along Interest, and (B) the denominator of which is the
         sum of (1) CGLH GP's and/or CGLH LP's Partnership Interests being
         transferred pursuant to the Sale and (2) such Executive Tag-Along
         Interest.

                  (b) If: (i) IHC GP and IHC LP elect to participate in the
         proposed Sale, (ii) the Sale would result in the transfer of all of IHC
         GP's and IHC LP's Partnership Interests and (iii) the termination of
         one or more property management agreements between the Manager and the
         Partnership or a Controlled Entity covering a Hotel (and its other,
         related assets) arises therefrom, CGLH GP and/or CGLH LP shall, upon
         consummation of the Sale, pay to the Partnership an amount equal to IHC
         LP's Undistributed Class B Capital invested in the Hotel, and other
         related assets as to which a property management agreement has been
         terminated as a result of the Sale. The Partnership shall distribute
         such amount to IHC LP in reduction of its Undistributed Class B
         Capital. The Partners and the Partnership acknowledge and agree that
         each of CGLH GP and CGLH LP has the right to consummate a Sale or other
         transfer, notwithstanding any termination of, or penalty with respect
         to, property management agreements or other agreements that may arise
         therefrom and without any liability with respect to any such
         termination or penalty.

                  (c) If IHC GP, IHC LP and/or the Executives elect to
         participate in the proposed Sale (to the extent of the IHC Tag-Along
         Interest or Executive Tag-Along Interest(s), as applicable), then IHC
         GP and/or IHC LP or an Executive, as applicable, shall give notice of
         such election by a signed writing by such electing party (the
         "Acceptance"). Any Acceptance shall be received by CGLH GP and/or CGLH
         LP prior to the end of the Notice Period. After the lapse of the Notice
         Period within which CGLH GP and/or CGLH LP shall not have received an
         Acceptance from IHC LP, IHC GP and/or the Executives, CGLH may
         consummate, without the participation of such party, a Sale to one or
         more purchasers, for consideration equal to or less than the purchase
         price specified in the Sale and on terms no more favorable to CGLH GP
         and/or CGLH LP than those specified in the Sale Notice. In the event
         CGLH GP's and/or CGLH LP's Partnership Interests covered by the Sale
         Notice are not disposed of within ninety (90) days following the lapse
         of the Notice Period, then they shall once again be subject to the
         tag-along rights set forth in this section.

                                       41
<PAGE>   46

                  (d) In connection with a Sale pursuant to which IHC GP and/or
         IHC LP exercises its right to "tag along" pursuant to this Section
         11.10 (and notwithstanding that an Executive did not exercise his right
         to "tag-along" pursuant to this Section 11.10), CGLH LP and/or CGLH GP
         may elect to require that the Executives, or either of them,
         participate in such Sale, as if such Executive(s) elected to
         "tag-along" pursuant to the other subsections of this Section 11.10.

         11.11 REDUCTION OF UNDISTRIBUTED CLASS B CAPITAL.

                  Except as otherwise provided in Section 11.10 of this
Agreement, if a property management agreement with a Manager is terminated for
any reason (including without limitation the failure by the Manager to meet
performance standards contained in such property management agreement), the
Partnership shall distribute to the holders of the Undistributed Class B Capital
an amount equal to such holders' Undistributed Class B Capital invested in the
Hotel and its other, related assets with respect to which the property
management agreement was terminated by the Partnership.

         11.12 OPTIONAL REDEMPTION.

                  Upon the termination of an Executive's employment with the
Corporation for any reason (including, without limitation, death, Cause, without
Cause, without Good Reason, with Good Reason or Disability, as such terms are
defined in such Executive's Executive Employment Agreement), the Partnership
shall have the right (but not the obligation) to acquire such Executive's
Percentage Interest in the Partnership as of the date immediately following the
date of such termination (i.e., after giving effect to the reduction in
Percentage Interest, if any, resulting from such termination) (such interest,
the "Redemption Interest"), for a purchase price (and subject to the amount of
such purchase price) determined pursuant to Section 11.12(a) and (h) hereof (the
"Redemption Price") as of the Redemption Closing Date. The following procedure
shall apply to such proposed acquisition:

                           (a) Upon the termination of an Executive's employment
         with the Corporation as a result of such Executive's death or
         Disability, without Cause or with Good Reason (as such terms are
         defined in such Executive's Executive Employment Agreement), the
         Redemption Price shall equal the greater of: (i) such Executive's
         Undistributed Tier 2 Capital allocable to his Redemption Interest and
         (ii) the fair market value of such Executive's Redemption Interest
         determined in accordance with Section 11.12(h) hereof. Upon the
         termination of an Executive's employment with the Corporation for Cause
         or without Good Reason (as such terms are defined in such Executive's
         Executive Employment Agreement), the Redemption Price shall equal the
         fair market value of such Executive's Redemption Interest determined in
         accordance with Section 11.12(h) hereof.

                           (b) The Partnership shall give notice (the
         "Redemption Notice") to such Executive of the Partnership's intent to
         acquire such Executive's Redemption Interest, subject to the
         determination of the fair market value thereof determined pursuant to
         Section 11.12(h). Delivery of the Redemption Notice shall be in
         accordance with the notice provisions of this Agreement.

                           (c) Within 75 days after the Redemption Notice has
         been given (or within 75 days after the delivery of a certified
         appraisal to the Partnership of the fair market value of the
         Executive's Redemption Interest as of the Redemption Date, if, after
         receipt of the appraisal, the Partnership elects to continue with the
         acquisition of the Redemption Interest), the Partnership shall pay to
         such Executive the Redemption Price, in full payment for his Redemption
         Interest

                                       42
<PAGE>   47

         and the Redemption Interest shall be assigned to the Partnership (such
         date, the "Redemption Closing Date"). The Redemption Price shall be
         payable entirely in cash. Such Executive shall represent to the
         Partnership that the Redemption Interests being sold are free and clear
         of liens other than those liens in connection with guaranties of the
         Partnership's indebtedness or otherwise pursuant to Article XI hereof.

                           (d) Upon the Partnership's tender of payment of the
         Redemption Price, including, without limitation, by wire transfer or
         delivery of a certified check to such Executive's address on the
         records of the Partnership, such Executive shall be deemed to have
         transferred his entire Partnership Interest and shall cease to be a
         Partner or to have any economic or other interest herein.

                           (e) Such Executive's only remedy in connection with a
         dispute arising under this Section (including, without limitation, any
         dispute over the Redemption Price) shall be for damages. The Partners
         agree that the remedy described herein bears a reasonable relationship
         to the damages which the Partners estimate may be suffered by an
         Executive for a breach by the Partnership under this Section and the
         limitation of remedy is not unreasonable under the circumstances
         existing as of the date hereof.

                           (f) The then existing Percentage Interests of the
         remaining Partners (other than an Executive) shall be proportionately
         increased to reflect the redemption of such Redemption Interest.

                           (g) For the purposes of this Section 11.12,
         "Executive's Percentage Interest" shall include any transferee of an
         Executive who is a spouse, natural or adopted child, grandchild,
         parent, sibling or natural or adopted child of any sibling of
         Executive, or trust for the benefit of any one of the foregoing
         persons, or his estate or designated beneficiary, heir or legatee.
         Nothing in this Section shall create a right of transfer contrary to
         the other provisions of Article XI or otherwise.

                           (h) The fair market value of an Executive's
         Redemption Interest shall be determined by agreement between the
         Partnership and such Executive. In the absence of an agreement within
         30 days following the date of the Redemption Notice, the following
         procedure shall apply: The value of an Executive's Redemption Interest
         as of the Redemption Closing Date shall be determined pursuant to an
         appraisal performed by an appraiser of recognized standing in the
         hospitality industry, selected by the Partnership in its reasonable
         discretion. If such appraiser is not reasonably acceptable to such
         Executive, such Executive shall so notify the Partnership and such
         Executive shall select a second appraiser of recognized standing in the
         hospitality industry. If, within ten days following notice to such
         Executive of the selection of an appraiser by the Partnership, such
         Executive does not notify the Partnership that such appraiser is not
         acceptable, such appraiser shall be deemed reasonably satisfactory to
         the Executive. If such Executive selects a second appraiser (as
         provided herein), such two appraisers shall jointly select a third
         appraiser of recognized standing in the hospitality industry and such
         third appraiser shall be the appraiser for purposes of this Section
         11.12. The appraiser selected by the Partnership, or the third
         appraiser selected pursuant to this paragraph, as the case may be,
         shall, within 60 days from the date of the Redemption Notice, complete
         and deliver to the Executive and the Partnership certified copies of
         the appraisal of the fair market value of the Executive's Redemption
         Interest as of the Redemption Date. The costs of the appraisal shall be
         borne by the Partnership. In order to determine the fair market value
         of the Executive's Redemption Interest, the appraiser shall determine
         the amount of cash the Executive would be entitled to receive under
         Section 13 hereof if (i) the Partnership sold all of its property for
         an amount of cash equal to the

                                       43
<PAGE>   48

         aggregate value of all hotels and other property owned by the
         Partnership, and paid or reserved for all liabilities of the
         Partnership, and the Partnership received liquidation value for its
         interests in entities in which the Partnership owns a direct or
         indirect interest and (ii) the Partnership thereafter liquidated in
         accordance with Section 13 hereof.

         11.13 TERMINATION FOR CAUSE AND WITHOUT GOOD REASON.

                  If the Corporation terminates an Executive for Cause (as such
term is defined in such Executive's Executive Employment Agreement) or if an
Executive terminates his employment with the Corporation without Good Reason (as
such term is defined in such Executive's Executive Employment Agreement), then
such Executive's Percentage Interest shall be reduced as of the date of such
termination, pursuant to Exhibit G hereto; provided, however, that if such
Percentage Interest has been reduced below the percentage provided on Exhibit G
hereto pursuant to the terms of this Agreement (by way of example and not as a
limitation, if such Executive's Percentage Interest has been diluted pursuant to
Section 4.3(b)) then such Executive's Percentage Interest shall equal such
lesser Percentage Interest. The then existing Percentage Interests of the
Partners (other than the Executives) shall each be increased by one-half of the
percentage by which such Executive's Percentage Interest is reduced. In any and
all events, such terminated Executive's Percentage Interest, if any, as reduced
hereby, shall be subject to optional redemption by the Partnership pursuant to
Section 11.12.

                                  ARTICLE XII

     WITHDRAWAL AND REMOVAL OF MANAGING GENERAL PARTNER AND GENERAL PARTNER

         12.1 EVENTS OF WITHDRAWAL.

                  (a) Neither the Managing General Partner nor the General
         Partner may voluntarily withdraw from the Partnership at any time. The
         Managing General Partner or the General Partner (as the case may be),
         however, will be deemed to have withdrawn from the Partnership on the
         occurrence of any one of the following events (each event herein
         referred to as an "Event of Withdrawal"):

                           (i) Pursuant to Section 12.2 hereof, the Managing
                  General Partner is removed as managing general partner of the
                  Partnership, or the General Partner is removed as general
                  partner of the Partnership; or

                           (ii) The Managing General Partner transfers all of
                  its right, title and interest as managing general partner of
                  the Partnership other than as permitted by Article XI; or

                           (iii) The General Partner transfers all of its right,
                  title and interest as general partner of the Partnership other
                  than as permitted by Article XI.

                                       44
<PAGE>   49

                  (b) Upon an Event of Withdrawal with respect to the General
         Partner, there shall be no dissolution of the Partnership, and if such
         dissolution is otherwise mandated by applicable law, the remaining
         Partners agree that they will be deemed to have unanimously elected to
         continue the Partnership and the Partnership shall be deemed to be
         dissolved and reconstituted as may be required by applicable law.

         12.2 REMOVAL.

                  (a) A Managing General Partner may be removed as Managing
         General Partner and a General Partner may be removed as General Partner
         at any time: (i) after such Person commits an act of fraud or gross
         negligence in its capacity as Managing General Partner or General
         Partner, as the case may be; (ii) after such Person commits a material
         breach of this Agreement; (iii) after such Person engages in
         intentional and willful misconduct against the interests of the
         Partnership; (iv) after such Person suffers or is subject to an Event
         of Bankruptcy; or (v) with respect to the General Partner only, upon
         the vote of a Majority Interest to remove the General Partner if the
         General Partner exceeds the power or authority expressly granted herein
         or the power or authority expressly granted by the Managing General
         Partner in writing, or purports to have power or authority in excess of
         those expressly granted herein or the power or authority expressly
         granted by the Managing General Partner in writing.

                  (b) Any such removal of that Person as the Managing General
         Partner or the General Partner shall be effective after the following
         conditions have been satisfied: (i) delivery of a removal notice to
         such Person, in the case of the removal of the Managing General
         Partner, from a Majority Interest, and in the case of the General
         Partner, from the Managing General Partner; and (ii) in the case of the
         Managing General Partner, approval by a Majority Interest of a new
         Managing General Partner and the admission of such Person as a Managing
         General Partner in the Partnership. The removal of the Managing General
         Partner shall cause a dissolution event under Section 13.1 of this
         Agreement.

                  (c) If a Person is removed as a General Partner but continues
         to own a Partnership Interest, then such Partnership Interest shall be
         converted into a Partnership Interest as a Limited Partner. In the
         event of a reconstitution of the Partnership pursuant to Section 13.2
         of this Agreement, the Partnership Interest of a removed Managing
         General Partner shall be converted into a Partnership Interest as a
         Limited Partner.

                  (d) If a Person is removed as a General Partner, such Person
         shall perform, execute and deliver or cause to be performed, executed
         and delivered any and all acts, documents and assurances as the
         Managing General Partner may reasonably require to evidence: (i) the
         removal of the former General Partner; and (ii) if applicable, a
         conversion of the Partnership Interest of the former General Partner to
         a Partnership Interest as a Limited Partner. If a Person is removed as
         a Managing General Partner, and thereafter the Partnership is
         reconstituted pursuant to Section 13.2 of this Agreement, such Person
         shall perform, execute and deliver or cause to be performed, executed
         and delivered any and all acts, documents and assurances as the newly
         appointed Managing General Partner may reasonably require to evidence:
         (i) the removal of the Managing General Partner; and (ii) if
         applicable, a conversion of the Partnership Interest of the former
         Managing General Partner to a Partnership Interest as a Limited
         Partner; and (iii) the admission of a new Managing General Partner.

                  (e) Notwithstanding anything to the contrary in Article XI, in
         connection with the admission of a new Managing General Partner, the
         Limited Partners may assign a portion of their respective Partnership
         Interests to such new Managing General Partner so that such new
         Managing General Partner has at least a 1% Percentage Interest in all
         items of Profit, Loss,

                                       45
<PAGE>   50

         income, gain, loss and deduction, Partnership capital, and
         distributions. The portion of the Partnership Interest of a Limited
         Partner that is assigned to such new Managing General Partner shall be
         converted into a Partnership Interest as a Managing General Partner
         upon its receipt by the new Managing General Partner.

                                  ARTICLE XIII

                           DISSOLUTION AND WINDING UP

         13.1 DISSOLUTION.

                  (a) Except as otherwise provided in this Agreement, no Partner
         shall have the right to terminate this Agreement or dissolve the
         Partnership by its express will or by withdrawal without the prior
         written consent of the other Partners.

                  (b) The Partnership shall be dissolved upon the first to occur
         of any of the following:

                           (i) The expiration of its term as provided in Section
                  1.3 of this Agreement (as such term may have been extended in
                  accordance with the provisions of Section 1.3 prior to an
                  event of dissolution);

                           (ii) The removal of the Managing General Partner, or
                  any other event that results in its ceasing to be the managing
                  general partner of the Partnership;

                           (iii) An election to dissolve the Partnership by the
                  Managing General Partner that is approved by all of the
                  Limited Partners other than the Executives;

                           (iv) At the election of CGLH GP, at such time as CGLH
                  Partners I LP, CGLH Partners II LP and their Affiliates cease
                  to Beneficially Own Voting Securities representing at least
                  30% or more of the Total Voting Power (without taking into
                  account any limitation on the conversion of such Voting
                  Securities in determining such Beneficial Ownership or the
                  number of shares issuable upon complete conversion); or

                           (v) Any other event, under the Delaware Act, that
                  would require (notwithstanding provisions in this Agreement to
                  the contrary) the Partnership's dissolution.

         13.2 CONTINUATION OF THE PARTNERSHIP.

                  (a) Except as otherwise provided in this Agreement, upon the
         occurrence of an event described in Section 13.1(b)(i), (b)(ii) or
         (b)(v), the Partnership shall be deemed to be dissolved and
         reconstituted only if 50.1% of the Percentage Interests of the
         remaining Partners elect to continue the Partnership within 90 days of
         such event. If no election to continue the Partnership is made within
         90 days of such event, the Partnership shall conduct only those
         activities necessary to wind up its affairs. If an election to continue
         the Partnership is made upon the occurrence of an event described in
         Section 13.1(b)(i), (b)(ii) or (b)(v), then:

                           (i) If there is no remaining Managing General Partner
                  as a result of Section 13.1(b)(ii), then within such 90 day
                  period a successor Managing General Partner shall be selected
                  by a Majority Interest (if such Partners cannot agree on the
                  selection of a successor Managing General Partner, the
                  Partnership shall be dissolved and liquidated);

                                       46
<PAGE>   51

                           (ii) The Partnership shall be deemed to be
                  reconstituted and shall continue until the end of the term for
                  which it is formed unless earlier dissolved in accordance with
                  this Article XIII;

                           (iii) If dissolution occurred pursuant to Section
                  (b)(ii), the withdrawn Managing General Partner shall be
                  automatically admitted to the Partnership as a Limited Partner
                  and its former Partnership Interest as a Managing General
                  Partner shall be automatically converted to a Limited
                  Partner's Partnership Interest in the manner provided in
                  Section 12.2 of the Agreement; and

                           (iv) All necessary steps shall be taken to amend or
                  restate this Agreement and the Certificate.

                  (b) Upon an Event of Withdrawal with respect to the General
         Partner or an Event of Withdrawal other than removal with respect to
         the Managing General Partner, there shall be no dissolution of the
         Partnership, and if such dissolution is otherwise mandated by
         applicable law, the remaining Partners agree that they will be deemed
         to have unanimously elected to continue the Partnership and the
         Partnership shall be deemed to be dissolved and reconstituted as may be
         required by applicable law.

         13.3 LIQUIDATION.

                  (a) Upon dissolution of the Partnership, unless the
         Partnership is continued under Section 13.2 of this Agreement, the
         Partnership's affairs shall be wound up. A Person selected by a
         Majority Interest shall be the liquidator (the "Liquidator"). The
         Liquidator shall be entitled to receive such compensation for its
         services as may be approved by all of the Limited Partners other than
         the Executives.

                  (b) The Liquidator shall agree not to resign at any time
         without 15 days' prior written notice and may be removed at any time,
         with or without cause, by notice of removal approved by a Majority
         Interest. Upon dissolution, removal, or resignation of the Liquidator,
         a successor and substitute Liquidator (who shall have, and succeed to,
         all rights, powers, and duties of the original Liquidator) shall within
         30 days thereafter be selected by a Majority Interest. The right to
         appoint a successor or substitute Liquidator in the manner provided
         herein shall be recurring and continuing for so long as the functions
         and services of the Liquidator are authorized to continue under the
         provisions hereof, and every reference herein to the Liquidator will be
         deemed to refer also to any such successor or substitute Liquidator
         appointed in the manner herein provided.

                  (c) Except as expressly provided in this Article XIII, the
         Liquidator appointed in the manner provided herein shall have and may
         exercise, without further authorization or consent of any of the
         parties hereto, all of the powers conferred upon the Managing General
         Partner under the terms of this Agreement (but subject to all of the
         applicable limitations, contractual and otherwise, upon the exercise of
         such powers) to the extent necessary or desirable in the good faith
         judgment of the Liquidator to carry out the duties and functions of the
         Liquidator hereunder for and during such period of time as shall be
         reasonably required in the good faith judgment of the Liquidator to
         complete the winding up and liquidation of the Partnership.

                  (d) The Liquidator shall liquidate the assets of the
         Partnership and apply and distribute the proceeds of such liquidation
         in the following order of priority, unless otherwise required by
         mandatory provisions of applicable law:

                                       47
<PAGE>   52

                           (i) To the payment of the expenses of the terminating
                  transactions including, without limitation, brokerage
                  commissions, legal fees, accounting fees and closing costs;

                           (ii) To the payment to creditors of the Partnership,
                  including Partners, in order of priority provided by law; and

                           (iii) To the Partners and assignees in accordance
                  with the manner in which proceeds from a Capital Event are
                  distributed pursuant to Section 6.1(b)(ii) hereof; provided,
                  however, that any Available Cash, on hand at the time of the
                  event of dissolution giving rise to the liquidation of the
                  Company and during the term of such liquidation, from the
                  operations of any Hotels and other, related assets or
                  otherwise not from a Capital Event shall be distributed in
                  accordance with the manner in which Available Cash is
                  distributed pursuant to Section 6.1(b)(i); provided, further,
                  however, that the Liquidator may place in escrow a reserve of
                  cash or other assets of the Partnership for contingent
                  liabilities in an amount determined by the Liquidator to be
                  appropriate for such purposes.

         13.4 DISTRIBUTION IN KIND.

                  Notwithstanding the provisions of Section 13.3 of this
Agreement which require the liquidation of the assets of the Partnership, but
subject to the order of priorities set forth therein, if on dissolution of the
Partnership the Liquidator determines (and if the Liquidator is the Managing
General Partner, then if the Liquidator determines after consultation with the
Limited Partners) that an immediate sale of part or all of the Partnership's
assets would be impractical or would cause undue loss to the Partners and
assignees, the Liquidator may defer for a reasonable time the liquidation of any
assets except those necessary to satisfy liabilities of the Partnership (other
than those to Partners) and/or may distribute to the Partners and assignees, in
lieu of cash, as tenants in common and in accordance with the provisions of
Section 13.3 of this Agreement, undivided interests in such Partnership assets
as the Liquidator deems not suitable for liquidation. Any such distributions in
kind shall be subject to such conditions relating to the disposition and
management of such properties as the Liquidator deems reasonable and equitable
and to any joint operating agreements or other agreements governing the
operation of such properties at such time. The Liquidator shall determine the
fair market value of any property distributed in kind using such reasonable
method of valuation as it may adopt.

         13.5 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP.

                  Upon the completion of the distribution of Partnership
property as provided in Section 13.3 and Section 13.4 of this Agreement, the
Partnership shall be terminated, and the Liquidator (or the Managing General
Partner and Limited Partners if necessary) shall cause the cancellation of the
Certificate in the State of Delaware and of all qualifications and registrations
of the Partnership as a foreign limited partnership in jurisdictions other than
the State of Delaware and shall take such other actions as may be necessary to
terminate the Partnership.

         13.6 RETURN OF CAPITAL.

                  Except as otherwise provided in Section 4.5, neither the
Managing General Partner nor the General Partner shall be personally liable for
the return of the Capital Contributions, or any portion thereof, it being
expressly understood that any such return shall be made solely from Partnership
assets.

                                       48
<PAGE>   53

         13.7 CERTAIN TERMINATIONS.

                  Notwithstanding any other provisions of this Article XIII, in
the event the Partnership is terminated within the meaning of Code Section
708(b)(1)(B), but no event requiring liquidation has occurred, the Partnership
shall not be liquidated, the Partnership's liabilities shall not be paid or
discharged, and the Partnership's affairs shall not be wound up.

                                   ARTICLE XIV

                        AMENDMENT OF AGREEMENT; CONSENTS

         14.1 AMENDMENT PROCEDURES.

                  Except as provided in Section 1.2 of this Agreement and the
amendments to Exhibit A and Exhibit B hereto, all amendments to this Agreement
shall be in accordance with the following requirements: (a) amendments to this
Agreement may be proposed only by a Partner; (b) if an amendment is proposed,
the Managing General Partner shall seek the written consent of the requisite
Percentage Interests of Limited Partners and as may be required under any debt
instruments pursuant to which the Partnership is debtor; (c) a proposed
amendment shall be effective upon its approval by: (i) the Managing General
Partner and the General Partner, and (ii) all of the Limited Partners; and (d)
the Managing General Partner shall notify all Partners upon final adoption of
any such proposed amendment.

         14.2 ACTION WITHOUT A MEETING.

                  Any action that that requires the consent of all of the
Partners may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by Limited Partners owning not less than the
minimum Percentage Interests that would be necessary to authorize or take such
action pursuant to the terms of this Agreement. To the extent that the laws of
any jurisdiction to which the Partnership or the Partnership Agreement is
subject require that any action of Limited Partners under this Agreement be
unanimous, any action taken by Limited Partners pursuant to and in accordance
with the preceding sentence shall be deemed to constitute the act of all Limited
Partners and, in such event, each Limited Partner that does not execute such
written consent hereby agrees to be bound by the decision of those Limited
Partners executing such consent and hereby approves such action to the extent
such approval is required for such matter to be effective under the laws of such
jurisdiction. Prompt notice of the taking of action shall be given to Limited
Partners that have not consented in writing.

                                   ARTICLE XV

                               GENERAL PROVISIONS

         15.1 ADDRESSES AND NOTICES.

                  Any notice, demand, request, or report required or permitted
to be given or made to a Partner under this Agreement shall be in writing and
shall be deemed given or made (unless otherwise expressly provided herein): (i)
when delivered in person, by overnight mail using a nationally recognized
courier service at his address as shown on the records of the Partnership or by
facsimile transmission (with call-back confirmation) at the telefacsimile phone
number for such Partner shown on the records of the Partnership, or (ii) three
days after being placed in a United States Postal Service mailbox when sent by
United States registered or certified mail to the Partner at its address as
shown on the records of the Partnership, in any case regardless of any claim of
any Person who may have an interest in any Partnership Interest by reason of an
assignment or otherwise. If any notice or action is to be given or taken, as the
case may be, on a day that is not a Business Day, then such notice or action may
be given or taken, as the case may be, on the next Business Day.

                                       49
<PAGE>   54

         15.2 TITLES AND CAPTIONS.

                  All article and section titles and captions in this Agreement
are for convenience only, shall not be deemed part of this Agreement, and in no
way shall define, limit, extend, or describe the scope or intent of any
provisions hereof. Except as specifically provided otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this Agreement.

         15.3 PRONOUNS AND PLURALS.

                  Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine, or neuter forms,
and the singular form of nouns, pronouns, and verbs shall include the plural and
vice versa.

         15.4 FURTHER ACTION.

                  The parties shall execute all documents, provide all
information, and take or refrain from taking all actions as may be necessary or
appropriate to achieve the purposes of this Agreement.

         15.5 BINDING EFFECT.

                  This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their heirs, executors, administrators, successors,
legal representatives, and permitted assigns. The failure of any parties hereto
to execute and deliver this Agreement shall not invalidate the Partnership
created by and among those parties executing and delivering this Agreement.

         15.6 INTEGRATION.

                  This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.

         15.7 CREDITORS.

                  Subject to the provisions of Section 7.15 only, none of the
provisions of this Agreement shall be for the benefit of or enforceable by any
creditors of the Partnership or any other Person not a party to this Agreement.

         15.8 WAIVER.

                  No failure by any party to insist upon the strict performance
of any covenant, duty, agreement, or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute a waiver
of any such breach or any other covenant, duty, agreement, or condition.

         15.9 COUNTERPARTS.

                  This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart.

         15.10 APPLICABLE LAW.

                  This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of law.

                                       50
<PAGE>   55

         15.11 INVALIDITY OF PROVISIONS.

                  If any provision of this Agreement is declared or found to be
illegal, unenforceable, or void, in whole or in part, then the parties shall be
relieved of all obligations arising under such provision, but only to the extent
that it is illegal, unenforceable, or void, it being the intent and agreement of
the parties that this Agreement shall be deemed amended by modifying such
provision to the extent necessary to make it legal and enforceable while
preserving its intent or, if that is not possible, by substituting therefor
another provision that is legal and enforceable and achieves the same
objectives.

         15.12 CONFIDENTIALITY.

                  (a) The terms of this Agreement and information about the
Hotels and other, related assets and properties and operations of the
Partnership, its Controlled Entities and its non-Controlled Entities constitute
proprietary information and each of the Partners agrees to keep (and cause its
employees, agents, advisors, officers, directors, members and partners to keep)
all such information confidential. Proprietary information does not include,
however, information that is or becomes generally available to the public other
than as a result of a disclosure by a Partner or its employees, agents,
advisors, officers, directors, members and/or partners. If a Partner is
requested pursuant to, or required by, applicable law or regulation or by legal
process to disclose any proprietary information, prior to such disclosure by
such Partner (which disclosure, in such circumstances, will not constitute, or
be deemed to constitute, a breach of this Agreement), such Partner will provide
the Partnership and the other Partners with prompt notice of such request or
requirement in order to enable the Partnership to seek an appropriate protective
order or other remedy, to consult with such Partner with respect to taking steps
to resist or narrow the scope of such request or legal process, or to waive
compliance, in whole or in part, with the terms of this Section. In any such
event, such Partner will use its reasonable efforts to cause all proprietary
information that is so disclosed to be accorded confidential treatment. Without
prejudice to the rights and remedies otherwise available to the Partnership or
the Partners individually and collectively, each Partner agrees that the
Partnership and each other Partner shall be entitled to equitable relief by way
of injunction or otherwise if a Partner or any of its employees, agents,
advisors, officers, directors, members and/or partners breaches or threatens to
breach any of the provisions of this Section.

                  (b) Notwithstanding anything in this Section or the remainder
of the Agreement to the contrary (but subject to Article XI), each of the
Partnership and the Partners acknowledges that CGLH GP and/or CGLH LP may sell
or otherwise transfer all or a portion of its or their Partnership Interest(s)
to an investment fund or a party which may pool such interests with a number of
other equity positions and grant participations therein or issue one or more
classes of securities evidencing a beneficial interest in a rated or unrated
public offering or private placement (the "Securities"). One or more national
rating agencies may rate the investment fund or the Securities. In connection
therewith, each of the Partnership and the Partners agrees that CGLH LP and CGLH
GP may make available certain proprietary information to investment banking
firms, rating agencies, accounting firms, law firms and other third-party
advisory firms involved with the Securities or the investment fund(s). Such
proprietary information provided may ultimately be incorporated into the
offering documents for the Securities or investment fund(s) and thus such
information may be disclosed to various investors, purchasers and prospective
purchasers of the Securities or interests in the investment fund(s). All of the
aforesaid third-party advisors and professional firms shall be entitled to rely
on the information supplied by, or on behalf of, the Partnership. The
Partnership shall execute and deliver all such instruments, documents and other
papers, and do or cause to be done all such acts and things as CGLH LP and/or
CGLH GP may reasonably request in order to effect such sale, transfers,
participations and/or issuance of Securities. CGLH LP and/or CGLH GP shall pay
all of the Partnership's actual out-of-pocket expenses and third-party costs
(including attorneys' fees and expenses) associated therewith.

                                       51
<PAGE>   56

         15.13 REPRESENTATIONS AND WARRANTIES OF IHC.

                  Each of IHC GP and IHC LP, individually, hereby represents and
warrants to CGLH and the Partnership as follows:

                  (a) Organization and Good Standing; Power and Authority;
         Qualifications. Such Person is duly organized, validly existing and in
         good standing under the laws of its state of incorporation or
         organization. Such Person has the Power to enter into and carry out the
         transactions contemplated by this Agreement to which it is a party.

                  (b) Authorization of the Agreement. The execution, delivery
         and performance by such Person of this Agreement has been duly
         authorized by all requisite corporate, partnership or other company
         action on the part of such entity and do not or will not require the
         approval or consent of the constituent equity holders of such entity.
         This Agreement constitutes a legal, valid and binding obligation of
         such Person, enforceable against such entity in accordance with its
         terms except to the extent that enforceability may be limited by
         bankruptcy, solvency or other similar laws affecting creditors' rights
         generally and subject to limitations on the availability of equitable
         remedies.

                  (c) No Conflict. The execution and delivery by such Person of
         this Agreement and the consummation by such entity of the transactions
         contemplated hereby and its compliance with the provisions hereof and
         thereof will not (a) violate any provision of any federal, state, local
         or foreign law, statute, rule or regulation, or any ruling, writ,
         injunction, order, judgment or decree of any court, administrative
         agency or other governmental body applicable to it, or (b) violate its
         organizational documents.

                  (d) Consents. No licenses, permits, qualifications and
         authorizations, consents or approvals of or by, or any notifications of
         or filings with, any Person is required in connection with the
         execution, delivery and performance by such Person of this Agreement,
         or the consummation by such entity of the transactions contemplated
         hereby.

                  (e) Financial Capacity. Such Person has cash on hand, in an
         aggregate amount sufficient to enable such Person to timely perform its
         obligations to fund its Tier 1 Capital Contributions.

         15.14 REPRESENTATIONS AND WARRANTIES OF CGLH.

                  Each of CGLH GP and CGLH LP, individually, hereby represents
and warrants to IHC and the Partnership as follows:

                  (a) Organization and Good Standing; Power and Authority;
         Qualifications. Such Person is duly organized, validly existing and in
         good standing under the laws of its state of incorporation or
         organization. Such Person has the Power to enter into and carry out the
         transactions contemplated by this Agreement to which it is a party.

                  (b) Authorization of the Documents. The execution, delivery
         and performance by such Person of this Agreement has been duly
         authorized by all requisite corporate, partnership or other company
         action on the part of such entity and do not or will not require the
         approval or consent of the constituent equity holders of such entity.
         This Agreement constitutes a legal,

                                       52
<PAGE>   57

         valid and binding obligation of such Person, enforceable against such
         entity in accordance with its terms except to the extent that
         enforceability may be limited by bankruptcy, solvency or other similar
         laws affecting creditors' rights generally and subject to limitations
         on the availability of equitable remedies.

                  (c) No Conflict. The execution and delivery by such Person of
         this Agreement and the consummation by such entity of the transactions
         contemplated hereby and its compliance with the provisions hereof and
         thereof will not (a) violate any provision of any federal, state, local
         or foreign law, statute, rule or regulation, or any ruling, writ,
         injunction, order, judgment or decree of any court, administrative
         agency or other governmental body applicable to it, or (b) violate its
         organizational documents.

                  (d) Consents. No licenses, permits, qualifications and
         authorizations, consents or approvals of or by, or any notifications of
         or filings with, any Person is required in connection with the
         execution, delivery and performance by such Person of this Agreement,
         or the consummation by such entity of the transactions contemplated
         hereby.

                  (e) Financial Capacity. Such Person has cash on hand, or
         commitments from its partners or other financially responsible third
         parties, or a combination thereof, in an aggregate amount sufficient to
         enable such Person to timely perform its obligations to fund its Tier 1
         Capital Contributions.

         15.15 CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT.

                  Notwithstanding anything to the contrary herein, this
Agreement shall not be effective unless and until the consummation of the
transactions contemplated under those certain Investor Agreement, dated as of
[____________], 2000 and Securities Purchase Agreement, dated as of August [__],
2000, each between the Corporation and the Investors, including, without
limitation, the filing of the Articles Supplementary to the Charter of the
Corporation designating the Series B Preferred Stock with the Secretary of State
of the State of Maryland, the issuance of the Series B Preferred Stock and the
Note to the Investors, and the execution of the Registration Rights Agreement.

         15.16 THIRD PARTY BENEFICIARIES.

                  The terms and provisions of this Agreement are intended solely
for the benefit of each party hereto and their respective successors or
permitted assigns, and, except as expressly provided it is not the intention of
the parties to confer third-party beneficiary rights upon any other person.

                       [REMAINDER OF THE PAGE LEFT BLANK]

                                       53
<PAGE>   58

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.

ADDRESS                          MANAGING GENERAL PARTNER:
-------
3 World Financial Center         CGLH PARTNERS III LP
12th Floor
New York, New York  10285        By:  MK/CG-GP LLC
                                      General Partner
                                      By:  CG Interstate Associates, LLC
                                           a Managing Member
                                           By:  Continental Gencom Holdings, LLC
                                                its Sole Member

                                                By:______________________
                                                   Name:
                                                   Title:

                                 By:  LB INTERSTATE GP LLC
                                      General Partner
                                      By:  PAMI LLC
                                           its Sole Member

                                           By:______________________
                                              Name:
                                              Title:

                                 GENERAL PARTNER:

Foster Plaza Ten                 Interstate Investment Corporation
680 Andersen Drive
Pittsburgh, PA  15220-8126

                                 By:______________________
                                    Name:
                                    Title:

                                 LIMITED PARTNERS:

__________________________       _________________________
__________________________       Thomas F. Hewitt

__________________________       _________________________
__________________________       J. William Richardson

                                       54
<PAGE>   59

3 World Financial Center         CGLH PARTNERS IV LP
12th Floor                       a Delaware limited partnership
New York, New York  10285
                                 By:  MK/CG-GP LLC
                                      General Partner
                                      By:  CG Interstate Associates, LLC
                                               a Managing Member
                                               By:  Continental Gencom Holdings,
                                                    LLC its Sole Member

                                                    By:______________________
                                                       Name:
                                                       Title:

                                 By:  LB INTERSTATE GP LLC
                                      General Partner
                                      By:  PAMI LLC
                                           its Sole Member

                                           By:______________________
                                              Name:
                                              Title:

Foster Plaza Ten                 INTERSTATE PROPERTY PARTNERSHIP, L.P.
680 Andersen Drive
Pittsburgh, PA  15220-8126       By:  Interstate Property Corporation
                                      its Sole General Partner

                                      By:______________________
                                         Name:
                                         Title:

                                       55
<PAGE>   60

[SAMPLE NOTARY BLOCKS FOR EXECUTIVES' SIGNATURES - TO BE CONFORMED AS NECESSARY]
--------------------------------------------------------------------------------

STATE OF ____________________    )
                                 )  ss.:
COUNTY OF ___________________    )

                  On the ___ day of _________ in the year ____ before me, the
undersigned, personally appeared _______________________________, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument, and that such individual made such appearance before
the undersigned in the __________________.

(Notarial Seal)                                      ___________________________
                                                                  Notary Public

STATE OF ____________________    )
                                 )  ss.:
COUNTY OF ___________________    )

                  On the ___ day of _________ in the year ____before me, the
undersigned, personally appeared _______________________________, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument, and that such individual made such appearance before
the undersigned in the __________________.

(Notarial Seal)                                      ___________________________
                                                                  Notary Public

                                       56<PAGE>   1
                                                                    Exhibit 10.2

                       CONVERSION AND REDEMPTION AGREEMENT

         This AGREEMENT FOR CONVERSION AND REDEMPTION is entered into as of the
31st day of August, 2000, by and among INTERSTATE HOTELS, LLC, a Delaware
limited liability company (the "Company"), PAH-INTERSTATE HOLDINGS, INC., a
Delaware corporation ("Wyndham"), WYNDHAM INTERNATIONAL, INC., a Delaware
corporation ("WII"), PATRIOT AMERICAN HOSPITALITY, INC., a Delaware corporation
("Patriot"), NORTHRIDGE HOLDINGS, INC., a Delaware corporation ("Northridge")
and INTERSTATE HOTELS CORPORATION, a Maryland corporation ("IHC").

                                    RECITALS

         A. Wyndham and Northridge constitute all of the Members of the Company,
pursuant to an Amended and Restated Limited Liability Company Agreement, dated
as of June 18, 1999 (the "LLC Agreement"). Northridge is the Managing Member of
the Company with a 45% membership interest in the Company. Wyndham is the
Non-Managing Member of the Company with a 55% membership interest in the Company
(the "Interest").

         B. Wyndham and Northridge have agreed (i) to cause the Company to
distribute certain management agreement assets of the Company to Wyndham in
partial redemption of the Interest at closing, (ii) to convert a portion of the
Interest to a Preferred Interest (as hereinafter defined), and, (iii) to provide
for the subsequent redemption of the Preferred Interest and the Common Interest
(as hereinafter defined) pursuant to the terms and conditions hereinafter set
forth.

         C. WII is the parent of Wyndham. WII is also the parent of Patriot,
which is a shareholder in IHC and has the right under IHC's Charter to designate
a member of IHC's Board of Directors (the "IHC Board"). In connection with and
as additional consideration for the conversion and redemption of Wyndham's
Interest pursuant to this Agreement, as more fully set

<PAGE>   2

forth herein, (i) WII and/or Patriot have agreed to cause its current
representative to the IHC Board to resign as of the Closing Date and to
relinquish its right to appoint a member of the IHC Board in the future and (ii)
each of Wyndham and Patriot has granted to IHC an option to acquire all of its
stock in IHC.

         D. In order to accommodate the transactions described above, IHC and
Northridge have agreed to guaranty certain obligations of the Company and to
fund certain capital contributions to the Company, as more fully set forth in
this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, intending to be legally bound, the Company,
Wyndham, WII, Northridge and IHC hereby agree as follows:

         1. Distribution of Management Agreements in Partial Redemption. On the
Closing Date (as defined below), Northridge as Managing Member of the Company
will cause the Company to distribute and assign to Wyndham or its affiliate, and
Wyndham or such affiliate will assume, the Company's interest (including rights
and obligations arising thereunder) as manager under the management agreements
with respect to the hotels identified on Exhibit 1-A to this Agreement
(collectively, the "Management Agreements") by executing an Assignment and
Assumption of Management Agreements in the form attached hereto as Exhibit 1-B
(the "Assignment of Management Agreements"). Wyndham, Northridge and the Company
agree that such distribution and assignment of the Management Agreements is in
partial redemption of its membership interest in the Company (the "Initial
Redemption"). The Initial Redemption shall be effected by execution and delivery
by Wyndham and the Company of an Assignment and Acceptance of Membership
Interest in the form attached hereto as Exhibit 1-C, modified to reflect
Wyndham's affiliate as assignee, if applicable. No termination fees, "make
whole" payments or similar fees or amounts shall be payable to or by the Company
or any other party as a result of such distribution and assignment of the
Management Agreements in partial redemption of the

<PAGE>   3

Interests, whether pursuant to the terms of the Management Agreements or any
other agreement to which the Company or any of its affiliates is a party. (The
interest of Wyndham in the Company remaining after the Initial Redemption is
sometimes referred to in this Agreement as the "Remaining Interest.")

         2. Conversion of a Portion of the Remaining Interest to Preferred
Interest. On the Closing Date, a portion of the Remaining Interest shall be
converted into a preferred membership interest (the "Preferred Interest") with
rights and privileges as set forth in the Second Amended and Restated LLC
Agreement, a form of which is attached hereto as Exhibit 2 (the "Amended LLC
Agreement"). The parties agree that the Preferred Interest comprises forty-nine
percent (49%) of the total membership interests in the Company. (The balance of
the Remaining Interest, comprising one percent (1%) of the total membership
interests in the Company, is hereinafter referred to as the "Common Interest"
and shall have the rights and privileges set forth in the Amended LLC
Agreement.) IHC and Northridge hereby agree and guaranty for the benefit of
Wyndham that they shall cause capital contributions to be made to the Company in
order to fund payment of (i) the Preferred Redemption Amount to the extent the
Preferred Redemption Amount exceeds the amount of the Escrowed Funds and other
funds of the Company, and (ii) to fund quarterly distributions on the Preferred
Interest pursuant to the Amended LLC Agreement to the extent such required
distributions exceed the amounts available from the Company's operating cash
flow, and such obligation and guaranty of IHC and Northridge to cause such
capital contributions to be made to the Company shall not be affected in any
respect by an assignment of Northridge's membership interest in the Company to
an affiliate as permitted under the Amended LLC Agreement.

         3. Redemption of the Preferred Interest. At any time on or subsequent
to July 1, 2001 (the date on which the Preferred Interest is so redeemed being
defined as the "Preferred Redemption Date"), Wyndham shall have the right to put
the Preferred Interest for redemption by

<PAGE>   4

the Company by giving written notice to such effect to the Company, and the
Company shall have the right to call for redemption of the entire Preferred
Interest by the Company by giving written notice to such effect to Wyndham, and
in either event, Northridge, as Managing Member of the Company, shall cause the
Company to redeem the entire Preferred Interest for Twelve Million Six Hundred
Eighty-One Thousand Eight Hundred Eighteen Dollars ($12,681,818) (the "Preferred
Redemption Amount"). The redemption of the Preferred Interest shall be completed
within five (5) business days of the exercise of such put or call right and
shall be effected by the execution by Wyndham and the Company of an Assignment
and Acceptance of Membership Interest in the form attached as Exhibit 3-D. Upon
delivery to the Escrow Agent by Wyndham of an executed Assignment and Acceptance
of Membership Interest in such form, the Company shall pay the Preferred
Redemption Amount to the Escrow Agent (as hereinafter defined) in the forms
outlined below, subject, however to the provisions of Section 40:

         (a)      A payment of Eight Million Two Hundred Fifty Thousand Dollars
                  ($8,250,000.00) in the form of a release of the Escrowed Funds
                  (as defined below) to Wyndham and, to the extent such released
                  Escrowed Funds are less than $8,250,000, the balance shall be
                  paid in cash by wire transfer.

         (b)      A promissory note issued by the Company, in the form attached
                  hereto as Exhibit 3-A, payable to Wyndham, in the principal
                  amount of Seven Hundred Fifty Thousand Dollars ($750,000.00),
                  with a maturity date of July 1, 2002 and with interest at a
                  fixed rate of 9.75% (the "Note Rate") payable in quarterly
                  installments ("Promissory Note A"); and

         (c)      A promissory note issued by the Company, in the form attached
                  hereto as Exhibit 3-B, payable to Wyndham, in the principal
                  amount of Three Million Six Hundred Eighty One Thousand Eight
                  Hundred Eighteen Dollars ($3,681,818) with a maturity date of
                  July 1, 2004 and with interest at the Note Rate payable in
                  quarterly installments ("Promissory Note B" and, collectively
                  with Promissory Note A, the "Promissory Notes").

The Promissory Notes shall be guaranteed by IHC and Northridge pursuant to a
guaranty in the form attached hereto as Exhibit 3-C.

         4. Creation of Escrow. In order to assure Wyndham that the Company will
have adequate liquidity to fund the cash portion of the Preferred Redemption
Amount if and when

<PAGE>   5

Wyndham or the Company exercise their respective rights to cause the redemption
of the entire Preferred Interest pursuant to Section 3 hereof, and to secure
payment of the cash portion of the Preferred Redemption Amount, on the Closing
Date the Company shall deposit with the Escrow Agent (as hereinafter defined)
cash in the amount of Seven Million Five Hundred Thousand Dollars ($7,500,000)
(the "Escrowed Funds"). The Escrowed Funds shall be held in an interest-bearing
account mutually acceptable to both the Company and Wyndham. All interest earned
on the Escrow Funds shall be deemed earned by and belong to the Company, but
shall be released from escrow and paid to Wyndham on behalf of the Company on a
quarterly basis and upon such payment shall be credited toward the Company's
obligation to make quarterly distributions with respect to the Preferred
Interest. On the Preferred Redemption Date, the Escrow Agent shall be required
to apply the Escrowed Funds (and any interest earned thereon which has not been
paid to Wyndham pursuant to the prior sentence) toward the cash portion of the
Preferred Redemption Amount pursuant to subsection 3(a) and, if applicable,
Section 40. Neither the Company, IHC, Northridge nor any of their affiliates
shall grant to any creditor any direct or indirect security interest, pledge,
security assignment or other interest in the Escrowed Funds or the escrow
agreement pursuant to which they are held.

         5. Financial Covenants of the Company. Until the Preferred Redemption
Date, IHC agrees and covenants that it will maintain a minimum Net Worth (as
hereinafter defined) on a consolidated basis with its subsidiaries in accordance
with generally accepted accounting principles of not less than 1.75 multiplied
by Five Million One Hundred Eighty-One Thousand Eight Hundred Eighteen Dollars
($5,181,818) (representing the difference between the Preferred Redemption
Amount and the amount of Escrowed Funds). After the Preferred Redemption Date,
IHC agrees and covenants that it will maintain a minimum Net Worth of not less
than 1.75 multiplied by the aggregate outstanding balance from time to time due
to Wyndham under the Promissory Notes. "Net Worth" means (i) the value of all
tangible assets, including, without limitation, the cash proceeds from the
Securities Transaction (as hereinafter defined) but excluding the Escrowed
Funds, goodwill, contract rights and other intangibles, plus (ii) the amount of
funds

<PAGE>   6

which are available to be drawn by IHC or its subsidiaries on any credit
facility then in place with the Investor Group or its Affiliates or any
institutional lender without the requirement to post additional security or meet
material conditions which have not been satisfied, minus (iii) all liabilities
and debt (treating the preferred stock issued in connection with the Securities
Transaction (as hereinafter defined) and any other preferred stock as a
liability for this purpose). At all times until the redemption of the Preferred
Interest and the payment in full on the Notes, IHC agrees and covenants that all
of the assets owned by it from time to time, (including (x) assets owned from
time to time directly by IHC or its wholly-owned direct or indirect subsidiaries
or (y) interests held from time to time in other entities not wholly-owned by
IHC which own assets) will be owned by IHC or its wholly-owned direct or
indirect subsidiaries. The Company shall provide to Wyndham quarterly within
forty-five (45) business days of the end of each calender quarter financial
statements of the Company certified by the Chief Financial Officer of IHC as
accurate and complete in all material respects showing compliance with the
foregoing minimum net worth requirements. A default with respect to the
covenants in this Section 5, which is not cured within thirty (30) days
following written notice by Wyndham to IHC shall constitute an event of default
under this Agreement and the Notes.

         6. Redemption of Common Interest. At any time on or subsequent to July
1, 2004 (the "Common Redemption Date"), Wyndham shall have the right to put the
Common Interest for redemption by the Company by giving written notice to such
effect to the Company, and the Company shall have the right to call for
redemption of the entire Common Interest by giving written notice to such effect
to Wyndham, and, in either event, Northridge, as Managing Member of the Company,
shall cause the Company to redeem the entire Common Interest for the Common
Redemption Amount (as hereinafter defined). The "Common Redemption Amount" shall
mean the lesser of (a) the product of (i) five (5) times the Company's net
income before interest, taxes, depreciation and amortization ("EBITDA") as
determined by the Company's independent

<PAGE>   7

accountants for the Company's fiscal year ending closest to December 31, 2003
and (ii) the percentage of membership interest represented by the Common
Interest or (b) Four Hundred Thirty-Two Thousand Eight Hundred Eighty-Three
Dollars ($432,883). The redemption of the entire Common Interest shall be
completed within five (5) business days of the exercise of such put or call
right and shall be effected by execution and delivery by Wyndham and the Company
of an Assignment and Acceptance of Membership Interests in the form attached
hereto as Exhibit 6 and payment by the Company to Wyndham of the Common
Redemption Amount. Immediately prior to the Common Redemption Date, the Company
shall have the right to admit one of Northridge's Affiliates as a member of the
Company on such terms as the Company and such Affiliate shall agree, as long as
such admission is effectively conditioned (to the reasonable satisfaction of
Wyndham) on the consummation of the redemption of the Common Interest by the
Company. IHC and Northridge hereby agree and guaranty for the benefit of Wyndham
that they shall cause capital contributions to be made to the Company in order
to fund payment of the Common Redemption Amount, to the extent the Common
Redemption Amount exceeds the amounts available from the Company's operating
cash flow, and such obligation and guaranty of IHC and Northridge to cause such
capital contributions to be made to the Company shall not be affected in any
respect by an assignment of Northridge's membership interest in the Company to
an affiliate as permitted under the Amended LLC Agreement. In connection with
the redemption of the Common Interests, the Company and Wyndham shall cooperate
in making any Hart-Scott-Rodino filing, if any, as may be deemed necessary under
the then applicable laws and regulations, and the Company and Wyndham shall each
pay one-half (1/2) of any filing fees in connection therewith.

         7. Relinquishment of Board Seat. In consideration for the Initial
Redemption and the agreements set forth in this Agreement regarding the future
redemption of the Preferred Interest and the Common Interest, WII and Patriot
agree that, effective at the Closing, (i) WII and/or Patriot, as the case may
be, will deliver to IHC a Resignation of its designee/nominee on the IHC Board
as currently provided for in IHC's Charter, fully and duly executed and
effective

<PAGE>   8

immediately, which Resignation shall be in the form of Exhibit 7 hereto (the
"Resignation"); (ii) WII's and/or Patriot's (as the case may be) contractual
right to designate or nominate a member of the IHC Board shall be extinguished;
and (iii) WII and/or Patriot, as the case may be, shall approve and cast its
stockholder votes in favor of amendments of IHC's Charter to reflect the
extinguishment of WII's or Patriot's right to designate/nominate a member of the
IHC Board.

         8. Option to Acquire Wyndham's IHC Stock. In consideration for the
Initial Redemption at Closing and the agreements set forth in this Agreement
regarding the future redemption of the Preferred Interest and the Common
Interest, Wyndham and Patriot each hereby grants to IHC or its designee the
option to acquire all, but not less than all, of the shares of stock in IHC
presently owned by Wyndham and Patriot at its Weighted Average Trading Price (as
hereinafter defined); provided, however, that unless such option is exercised
effective on the Closing Date under this Agreement, the purchase price shall not
be less than Three Dollars ($3.00) nor more than Four Dollars ($4.00) per share.
For example, assuming that the date of exercise is not on the Closing Date, if
on the date of exercise of the foregoing option the Weighted Average Trading
Price were $2.50 per share, then the price to be paid to Wyndham and Patriot for
their stock in IHC would be $3.00 per share, and if on such exercise date the
Weighted Average Trading Price were $4.50 per share, then the price to be paid
by IHC to Wyndham and Patriot for their stock in IHC would be $4.00 per share.
"Weighted Average Trading Price" means the average trading price of the common
stock of IHC during the ten (10) trading days immediately preceding the date on
which IHC or its designee gives notice to Wyndham and Patriot of the exercise of
the option described in this Section 8, weighted by trading volume. The
foregoing option shall be exercisable on or before ninety (90) days following
the Closing Date hereunder, by written notice from IHC or its designee to
Wyndham and Patriot. The purchase shall close five (5) business days after
delivery of the exercise notice and at the time of closing the shares of stock
in IHC shall be conveyed to IHC or its designee free and clear of all liens,
encumbrances and security interests of

<PAGE>   9

any kind; provided that Wyndham shall have the right to defer the closing date
for up to an additional forty (40) days in order to permit Wyndham and Patriot
to cause the shares of IHC to be released from the existing pledge to Chase
Manhattan Bank.

         9. Consent to Amendment of IHC Bylaws. Wyndham and WII acknowledge
that, except as set forth in Section 17, the obligation of IHC and its
Affiliates to close the transaction contemplated by this Agreement is expressly
conditioned upon the closing of the issuance by IHC of convertible preferred
stock and convertible notes in the aggregate amount of Thirty Million Dollars
($30,000,000) (the "Securities Transaction") to, and the purchase of such stock
and notes by, an investment group led by Lehman Brothers (the "Investor Group"),
and that the closing of the Securities Transaction requires the amendment of
IHC's Bylaws to eliminate the rights of the Class B Director (as defined in the
Bylaws) and the Class C Director (as defined in the Bylaws) to approve the
creation of committees of the Board of Directors or the appointment or removal
of any member from such committee pursuant to Section 4.1 of the Bylaws. WII and
Wyndham, in their capacity as Class C Stockholders, (a) hereby consent to the
amendment to IHC's Bylaws in the form attached hereto as Exhibit 9, and (b)
hereby acknowledge that the Class C Director has voted in favor of such
amendment to the Bylaws in connection with the unanimous approval by the IHC
Board of Directors of the Securities Transaction and the documents to be
executed in connection therewith, in each case conditional on the closing of the
Securities Transaction.

         10. Amended LLC Agreement; Discharge of Obligations Under LLC
Agreement. At the closing, Wyndham and Northridge shall execute and deliver the
Amended LLC Agreement in the form attached hereto as Exhibit 2 in order to
permit, among other things, all of the transactions contemplated by this
Agreement. Except as otherwise expressly set forth in this Agreement and the
Amended LLC Agreement, the Initial Redemption on the Closing Date and the
agreements set forth in this Agreement with respect to the redemption of the
Preferred Interest on the Preferred Redemption Date and of the Common Interest
on the Common Redemption Date

<PAGE>   10

shall constitute a complete satisfaction and discharge of all of the Company's
and/or Northridge's obligations and/or liabilities to Wyndham under the LLC
Agreement, as specified in the Amended LLC Agreement; provided, however, that
such obligations and liabilities shall be replaced by, and to the extent of,
those created under this Agreement or under the Amended LLC Agreement including,
without limitation, the Company's obligation to make distributions with respect
to the Preferred Interest, the Company's obligations under the Promissory Notes,
Northridge's and the Company's obligations to redeem the Preferred Interest and
the Common Interest as set forth in this Agreement, and the Company's or
Northridge's liability as a result of a breach of a representation or warranty
contained in this Agreement. Except as expressly set forth in this Agreement,
the Initial Redemption, and the redemption of the Preferred Interest and the
Common Interest at the times set forth above, shall constitute a complete
satisfaction and discharge of all of Wyndham's obligations and/or liability to
Northridge or the Company under the LLC Agreement; provided, however, that the
foregoing shall not absolve Wyndham from any liability it may have pursuant to
this Agreement or the Amended LLC Agreement, including, without limitation, its
obligation to tender the entire Preferred Interest or the entire Common Interest
for redemption if called by the Company, at the times and under the conditions
set forth herein, or its liability as a result of a breach of a representation
or warranty contained in this Agreement.

         11. Treatment of Intercarp Transaction. In connection with the
preparation of the Company's Federal Income Tax Return for 1999, the parties
agree that the Company shall elect not to take installment sale treatment under
Section 453 of the Internal Revenue Code, as amended, with respect to the gain
associated with the sale by the Company to F&H Realty LLC ("F&H") of its
partnership interest in Intercarp Limited Partnership, a Delaware limited
partnership, a portion of the purchase price of which was taken by the Company
in the form of a Secured Promissory Note, dated June 18, 1999, in the principal
amount of $5,750,000 from F&H and F&H GP Corporation, its general partner, as
makers, to the Company, as payee.

         12. Continuation of Obligations Under Distribution Agreement. The
Closing of this transaction shall not terminate, modify or affect in any respect
the obligations, if any, of

<PAGE>   11

Wyndham, Northridge, Patriot, WII, the Company, or IHC pursuant to the
Distribution Agreement dated as of June 18, 1999 by and among such parties (the
"Distribution Agreement"), including, without limitation, the Patriot/Wyndham
Obligations set forth in Schedule 5.2.1(b) of the Distribution Agreement, the
indemnities among the parties pursuant to Section 5.2 of the Distribution
Agreement, the provisions of Section 11.2 relating to the obligation to pay
taxes and the provisions of Section 11.7 relating to cooperation with tax
audits.

         13. Wyndham's Representations and Warranties. Wyndham represents and
warrants to Northridge, as of the date of this Agreement, as follows:

                  (a)      Wyndham is duly authorized by all necessary corporate
                           action to execute and deliver this Agreement and to
                           complete the transactions contemplated herein in
                           accordance with its terms;

                  (b)      No consent, approval or authorization (except such
                           consent as has already been obtained) or filing with
                           any governmental agency, is required for Wyndham to
                           consummate the transactions contemplated hereunder;

                  (c)      Subject to obtaining the consents described in
                           Section 26, neither the execution and delivery of
                           this Agreement nor the consummation of the
                           transactions contemplated hereby will constitute a
                           default under the terms of any agreement or court
                           order to which Wyndham is a party or by which the
                           Interest is bound;

                  (d)      Wyndham owns the Interest free and clear of all lien,
                           pledge, security interest, adverse claim,
                           restriction, covenant, option or right of any third
                           person to purchase, or other encumbrance;

                  (e)      This Agreement has been duly executed and delivered
                           by Wyndham and constitutes the valid and binding
                           obligation of Wyndham, enforceable against Wyndham in
                           accordance with its terms;

                  (f)      There is no litigation pending or, to Wyndham's
                           knowledge, threatened in writing which in any manner
                           does or could adversely affect Wyndham's legal
                           capacity to consummate the transactions contemplated
                           by this Agreement or Wyndham's title to the Interest;

                  (g)      Wyndham has paid all income or personal property
                           taxes which are due and payable with respect to the
                           Interest;

                  (h)      The Interest constitutes Wyndham's entire legal and
                           beneficial interest in the Company (except for
                           Wyndham's or Patriot's indirect interest in the

<PAGE>   12

                           Company by virtue of their ownership of IHC stock),
                           and, upon consummation of transactions contemplated
                           in this Agreement, except as expressly provided in
                           this Agreement and the Amended LLC Agreement, Wyndham
                           will have no further right, title or interest in the
                           Interest, the Company or IHC (except for such stock
                           in IHC owned by Wyndham or Patriot);

                  (i)      Wyndham has not made any agreement or taken any
                           action as a result of which Northridge or the Company
                           would be obligated to pay any person or entity a
                           broker's fee or commission as a result of the
                           transactions contemplated by this Agreement;

                  (j)      Each of the hotels that is the subject of a
                           Management Agreement is owned in fee simple by, or
                           ground leased to, an Affiliate of Wyndham or WII
                           (each, a "Wyndham Affiliate"). (For purposes of this
                           Agreement "Affiliate" means as to any entity, an
                           individual or entity that directly or indirectly
                           Controls (as hereinafter defined), is controlled by,
                           or is under common Control with such entity.
                           "Control" means the possession, directly or
                           indirectly, of the power to direct or cause the
                           direction of the management and policies of an
                           entity, whether through ownership of voting
                           securities or interests, by contract, or otherwise.

                  (k)      Each applicable Wyndham Affiliate has consented to
                           the transfer of the Management Agreement with respect
                           to the hotel property listed on Exhibit 26 owned or
                           ground leased by such Wyndham Affiliate.

                  (l)      Wyndham is the legal and beneficial owner of 60,639
                           Class C shares of IHC stock representing, to
                           Wyndham's knowledge, approximately one percent (1%)
                           of the common stock of IHC, and such shares of IHC
                           stock are not subject to any encumbrances or options
                           (other than the option to IHC granted hereunder).

         The foregoing representations and warranties shall be deemed remade at
the Closing.

         14. WII's and Patriot's Representations and Warranties. WII and Patriot
represent and warrant to IHC and Northridge, as of the date of this Agreement,
as follows:

                  (a)      Each of WII and Patriot is duly authorized by all
                           necessary corporate action to execute and deliver
                           this Agreement and to complete the transactions
                           contemplated herein in accordance with its terms;

                  (b)      No consent, approval or authorization (except such
                           consent as has already been obtained)

<PAGE>   13

                           or filing with any governmental agency, is required
                           for Wyndham or Patriot to consummate the transactions
                           contemplated hereunder;

                  (c)      Neither the execution and delivery of this Agreement
                           nor the consummation of the transactions contemplated
                           hereby will constitute a default under the terms of
                           any agreement or court order to which WII or Patriot
                           is a party;

                  (d)      This Agreement has been duly executed and delivered
                           by WII and Patriot and constitutes the valid and
                           binding obligation of WII and Patriot, enforceable
                           against WII and/or Patriot in accordance with its
                           terms;

                  (e)      There is no litigation pending or, to WII's or
                           Patriot's knowledge, threatened in writing which in
                           any manner does or could adversely affect WII's or
                           Patriot's legal capacity to consummate the
                           transactions contemplated by this Agreement; and

                  (f)      Patriot is the legal and beneficial owner of 181,916
                           Class A shares of IHC stock representing, to WII's
                           and Patriot's knowledge, approximately three percent
                           (3%) of the common stock of IHC, and such shares of
                           IHC stock are not subject to any encumbrances or
                           options other than a pledge of such stock to Chase
                           Manhattan Bank as administrative agent for certain
                           lenders as security for a credit facility provided by
                           such lenders to WII and certain of its affiliates and
                           other than the option to IHC granted hereunder.
                           Patriot represents and warrants that there is not
                           currently an Event of Default under any of the terms
                           of such credit facility and that under the terms of
                           such credit facility Patriot is entitled to release
                           of such pledge upon the sale of such shares of IHC
                           stock, conditioned only on WII making a request
                           therefor and related certifications in accordance
                           with the provisions of the documents governing such
                           credit facility and there being no default under such
                           credit facility.

         The foregoing representations and warranties shall be deemed remade at
the Closing.

         15. Northridge's Representations and Warranties. Northridge represents
and warrants to Wyndham and WII, as of the date of this Agreement, as follows:

                  (a)      Northridge is duly authorized by all necessary
                           corporate action to execute and deliver this
                           Agreement and to complete the transactions
                           contemplated herein in accordance with its terms;

                  (b)      Subject to obtaining the consents described in
                           Section 26, no consent, approval or authorization
                           (except such consent as has already been obtained),
                           or filing with any governmental agency, is required
                           for Northridge to consummate the transactions
                           contemplated hereunder;

                  (c)      Neither the execution and delivery of this Agreement
                           nor the consummation of the transaction contemplated
                           hereby will constitute a default under the terms of
                           any agreement or court order to which Northridge is a
                           party or by which its property is bound;

                  (d)      This Agreement has been duly executed and delivered
                           by Northridge and constitutes the

<PAGE>   14

                           valid and binding obligation of Northridge,
                           enforceable against Northridge in accordance with its
                           terms;

                  (e)      There is no litigation pending or, to Northridge's
                           knowledge, threatened in writing which in any manner
                           does or could adversely affect Northridge's or the
                           Company's legal capacity to consummate the
                           transactions contemplated by this Agreement; and

                  (f)      Northridge has not made any agreement or taken any
                           action as a result of which Wyndham would be
                           obligated to pay any person or entity a broker's fee
                           or commission as a result of the transactions
                           contemplated by this Agreement.

                  (g)      Since June 18, 1999 (the effective date of the LLC
                           Agreement), none of the Existing Contracts or
                           Existing Subsidiary Contracts (each as defined in the
                           LLC Agreement) have been terminated or amended except
                           as disclosed on the schedule attached hereto as
                           Exhibit 15.

         The foregoing representations and warranties shall be deemed remade at
the Closing.

         16. IHC's Representations and Warranties. IHC represents and warrants
to Wyndham and WII, as of the date of this Agreement, as follows:

                  (a)      IHC is duly authorized by all necessary corporate
                           action to execute and deliver this Agreement and to
                           complete the transactions contemplated herein in
                           accordance with its terms;

                  (b)      No consent, approval or authorization (except such
                           consent as has already been obtained) or filing with
                           any governmental agency, is required for IHC to
                           consummate the transactions contemplated hereunder;

                  (c)      Neither the execution and delivery of this Agreement
                           nor the consummation of the transactions contemplated
                           hereby will constitute a default under the terms of
                           any agreement or court order to which IHC is a party;

                  (d)      This Agreement has been duly executed and delivered
                           by IHC and constitutes the valid and binding
                           obligation of IHC, enforceable against IHC in
                           accordance with its terms;

                  (e)      There is no litigation pending or, to IHC's
                           knowledge, threatened in writing which in any manner
                           does or could adversely affect IHC's legal capacity
                           to consummate the transactions contemplated by this
                           Agreement; and

                  (f)      The only material conditions to the closing of the
                           Securities Transaction (other than performance by IHC
                           and the Investor Group of their respective
                           obligations under the documents governing the
                           Securities Transaction) are (i) the approval by the
                           stockholders of IHC, (ii) receipt of a consent from
                           Holiday Hospitality Franchising, Inc., (iii)
                           obtaining certain NASDAQ

<PAGE>   15

                           approvals relating to the Securities Transaction; and
                           (iv) the absence of material adverse effect since the
                           date of the Securities Purchase Agreement with
                           respect to the Securities Transaction. IHC covenants
                           to keep Wyndham informed from time to time on any
                           developments in the Securities Transaction, including
                           any amendments to the deal and progress (or lack of
                           progress) in obtaining consents and meeting
                           conditions.

         The foregoing representations and warranties shall be deemed remade at
the Closing.

         17. Closing Date. This transaction shall close ("Closing Date") on the
same day as the closing of the Securities Transaction, except as expressly
provided below. The closing of the Securities Transaction is anticipated to
occur on or before October 16, 2000, but is subject to extension by IHC until
November 30, 2000, whereupon either IHC or the Investor Group has the option to
terminate the Securities Transaction. In the event that the Securities
Transaction is terminated by either IHC or the Investor Group prior to January
16, 2001, then IHC shall give notice of such termination to Wyndham within two
(2) business days of such termination, whereupon either Northridge or Wyndham
may elect to close this transaction, notwithstanding such termination, by
delivering written notice (the "Closing Notice") to the other parties on or
before that date which is five (5) business days after Wyndham's receipt of such
notice and this transaction shall close within ten (10) business days thereafter
under the alternative terms set forth in Section 40 hereof. In the event that by
the end of the business day on January 16, 2001 (a) the Securities Transaction
has not closed, and (b) neither Northridge nor Wyndham has delivered the Closing
Notice, Wyndham or Northridge may elect at any time thereafter to terminate this
Agreement by delivering written notice to the other parties. In the event of the
termination by either Wyndham or Northridge of this Agreement, the LLC Agreement
shall remain in full force and effect and this Agreement shall be of no further
force and effect, except for the agreement set forth in Section 11 hereof.

         18. Accounting at Closing. Within thirty (30) days following the
Closing Date, Northridge shall provide to Wyndham an accounting of all Net
Operating Cash Flow and Net Capital Proceeds (each as defined in the LLC
Agreement) of the Company through the day immediately preceding the Closing Date
in form reasonably acceptable to Wyndham and certified

<PAGE>   16

by the Chief Financial Officers of IHC and of Northridge, as Managing Members of
the Company, as true and accurate in all material respects. To the extent
Wyndham accepts such accounting, Northridge shall distribute Wyndham's share of
any such Net Operating Cash Flow and Net Capital Proceeds with respect to such
accepted accounting to Wyndham in accordance with the LLC Agreement as in effect
immediately prior to Closing. Wyndham shall have the right to review the books
and records of the Company with respect to any aspect of such accounting and to
cause an audit of such accounting. Such audit shall be at Wyndham's expense
unless it discloses that Northridge's accounting would have resulted in an
underpayment to Wyndham of more than three percent (3%), in which event the cost
of such audit shall be borne by Northridge. Such audit, if desired by Wyndham,
shall be completed before Wyndham accepts the accounting with respect to
questioned matters and receives payment on account of such questioned matters.
No interest shall accrue on such payment during the pendency of such audit. Upon
receipt of such payment, Wyndham's audit rights with respect to such books and
records shall terminate, except as expressly provided in the Amended LLC
Agreement.

         19. Escrow Agent. Chicago Title Insurance Company, Pittsburgh,
Pennsylvania, shall serve as the escrow agent for this transaction (the "Escrow
Agent") pursuant to closing escrow instructions reasonably satisfactory to
Wyndham and Northridge.

         20. Closing Procedures.

         (a) On or before the Closing Date, Wyndham shall deliver to the Escrow
Agent the following documents executed by Wyndham in multiple counterparts:

                  (i)      Assignment of Management Agreements;

                  (ii)     Initial Redemption Assignment;

                  (iii)    Resignation; and

                  (iv)     Amended LLC Agreement.

<PAGE>   17

         (b) On or before the Closing Date, the Company shall deliver to the
Escrow Agent the following documents executed by the Company in multiple
counterparts:

                  (i)      Assignment of Management Agreements;

                  (ii)     Initial Redemption Assignment; and

                  (iii)    cash in the amount of the required Escrowed Funds
                           pursuant to Section 4 hereof.

         (c) On or before the Closing Date, Northridge shall deliver to the
Escrow Agent the Amended LLC Agreement executed by Northridge in multiple
counterparts.

         (d) When the Escrow Agent has received from Wyndham, the Company and
Northridge, respectively, all of the deliveries required under Sections 20(a),
20(b) and 20(c) above, the Escrow Agent shall close the transaction (the
"Closing") by:

                  (i)      delivering to Wyndham, by overnight courier, the
                           Assignment of Management Agreements and a counterpart
                           of the Amended LLC Agreement;

                  (ii)     delivering to the Company, by overnight courier, the
                           Initial Redemption Assignment;

                  (iii)    delivering to IHC, by overnight courier, the
                           Resignation; and

                  (iv)     delivering to Northridge, by overnight courier, a
                           counterpart of the Amended LLC Agreement.

         21. Indemnities by Wyndham. Following the Closing, Wyndham shall
indemnify, defend and hold Northridge and IHC harmless with respect to all loss,
cost, liability and expense arising (a) as a result of any breaches by Wyndham
or WII of any representations and warranties of Wyndham or WII pursuant to this
Agreement, or (b) under the Management Agreements subsequent to the Closing
Date.

         22. Indemnities by Northridge. Following the Closing, Northridge shall
indemnify, defend and hold Wyndham or WII harmless with respect to all loss,
cost, liability or expense arising as a result of (a) any breaches by Northridge
or IHC of any representations and warranties of Northridge pursuant to this
Agreement or (b) Northridge's ownership of any portions of the Interest or
Northridge's operation of the Company subsequent to the Closing Date, provided
that

<PAGE>   18

the foregoing indemnity does not constitute a guaranty by either the Company or
Northridge with respect to the profitability of the Company or its ability to
make distributions (other than the obligation and guaranty of IHC and Northridge
to make or cause to be made capital contributions to the Company to fund
distributions payable on the Preferred Interest and to pay the Preferred
Redemption Amount and the Common Redemption Amount). IHC agrees to contribute
timely cash capital to Northridge in order that Northridge can make the capital
contributions to the Company described in the foregoing parenthetical.

         23. Transition of Management; Liquor Licenses. The management fees
under the Management Agreements shall be paid through the effective date of
termination or assignment in accordance with the provisions of the Management
Agreements except that no termination or other fees shall be payable as a result
of the transactions contemplated in this Agreement notwithstanding the
provisions of such Management Agreements. The parties agree to cooperate, but at
no out-of-pocket cost to the Company, IHC or Northridge, in connection with any
required transfer of liquor licenses to Wyndham or any affiliate of Wyndham
designated by Wyndham or any required amendment to liquor licenses with respect
to the hotels listed on Exhibit 1-A both before and after the Closing Date in
the same manner as set forth in Section 6.3.3 of the Distribution Agreement,
mutatis mutandis, in order to ensure to the maximum extent possible that all
bars and lounges and other liquor facilities at such hotels remain open and
operating during the period following the Closing Date.

         24. Defaults and Remedies. In the event any party defaults in its
obligations hereunder, the other parties shall have such rights and remedies as
may be available at law or in equity or as specified in the Promissory Notes.

         25. Lien Search. It shall be a condition of the Company's and
Northridge's obligation to close this transaction that a personal property lien
search (Form UCC-11) reveal no lien or encumbrance on the Interest (a "Defect").
Promptly following the execution of this Agreement,

<PAGE>   19

the Company shall order a lien search at the Company's expense. If any Defect
shall be discovered as the result of such lien search, the Company shall
promptly notify Wyndham and Wyndham shall have up to twenty (20) days to cure
the Defect to the Company's satisfaction. In the event that Wyndham fails to
cure the Defect at the conclusion of said twenty (20) days, the Company may
elect, in its sole discretion (a) to close the transaction with a reduction in
the Consideration, in the amount(s) of the obligation underlying any such
Defect(s) or (b) to extend the Closing Date for an additional period designated
by the Company, but in no event more than (45) days, to give Wyndham time to
eliminate the Defect; or (c) to terminate this Agreement. If the Company elects
to terminate this Agreement such uncured Defect shall be deemed to constitute a
default by Wyndham under this Agreement.

         26. Consents. Wyndham shall use best efforts to obtain each of the
mortgagee consents described in Exhibit 26 within forty-five (45) days following
the date hereof to the transfer of the Management Agreements as provided herein
or, alternatively, to an amendment to the Management Agreements which provides
for (i) a thirty (30) day termination right by Wyndham (or its applicable
affiliate) without any termination payment, "make whole" payment or similar
payment, and (ii) reduced management fees of $5,000 per month per hotel (and
elimination of any incentive fees) plus pass-through of out-of-pocket expenses
as provided in the Management Agreements. It shall be a condition to Wyndham's,
WII's and Patriot's obligations under this Agreement that all such mortgagee
consents are obtained. Wyndham shall not be required to make any payments or
undertake any additional liabilities in order to obtain such mortgagee consents
other than the payment of legal costs and other out-of-pocket expenses of such
mortgagees. Wyndham and Northridge shall each use commercially reasonable
efforts to obtain each of the franchisor consents described in Exhibit 26, with
Northridge assuming primary responsibility for obtaining the franchisor consents
listed on Exhibit 26 from Promus Hotels, Inc. and Hilton Inns, Inc.; provided,
however, that any assignment fees or amounts paid or payable in connection with
obtaining such consents shall be subject to Wyndham's approval in its sole and
absolute discretion. All out-of-pocket costs associated with obtaining the
foregoing consents shall be borne by

<PAGE>   20
Wyndham. In the event that any of the franchisor consents is not obtained prior
to the Closing Date, the transaction shall close in accordance with the terms of
this Agreement, except that the Management Agreement(s) with respect to the
Hotel(s) with respect to which consent has not been obtained shall not be
assigned on the Closing Date and the Company shall continue to manage such
hotel(s) pursuant to the terms of the applicable Management Agreement(s),
provided that such Management Agreement(s) will be amended to provide for (a) a
thirty (30) day termination right by Wyndham without any termination payment,
"make-whole" or similar payment, and (b) management fees shall be reduced to
$5,000 per month per hotel plus pass-through of out-of-pocket expenses. Any
amendment of Management Agreements pursuant to this Section 26 shall be treated
for purposes of this Agreement as a distribution of such Management Agreements
pursuant to Section 1 hereof and shall not affect the Initial Redemption at
Closing.

         27. Notices. All notices, consents or waivers required or permitted in
this Agreement shall be in writing and be deemed to have been duly given on the
earlier of (a) when delivered to the recipient personally; (b) 72 hours after
being mailed by registered or certified mail, return receipt requested, postage
prepaid, addressed to the recipient as set forth below; or (c) upon
electronically verified transmission by telecopier, as long as a confirming copy
is sent by overnight courier service which provides evidence of delivery or
attempted delivery. A party may change its address for notice by such notice.

         If to Wyndham, Patriot     c/o Wyndham International, Inc.
         or WII:                    1950 Stemmons Freeway, Suite 6001
                                    Dallas, TX 75201
                                    Attn:  Leslie Ng
                                    Facsimile No.: 212/355-7772

         With a copy to:            c/o Wyndham International, Inc.
                                    1950 Stemmons Freeway, Suite 6001
                                    Dallas, TX 75201
                                    Attn: General Counsel
                                    Facsimile No.: 214/863-1986

<PAGE>   21

         If to Northridge, the      c/o Interstate Hotels Corporation
         Company or IHC             Foster Plaza 10
                                    680 Andersen Drive
                                    Pittsburgh, PA 15220-8126
                                    Attn: Chairman and CEO
                                    Facsimile No.: 412/937-8051

         With a copy to:            c/o Interstate Hotels Corporation
                                    Foster Plaza 10
                                    680 Andersen Drive
                                    Pittsburgh, PA  15220-8126
                                    Attn:  General Counsel
                                    Facsimile No.:  412/937-3116

         28. Entire Agreement. This Agreement, including the Exhibits and other
documents referred to herein, contains the entire agreement between the parties
pertaining to the subject matter hereof and fully supersedes all prior
agreements and understandings between the parties pertaining to such subject
matter. No change in or amendment to this Agreement shall be valid unless set
forth in writing and signed by all of the parties after the execution of this
Agreement.

         29. Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, each party
will pay its own costs and expenses incurred in connection with the negotiation,
execution and closing of this Agreement and the transactions contemplated
hereby.

         30. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of Delaware.

         31. Counterparts. This Agreement may be executed in several
counterparts, and all such executed counterparts shall constitute the same
agreement. It shall be necessary to account for only one such counterpart in
proving this Agreement.

         32. Headings, Gender and Number. The section headings used in this
Agreement are intended solely for convenience of reference and shall not
amplify, limit, modify or otherwise be used in the interpretation of any
provision of this Agreement. The masculine, feminine or neuter gender and the
singular or plural number shall be deemed to include the others whenever the
context so indicates or requires.

<PAGE>   22
         33. Waiver. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.

         34. Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.

         35. No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other person.

         36. Binding Agreement; Assignment. The provisions of this Agreement
shall be binding upon and inure to the benefit of the successors and permitted
assigns of the parties hereto. No party shall be permitted to assign any of
their respective rights or obligations under this Agreement without the prior
written consent of the other parties. Notwithstanding the foregoing, either
Wyndham or Northridge may cause documents executed and delivered on the Closing
Date to be executed in favor of an Affiliated nominee by giving written
direction to such effect to the other parties, on which such other parties may
conclusively rely, but no such direction shall affect any of the rights,
interests or obligations of Wyndham or Northridge under this Agreement.

         37. Severability. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable, the remainder of
this Agreement shall nonetheless remain in full force and effect.

<PAGE>   23

         38. Exhibits. References in this Agreement to Exhibits mean the
exhibits attached hereto, all of which are incorporated by reference into this
Agreement.

         39. Further Documents. Each party will, whenever and as often as it
shall be reasonably requested by the other party, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such further
instruments and documents as may reasonably be necessary in order to carry out
the terms and conditions of this Agreement and to complete the transactions,
herein contemplated and shall do any and all other acts as may be reasonably
requested in order to carry out the intent and purpose of this Agreement.

         40. Alternative Redemption Terms. In the event that either Northridge
or Wyndham exercise their respective rights under Section 17 hereof to close
this transaction notwithstanding the termination of the Securities Transaction,
the terms of the redemption shall be as set forth in prior sections of this
Agreement except as follows:

         (a)      At the Closing, the Company shall increase the amount of the
                  Escrowed Funds from the amount required under Section 4 to an
                  amount equal to the Preferred Redemption Amount.

         (b)      On the Preferred Redemption Date, the Preferred Redemption
                  Amount shall be paid by the Company in full in cash. The
                  Escrowed Funds shall be applied toward this obligation.

         (c)      Since no Promissory Notes will be issued by the Company
                  pursuant to Section 3, there will be no guaranties of the
                  Promissory Notes by IHC or Northridge.

         (d)      Since the Preferred Redemption Amount is being secured in full
                  pursuant to subparagraph (a) above and since the Preferred
                  Redemption Amount is being paid in full in cash on the
                  Preferred Redemption Date, there will be no financial
                  covenants pursuant to Section 5.

<PAGE>   24

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

                             INTERSTATE HOTELS, LLC

                             By:  Northridge Holdings, Inc.,
                                  its Managing Member

                             By: /s/ Timothy Q. Hudak
                             Name: Timothy Q. Hudak
                             Title: Senior Vice President

                             PAH-INTERSTATE HOLDINGS, INC.

                             By: /s/ Fred J. Kleisner
                             Name: Fred J. Kleisner
                             Title:

                             PATRIOT AMERICAN HOSPITALITY, INC.

                             By: /s/ Fred J. Kleisner
                             Name: Fred J. Kleisner
                             Title:

                             WYNDHAM INTERNATIONAL, INC.

                             By: /s/ Fred J. Kleisner
                             Name: Fred J. Kleisner
                             Title: President and Chief Executive Officer

                             NORTHRIDGE HOLDINGS, INC.

                             By: /s/ Timothy Q. Hudak
                             Name: Timothy Q. Hudak
                             Title: Senior Vice President

                             INTERSTATE HOTELS CORPORATION

                             By: /s/ Timothy Q. Hudak
                             Name: Timothy Q. Hudak
                             Title: Senior Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}]]