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LIMITED LIABILITY COMPANY AGREEMENT
OF
EQUISTAR SALT LAKE COMPANY, L.L.C.
Dated: February 9, 1995
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TABLE OF CONTENTS
Page
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1. Definitions . . . . . . . . . . . . . . . . . . . 1
2. Formation and Name . . . . . . . . . . . . . . . . 6
3. Principal and Registered Offices; Agent for
Service of Process . . . . . . . . . . . . . . . . 6
4. Term . . . . . . . . . . . . . . . . . . . . . . . 7
5. Purpose . . . .. . . . . . . . . . . . . . 7
6. Capital Contributions; Percentage Interests . . .. 7
7. Income and Losses; Distribution of Available Net
Income . . . . . . . . . . . . . . . . . . . . . . 8
8. Tax Matters . . . . . . . . . . . . . . . . . . . 13
9. Management and Rights, Duties and Obligations of
the Members . . . . . . . . . . . . . . . . . . . 13
10. Transfer of Members' Interests . . . . . . . . . . 14
11. Resignation, Expulsion or Bankruptcy of a Member . 14
12. Termination of the Company . . . . . . . . . . . . 14
13. Gain, Loss and Distribution on Liquidation . . . . 15
14. Further Assurances; Consents and Approvals . . . . 16
15. Notices . . . . . . . . . . . . . . . . . . . . . 16
16. Captions . . . . . . . . . . . . . . . . . . . . . 16
17. Variations of Pronouns . . . . . . . . . . . . . . 17
18. Counterparts . . . . . . . . . . . . . . . . . . . 17
19. Governing Law . . . . . . . . . . . . . . . . . . 17
20. Successors and Assigns . . . . . . . . . . . . . . 17
21. Invalidity . . . . . . . . . . . . . . . . . . . . 17
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LIMITED LIABILITY COMPANY AGREEMENT
OF
EQUISTAR SALT LAKE COMPANY, L.L.C.
This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is made as
of the 9th day of February, 1995, by and among EQUISTAR HOTEL INVESTORS, L.P., a
Delaware partnership having an office c/o CapStar Hotels, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ ("EquiStar, L.P."), and EQUISTAR
ACQUISITION CORPORATION, a Delaware corporation having an office c/o CapStar
Hotels, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ ("EquiStar
Corp.").
WITNESSETH
WHEREAS, the parties hereto (collectively, the "Members" and
individually, a "Member") desire to form a limited liability company for the
purposes hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the respective meanings set forth below:
1.1 "Act" shall mean the Limited Liability Act of the State of
Delaware, as the same may have been or may be amended.
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1.2 "Adjusted Capital Account" shall mean, with respect to any
Member, such Member's Capital Account balance, increased by such
Member's share of Company Minimum Gain and Member Minimum Gain.
1.3 "Code" shall mean the Internal Revenue Code of 1986 as the
same has been and may hereafter be amended.
1.4 "Company" shall have the meaning set forth in Article 2.
1.5 "Company Minimum Gain" means "partnership minimum gain,"
as defined in Treasury Regulations Section 1.704-2(b)(2) and shall be
determined in accordance with Treasury Regulations Section 1.704-2(d).
1.6 "Depreciation" shall mean, with respect to any year or
portion thereof, an amount equal to the depreciation, amortization or
other cost recovery deduction allowable with respect to an asset for
Federal income tax purposes, except that if the Gross Asset Value of
the asset differs from its adjusted tax basis, Depreciation shall be
determined in accordance with the methods used for Federal income tax
purposes and shall equal the amount that bears the same ratio to the
Gross Asset Value of such asset as the depreciation, amortization or
other cost recovery deduction computed for Federal income tax purposes
with respect to such asset bears to the adjusted Federal income tax
basis of
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such asset; provided, however, that if any such asset that is
depreciable or amortizable has an adjusted Federal income tax basis of
zero, the rate of Depreciation shall be as determined by the Members.
1.7 "Gross Asset Value" shall mean, with respect to any asset,
the asset's adjusted basis for Federal income tax purposes, except that
(i) the Gross Asset Value of any asset contributed to the Company shall
be its gross fair market value at the time of contribution, (ii) the
Gross Asset Value of any asset distributed in kind to any Member
(including upon a liquidation of the Company) shall be the gross fair
market value of such asset, and (iii) the Gross Asset Value of any
asset determined pursuant to clause (i) above shall thereafter be
adjusted from time to time by the Depreciation taken into account with
respect to such asset for purposes of determining Net Profit or Net
Loss.
1.8 "Member" shall mean each of the parties to this Agreement
and any other Person to which an interest in the Company is hereafter
transferred and who is admitted to the Company in accordance with the
terms of this Agreement.
1.9 "Member Minimum Gain" means "partner nonrecourse debt
minimum gain," as defined in Treasury Regulations Section 1.704-2(i)(2)
and determined in accordance with Treasury Regulations Section
1.704-2(i)(3).
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1.10 "Member Nonrecourse Debt" means "partner nonrecourse
debt," as defined in Treasury Regulations Section 1.704-2(b)(4).
1.11 "Member Nonrecourse Deductions" means
"partner-nonrecourse deductions," as defined in Section 1.704-2.(i)(1)
of the Treasury Regulations and shall be determined in accordance with
Section 1.704-2(i)(2) of the Treasury Regulations.
1.12 "Net Profit" or "Net Loss" shall mean, with respect to
any fiscal year, the taxable income or loss of the Company as
determined for Federal income tax purposes, with the following
adjustments:
1.12.1 Such taxable income or loss shall be increased
by the amount, if any, of tax-exempt income received or
accrued by the Company;
1.12.2 Such taxable income or loss shall be reduced
by the amount, if any, of all expenditures of the Company
described in Section 705(a)(2)(B) of the Code, including
expenditures treated as described therein under
Section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations;
1.12.3 If the Gross Asset Value of any asset is
adjusted pursuant to clause (ii) of the definition of Gross
Asset Value, the amount of such adjustment shall be taken into
account, immediately prior to the event giving rise to such
adjustment, as gain or loss from the
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disposition of such asset for purposes of computing Net Profit
or Net Loss;
1.12.4 Gain or loss resulting from any disposition of
any asset with respect to which gain or loss is recognized for
Federal income tax purposes shall be computed by reference to
the Gross Asset Value of the asset disposed of,
notwithstanding that such Gross Asset Value differs from the
adjusted tax basis of such asset; and
1.12.5 In lieu of the depreciation, amortization, or
other cost recovery deductions taken into account in computing
such taxable income or loss, there shall be taken into account
Depreciation for such fiscal year.
1.13 "Percentage Interests" shall have the meaning specified
in Section 6.2.
1.14 "Property" shall mean that certain property presently
known as the Salt Lake City Hilton Hotel and located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇, and all personal property situated at such
property or used or useful in connection therewith.
1.15 "Regulatory Allocations" has the meaning ascribed thereto
in subsection 7.3.8.
1.16 "Treasury Regulations" means the rules, regulations,
orders and interpretations of rules, regulations and orders validly
promulgated by the Treasury
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Department under the Code, whether final, temporary or proposed, as in
effect from time to time.
2. Formation and Name. The Members hereby form a limited
liability company (the "Company") pursuant to the provisions of the
Act. The business of the Company shall be conducted under the name
"EQUISTAR SALT LAKE COMPANY, L.L.C."
3. Principal and Registered Offices; Agent for Service of
Process.
3.1 The principal place of business of the Company, and the
address of the office at which the records of the Company shall be
maintained, shall be in care of CapStar Hotels, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, or at such other place
as may hereafter from time to time be selected by the Managing Member.
3.2 The Company's registered office shall be c/o CapStar
Hotels, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇.
3.3 The registered agent of the Company for service of process
within the State of Delaware shall be United Corporate Services, ▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. In the event that the person
or entity at any time acting as such agent shall cease to act as such
for any reason, EquiStar, L.P. shall appoint a substitute agent.
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Such agent shall be the agent of the Company on which any process,
notice or demand required or permitted by law to be served on the
Company may be served.
4. Term. The term of the Company shall commence upon the execution and
delivery of this Agreement and shall continue until terminated by agreement of
the Members or as otherwise provided in this Agreement.
5. Purpose. The purpose of the Company shall be to acquire the Property
and other property incidental to the ownership and operation of the Property,
and to hold, own, finance, mortgage, encumber, alter, dispose of and in all
respects deal as owner of the Property, subject to the terms and conditions of
this Agreement.
6. Capital Contributions; Percentage Interests.
6.1 Simultaneously with the execution and delivery of this
Agreement the Members are making the following contributions to the
capital of the Company:
(a) EquiStar, L.P. - $ 99.00
(b) EquiStar Corp. - $ 1.00
6.2 The Members' percentage interests in the Company
("Percentage Interests") shall be as follows:
(a) EquiStar, L.P. - 99%
(b) Equistar, Corp.- 1%
6.3 If the Company shall require any additional funds after
the date hereof, as determined by EquiStar, L.P., the Members shall
contribute such funds to
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the Company in proportion to their respective Percentage Interests.
6.4 Except as expressly provided in this Article 6, no Member
shall be required to make any capital contributions or loans to the
Company and no Member shall make any capital contributions or loans to
the Company without the consent of the other Member.
7. Income and Losses; Distribution of Available Net Income.
7.1 A separate "Capital Account" shall be maintained for each
Member. Each Member's Capital Account shall be credited with the amount
of such Member's capital contributions made in cash and the fair market
value (net of liabilities assumed or taken subject to) of all property
contributed by such Member and such Member's allocated share of Net
Profit, income and gain of the Company. Each Member's Capital Account
shall be debited with the amount of any cash distributions to such
Member and the fair market value (net of liabilities assumed or taken
subject to) of all property distributed in kind to such Member and such
Member's allocated share of Net Loss of the Company.
7.2 From and after the date of this Agreement, all Net Profit
and all Net Loss of the Company for each year or fraction thereof
(determined after taking into account any allocation for such period
under Section 7.3)
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shall be credited to the Capital Accounts of the Members in proportion
to their respective Percentage Interests.
7.3 Special Allocations.
7.3.1 Except as otherwise provided in Section 7.3.2,
all items of Company income, gain, deduction and loss shall be
allocated among the Members in the same proportion as they
share in the Net Profit and Net Loss to which such items
relate. Any credits against income tax shall be allocated in
accordance with the Members' Percentage Interests.
7.3.2 Income, gain, loss or deductions of the Company
shall, solely for income tax purposes, be allocated among the
Members in accordance with Section 704(c) of the Code and the
Treasury Regulations promulgated thereunder, so as to take
account of any difference between the adjusted basis of the
assets of the Company and their respective Gross Asset Values
in accordance with the traditional method set forth in Section
1.704-3(b) of the Treasury Regulations.
7.3.3 Notwithstanding any other provision of this
Article 7, if there is a net decrease in Company Minimum Gain
during any year, each Member shall be specially allocated
items of income and gain for such year (and, if necessary,
subsequent years) in an amount equal to the portion of such
Member's share of the net decrease in
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company Minimum Gain, determined in accordance with Section
1.704-2(g) of the Treasury Regulations. Allocations pursuant
to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated shall be
determined in accordance with Section 1.704-2(f)(6) of the
Treasury Regulations. This Section 7.3.3 is intended to comply
with the minimum gain chargeback requirement in Section
1.704-2(f) of the Treasury Regulations and shall be
interpreted consistently therewith.
7.3.4 Notwithstanding any other provisions of this
Article 7, if there is a net decrease in Member Minimum Gain
attributable to a Member Nonrecourse Debt during any year,
each Member who has a share of the Member Minimum Gain
attributable to such Member Nonrecourse Debt, determined in
accordance with Section 1.704-2(i)(5) of the Treasury
Regulations, shall be specially allocated items of income and
gain for such year (and, if necessary, subsequent years) in an
amount equal to the portion of such Member's share of the net
decrease in Member Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Section
1.704-2(i)(4) of the Treasury Regulations. Allocations
pursuant to the previous sentence shall be made in proportion
to the respective amounts required to be allocated to each
Member pursuant thereto. The items to be
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so allocated shall be determined in accordance with Section
1.704-2(i)(4) of the Treasury Regulations. This Section 7.3.4
is intended to comply with the minimum gain chargeback
requirement in Section 1.704-2(i) of the Treasury Regulations
and shall be interpreted consistently therewith.
7.3.5 Nonrecourse Deductions for any year shall be
allocated as Net Loss pursuant to Section 7.2.
7.3.6 Any Member Nonrecourse Deductions for any year
shall be specially allocated to the Member who bears the
economic risk of loss with respect to the Member Nonrecourse
Debt to which such Member Nonrecourse Deductions are
attributable in accordance with Section 1.704-2(i)(1) of the
Treasury Regulations.
7.3.7 Notwithstanding any other provision of this
Article 7, no Member shall be allocated in any year of the
Company any Net Loss to the extent such allocation would cause
or increase a deficit balance in such Member's Adjusted
Capital Account, taking into account all other allocations to
be made for such year pursuant to this Article 7 and the
reasonably expected adjustments, allocations and distributions
described in Section 1.704-1(b)(2)(ii)(d) of the Treasury
Regulations. Any such Net Loss that would be allocated to a
Member (the "Deficit Member") shall instead be allocated to
the other Member. Moreover, if a Deficit Member unexpectedly
receives an adjustment, alloca-
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tion or distribution described in Section 1.704-1(b)(2)(ii)(d)
of the Treasury Regulations which creates or increases a
deficit balance in such Member's Adjusted Capital Account
(computed after all other allocations to be made for such year
pursuant to this Article 7 have been tentatively made as if
this Section 7.3.7 were not in this Agreement), such Deficit
Member shall be allocated items of income and gain in an
amount equal to such deficit balance. This Section 7.3.7 is
intended to comply with the qualified income offset
requirement of Section 1.704-1(b)(2)(ii)(d) of the Treasury
Regulations and shall be interpreted consistently therewith.
7.3.8 The allocations set forth in Sections 7.3.3
through 7.3.7 (the "Regulatory Allocations") shall be taken
into account in allocating items of income, gain, loss and
deduction among the Members so that, to the extent possible,
the net amount of such allocations of other items and the
Regulatory Allocations to each Member shall be equal to the
net amount that would have been allocated to each such Member
if the Regulatory Allocations had not occurred.
7.4 Distributions. All distributions of Company cash and other
property shall be made to the Members in proportion to their respective
Percentage Interests; provided, however, that the provisions of this
Section 7.4
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shall not apply upon the liquidation of the Company or upon the sale of
all or substantially all of the Company's assets, it being understood
that in such circumstances the provisions of Section 13.4 shall apply.
8. Tax Matters.
Federal, state and local income tax returns of the Company
shall be prepared and filed, or caused to be prepared and filed, by
EquiStar, L.P. EquiStar, L.P. shall at all times be the "tax matters
partner" of the Company for purposes of Section 6231(a)(7) of the Code.
9. Management and Rights, Duties and Obligations of the Members.
9.1 The management and control of the Company's business shall
be exercised, and all decisions to be made by the Company shall in each
case be made, by EquiStar, L.P. EquiStar, L.P. shall have the sole
right to bind, or otherwise act on behalf of, the Company. Without
limiting the foregoing, EquiStar, L.P. shall have the right, without
the consent or approval of EquiStar Corp., to acquire, mortgage or
otherwise encumber, and sell or otherwise dispose of the Property or
any portion thereof.
9.2 Except as otherwise expressly provided in this Agreement,
no Member shall have the right to resign from the Company or to demand
the return of all or any part of its contribution to the capital of the
Company until the
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Company has been dissolved and terminated, and then only to the extent
provided in this Agreement, nor shall any Member have the right to
demand or receive property other than cash in return for its
contribution.
10. Transfer of Members' Interests. No Member shall sell, assign,
transfer or otherwise dispose of, or mortgage, hypothecate, pledge or otherwise
encumber, or permit or suffer any encumbrance of, all or any part of its
interest in the Company, or any interest therein.
11. Resignation, Expulsion or Bankruptcy of a Member. In the event of
the resignation, expulsion or bankruptcy of any Member, the Company shall
thereupon be dissolved and terminated and the Members shall cause a Certificate
of Cancellation in the form required by the Act to be filed with the Secretary
of State of Delaware when the Company is dissolved.
12. Termination of the Company. Upon the voluntary termination of the
Company upon the consent of the Members, the sale or other transfer of all or
substantially all of the Company's assets or any other termination of the
Company in accordance with the provisions of this Agreement, the Company shall
wind up its affairs and shall then be liquidated as provided in Article 13.
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13. Gain Loss and Distribution on Liquidation. Upon any termination of
the Company each of the following shall be accomplished:
13.1 The Members shall cause to be prepared a statement
setting forth the assets and liabilities of the Company as of the date
of such termination, and such statement shall be furnished to each
Member.
13.2 The property and assets of the Company, if any, shall be
liquidated as promptly as possible, but in an orderly and businesslike
manner so as not to involve undue sacrifice.
13.3 Any Net Profit or Net Loss realized by the Company upon
the sale or other disposition of the property and assets of the Company
shall be credited or charged to the capital accounts of the Members
pursuant to Section 7.2 or 7.3, as applicable.
13.4 The proceeds of sale and all other assets of the Company
shall be paid and distributed as follows and in the following order of
priority:
13.4.1 to the payment of the debts and liabilities of
the Company and the expenses of liquidation;
13.4.2 to the setting up of any reserves which
EquiStar, L.P. determines are reasonably necessary for any
contingent or unforeseen liabilities or
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obligations of the Company or the Members arising out of, or
in connection with, the Company; and
13.4.3 to the Members in proportion to their
respective Capital Account balances.
14. Further Assurances; Consents and Approvals. Each party to this
Agreement agrees to execute, acknowledge, deliver, file and record such further
certificates, amendments, instruments and documents, and to do all such other
acts and things, as may be required by law, or as may, be necessary or advisable
to carry out the intent and purposes of this Agreement.
15. Notices. Unless otherwise specified in this Agreement, all notices,
demands, elections, requests or other communications (collectively "notices")
which any Member may desire or be required to give hereunder shall be in writing
and shall be given by mailing the same by registered or certified mail, return
receipt requested, or by Federal Express or comparable air courier service,
postage prepaid, or by delivering the same by hand, addressed to the Members at
their addresses first set forth above.
16. Captions. All section and article titles or captions contained in
this Agreement and the table of contents, if any, are for convenience only and
shall not be deemed a part of this Agreement.
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17. Variations of Pronouns. All pronouns and all variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the person(s) or entity(ies) may require.
18. Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original and all of which, when taken together,
shall constitute one agreement.
19. Governing Law. This Agreement is made pursuant to the provisions of
the Act and shall be construed accordingly.
20. Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors and permitted assigns and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, but shall not inure to the benefit of, or be enforceable by,
any other person or entity.
21. Invalidity. If any provision or any portion of any provision of
this Agreement, or the application of any such provision or any portion thereof
to any Member or circumstance, shall be held invalid or unenforceable, the
remaining portion of such provision and the remaining provisions of this
Agreement, and the application of such provision or such portion to a Member or
to circumstances other
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than those as to which it is held invalid or unenforceable, shall not be
affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
EQUISTAR HOTEL INVESTORS, L.P.,
a Delaware limited partnership
By: Cherwell Investors, Inc.,
a Delaware corporation, general
partner
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Illegible
By: CapStar Executive Investors I,
L.L.C.,
a Delaware limited liability
company, general partner
By: /s/ Illegible
------------------------------
Member
EQUISTAR ACQUISITION CORPORATION,
a Delaware corporation
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title. V.P.