Document:

EXHIBIT 10.3

                                                              March 15, 2000

Richard Beckwitt
1901 Ascension Blvd., Suite 100
Arlington, Texas  76006

Dear Rick,

         In connection with your  resignation as an officer and employee of D.R.
Horton,  Inc. (the "Company"),  you and the Company hereby agree that your bonus
for the fiscal year 2000 under the D.R.  Horton,  Inc. 2000 Incentive Bonus Plan
(the "Plan") shall be 45.83% of whatever Donald J. Tomntiz  ("Tomnitz") would be
entitled  to receive  under the Plan,  assuming  that he remained an employee in
good  standing  with the  Company  throughout  the fiscal  year  (subject to any
adjustments to Tomnitz's award permitted or required under the Plan).

         In the event  Tomnitz's  bonus is for less than a full fiscal year, for
the  purpose  of  calculating  your  bonus  in  accordance  with  the  preceding
paragraph, the amount of Tomnitz's bonus shall be annualized.  That is, it shall
be multiplied by a fraction, the numerator of which is the number of days in the
fiscal year,  and the  denominator  of which is the number of days in the fiscal
year for which Tomnitz received a bonus. That amount shall then be multiplied by
45.83% to determine your bonus.

         This  letter  agreement  is entered  into  subject to  approval  of the
Compensation Committee.  Please confirm your agreement to this letter by signing
in the space provided below.

                                                 Very truly yours,

                                                 D.R. HORTON, INC.

                                                 By:   /s/ Donald R. Horton
                                                     -----------------------
                                                      Donald R. Horton,
                                                      Chairman of the Board

AGREED TO:         /s/ Richard Beckwitt
                 -------------------------
                    Richard BeckwittEXHIBIT 10.4

                    ENCORE VENTURE PARTNERS II (TEXAS), L.P.

                          LIMITED PARTNERSHIP AGREEMENT

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                                TABLE OF CONTENTS

                                                                     Page

ARTICLE I. GENERAL PROVISIONS..........................................1
   Section 1.1.  Certain Definitions...................................1
   Section 1.2.  Partnership Name......................................5
   Section 1.3.  Fiscal Periods........................................5
   Section 1.4.  Principal Office......................................5
   Section 1.5.  Purposes of the Partnership...........................5
   Section 1.6.  Restrictions on Assignability.........................5
   Section 1.7.  Registered Office and Agent in Delaware...............6

ARTICLE II. MANAGEMENT OF PARTNERSHIP..................................6
   Section 2.1.  Management Generally..................................6
   Section 2.2.  Authority of Each General Partner.....................6
   Section 2.3.  Matters Requiring the Consent of the Majority
                 General Partners......................................7
   Section 2.4.  Matters Requiring the Consent of All the General
                 Partners..............................................8
   Section 2.5.  Reliance by Third Parties.............................8
   Section 2.6.  Activities of Class A General Partner.................8
   Section 2.7.  Exculpation...........................................9
   Section 2.8.  Indemnification of Partners...........................9
   Section 2.9.  Payment of Costs and Expenses........................10
   Section 2.10.  Management Fee......................................10

ARTICLE III. CAPITAL ACCOUNTS OF PARTNERS AND OPERATION THEREOF.......11
   Section 3.1.  Capital Contributions and Calls......................11
   Section 3.2.  Capital Accounts.....................................12
   Section 3.3.  Interest.............................................13
   Section 3.4.  Tax Allocations......................................13
   Section 3.5.  Determination by General Partners....................16
   Section 3.6.  Adjustments to Take Account of Interim Events........16

ARTICLE IV. WITHDRAWALS, DISTRIBUTIONS AND LOANS OF CAPITAL...........16
   Section 4.1.  Withdrawals and Distributions in General.............16
   Section 4.2.  Portfolio Distributions..............................17
   Section 4.3.  Restrictions on Distributions........................18
   Section 4.4.  Deemed Sale of Assets................................18
   Section 4.5.  Loans to Partners....................................19
   Section 4.6.  Withholding..........................................20

                                       i
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ARTICLE V. WITHDRAWAL, DEATH, INCOMPETENCY............................20
   Section 5.1.  Withdrawal of Partners...............................20
   Section 5.2.  Effect of Withdrawal, Death, Etc.....................20

ARTICLE VI. DURATION AND TERMINATION OF PARTNERSHIP...................20
   Section 6.1.  Duration.............................................20
   Section 6.2.  Termination..........................................20

ARTICLE VII. TAX RETURNS; REPORTS TO PARTNERS.........................21
   Section 7.1.  Filing of Tax Returns................................21
   Section 7.2.  Tax Matters Partner..................................21
   Section 7.3.  Reports to Partners..................................21
   Section 7.4.  Tax Information......................................22
   Section 7.5.  Tax Elections........................................22

ARTICLE VIII. MISCELLANEOUS...........................................23
   Section 8.1.  General..............................................23
   Section 8.2.  Power of Attorney....................................23
   Section 8.3.  Amendments to Partnership Agreement..................24
   Section 8.4.  Choice of Law........................................24
   Section 8.5.  Notices..............................................24
   Section 8.6.  Headings.............................................24
   Section 8.7.  Construction and Interpretation......................24

                                       ii

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                          LIMITED PARTNERSHIP AGREEMENT
                           Dated as of March 21, 2000

         The undersigned (the  "Partners",  which term shall include any persons
hereafter  admitted  to the  Partnership  pursuant to this  Agreement  and shall
exclude  any  persons  who cease to be  Partners  pursuant  to Article V of this
Agreement) hereby agree to form and hereby form, as of March 21, 2000, a limited
partnership  (the  "Partnership")  pursuant to the  provisions  of the  Delaware
Revised  Uniform  Limited  Partnership  Act (the "Delaware  Act") which shall be
governed by, and operated  pursuant to, the terms and provisions of this Limited
Partnership Agreement (this "Agreement").

                                   ARTICLE I.
                               GENERAL PROVISIONS

         Section 1.1.  Certain  Definitions.   Unless   the  context   otherwise
                       --------------------
specifies or requires, for purposes of this Agreement:

                  "Adjusted Capital Account Deficit" shall mean, with respect to
                  any Partner,  the deficit  balance,  if any, in such Partner's
                  Capital  Account as of the end of the  relevant  Fiscal  Year,
                  after giving effect to the following adjustments:

                           (a)      credit to such  Capital  Account any amounts
                                    which such  Partner is  obligated to restore
                                    or is  deemed  to be  obligated  to  restore
                                    pursuant  to Treasury  Regulations  sections
                                    1.704-2(g) and 1.704-2(i)(5); and

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

                  The foregoing  definition of Adjusted  Capital Account Deficit
                  is  intended  to  comply  with  the   provisions  of  Treasury
                  Regulations  section  1   .704-1(b)(2)(ii)(d)   and  shall  be
                  interpreted consistently therewith.

                  "Business Day" shall mean any day except  Saturday,  Sunday or
                  other  days on which  commercial  banks  in New York  City are
                  authorized by law to close.

                  "Capital  Account" shall have the meaning specified in Section
                  3.2.

                  "Capital  Call"  shall have the meaning  specified  in Section
                  3.1(c).

                  "Capital Commitment" shall mean, with respect to each Partner,
                  (a) the sum of (i) the  amount of  capital  each such  Partner
                  commits to  contribute to the  Partnership  as set forth under
                  the heading "Capital Commitment" on the Schedule and (ii) such
                  Partner's   Rollover   Commitment   and  (b)  such   Partner's
                  obligation, if any, to contribute Fee and Expense Capital.

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                  "Capital  Contribution"  shall  mean,  with  respect  to  each
                  Partner,   (i)  the  amount  of  capital   each  such  Partner
                  contributes  to the  Partnership,  plus  (ii)  such  Partner's
                  Rollover Commitment Account.

                  "Class  A General  Partner" shall mean Encore Capital (Texas),
                  L.P.,  a  Delaware  limited partnership.

                  "Class  B  General  Partner"  shall  mean  Encore I,  Inc., an
                  Arizona corporation.

                  "Closing" shall mean the initial date upon which Interests are
                  purchased.

                  "Code"  shall  mean the  Internal  Revenue  Code of  1986,  as
                  amended.

                  "Delaware Act" has the meaning provided in the preamble.

                  "Fee and Expense Capital" shall mean Capital  Contributions of
                  the  Limited  Partners  other than  Richard  Beckwitt  for the
                  payment of Management Fees and Overhead Expenses.

                  "General  Partner"  shall mean the Class A General  Partner or
                  the Class B General Partner.

                  "Immediate  Family"  shall mean father,  mother,  grandfather,
                  grandmother, child, grandchild, father-in-law,  mother-in-law,
                  brother, sister, brother-in-law,  sister-in-law, nephew, niece
                  and cousin.

                  "Indemnified  Persons"  shall mean each Partner,  any officer,
                  manager,  director,   stockholder,  member  or  partner  of  a
                  Partner, or any controlling Person of any of them.

                  "Initial  Capital  Contribution"  shall mean,  with respect to
                  each Partner,  the amount of capital initially  contributed by
                  such Partner to the Partnership as set forth under the heading
                  "Initial Capital Contribution" on the Schedule.

                  "Interests"  shall mean  interests in the  Partnership,  which
                  interests  shall only be held by a Partner and which represent
                  such  Partner's  share  of  the  profits  and  losses  of  the
                  Partnership  and its  right to  receive  distributions  of the
                  Partnership's assets in accordance with this Agreement.

                  "Investment  Period"  shall  have  the  meaning  set  forth in
                  Section 3.1 (a)(ii).

                  "Limited  Partner"  shall  mean  Encore II, Inc.,  an  Arizona
                  corporation,  Richard  Beckwitt,  or any  Person admitted as a
                  limited partner of the Partnership pursuant to Section 1.6.

                  "Losses" shall mean any and all losses,  expenses,  judgments,
                  fees  (including  reasonable  attorneys'  fees and  expenses),
                  costs or damages.

                                       2

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                  "Majority  General  Partners"  shall mean one or more  General
                  Partners  holding at least a majority of the votes held by the
                  General  Partners.  For  such  purpose,  the  Class A  General
                  Partner shall have one vote,  and the Class B General  Partner
                  shall  have two  votes.  The  relative  votes  of the  General
                  Partners  shall not be  affected  by the  relative  amounts in
                  their Capital Accounts from time to time.

                  "Management  Fee"  shall  mean  the fee  paid  to the  Class A
                  General Partner pursuant to Section 2.10.

                  "Net Loss" shall mean the net loss, if any, of the Partnership
                  with respect to a Fiscal  Period,  as  determined  for federal
                  income  tax  purposes,   provided  that  such  loss  shall  be
                  decreased by the amount of all income during such period which
                  is exempt from federal  income tax, and shall be determined by
                  excluding  all items of expense and income that are  specially
                  allocated to the Partners  pursuant to Section 3.4(c) for such
                  Fiscal Period, and increased by the amount of all expenditures
                  made by the  Partnership  during  such  period  which  are not
                  deductible  for federal  income tax  purposes and which do not
                  constitute capital expenditures.

                  "Net  Profit"  shall  mean  the net  income,  if  any,  of the
                  Partnership with respect to a Fiscal Period, as determined for
                  federal  income tax purposes,  provided that such income shall
                  be  increased  by the amount of all income  during such period
                  that  is  exempt  from  federal   income  tax,  and  shall  be
                  determined  by excluding  all items of income and expense that
                  are  specially  allocated to the Partners  pursuant to Section
                  3.4(c) for such Fiscal Period,  and decreased by the amount of
                  all  expenditures  made by the Partnership  during such period
                  which are not  deductible  for federal income tax purposes and
                  which do not constitute capital expenditures.

                  "Nonrecourse  Deductions"  shall have the meaning set forth in
                  Treasury Regulations section 1.704-2(b)(1).

                  "Nonrecourse  Liability"  shall have the  meaning set forth in
                  Treasury Regulations section 1.752-1(a)(2).

                  "Organizational  Expenses" shall mean all legal and accounting
                  fees, costs and other expenses  incurred by the Partnership in
                  connection  with the  initial  structuring,  organization  and
                  closing of the Partnership.

                  "Overhead  Expenses" shall mean all expenses to be paid by the
                  Partnership pursuant to Section 2.9(b)(ii).

                  "Partners"  shall mean the  General  Partners  and the Limited
                  Partners.

                  "Partner Loan" shall refer to a loan from the Partnership to a
                  Partner pursuant to Section 4.5.

                  "Partner Nonrecourse Debt Minimum Gain" shall have the meaning
                  set forth in Treasury Regulations section 1.704-(i)(2).

                                       3

<PAGE>

                  "Partnership Minimum Gain" shall have the meaning set forth in
                  Treasury Regulations section 1.704-2(b)(2) and (d).

                  "Person"  means any  individual,  partnership,  joint venture,
                  corporation,   limited   liability   company,   unincorporated
                  organization  or  association,  trust  (including the trustees
                  thereof in their  capacity as such),  government (or agency or
                  political subdivision thereof) or other entity.

                  "Portfolio  Distribution"  shall have the meaning set forth in
                  Section 4.2.

                  "Portfolio   Expenses"  shall  mean  those  expenses  directly
                  related   to   Portfolio   Investments,   including   (without
                  limitation),  all taxes, all  out-of-pocket  expenses directly
                  attributable  to the  purchase,  holding  and  disposition  of
                  Portfolio  Investments,  such as due diligence and negotiation
                  costs  (including  travel  and  entertainment   costs),  legal
                  expenses, insurance expenses, and external accounting fees and
                  expenses, and all extraordinary  expenses,  such as litigation
                  and  indemnification  expenses;  provided  that such  expenses
                  shall  not  include   the   expenses   described   in  Section
                  2.9(b)(ii).

                  "Portfolio  Investment" shall mean any private equity or other
                  investment made by the Partnership.

                  "Rollover   Commitment"  shall  mean,  with  respect  to  each
                  Partner, 50% of the aggregate amount, if any, by which (i) all
                  Net Profits for any Fiscal  Year of the  Partnership,  reduced
                  for taxes  thereon at an assumed  combined  federal  and state
                  income tax rate of 40%,  that are  allocated  to such  Partner
                  exceeds  (ii) all Net  Losses  for any  Fiscal  Year  that are
                  allocated to such Partner.

                  "Rollover Commitment Account" shall mean an account maintained
                  for each  Partner  having  an  opening  balance  equal to such
                  Partner's Rollover Commitment,  as adjusted from time to time,
                  less (i) the principal  amount of any Partner Loan received by
                  such  Partner,  plus (ii) the amount of principal and interest
                  repaid by such Partner to the Partnership  with respect to any
                  Partner  Loan  received  by such  Partner,  and less (iii) all
                  distributions   received  by  such   Partner   under   Section
                  4.2(a)(ii).

                  "Schedule" shall mean the schedule  attached  hereto,  setting
                  forth each Partner's  respective Initial Capital  Contribution
                  and Capital Commitment other than for Fee and Expense Capital.

                  "Tax  Matters  Partner"  shall have the  meaning  set forth in
                  Section 7.2.

                  "Termination Date" shall have the meaning set forth in Section
                  6.1.

                  "Treasury  Regulations" shall mean the income tax regulations,
                  including temporary regulations  promulgated,  under the Code,
                  as the  same  may be  amended  hereafter  from  time  to  time
                  (including  corresponding  provisions of succeeding income tax
                  regulations).

                                       4

<PAGE>

                  "Unfunded  Capital  Commitment"  shall mean, with respect to a
                  particular  Partner at a particular  time, the portion of such
                  Partner's  Capital  Commitment  other than for Fee and Expense
                  Capital which has not yet been funded at such time.

         Section 1.2.  Partnership Name. The Partnership shall do business under
the name of Encore  Venture  Partners II (Texas),  L.P.  Should any Person cease
being a Partner of the  Partnership,  such Person shall have no right to use the
name "Encore  Venture  Partners" or "Encore" in any competing  business,  except
that upon  liquidation of the  Partnership the  Partnership's  rights to use the
name "Encore Venture Partners" or "Encore" shall be among the assets distributed
to Encore II, Inc., as a Limited Partner.

         Section 1.3. Fiscal Periods. The "Fiscal Year" of the Partnership shall
end on September 30 of each year. The "Fiscal Quarters" of the Partnership shall
end on December  31,  March 31, June 30 and  September 30 of each Fiscal Year. A
"Fiscal  Period" of the  Partnership  shall commence (i) at the beginning of the
Fiscal Year,  (ii) on each date of the  admission of any Partner,  (iii) on each
date  of  the  acceptance  by  the   Partnership   of  any  additional   Capital
Contributions  and (iv) on each date next  following  any  withdrawal of capital
from the Partnership by any Partner  (whether or not the date of such withdrawal
is September 30 of any year) and shall end on the date immediately preceding the
next Fiscal Period or Fiscal Year.

         Section 1.4.  Principal Office. The principal office of the Partnership
shall be at 1901 Ascension Blvd., Arlington, Texas 76006, or such other place as
may from time to time be designated by the Majority General Partners.  The Class
A General Partner shall give prompt notice of any change to each Partner.

         Section 1.5. Purposes of the Partnership.  The Partnership is organized
for the purposes of (a) seeking long-term capital appreciation through a variety
of Portfolio  Investments and (b) engaging in all activities and transactions as
the General Partners may deem reasonably necessary or advisable or incidental in
connection  therewith;  provided,  however,  the Partnership shall not invest or
trade in,  purchase or sell,  sell short or cover any  commodity or  commodities
contract that is regulated under the Commodity Exchange Act, as amended.

         Section 1.6.  Restrictions on Assignability.
                       -----------------------------

         (a)  Except  with the  express  written  consent  of the other  General
Partner, neither the Class A General Partner nor the Class B General Partner may
assign, sell, transfer,  pledge,  hypothecate or otherwise dispose of any of the
attributes of its interest in the Partnership in whole or in part to any Person,
whether directly or indirectly,  by operation of law or otherwise.  For purposes
of the  preceding  sentence,  a change in  control  of a General  Partner or any
Person controlling a General Partner, shall be deemed a transfer;  provided that
if, in the case of the Class B General  Partner,  the change in control  results
from the change in control of D.R. Horton, Inc., a Delaware corporation,  or its
successors,  such change in control  shall be deemed not to be a  transfer.  Any
assignment,  sale, transfer, pledge,  hypothecation or other disposition made in
violation of this Section  1.6(a) shall be void and of no effect.  No transferee
of an interest of a General  Partner in the  Partnership  shall become a Partner
except upon the consent of all the Partners.

                                       5

<PAGE>

         (b) A Limited Partner may assign, sell, transfer,  pledge,  hypothecate
or  otherwise  dispose  of  any  of  the  attributes  of  its  interest  in  the
Partnership,  in whole or in part,  to any  Person  upon  notice to the  General
Partners and compliance  with any  applicable  laws to the  satisfaction  of the
General  Partners.  No transferee  of an interest of the Limited  Partner in the
Partnership  shall  become a Partner  except  upon the  consent of the  Majority
General Partners.

         Section 1.7.  Registered  Office and Agent in Delaware.  The address of
the  Partnership's  registered  office in the State of  Delaware  is 1209 Orange
Street,  City  of  Wilmington  in the  County  of New  Castle.  The  name of its
registered  agent  at  that  address  is  The  Corporation  Trust  Company.  The
Partnership  may from time to time have such other  place or places of  business
within or without  the State of Delaware as may be  designated  by the  Majority
General Partners.

                                   ARTICLE II.
                            MANAGEMENT OF PARTNERSHIP

         Section 2.1.  Management  Generally.  The management of the Partnership
shall be vested exclusively in the General Partners.  The Limited Partners shall
have no part in the management of the Partnership and shall have no authority or
right to act on  behalf  of the  Partnership  in  connection  with  any  matter.
Employees of the Partnership,  if any, shall have authority to act on behalf and
in the name of the Partnership to the extent authorized by the General Partners.

         Section 2.2.  Authority of Each General Partner.  Except as provided in
Sections  2.3 or 2.4,  or in other  Sections  of this  Agreement,  each  General
Partner shall have the authority on behalf and in the name of the Partnership to
carry out any and all of the  purposes  of the  Partnership,  and to perform all
acts and enter into and perform all  contracts and other  undertakings  which it
may deem  necessary or  advisable  or  incidental  thereto,  including,  without
limitation, the authority to:

                  (a)  act  as an  investment  adviser  to the  Partnership  and
         consult with the other General Partner in the performance of any of the
         following activities: identify potential Portfolio Investments; conduct
         due diligence, analysis, and evaluation thereof; negotiate the terms of
         potential   Portfolio   Investments;   and  monitor  the   progress  of
         negotiations of Portfolio Investments;

                  (b) open,  maintain and close accounts with brokers,  dealers,
         banks,  currency  dealers and others,  and issue all  instructions  and
         authorizations to entities  regarding the purchase and sale or entering
         into,  as the case may be,  of  securities,  options,  certificates  of
         deposit,   bankers  acceptances,   repurchase  and  reverse  repurchase
         agreements,  agreements  for the  borrowing  and lending of'  portfolio
         securities  and  other  assets,  instruments  and  investments  for the
         purpose of seeking to achieve the Partnership's  purposes as well as to
         facilitate  capital  contributions,   distributions,  withdrawals,  the
         payment of Partnership expenses;

                  (c) open, maintain and  close  bank  accounts  and draw checks
         or other orders for the payment of monies;

                                       6

<PAGE>

                  (d) deposit,  withdraw,  pay,  retain   and   distribute   the
         Partnership's funds in a manner consistent with this Agreement; and

                  (e) take  any  action   that  may  be required by governmental
         authorities having jurisdiction over the Partnership.

         Section 2.3.  Matters  Requiring  the Consent of the  Majority  General
Partners.  Subject to Section 2.4, a General  Partner  shall have the  authority
regarding  the following  matters only with the consent of the Majority  General
Partners:

                  (a) delegate  responsibility  as  investment  adviser  of  the
         Partnership;

                  (b) lease, sell or dispose of any assets or investments in the
         name or for the account of the  Partnership  or enter into any contract
         or endorsement in the name or for the account of the  Partnership  with
         respect to any such assets or  investments  or in any other manner bind
         the  Partnership  to  lease,  sell or  dispose  of any such  assets  or
         investments  on  such  terms  as  the  Majority  General  Partners  may
         determine;

                  (c) loan or borrow  money,  post margin on securities or enter
         into transactions  having a similar  leveraging effect or for temporary
         purposes  on behalf  of the  Partnership,  from any  source or with any
         party,  upon such terms and conditions as the Majority General Partners
         may deem advisable and proper,  to execute  promissory  notes,  drafts,
         bills of exchange and other  instruments  and evidences of indebtedness
         and to secure the payment thereof by mortgage,  pledge or assignment of
         or  security  interest  in all or any part of  property  then  owned or
         thereafter acquired by the Partnership,  and refinance,  recast, modify
         or extend any of the obligations of the Partnership and the instruments
         securing those obligations;

                  (d) lend, transfer, mortgage, pledge or otherwise deal in, and
         secure the payment of obligations of the  Partnership by mortgage upon,
         or  hypothecation  or pledge  of,  all or part of the  property  of the
         Partnership,  whether  at the time  owned or  thereafter  acquired,  or
         participate in  arrangements  with  creditors,  institute and settle or
         compromise  suits and  administrative  proceedings  and  other  similar
         matters;

                  (e) employ,   retain  or  otherwise   secure  or  enter   into
         contracts,  agreements  and other  undertakings  with  Persons by or on
         behalf of the Partnership, including, without limitation, any attorneys
         and accountants, providing for the payment by the Partnership for goods
         or services in one  transaction  or series of related  transactions  of
         $100,000 or more;

                  (f)  bring or defend,  pay,  collect,  compromise,  arbitrate,
         resort  to  legal action,  or otherwise adjust  claims or demands of or
         against the Partnership;

                  (g) do any and all  acts on  behalf  of the  Partnership,  and
         exercise all rights of the Partnership, with respect to its interest in
         any property or any Person, including,  without limitation,  the voting
         of  securities,  participation  in  arrangements  with  creditors,  the
         institution  and  settlement or compromise of suits and  administrative
         proceedings and other like or similar matters;

                                       7

<PAGE>

                  (h) authorize any officer,  director,  employee or other agent
         of a General Partner or a Limited Partner,  or any employee or agent of
         the Partnership,  to act for and on behalf of the Partnership in any or
         all of the matters incidental thereto; and

                  (i) do any  acts  that  the  Majority  General  Partners  deem
         advisable to further the purpose of the  Partnership  or this Agreement
         that are not prohibited by applicable law.

         Section 2.4. Matters Requiring the Consent of All the General Partners.
A General Partner shall have authority regarding the following matters only with
the consent of all the General Partners:

                  (a) Make any Portfolio Investment;

                  (b) Make  any  Capital  Call  other  than  for Fee and Expense
         Capital;

                  (c) Enter into any contract,  agreement or other  undertakings
         or transaction on behalf of and in the name of the Partnership with any
         General Partner,  any Limited Partner or any Person controlling,  under
         common control with or controlled by any General Partner or any Limited
         Partner;

                  (d) Issue any additional interests in the Partnership;

                  (e) Merge with or transfer substantially all of the
         Partnership's  assets  to  any  other  Person  other  than by mortgage,
         hypothecation, pledge or the grant of a security interest; and

                  (f) Effect an  initial  public  offering  with respect  to the
         Partnership's business.

         Section 2.5. Reliance   by  Third  Parties.  Persons  dealing  with the
Partnership are entitled to rely  conclusively upon the certificate of a General
Partner to the effect that it is then  acting as a General  Partner and upon the
power and authority of a General Partner and an employee or agent of the General
Partner as set forth in this Agreement.

         Section 2.6. Activities of Class A General Partner. The Class A General
Partner,  its general partners and their respective  general partners,  members,
managers,  officers and  employees,  including  Richard  Beckwitt,  shall devote
substantially  all of their  business  time to the  business  and affairs of the
Partnership. The general partners, members, managers, officers, and employees of
the Class A General  Partner and its general  partners shall not be permitted to
provide   investment  advice  to,  or  perform  duties  similar  to  the  duties
contemplated  by this Agreement for, any other Person for  compensation or other
consideration other than members of the Immediate Family of Richard Beckwitt and
his wife, or trusts for members of such family and any other Person  approved in
writing by the Majority  General  Partners;  provided that nothing  herein shall
restrict the making of bona fide personal investments that do not interfere with
or create a conflict of interest with respect to the business and affairs of the
Partnership as reasonably  determined by the Majority General Partners.  Richard
Beckwitt may not serve on the board of  directors,  managers or trustees (or the
equivalent)  of any  business  entity  other  than an  affiliate  of the Class B
General  Partner  or  business  entities  in which  the  Partnership  has made a
Portfolio  Investment without the prior written approval of the Majority General
Partners.

                                       8

<PAGE>

         Section 2.7. Exculpation.  No Indemnified Person shall be liable to any
Partner  or the  Partnership  for any act or  failure  to act on  behalf  of the
Partnership,  unless  such act or  failure  to act  resulted  from  the  willful
misfeasance,  bad faith or gross  negligence  of the  Indemnified  Person.  Each
Indemnified  Person may consult with counsel and  accountants  in respect of the
Partnership  business and affairs and shall be fully  protected and justified in
any action or inaction  which is taken in accordance  with the advice or opinion
of such  counsel or  accountants.  Notwithstanding  any of the  foregoing to the
contrary,  the  provisions  of this  Section 2.7 shall not be construed so as to
relieve (or attempt to relieve) any Indemnified Person of any liability,  to the
extent (but only to the extent) that such liability may not be waived,  modified
or limited under  applicable law, but shall be construed so as to effectuate the
provisions of this Section 2.7 to the fullest extent permitted by law.

         Section 2.8.  Indemnification of Partners.
                       ---------------------------

         (a) The Partnership, out of its own assets and not out of the assets of
any Partner,  shall indemnify and hold harmless each Indemnified Person from and
against any and all Losses directly or indirectly relating to, arising out of or
in connection  with, or based upon (i) such  Indemnified  Person being or having
been a Partner, a manager,  member,  officer,  director,  shareholder,  partner,
employee or agent (or a legal  representative  or  controlling  person of any of
them) of a Partner,  or a member of any committee or advisory board of a Partner
or the  Partnership,  or (ii) any  action or  failure to act on the part of such
Indemnified  Person  unless  such act or  failure  to act was the  result of the
willful  misconduct,  bad faith or gross negligence of such Indemnified  Person.
The Partnership  shall, in the sole discretion of the Majority General Partners,
advance to any Indemnified Person reasonable attorneys' fees and other costs and
expenses  incurred in  connection  with the defense of any action or  proceeding
which arises out of conduct which is the subject of the indemnification provided
hereunder.  Each Partner hereby agrees,  and each other Indemnified Person shall
agree,  as a condition to any such advance,  that in the event such  Indemnified
Person  receives  such  advance,  such  Indemnified  Person shall  reimburse the
Partnership  for such advance to the extent that it shall be finally  judicially
determined  that such  Indemnified  Person was not  entitled to  indemnification
under this Section 2.8.

         (b) The  provisions of this Section 2.8 shall not be construed so as to
provide for the  indemnification  of any Indemnified Person for any liability to
the  extent  (but  only to the  extent)  that such  indemnification  would be in
violation of applicable  law or such  liability  may not be waived,  modified or
limited under  applicable  law, but shall be construed so as to  effectuate  the
provisions of this Section 2.8 to the fullest extent permitted by law.

         (c) Notwithstanding  anything  expressed  or implied to the contrary in
this Agreement,  the Majority General Partners are authorized to take any action
that they determine to be necessary or  appropriate to cause the  Partnership to
comply with any foreign or United  States  federal,  state or local  withholding
requirement  with  respect to any  allocation,  payment or  distribution  by the
Partnership to any Partner or other  Person.  All  amounts so withheld  shall be
treated  as distributions  to  the  applicable  Partners  under  the  applicable
provision of this Agreement. If any such withholding requirement with respect to
any  Partner  exceeds  the  amount  distributable  to such  Partner  under  this
Agreement or if any such withholding  requirement was not satisfied with respect
to any amount previously  allocated,  paid or distributed to such Partner,  such
Partner or any  successor or assignee  with respect to such  Partner's  interest
hereby  indemnifies  and  agrees to hold  harmless  the other  Partners  and the
Partnership for such excess amount or such withholding requirement,  as the case
may be,  including  interest on such amount and any  penalties  assessed on such
amounts.

                                       9

<PAGE>

         Section 2.9.  Payment of Costs and Expenses.
                       -----------------------------

         (a) The  Partnership  will  pay  all  Organizational  Expenses  and all
Portfolio Expenses.

         (b) The Class A General Partner shall provide (i) all investment advice
required for the  purposes of the  Partnership  and (ii),  at the expense of the
Partnership  through the Termination  Date,  staffing,  equipment and facilities
that are adequate, suitable and reasonably required for the business and affairs
of the  Partnership.  In  furtherance  of the  foregoing,  but not in limitation
thereof,  the  Partnership  shall pay the rent of the offices  which the Class A
General Partner will occupy,  the  compensation and benefits of the staff of the
Class A General  Partner,  the costs or expenses of  maintenance  of Partnership
books and records,  and the telephone charges,  costs of computer equipment (and
related  software),  communications  equipment and other office  equipment,  and
other overhead  costs required for the business and affairs of the  Partnership;
provided that, in all cases, such amounts shall be reasonable in the judgment of
the Majority General Partners.

         (c) The Majority General Partners shall have authority to determine all
accounting  practices of the Partnership  and may establish  reserves or similar
adjustments  as they deem  appropriate or necessary to account for or accrue for
expenses and liabilities (whether actual or contingent).

         Section 2.10.  Management Fee.
                        --------------

         (a) The Partnership shall pay the Management Fee to the Class A General
Partner,  quarterly in advance.  The first payment shall be $52,083 and shall be
made at  Closing,  and all  subsequent  payments  shall be made on or before the
first day of each calendar quarter.

         (b) Until the fourth anniversary of the Closing,  the annual Management
Fee shall be 2.5% of the aggregate amount of the Capital  Commitments other than
for Fee and  Expense  Capital  or  Rollover  Commitments  of the Class B General
Partner and the Limited Partners, but in no event more than $1,250,000.

         (c) After the fourth anniversary of the Closing,  the annual Management
Fee shall be equal to 2% of (i) the aggregate amount of Capital Contributions of
the Class B General  Partner  and the  Limited  Partners  other than for Fee and
Expense  Capital,  less (ii) the aggregate  amount of all  distributions  to the
Class B General Partner and the Limited  Partners in excess of the aggregate Net
Profit allocated to such Partners, but in no event more than $1,250,000.

         (d) Notwithstanding  the foregoing, the Management Fee shall not accrue
from and after the Termination Date.

                                       10

<PAGE>

                                  ARTICLE III.
               CAPITAL ACCOUNTS OF PARTNERS AND OPERATION THEREOF

         Section 3.1.  Capital Contributions and Calls.
                       -------------------------------

         (a) Capital Commitments.

                  (i) Each Partner hereby agrees to  make the  amount of Capital
                      Contributions  equal  to the Capital  Commitment set forth
                      opposite its name in the Schedule if requested pursuant to
                      Capital Calls within  the Investment  Period and  has made
                      the Initial Capital  Contribution in  the amount set forth
                      opposite  such   Partner's   name  in  the  Schedule.   In
                      addition, the Limited Partners other than Richard Beckwitt
                      agree to make Capital Contributions in such amounts as may
                      be required  to pay  when  due  all  Management  Fees  and
                      Overhead  Expenses.  All  Capital  Contributions  shall be
                      made in cash in U.S. dollars.
                 (ii) The General  Partners  shall have no  obligation  to  make
                      Capital  Calls  other than  for  Fee and  Expense  Capital
                      required to pay Management Fees and Overhead Expenses when
                      due.  No General Partner shall be obligated to  consent to
                      a Portfolio  Investment not acceptable  to it in  its sole
                      discretion even though it or any Person affiliated with it
                      has a  Capital  Commitment.  All Capital Commitments other
                      than for Fee and Expense Capital not called will terminate
                      four years after the Closing, or (if earlier) (A) when all
                      Capital Commitments other than for Fee and Expense Capital
                      are drawn down or (B)  when the Partnership  is terminated
                      (the "Investment Period"); provided that (1) the  Majority
                                                 --------
                      General Partners may extend  the Investment  Period in the
                      case  of  Portfolio  Investments  with  longer  commitment
                      periods  than the  Investment Period  until the earlier of
                      (x)  the   expiration   of  such  Portfolio   Investment's
                      commitment period and (y) six years after the Closing.
                (iii) During  the  Investment  Period, amounts  drawn  down will
                      proportionately  reduce  a  Partner's  Capital  Commitment
                      other  than for Fee and Expense Capital and not be subject
                      to recall,  except where:  (A) an amount was drawn down in
                      anticipation of a  potential  Portfolio  Investment,  such
                      investment  was  not  consummated   and  such  amount  was
                      returned to the Partner, or (B) a Portfolio Investment was
                      (1) sold within the Investment Period  or after being held
                      by the Partnership for less than a 6-month  period and (2)
                      the proceeds were distributed to  the  Partners,  in which
                      case a Partner's Capital Commitment  will be  increased by
                      the lesser of (x) amounts drawn down  for investment under
                      clause (A) above or invested  in  a  Portfolio  Investment
                      pursuant to clause (B) above,  and  (y)  amounts  actually
                      distributed to such Partner with respect to any  Portfolio
                      Investment described in clauses (A) or (B) above.

                                       11

<PAGE>

                 (iv) Except as otherwise  set forth in  Section 3.1, at the end
                      of the Investment  Period,  Capital  Commitments not drawn
                      down  will  be   released   from  any  further obligations
                      and no Partner  will  be  required  to  make  any  further
                      Capital Contributions to the  Partnership, except  Capital
                      Contributions  necessary to (A) fund Rollover Commitments,
                      (B) pay  Management  Fees and  Overhead  Expenses  through
                      the Termination Date or (C) complete Portfolio Investments
                      which  were  in  process  as  of  the  termination  of the
                      Investment Period.

         (b) Capital Contributions.  On or about the  Closing, each Partner will
             ---------------------
have made  its  Initial Capital  Contribution,  unless all  the Majority General
Partners, in their sole discretion, require a different amount.

         (c) Capital Calls.  The Majority  General  Partners,  upon at least two
Business Days' notice, may issue calls for Capital Contributions at any time, in
the case of Capital  Contributions  other than for Fee and Expense Capital,  and
shall issue calls for Capital  Contributions  for Fee and Expense  Capital  when
required to pay when due Management Fees and Overhead  Expenses (each such call,
a "Capital  Call"). A Capital Call other than for Fee and Expense Capital may be
in any amount up to a Partner's Unfunded Capital  Commitment.  All Capital Calls
shall be made pro rata for all Partners or, in the case of Capital Calls for Fee
and Expense Capital,  the Limited Partners other than Richard Beckwitt according
to their Capital Commitments other than for Fee and Expense Capital. The Capital
Call shall specify the date,  place and amount of the Capital Call, give a brief
description of the transaction or purpose for which such call is being made, and
set forth the  depository  institution  and  account  into  which  such  Capital
Contribution shall be made. Each Partner agrees to comply with the terms of each
Capital Call.

         Section 3.2. Capital Accounts.  Capital accounts  ("Capital  Accounts")
shall be established and maintained on the  Partnership's  books with respect to
each Partner, in accordance with the provisions of Treasury  Regulations section
1.704-1(b), including the following:

                  (a)      Each Partner's Capital Account shall be increased by:

                           (i)      the   amount   of   capital   such   Partner
                                    contributes to the Partnership;

                           (ii)     the amount of Net Profit  allocated  to such
                                    Partner  and all  items  of  income  or gain
                                    specially  allocated to such  Partner  under
                                    this Agreement;

                           (iii)    the fair market value of any property (other
                                    than cash) contributed in the Partnership by
                                    such  Partner (net of  liabilities  to which
                                    such property is subject); and

                           (iv)     any  other increases required by the Code or
                                    Treasury Regulations.

                  (b)      Each Partner's Capital Account shall be decreased by:

                                       12

<PAGE>

                           (i)      the amount of Net  Loss  allocated  by  such
                                    Partner and  all items of deduction  or loss
                                    specially  allocated  to  such Partner under
                                    this Agreement;

                           (ii)     all  amounts  paid  or  distributed  to such
                                    Partner  pursuant to this  Agreement,  other
                                    than any amount  required to be treated as a
                                    payment for  property or services  under the
                                    Code;

                           (iii)    the  fair  market   value  of  any  property
                                    distributed  in kind to such Partner (net of
                                    any liabilities  secured by such distributed
                                    property  that such Partner is considered to
                                    assume or take  subject to for  purposes  of
                                    section 752 of the Code); and

                           (iv)     any other  decreases required by the Code or
                                    Treasury Regulations.

                  (c) Capital  Accounts  shall be adjusted  pursuant to Treasury
         Regulation Section  1.704-1(b)(2)(iv)(f) and (g) upon the occurrence of
         any  of  the  events   set  forth  in   Treasury   Regulation   Section
         1.704-1(b)(2)(iv)(f)(5). Any gain or loss resulting from the adjustment
         of Capital  Accounts  shall be  determined  and  allocated  pursuant to
         Section 4.4.

                  (d)  All  provisions  of  this   Agreement   relating  to  the
         maintenance  of Capital  Accounts  are intended to comply with the Code
         and  Treasury  Regulations  thereunder  and  shall be  interpreted  and
         applied in a manner  consistent  with such law.  The  Majority  General
         Partners  are  hereby  authorized  to  and  shall  make  any  necessary
         modifications  to this  Article III in the event  unanticipated  events
         occur that might otherwise cause this Agreement not to comply with such
         law or any changes thereto.

         Section  3.3.  Interest.  No interest  shall be paid or credited to the
Partners with respect to their Capital  Commitments,  Capital  Contributions  or
Capital  Accounts or upon any  undistributed  profits  left on deposit  with the
Partnership.

         Section 3.4.  Tax Allocations.
                       ---------------

         (a) General  Rule.  Except as provided in this  Section 3.4, Net Profit
(and items thereof) and Net Loss (and items thereof) for any Fiscal Period shall
be  allocated  among the  Partners in a manner such that the Capital  Account of
each Partner,  immediately after giving effect to such allocation, is, as nearly
as possible  equal  (proportionately)  to the amount of the  distributions  that
would be made to such Partner during such Fiscal Period pursuant to Section 4.2,
without regard to Section 4.2(c), if

                  (i)      the Partnership were dissolved and terminated;

                  (ii)     its affairs were wound up and each Partnership  asset
                           was  sold   for  cash   equal  to  its  cost  to  the
                           Partnership  (except that any Partnership  asset that
                           is sold in such Fiscal  Period shall be treated as if
                           sold for an  amount  of cash  equal to the sum of (x)
                           the amount of any net cash proceeds actually received
                           by  the   Partnership   in   connection   with   such
                           disposition  and (y) the  fair  market  value  of any
                           property  actually  received  by the  Partnership  in
                           connection with such disposition); and

                                       13

<PAGE>

                  (iii)    all Partnership  liabilities were satisfied  (limited
                           with  respect to each  nonrecourse  liability  to the
                           book value of the assets securing such liability).

The Majority  General  Partners may, in their sole  discretion,  make such other
assumptions  (whether or not consistent with the above assumptions) as they deem
necessary  or  appropriate   in  order  to  effectuate  the  intended   economic
arrangement of the Partners as reflected in Article IV.

         (b)  Allocations  Relating to Last Fiscal  Year.  Except as provided in
this  Agreement,  if upon the  dissolution  and  termination of the  Partnership
pursuant to Article VI, after all other allocations provided for in this Section
3.4  have  been  tentatively  made as if this  Section  3.4(b)  were not in this
Agreement,  a  distribution  to the  Partners  under  Section  6.2(c)  would  be
different from a distribution  to the Partners under Article IV, then Net Profit
(and items  thereof) and Net Loss (and items  thereof) for the Fiscal  Period of
the dissolution and termination of the Partnership  pursuant to Article VI shall
be  allocated  among the  Partners in a manner such that the Capital  Account of
each Partner,  immediately after giving effect to such allocation, is, as nearly
as possible,  equal  (proportionately)  to the amount of the distributions  that
would be made to such Partner during such last Fiscal Period pursuant to Section
4.2(a).  The Majority General Partners may, in their sole discretion,  apply the
principles of this Section 3.4(b) to any Fiscal Year preceding the Fiscal Period
in which the Partnership dissolves and terminates (including through application
of section 761(e) of the Code) if delaying application of the principles of this
Section 3.4 would likely result in  distributions  under Section  6.2(c)that are
materially  different  from  distributions  under  Section  4.2(a) in the Fiscal
Period in which the Partnership dissolves and terminates.

         (c)  Regulatory and  Related  Allocations.  Notwithstanding  any  other
              ------------------------------------
provision  in  this Agreement to the contrary, the following special allocations
shall be made in the following order:

                    (i)    Minimum  Gain  Chargeback.  Notwithstanding any other
                           -------------------------
                           provision  of  this  Article III,  if  there is a net
                           decrease  in  Partnership  Minimum  Gain  during  any
                           Fiscal   Year,   each  Partner   shall  be  specially
                           allocated  items  of  Partnership income and gain for
                           such  Fiscal  Year  (and,  if  necessary,  subsequent
                           Fiscal Years) in  an amount  equal to the  portion of
                           such Partner's share  of the  net  decrease  in  such
                           Partnership  Minimum  Gain,  determined in accordance
                           with  Treasury  Regulations sections 1.704-2(d)(1)(f)
                           and (g),  that is allocable  to  the  disposition  of
                           Partnership   property,    subject   to   Nonrecourse
                           Liabilities.   Such  allocations  shall  be  made  in
                           proportion  to the  respective amounts required to be
                           allocated  to  the  Partners  pursuant  thereto.  The
                           items to  be  so  allocated  shall be  determined  in
                           accordance with Treasury Regulations section 1.104-2.
                           This  clause (i)  is  intended  to  comply  with  the
                           minimum  gain  chargeback requirement in such section
                           of the  Treasury Regulations and shall be interpreted
                           consistently therewith.

                                       14

<PAGE>

                   (ii)    Partnership Minimum Gain Chargeback.  Notwithstanding
                           -----------------------------------
                           any other provision  of this Article III, if there is
                           a net decrease in a  Partner Nonrecourse Debt Minimum
                           Gain  attributable to a  Partner nonrecourse debt (as
                           defined  in Treasury  Regulations section 1.704-2(i))
                           during  any  Fiscal  Year,   each  Partner  shall  be
                           specially allocated items of  Partnership income  and
                           gain  for  such  Fiscal  Year  (and,  if   necessary,
                           subsequent Fiscal Years) in an  amount  equal to  the
                           portion  of such Partner's  share of the net decrease
                           in Partner Nonrecourse Debt Minimum Gain attributable
                           to such  Partner's  nonrecourse debt,  determined  in
                           accordance   with   Treasury   Regulations    section
                           1.704-2(i).  This clause (ii) is  intended to  comply
                           with the minimum gain chargeback requirements in such
                           section  of  the  Treasury  Regulations and  shall be
                           interpreted consistently therewith.

                  (iii)    Qualified Income Offset.  In the  event  any  Partner
                           -----------------------
                           unexpectedly  receives  any adjustments, allocations,
                           or distributions  described in  Treasury  Regulations
                           sections 1 .704-1(b)(2)(ii)(d)(4),  (5)  or  (6) with
                           respect to  such Partner's  Capital Account, items of
                           Partnership   income  and  gain  shall  be  specially
                           allocated to each  such  Partner  in  an  amount  and
                           manner   sufficient   to  eliminate,  to  the  extent
                           required by the Treasury  Regulations,  the  Adjusted
                           Capital Account Deficit of such Partner as quickly as
                           possible,  provided  that  an allocation  pursuant to
                                     --------
                           this Section 3.4(c)(iii) shall be made only if and to
                           the extent  that  such Partner would have an Adjusted
                           Capital  Account  Deficit after all other allocations
                           provided   for   in   this  Section  3.4   have  been
                           tentatively  made as if this Section 3.4(c)(iii) were
                           not in this Agreement.

                   (iv)    Nonrecourse Deductions.   Any  Nonrecourse Deductions
                           ----------------------
                           attributable to Portfolio  Investments for any Fiscal
                           Period or  other  period shall be  allocated  to  the
                           Partners in  accordance with their respective Capital
                           Accounts.

                    (v)    Gross Income Allocation.  In the  event  any  Partner
                           -----------------------
                           has an Adjusted Capital  Account  Deficit,  items  of
                           Partnership  income  and   gain  shall  be  specially
                           allocated to such Partner  in  an amount  and  manner
                           sufficient  to  eliminate   such  Partner's  Adjusted
                           Capital  Account  Deficit  as  quickly  as  possible;
                           provided that an allocation pursuant to this  Section
                           3.4(c)(v) shall be made only  if  and  to the  extent
                           that such Partner  would  have  an  Adjusted  Capital
                           Account Deficit  after all other allocations provided
                           for  in  this  Section 3.4 (other than Section 3.4(c)
                           (iii)) have  been tentatively made as if this Section
                           3.4(c)(v) were not in this Agreement.

                   (vi)    Loss Allocation Limitation. No allocation of Net Loss
                           (or items  thereof)  shall be made to any  Partner to
                           the  extent  that  such  allocation  would  create or
                           increase an Adjusted  Capital  Account  Deficit  with
                           respect to such Partner.

                                       15

<PAGE>

                  (vii)    Section  754  Adjustments.   Pursuant   to   Treasury
                           -------------------------
                           Regulations section  1.704-1  (b)(2)(iv)(m),  to  the
                           extent an adjustment to the adjusted tax basis of any
                           Partnership asset  under  Code section 732, 734(b) or
                           743(b) is  required  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 Treasury Regulations.

                 (viii)    Certain  Expense  Allocations.   All  Management  Fee
                           -----------------------------
                           expense  and  Overhead  Expense  shall  be  specially
                           allocated  to the Limited Partner who contributes the
                           Fee and Expense Capital to pay them.

         (d) Transfer of or Change in Interests.  The Majority  General Partners
are authorized to adopt any  convention or combination of conventions  likely to
be upheld for  federal  income tax  purposes  regarding  the  allocation  and/or
special  allocation of items of Partnership  income,  gain, loss,  deduction and
expense with respect to a newly issued  Interest,  a transferred  Interest and a
redeemed  Interest.  A transferee  of an Interest  shall  succeed to the Capital
Account of the  transferor  Partner to the extent it relates to the  transferred
Interest.

         Section 3.5.  Determination by General Partners. All matters concerning
the  computation  of Capital  Accounts,  the allocation of Net Profit (and items
thereof)  and  Net  Loss  (and  items  thereof),  the  allocation  of  items  of
Partnership income,  gain, loss,  deduction and expense for all purposes of this
Agreement and the adoption of any accounting procedures,  including reserves for
expenses  and  contingencies  not  expressly  provided  for by the terms of this
Agreement shall be determined in good faith by the Majority General Partners.

         Section  3.6.  Adjustments  to Take  Account  of Interim  Events.  If a
Partner shall make additional  Capital  Contributions to the Partnership as of a
date other than the first day of a Fiscal Quarter, withdraw from the Partnership
or make a withdrawal from such Partner's Capital Account as of a date other than
the last day of a Fiscal Year,  the Majority  General  Partners  shall make such
adjustments in the determination and allocation among the Partners of Net Profit
and Net Loss and  items of  income,  deduction,  gain,  loss or  credit  for tax
purposes and  accounting  procedures as shall  equitably  take into account such
interim event and applicable provisions of law.

                                   ARTICLE IV.
                 WITHDRAWALS, DISTRIBUTIONS AND LOANS OF CAPITAL

         Section 4.1. Withdrawals and Distributions in General.  Except with the
consent of all the General Partners in their sole  discretion,  no Partner shall
be entitled to (i) receive  distributions  from the Partnership or (ii) withdraw
any amount from such Partner's  Capital Account,  other than as provided in this
Article IV and Article VI.

                                       16

<PAGE>

         Section 4.2.  Portfolio Distributions.
                       -----------------------

         (a) Subject to Section 4.3,  after  provision for  Portfolio  Expenses,
sufficient  working  capital  consistent with good fiscal  operating  policy and
management,  taxes  payable,  and  such  other  needs  as the  Majority  General
Partners, in their sole discretion, shall deem appropriate, the Partnership will
cause all funds received by the  Partnership in connection  with the liquidation
or other disposition of the Portfolio Investments and from interest, dividend or
other income from the Portfolio  Investments  to be  distributed in such amounts
and at such times as the Majority  General  Partners,  in their sole discretion,
shall determine (each such  distribution of funds, a "Portfolio  Distribution"),
in the following order of priority:

                  (i)      100% to the Partners, pro rata in proportion to their
                           respective  contributions  of capital (other than Fee
                           and Expense  Capital) to the  Partnership,  until the
                           Partners have received cumulative distributions in an
                           amount  equal  to  the  Partners'   contributions  of
                           capital  (other than Fee and Expense  Capital) to the
                           Partnership;

                  (ii)     100% to the Partners, pro rata in proportion to their
                           respective   Rollover  Commitment  Account  balances,
                           until   the   Partners   have   received   cumulative
                           distributions  in an amount  equal to the  balance of
                           their Rollover Commitment Accounts;

                  (iii)    100% to the Class B General  Partner  and the Limited
                           Partners,  pro rata in proportion to their respective
                           Capital  Contributions other than for Fee and Expense
                           Capital,  until each such  Partner  has  received  an
                           amount that,  when  combined  with its  distributions
                           under  subsection (i) above,  results in such Partner
                           having  achieved a 10% internal rate of return on the
                           aggregate   amount   of   such   Partner's    Capital
                           Contributions  other than its Fee and Expense Capital
                           and its Rollover Commitment Account;

                  (iv)     100%  to the  Class A  General  Partner,  until  such
                           Partner has  received an amount that equals 5% of the
                           aggregate amount  distributed  under subsection (iii)
                           above and this subsection (iv); and

                  (v)      thereafter,    all   remaining   proceeds   will   be
                           distributed  95% to the Class B General  Partner  and
                           the Limited Partners, pro rata in proportion to their
                           respective Capital  Contributions  other than for Fee
                           and  Expense  Capital,  and 5% to the Class A General
                           Partner.

         (b) The Majority General Partners may make  distributions in cash or in
kind in their sole discretion;  provided that distributions  shall be made so as
                                --------
to  distribute to the Partners the same  proportionate  amounts of cash or other
assets to the greatest extent practicable.

         (c) Tax Distributions.  Notwithstanding Section 4.2(a), the Partnership
             ------------------
shall,  prior to any  Portfolio  Distribution  pursuant  to Section  4.2(a) with
respect to Portfolio Investments,  make distributions to the Partners from their
respective  Capital  Accounts in amounts intended to enable the Partners (or any
Person  whose tax  liability  is  determined  by  reference  to the  income of a
Partner) to discharge  their United States  federal,  state and local income tax
liabilities  arising  from the  allocations  made  pursuant to Section  3.4. The
amount distributable  pursuant to this Section 4.2(c) shall be determined by the
Majority General Partners in their sole discretion, based on an assumed combined
federal  and  state  income  tax rate of 40% and the  amounts  allocated  to the
Partners,  and otherwise  based on such  reasonable  assumptions as the Majority
General  Partners  determine  in  good  faith  to  be  appropriate.  The  amount
distributable  to any Partner pursuant to Section 4.2(a) shall be reduced by the
amount distributed to such Partner pursuant to this Section 4.2(c).

                                       17

<PAGE>

         Section 4.3.  Restrictions on Distributions.   The  provisions  of this
                       -----------------------------
Article IV to the contrary notwithstanding, no distribution shall be made:

                  (a)  if  such  distribution  would  violate  any  contract  or
         agreement to which the  Partnership  is then a party or any law,  rule,
         regulation,  order or  directive  of any  governmental  authority  then
         applicable to the Partnership;

                  (b) to the extent that the Majority General Partners determine
         in good  faith  that  any  amount  otherwise  distributable  should  be
         retained by the  Partnership  to pay, or to establish a reserve for the
         payment of, any actual or  estimated  liability  or  obligation  of the
         Partnership, whether liquidated, fixed, contingent or otherwise; or

                  (c) to the extent that the Majority General Partners determine
         in good  faith  that  (i) the  cash  available  to the  Partnership  is
         insufficient  to  permit  such  distribution  or (ii) the  amount to be
         distributed pursuant to this Article IV is immaterial.

         Section 4.4.  Deemed Sale of Assets.
                       ---------------------

         (a)  Any  property  (other  than  cash)  that is  distributed  or to be
distributed  in kind to one or more  Partners  with  respect to a Fiscal  Period
(including, without limitation, any non-cash property which is distributed or to
be distributed upon the dissolution and winding up of the Partnership) or, under
the principles of Section  3.2(c),  revalued in the Partners'  Capital  Accounts
shall be  deemed to have  been  sold for cash  equal to its value as  determined
under the principles of Section 4.4(b) (net of any relevant  liabilities secured
by such  property),  and the  unrealized  gain or loss inherent in such property
shall be treated as recognized  gain or loss for purposes of determining the Net
Profit and Net Loss of the  Partnership to be allocated  pursuant to Section 3.4
for such Fiscal Period.

         (b) For purposes of determining the value of Partnership  assets in the
event of (and  thus the  resulting  Net  Profits  and Net Loss  arising  from) a
distribution or revaluation under Section 4.4(a):

                  (i) Any security  that is traded  principally  on a market for
         which daily transaction prices are published  generally shall be valued
         at the last sale price on the date of  valuation.  If there has been no
         sale of such security on such day, such security shall be valued at the
         mean of the  closing  bid and asked  prices  on such day.  If no bid or
         asked prices are quoted on such day, such  security  shall be valued by
         such method as the Majority  General  Partners shall  determine in good
         faith to reflect its fair market value.

                                       18

<PAGE>

                 (ii) Any  security   traded  principally  in a market for which
         daily  transaction  prices are not  published but for which bid and ask
         quotations  are available  generally  shall be valued at the latest bid
         price  available on the date of valuation  for long  positions  and the
         asked price for short positions.

                (iii) All  other  securities  or  investments  and assets of the
         Partnership  including  securities whose market value cannot be readily
         determined (whether or not a bid, ask or sale price exists) (the "Other
         Assets")  shall be valued at fair  market  value as  determined  by the
         Majority General Partners in good faith, except as follows:

                           (A) Other Assets  consisting of equity  securities of
                  any Person distributed to the Partners upon termination of the
                  Partnership  to effect an  initial  public  offering  shall be
                  valued  at the  offering  price  of  such  securities  in such
                  initial public offering;

                           (B) all  Other  Assets  to be valued as a result of a
                  termination of the  Partnership by the Class A General Partner
                  pursuant  to Section  6.1 shall be valued at the lower of cost
                  or fair  market  value  (as  determined  in good  faith by the
                  Majority  General  Partners) unless at the time notice of such
                  termination  is given the Limited  Partners other than Richard
                  Beckwitt  are  in  material   default  of  any  obligation  to
                  contribute Fee and Expense Capital and such default shall have
                  continued  uncured  for 30 days  after  the  Class  A  General
                  Partner  shall have  provided  written  notice to such Limited
                  Partners  describing  such default and  requesting  that it be
                  cured; and

                           (C) all  Other  Assets  to be valued as a result of a
                  termination of the  Partnership by the Class B General Partner
                  pursuant  to Section  6.1 shall be valued at the lower of cost
                  or fair  market  value  (as  determined  in good  faith by the
                  Majority  General  Partners)  if at the  time  notice  of such
                  termination  is given the Class A General  Partner (or, in the
                  case of Section 2.6,  Richard  Beckwitt) is in material breach
                  of its (or  his)  obligations  under  this  Agreement  or as a
                  general  partner of the Partnership and such breach shall have
                  continued  uncured  for 30 days  after  the  Class  B  General
                  Partner  shall  have  provided  written  notice to the Class A
                  General Partner  describing such breach and requesting that it
                  be cured.

                 (iv) All values stated in a foreign currency shall be converted
         into  U.S. dollars  at the average  interbank currency exchange rate at
         the close of business on the valuation day.

         (c) Any values  determined  for the  purposes of this Section 4.4 shall
not be used for  purposes  of  computing  Net Profit and Net Loss under  Section
3.4(a)(ii) except as expressly provided in Section 4.4(a).

         Section 4.5. Loans to Partners.  If the  Partnership has cash available
in  excess  of its needs for  working  capital  and for which it has no  current
reinvestment plans, it shall, upon the request of a Partner, make a loan to such
Partner in an amount not to exceed such Partner's Rollover  Commitment  Account;
provided  that  prior to making a  Partner  Loan,  the  Partnership  shall  have
received  security for such loan in the form of an irrevocable  letter of credit
drawn on a nationally  recognized financial  institution issued on behalf of the
Partner requesting such Partner Loan. Any Partner Loan shall be in the form of a
demand note, callable by the Majority General Partners,  and shall bear interest
at the 90-day London Inter-Bank  Offering Rate (LIBOR) as announced from time to
time by BankAmerica, N.A.

                                       19

<PAGE>

         Section 4.6. Withholding. Notwithstanding anything expressed or implied
to the contrary in this Agreement,  the Majority General Partners are authorized
to take any action that they  determine to be necessary or  appropriate to cause
the  Partnership to comply with any foreign or United States  federal,  state or
local  withholding  requirement  with  respect  to any  allocation,  payment  or
distribution by the  Partnership to any Partner or other Person.  All amounts so
withheld,  and, in the manner  determined  by the Majority  General  Partners in
their sole discretion,  amounts withheld with respect to any allocation, payment
or  distribution  by  any  person  to  the  Partnership,  shall  be  treated  as
distributions to the applicable Partners under the applicable  provision of this
Agreement.  If any such  withholding  requirement  with  respect to any  Partner
exceeds the amount distributable to such Partner under this Agreement, or if any
such  withholding  requirement  was not  satisfied  with  respect  to any amount
previously  allocated,  paid or distributed to such Partner, such Partner or any
successor or assignee with respect to such Partner's Interest hereby indemnifies
and agrees to hold  harmless  the other  Partners and the  Partnership  for such
excess amount or such withholding requirement, as the case may be.

                                   ARTICLE V.
                         WITHDRAWAL, DEATH, INCOMPETENCY

         Section 5.1.  Withdrawal of Partners.  No Partner may withdraw from the
Partnership  without  the  consent  of all the  General  Partners  in their sole
discretion.  No  partial  withdrawal  will be  permitted.  If a General  Partner
resigns or withdraws  as a general  partner of the  Partnership  in violation of
this  Section  5.1, its interest in the  Partnership  shall  thereupon  become a
Limited  Partner's  interest  in  the  Partnership,   except  that  the  amounts
distributable  pursuant to Article IV shall  continue to be those  provided  for
such General  Partner prior to such event.  The Partners  shall have no right to
remove or replace a General Partner.

         Section 5.2. Effect of Withdrawal,  Death, Etc. The withdrawal,  death,
disability, incapacity, incompetency, bankruptcy, insolvency or dissolution of a
Partner shall not dissolve the  Partnership,  unless there shall cease to be any
general partners of the Partnership.

                                   ARTICLE VI.
                     DURATION AND TERMINATION OF PARTNERSHIP

         Section 6.1.  Duration.  The Partnership will dissolve and terminate on
March 31, 2006 (the  "Termination  Date");  provided  that the Majority  General
Partners  may twice  extend the  Termination  Date for a period of one year upon
written notice to all of the Partners at least 90 days prior to the  Termination
Date,  as extended;  provided  further  that either of the General  Partners may
terminate the Partnership at any time upon 180 days' written notice.

         Section  6.2.  Termination.  On  termination  of the  Partnership,  the
General Partners or, if there is only one General Partner, the remaining General
Partner (or in the absence of the General Partners,  a liquidator  selected by a
majority in Partnership  interest of the Limited Partners) shall, within no more
than 30 days after  completion of a final audit of the  Partnership's  books and
records  (which shall be  performed  within 90 days of such  termination),  make
distributions,  out of assets of the  Partnership,  in the following  manner and
order:

                                       20

<PAGE>

                  (a)      to payment and  discharge (or the provision therefor)
         of the claims of all creditors of the Partnership who are not Partners;

                  (b)      to payment and  discharge (or the provision therefor)
         of the claims of all creditors of the Partnership who are Partners;

                  (c)  to  the  Partners  pro  rata  in  accordance  with  their
         respective  positive  Capital  Accounts  after  giving  effect  to  any
         allocations  pursuant  to Article  III with  respect to the Fiscal Year
         ending on the date of termination.

         In the event that the  Partnership  is  terminated on a date other than
the last day of a Fiscal Year, the date of such  termination  shall be deemed to
be the last day of a Fiscal Year for purposes of adjusting the Capital  Accounts
of the Partners pursuant to Article III.

                                  ARTICLE VII.
                        TAX RETURNS; REPORTS TO PARTNERS

         Section  7.1.  Filing of Tax  Returns.  The Tax Matters  Partner  shall
prepare and file, or cause the  accountants  of the  Partnership  to prepare and
file, a federal  information  tax return in compliance  with section 6031 of the
Code and any  required  state and local income tax and  information  returns for
each tax year of the Partnership.  The Class A General Partner shall provide the
Tax Matters  Partner with such  assistance in the preparation of such returns as
the Tax Matters Partner shall require.

         Section 7.2. Tax Matters Partner.  The Class B General Partner,  or (in
its  absence)  the  Class  A  General  Partner,   shall  be  designated  on  the
Partnership's  annual federal  information tax return as the Tax Matters Partner
of the Partnership (the "Tax Matters Partner") as provided in section 6231(a)(7)
of the Code. In the event the Partnership  shall be the subject of an income tax
audit by any federal, state or local authority, to the extent the Partnership is
treated  as an  entity  for  purposes  of such  audit  including  administrative
settlement and judicial review,  the Tax Matters Partner shall act in accordance
with the  decisions  and  restrictions  of the Majority  General  Partners.  All
expenses incurred in connection with any such audit,  investigation,  settlement
or review shall be borne by the  Partnership.  The Tax Matters Partner shall use
reasonable  efforts to inform the other Partners of any audit or  administrative
or judicial proceeding involving the Partnership.

         Section  7.3.  Reports  to  Partners.  Subject  to  its  receiving  all
necessary information from third parties,  within 120 days after the end of each
Fiscal Year, the Class B General Partner shall prepare and mail to each Partner,
or shall cause others to do so, a financial report setting forth the following:

                  (a)      a balance sheet of the Partnership as of the close of
         such Fiscal Year;

                                       21

<PAGE>

                  (b)      a statement showing the Net Profit or Net Loss of the
         Partnership for such Fiscal Year in reasonable detail;

                  (c)      a statement indicating  the balance of such Partner's
         Capital Account as of the beginning of such Fiscal Year;

                  (d)      a statement indicating  the  amount  of Net Profit or
         Net Loss  allocated  to such Partner's  Capital Account for such Fiscal
         Year;

                  (e)      a  statement  indicating  any  distribution  to  such
         Partner  from,  and   any   withdrawals   from  or  additional  Capital
         Contributions to, the  Capital Account  of  such  Partner  during  such
         Fiscal Year; and

                  (f)      a statement  indicating the balance of such Partner's
         Capital Account as of the end of such Fiscal Year.

The Partnership shall provide to each Partner such other information  concerning
the  business  and  affairs  of the  Partnership,  and  access  to its books and
records, as such Partner may reasonably request.

         Section 7.4. Tax  Information.  Subject to its  receiving all necessary
information  from  third  parties,  within 90 days (or  longer,  if the date for
filing the  Partnership's  income tax return is extended)  after the end of each
Fiscal Year, the Tax Matters Partner shall send each Person who was a Partner at
any time during the fiscal year then ended a Schedule  K-1 and such  Partnership
tax information as the Majority  General  Partners  reasonably  believe shall be
necessary for the preparation by such Person of his United States federal, state
and  local  tax  returns  in  accordance  with any  applicable  laws,  rules and
regulations then prevailing.  Such information shall include a statement showing
such  Person's  share of  distributions,  income,  gain,  loss,  deductions  and
expenses  and other  relevant  fiscal items of the  Partnership  for such fiscal
year. Promptly upon the request of any Partner, the Class B General Partner will
furnish to such Partner:

                  (a)      all United States federal, state and local income tax
         returns  or  information  returns,  if  any,  which  the Partnership is
         required to file; and

                  (b)      such other information as such Partner may reasonably
         request  for  the  purpose of applying for  refunds of any  withholding
         taxes.

         Section 7.5.  Tax Elections.
                       -------------

         (a) The Tax Matters Partner (and to the extent  necessary to effectuate
any election,  the other Partners) shall make the following elections (including
the filing of any forms necessary therefor) on behalf of the Partnership:

                  (i)      to be treated as a partnership for federal income tax
                           purposes and, where possible, for state and local tax
                           purposes;

                 (ii)      to elect the year ending  September 30 as  the Fiscal
                           Year if permitted by applicable law;

                                       22

<PAGE>

                (iii)      to elect to treat all organization and start-up costs
                           of the Partnership as deferred  expenses  amortizable
                           over 60 months under sections 195 and 709 of the Code
                           for federal, state and local tax purposes; and

                 (iv)      to elect  with  respect  to such  other  tax  matters
                           involving any United States or other tax authority as
                           the Majority General Partners may determine from time
                           to time in their sole discretion.

         (b) Section 754 Election.  In the event of a transfer of an Interest as
permitted  hereunder,  or in the event of a transfer of an Interest as permitted
hereunder  and if  requested  to do so by  any  transferring  Partner  or by the
transferee  by  notice  given to the  General  Partners,  the  Majority  General
Partners shall have the right  (exercisable in their sole  discretion),  but not
the obligation, to cause the Partnership to make a timely election under section
754 of the Code (and a corresponding  election under  applicable state and local
law).  The Majority  General  Partners also may cause the  Partnership to make a
timely  election under section 754 of the Code in the event of a distribution of
property to a Partner.

                                  ARTICLE VIII.
                                  MISCELLANEOUS

         Section  8.1.  General.  This  Agreement  (a) shall be  binding  on the
executors,  administrators,  estates, heirs, successors and permitted assigns of
the  Partners;  and (b) may be executed  through  the use of separate  signature
pages or in any number of  counterparts  with the same  effect as if the parties
executing such counterparts had all executed one counterpart;  provided that the
counterparts, in the aggregate, shall have been signed by all of the Partners.

         Section 8.2. Power of Attorney.  Each of the Partners  hereby  appoints
the Class A General Partner or (in its absence) the Class B General Partner,  or
any manager or officer of either,  acting  individually,  as the true and lawful
representative  of such Partner and  attorney-in-fact,  in such Partner's  name,
place and stead:

                  (a)    to receive  and pay  over  to the Partnership on behalf
         of such Partner, to  the extent set forth  in this Agreement, all funds
         received hereunder, and

                  (b)    to make, execute, sign, acknowledge, swear to and file:

                           (i)      a Certificate of Limited  Partnership of the
                                    Partnership  and all  amendments  thereto as
                                    may  be  required  under  the  Delaware  Act
                                    including,   without  limitation,  any  such
                                    filing  for the  purpose  of  admitting  the
                                    undersigned   and  others  as  Partners  and
                                    describing  their  initial or any  increased
                                    Capital  Contributions  in  accordance  with
                                    this Agreement;

                           (ii)     any and all instruments,  certificates,  and
                                    other   documents   which   may  be   deemed
                                    necessary   or   desirable   to  effect  the
                                    winding-up    and    termination    of   the
                                    Partnership (including,  but not limited to,
                                    a  Certificate   of   Cancellation   of  the
                                    Certificate of Limited Partnership);

                                       23

<PAGE>

                           (iii)    any business  certificate,  fictitious  name
                                    certificate,  amendment  thereto,  or  other
                                    instrument,  agreement  or  document  of any
                                    kind  that  the  Majority  General  Partners
                                    consider    necessary    or   desirable   to
                                    accomplish   the   business,   purpose   and
                                    objectives of the  Partnership,  or required
                                    by any  applicable  federal,  state or local
                                    law; and

                           (iv)     all  other  filings  with  agencies  of  the
                                    federal  government,  of any  state or local
                                    government,  or of any  other  jurisdiction,
                                    which the Majority General Partners consider
                                    necessary  or  desirable  to  carry  out the
                                    purposes of this  Agreement and the business
                                    of the Partnership.

The power of attorney  hereby granted by each of the Partners is coupled with an
interest,  is irrevocable,  shall survive the transfer of the Partner's interest
in the  Partnership  and  shall  survive,  and  shall not be  affected  by,  the
subsequent death, disability, incapacity, incompetency, termination, bankruptcy,
insolvency or dissolution of such Partner. Such attorney-in-fact  shall not have
any right,  power or authority to amend or modify this  Agreement when acting in
such capacity.

         Section 8.3.  Amendments  to  Partnership  Agreement.   The  terms  and
                       --------------------------------------
provisions of this Agreement may be modified or amended  only with  the  written
consent of all the Partners.

         Section  8.4.  Choice  of Law.  Notwithstanding  the place  where  this
Agreement may be executed by any of the parties thereto,  the parties  expressly
agree that all the terms and provisions hereof shall be construed under the laws
of the State of Delaware and, without limitation thereof,  that the Delaware Act
as now adopted or as may be hereafter amended shall govern this Agreement.

         Section 8.5. Notices. Except as provided in this Agreement, each notice
relating to this  Agreement  shall be in writing  and  delivered  in person,  by
facsimile or by registered  or certified  mail.  All notices to the  Partnership
shall be addressed to its  principal  office and place of business.  All notices
addressed  to a Partner  shall be  addressed  to such Partner at the address set
forth in the Schedule. Any Partner may designate a new address by notice to that
effect given to the Partnership.  Unless otherwise specifically provided in this
Agreement, a notice shall be deemed to have been effectively given when faxed or
mailed by registered or certified  mail to the proper  address or when delivered
in person.

         Section 8.6.  Headings.  The titles of the Articles and the headings of
                       --------
the Sections of this Agreement are  for convenience of  reference  only, and are
not to be considered in construing the terms and provisions of this Agreement.

                                       24

<PAGE>

         Section 8.7.  Construction and Interpretation.  Whenever possible,  the
provisions  of this  Agreement  shall be  interpreted  in such  manner  as to be
effective  and  valid  under  applicable  law,  but  if' any  provision  of this
Agreement  shall be  unenforceable  or invalid  under any  applicable  law, such
provision shall be ineffective  only to the extent of such  unenforceability  or
invalidity,  and the remaining provisions of this Agreement shall continue to be
binding and in full force and effect.

                                             [SIGNATURES ON NEXT PAGE]

                                       25

<PAGE>

         IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the date first set forth above.

CLASS A GENERAL PARTNER:                         LIMITED PARTNERS:

ENCORE CAPITAL (TEXAS), L.P.                     ENCORE II, INC.

By:   ENCORE MANAGEMENT, LLC,
      its general partner                        By: /s/ Don C. Merrell
                                                     ------------------
                                                    Name:   Don C. Merrell
                                                    Title:  Vice President
      By: /s/ Richard Beckwitt
         ---------------------
         Name:  Richard Beckwitt
         Title: Member

CLASS B GENERAL PARTNER:                         /s/ Richard Beckwitt
                                                 ---------------------------
                                                 RICHARD BECKWITT
ENCORE I, INC.

By: /s/ Donald R. Horton
   -----------------------
   Name:   Donald R. Horton
   Title:  Chairman

                                       26

<PAGE>

                    ENCORE VENTURE PARTNERS II (TEXAS), L.P.

                        SCHEDULE OF CAPITAL CONTRIBUTIONS

                                     PART I
                                General Partners

                                          Initial Capital           Capital
-----------------------------------        Contribution         Commitment(1)(2)
          Name and Address               -----------------     -----------------
-----------------------------------
ENCORE CAPITAL (TEXAS), L.P.
1901 Ascension Blvd.                            $0                    $0
Arlington, Texas  76006
Attn:  General Partner

ENCORE I, INC.                                  $10                 $500,000
1901 Ascension Blvd.
Suite 100
Arlington, Texas  76006
Attn:  D.R. Horton

                                     PART II
                                Limited Partners

                                          Initial Capital           Capital
-----------------------------------        Contribution         Commitment(1)(2)
          Name and Address                ----------------     -----------------
-----------------------------------
ENCORE II, INC.                                $990               $49,500,000
7001 N. Scottsdale Rd.
Suite 2050
Scottsdale, AZ  85253
Attn:  Don C. Merrell

RICHARD BECKWITT                                $0                  $100,000
1901 Ascension Blvd.
Arlington, Texas  76006

(1)  Includes Initial Capital Contribution.

(2)  Subject to termination as provided in Section 3.1(a)(ii).

                                       27

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