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Exhibit 10.2
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SECOND
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SLC OPERATING LIMITED PARTNERSHIP
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TABLE OF CONTENTS
ARTICLE 1
Definitions..........................................................4
1.1 Definitions.................................................4
ARTICLE 2
Continuation and Business of the Partnership........................16
2.1 Continuation...............................................16
2.2 Name.......................................................17
2.3 Character of the Business..................................17
2.4 Location of Principal Place of Business....................17
2.5 Registered Agent and Registered Office.....................17
2.6 Restatement of Agreement...................................18
ARTICLE 3
Term................................................................18
3.1 Commencement...............................................18
3.2 Dissolution................................................18
ARTICLE 4
Capital Contributions...............................................18
4.1 Capital Contributions; Units...............................18
4.2 Redemption of Units Held by Limited Partner................20
4.3 Percentage Interests.......................................21
4.4 Purchase Rights............................................21
4.5 Redemption of Units Held by the General Partner............21
4.6 No Third Party Beneficiaries...............................21
4.7 No Interest on or Return of Capital Contribution...........22
ARTICLE 5
Indemnification.....................................................22
5.1 Indemnification of the General Partner.....................22
5.2 Indemnification of Limited Partners........................23
5.3 Notice of Claims...........................................25
5.4 Third Party Claims.........................................25
5.5 Indemnification Pursuant to Formation Agreement............26
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ARTICLE 6
Allocations, Distributions and Other Tax and Accounting Matters.....26
6.1 Allocations................................................26
6.2 Distributions..............................................31
6.3 Books of Account...........................................32
6.4 Reports....................................................32
6.5 Tax Elections and Returns..................................32
6.6 Tax Matters Partner........................................32
6.7 Withholding Payments Required By Law.......................33
ARTICLE 7
Rights, Duties and Restrictions of the General Partner..............34
7.1 Powers and Duties of the General Partner...................34
7.2 Reimbursement of the General Partner.......................37
7.3 Outside Activities of the General Partner..................38
7.4 Contracts with Affiliates..................................38
7.5 Title to Partnership Assets................................38
7.6 Reliance by Third Parties..................................39
7.7 Liability of the General Partner...........................39
7.8 Other Matters Concerning the General Partner...............40
7.9 Operation of SLT in Accordance with REIT Requirements......40
7.10 Replacement of General Partner.............................41
ARTICLE 8
Dissolution, Liquidation and Winding-Up.............................41
8.1 Accounting.................................................41
8.2 Distribution on Dissolution................................41
8.3 Documentation of Liquidation...............................42
ARTICLE 9
Transfer............................................................43
9.1 General Partner............................................43
9.2 Transfers by Limited Partners..............................43
9.3 Certain Restrictions on Transfer...........................45
9.4 Effective Dates of Transfers...............................45
9.5 Transfer...................................................46
9.6 Nevada Gaming Control Act..................................46
ARTICLE 10
Rights and Obligations of the Limited Partners......................47
10.1 No Participation in Management.............................47
10.2 Bankruptcy of a Limited Partner............................47
10.3 No Withdrawal..............................................47
10.4 Conflicts..................................................47
10.5 Provision of Information...................................48
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10.6 Power of Attorney..........................................49
10.7 Ownership of Paired Shares.................................50
10.8 Waiver of Fiduciary Duty...................................51
ARTICLE 11
Amendment of Partnership Agreement, Meetings........................51
11.1 Amendments.................................................51
11.2 Meetings of the Partners; Notices to Partners..............52
ARTICLE 12
General Provisions..................................................53
12.1 No Liability of Directors and Others.......................53
12.2 Notices....................................................53
12.3 Controlling Law............................................54
12.4 Execution of Counterparts..................................54
12.5 Severability...............................................54
12.6 Entire Agreement...........................................54
12.7 Paragraph Headings.........................................54
12.8 Gender, Etc................................................54
12.9 Number of Days.............................................55
12.10 Partners Not Agents........................................55
12.11 Assurances.................................................55
12.12 Waiver of Partition........................................55
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LIST OF EXHIBITS
Exhibit
A List of Partners, Percentage Interests and Units
A-1 List of Class A Partners, Percentage Interests and Units
B Notice Address of Partners
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THE LIMITED PARTNERSHIP INTERESTS REFERRED TO IN THIS AGREEMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS. REFERENCE IS MADE TO ARTICLE 9 OF THIS
AGREEMENT FOR PROVISIONS RELATING TO VARIOUS RESTRICTIONS ON THE SALE
OR OTHER TRANSFER OF THESE INTERESTS.
SECOND
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SLC OPERATING LIMITED PARTNERSHIP
THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
(this "Agreement") is made and entered into this 14th day of November, 1997, by
and among Starwood Lodging Corporation, a Maryland corporation ("SLC"), as
General Partner, and the persons whose names are set forth on Exhibit A hereto
and Exhibit A-1 hereto, as each such exhibit may be amended from time to time,
as limited partners, pursuant to the provisions of the Delaware Revised Uniform
Limited Partnership Act.
RECITALS
A. Starwood Lodging Corporation, Columbus Operators, Inc., Hotel Investors of
Arizona, Inc., Hotel Investors of Michigan, Inc., Hotel Investors of Virginia,
Inc., Western Host, Inc., Hotel Investors Corporation of Nevada, Inc., Hotel
Investors of Nebraska, Inc., Berl Holdings, L.P., Starwood-Apollo Hotel Partners
VIII, L.P., Starwood-Apollo Hotel Partners IX, L.P., Starwood-Nomura Hotel
Investors, L.P., Starwood/Wichita Investors, L.P., Starwood-Huntington Partners,
L.P., and Woodstar Partners I, L.P., were the parties to that certain Limited
Partnership Agreement of SLC Operating Limited Partnership, dated as of December
15, 1994 (hereinafter, the "Original Agreement" and the "Partnership",
respectively).
B. Firebird Consolidated Partners, L.P., was admitted as a limited
partner of the Partnership pursuant to that certain Admission of Limited
Partner, Consent and Amendment dated March 24, 1995.
C. The Original Agreement was restated by that certain Amended and
Restated Limited Partnership Agreement of SLC Operating Limited Partnership by
and between SLC,
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as General Partner, and the General Partners and the Limited Partners of the
Partnership, as such groups were then constituted, and dated as of June 29, 1995
(the "Original Restated Agreement").
D. The Original Restated Agreement was amended by that certain
Amendment by and between SLC, as General Partner, and the General Partners and
the Limited Partners of the Partnership, as such groups were then constituted,
and dated as of May 14, 1996.
E. Philadelphia HSR Limited Partnership ("HSR") was admitted as a
limited partner of the Partnership pursuant to that certain Admission of Limited
Partner, Consent and Amendment (Operating Partnership) dated as of June 3, 1996.
F. Starwood/Wichita Investors, L.P., Berl Holdings, L.P.,
Starwood-Huntington, L.P., Woodstar Partners I, L.P., and Wichita Xxxxxx
Partners, Ltd., transferred their respective interests in the Partnership to SRL
Holdings, Inc., Starwood Capital Group I, L.P., Starwood Opportunity Fund II,
L.P., Moonwood Investment Partners, L.P., Woodstar II, L.P., Hospitality
Partners, Bristol Hotel Management Corp., and Xxxxxx X. Xxxxxxx, and each such
Person was admitted as a limited partner of the Partnership pursuant to that
certain Admission of Limited Partners Agreement dated as of June 4, 1996.
G. Philadelphia HIR Limited Partnership ("HIR") was admitted as a
limited partner of the Partnership pursuant to that certain Admission of Limited
Partner, Consent and Amendment (Operating Partnership) dated as of July 1, 1996.
H. Starwood-Apollo Hotel Partners VIII, L.P., transferred its interest
in the Partnership to SAHI, Inc., Starwood Hotel Investors, L.P., and AP-GP
Midstar Hotels VIII, Inc.; Starwood-Apollo Hotel Partners IX, L.P., transferred
its interest in the Partnership to SAHI, Inc., Starwood Hotel Investors, L.P.,
and AP-GP Midstar Hotels IX, Inc.; Starwood Hotel Investors, L.P., transferred
its interest in the Partnership to Starwood Hotel Investors II, L.P., SAHI, Inc.
and AP-GP Master Midstar, L.P.; and AP-GP Midstar Hotels VIII, Inc., AP-GP
Midstar Hotels IX, Inc., and AP-GP Master Midstar, L.P., transferred their
respective interests in the Partnership to Apollo Real Estate Investment Fund,
L.P., and each of Starwood Hotel Investors II, L.P., SAHI, Inc. and Apollo Real
Estate Investment Fund was admitted as a limited partner of the Partnership
pursuant to that certain Admission of Limited Partners Agreement dated as of
December 12, 1996;
I. Starwood-Nomura Hotel Investors, L.P., SRL Holdings, Inc., Starwood
Capital Group, L.P., Moonwood Investment Partners, L.P., Woodstar Partners II,
L.P., Berl Holdings I, Inc., SAHI, Inc., and Harveywood Hotel Investors II,
L.P., transferred their interests in the Partnership to Burden Direct Investment
Fund I., L.P., Ziff Investors Partnership, L.P., II, Xxxxx Xxxxx, Lambster
Partners Limited Partners, Montrose Corporation, Star Investors G.P., Meridian
Investment Group, 1985 Trust f/b/o Xxxxx Xxxxxx Xxxxxxx, 1985 Trust f/b/o Xxxxxx
Xxxxxxxxx Xxxxxxx, Xxxx Xxxx, the Xxxx Family Partnership, Xxxxxxxx Holdings,
Inc., Xxxxxx X. Xxxxx, Xxx X. Xxxxxxx, Xxxx Xxxxxxxx, Xxxxxxxx X. Xxxxx, Xxxxxxx
Beer, Xxxxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxx
X. Xxxxx, Xxxx X. Xxxxxx, Xxxx X. Xxxxxxx, Xxxxx X. Xxxxxxxxxx, the Xxxxx X.
Xxxxxxxxxx
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Family Spray Trust I, the Xxxxx X. Xxxxxxxxxx Family Spray Trust II, the Xxxxx
X. Xxxxxxxxxx Family Spray Trust III, Xxxxx X. Xxxx, III, Madison X. Xxxxx, the
Madison X. Xxxxx Irrevocable Insurance Trust, Xxxxxxx X. Xxxxxxx, JDE Revocable
Trust u/a dated December 31, 1996, Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxx, Xxxxxxxx
Beer, Xxx Xxxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxxx,
Xxxxx X. Xxxxxxx, and J. Xxxxx Xxxxxxxxx and each such Person was admitted as a
limited partner of the Partnership pursuant to forty-four (44) separate
Admission of Limited Partner Agreements each dated as of December 31, 1996.
J. The Prudential Insurance Company of America, on behalf of Prudential
Property Investment Separate Account II, Xxxxxxx Xxxxxxx, as Trustee of the Xxxx
Xxxxxxx Family Trust, Xxxx Xxxxxxx, Xxxxx-Xx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx X.
Xxxxxxxx, Xxxxxx Xxx XX, Westport Hospitality, Inc., Zapco Interest Holdings,
LP, Zapco Holdings, Inc., Zapco Holdings, Inc. Deferred Compensation Plan Trust,
Xxxx X. Xxxxxxx, Xxxxxx Xxxxx, Xxxxxxx Xxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxxxxx, Xxxx
Xxxxx, Xxxxx Xxxxxxxx, Xxxxxx Clearwater, Xxxxxx Xxxxx, and Xxxxx Xxxxxxxx
(collectively, the "HEI Contributors") were each admitted as a limited partner
of the Partnership pursuant to that certain Admission of Limited Partners,
Consent and Amendment (Operating Partnership) dated as of February 14, 1997.
K. Xxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxxx Xxx XX,
and Westport Hospitality, Inc. (collectively with the HEI Contributors, the "HEI
Parties"), were each admitted as a Class A Limited Partner pursuant to that
certain Admission of Class A Limited Partners, Consent and Amendment (Operating
Partnership) dated as of February 14, 1997.
L. The Hermitage, L.P. was admitted as a limited partner of the
Partnership pursuant to that certain Admission of Limited Partners, Consent and
Amendment (Operating Partnership) dated as of March 11, 1997.
M. Effective as of the date first written above, each of Columbus
Operators, Inc., Hotel Investors of Arizona, Inc., Hotel Investors of Michigan,
Inc., Hotel Investors of Virginia, Inc., Western Host, Inc., Hotel Investors
Corporation of Nevada, Inc., Hotel Investors of Nebraska, Inc. has transferred
its respective interest in the Partnership to SLC and has thereby withdrawn as a
General Partner of the Partnership, and by its signature below, each of the
Limited Partners has consented thereto.
N. The parties hereto have agreed to amend and restate the Original
Restated Agreement, as previously amended, in its entirety to reflect the
foregoing and to make other necessary or appropriate changes.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
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ARTICLE 1
Definitions
1.1 Definitions. Except as otherwise herein expressly
provided, the following terms and phrases shall have the meanings as set forth
below:
"Accountants" shall mean the national firm or firms
of independent certified public accountants selected by the General Partner on
behalf of the Partnership to audit the books and records of the Partnership and
to prepare statements and reports in connection therewith.
"Act" shall mean the Delaware Revised Uniform Limited
Partnership Act, as the same may hereafter be amended from time to time.
"Adjusted Capital Account Deficit" shall mean, with
respect to any Partner or holder of Units other than the General Partner, the
deficit balance, if any, in such holder's Capital Account as of the end of any
relevant fiscal year and after giving effect to the following adjustments:
(a) credit to such Capital Account any
amounts which such holder is obligated or treated as obligated to restore with
respect to any deficit balance in such Capital Account pursuant to Section
1.704-1(b)(2)(ii)(c) of the Regulations, or is deemed to be obligated to restore
with respect to any deficit balance pursuant to the penultimate sentences of
Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and
(b) debit to such Capital Account the items
described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the requirements of the alternate test for economic effect contained
in Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted
consistently therewith.
"Administrative Expenses" shall mean: (a) all
administrative and operating costs and expenses of the Partnership; (b) those
administrative costs and expenses of the General Partner, including, but not
limited to, salaries and other remunerations paid to trustees, officers and
employees of the General Partner and accounting and legal expenses undertaken by
the General Partner on behalf or for the benefit of the Partnership; and (c) all
expenses which the Partnership hereby assumes and agrees to pay as incurred for
the benefit of the Partnership, including (i) costs and expenses relating to the
formation and continuation of the Partnership and continuity of existence of the
General Partner, including taxes (other than the General Partner's federal and
state income and franchise taxes, if any), fees and assessments associated
therewith, any and all costs, expenses or fees payable to any director or
trustee of the General Partner, (ii) to the extent funded by the General Partner
for payment by the Partnership, costs and expenses relating to any offer or
registration of securities by the General Partner the net proceeds of which are
to be contributed or loaned to the Partnership and all statements, reports, fees
and expenses incidental thereto, including underwriting
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discounts and selling commissions applicable to any such offer of securities,
(iii) costs and expenses associated with the preparation and filing of any
periodic reports by the General Partner under federal, state or local laws or
regulations, including filings with the SEC, (iv) costs and expenses associated
with compliance by the General Partner with laws, rules and regulations
promulgated by any regulatory body, including the SEC, and (v) all other costs
of the General Partner incurred in the course of its business on behalf of the
Partnership including, but not limited to, any indemnification obligations of
the General Partner (other than indemnification pursuant to Section 9.1 and 9.2
of the Formation Agreement).
"Affected Gain" shall have the meaning set forth in
Section 6.1(c)(ii) hereof.
"Affiliate" shall mean, with respect to any Partner
(or as to any other Person the Affiliates of whom are relevant for purposes of
any of the provisions of this Agreement): (a) any member of the Immediate Family
of such Partner or Person; (b) any trustee or beneficiary of a Partner which is
a trust; (c) any trust for the benefit of any Person referred to in the
preceding clauses (a) and (b); or (d) any Entity which directly or indirectly
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with, any Partner or Person referred to in the preceding clauses
(a) through (c).
"Agreement" shall mean this Limited Partnership
Agreement, as amended, modified, supplemented or restated from time to time, as
the context requires.
"Articles of Incorporation" shall mean the Amended
and Restated Articles of Incorporation of the General Partner, as the same may
be amended, modified, supplemented, restated or superseded from time to time.
"Audited Financial Statements" shall mean financial
statements (balance sheet, statement of income, statement of partners equity and
statement of cash flows) prepared in accordance with GAAP and accompanied by an
independent auditor's report containing an opinion thereon.
"Bankruptcy" shall mean, with respect to any Person:
(a) the commencement by such Person of any petition, case or proceeding seeking
relief under any provision or chapter of the federal Bankruptcy Code or any
other federal or state law relating to insolvency, bankruptcy or reorganization;
(b) an adjudication that such Person is insolvent or bankrupt; (c) the entry of
an order for relief under the federal Bankruptcy Code with respect to such
Person; (d) the filing of any such petition or the commencement of any such case
or proceeding against such Person, unless such petition and the case or
proceeding initiated thereby are dismissed within ninety (90) days from the date
of such filing; or (e) the filing of an answer by such Person admitting the
allegations of any such petition.
"Business Day" shall mean any day that is not a
Saturday, Sunday or a day on which banking institutions in the State of
California or the State of New York are authorized or obligated by law or
executive order to close.
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"Capital Account" shall mean, as to any Partner or
holder of Units, a book account maintained in accordance with the following
provisions:
(a) to each Partner's or holder of Unit's
Capital Account there shall be credited the amount of cash contributed by the
Partner or holder, the initial Gross Asset value of any other asset contributed
by such Partner or holder to the capital of the Partnership (net of liabilities
secured by contributed property that the Partnership assumes or takes subject
to), such Partner's or holder's distributive share of Net Income and any other
items of income or gain allocated to such Partner or holder, the amount of any
Partnership liabilities assumed by the Partner or holder or secured by
distributed assets that such Partner or holder takes subject to and any other
items in the nature of income or gain that are allocated to such Partner or
holder pursuant to Section 6.1 hereof; and
(b) to each Partner's or holder of Unit's
Capital Account there shall be debited the amount of cash distributed to the
Partner or holder, the Gross Asset Value of any Partnership asset distributed to
such Partner or holder pursuant to any provision of this Agreement, such
Partner's or holder's distributive share of Net Losses and any other items in
the nature of expenses or losses that are allocated to such Partner pursuant to
Section 6.1 hereof.
In the event that a Partner's Partnership Interest or a holder of Unit's Units
or portion thereof is transferred within the meaning of Section
1.704-1(b)(2)(iv)(f) of the Regulations, the transferee shall succeed to the
Capital Account of the transferor to the extent that it relates to the
Partnership Interest, Units or portion thereof so transferred. In the event that
the Gross Asset Values of Partnership assets are adjusted, as contemplated in
paragraph (b) or (c) of the definition of "Gross Asset Value," the Capital
Accounts of the Partners and holders of Units shall be adjusted to reflect the
aggregate net adjustments as if the Partnership sold all of its properties for
their fair market values and recognized gain or loss for federal income tax
purposes equal to the amount of such aggregate net adjustment. This definition
of Capital Accounts is intended to comply with the maintenance of capital
account provisions of Section 1.704-1(b) of the Regulations and shall be
interpreted and applied in a manner consistent therewith.
"Capital Contribution" shall mean, with respect to
any Partner, the amount of cash and the initial Gross Asset Value of any
Contributed Property (net of liabilities to which such property is subject).
"Certificate" shall mean the Certificate of Limited
Partnership establishing the Partnership, as filed with the office of the
Delaware Secretary of State, as amended from time to time in accordance with the
terms of this Agreement and the Act.
"Class A Limited Partners" shall mean those Persons
listed under the heading "Class A Limited Partners" on Exhibit A-1 hereto in
their respective capacities as Class A Limited Partners hereof, and any Person
who, at the time of reference thereto, is a Class A Limited Partner of the
Partnership.
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"Class A Preferred Return" shall mean, with respect
to any Special Class A Distribution that is not paid within five (5) Business
Days of when due, an amount calculated as interest equal to the rate of interest
most recently announced by Citibank, N.A. (or any successor to substantially all
of its assets and business), as its prime rate, plus eight (8) percent,
compounded annually.
"Class A Units" shall have the meaning set forth in
Section 4.1(c) hereof.
"Code" shall mean the Internal Revenue Code of 1986,
as amended and in effect from time to time, as interpreted by the applicable
regulations thereunder. Any reference herein to a specific section or sections
of the Code shall be deemed to include a reference to any corresponding
provision of future law.
"Commission" shall mean the Nevada Gaming Commission.
"Consent of the Class A Limited Partners" shall mean
the written consent of a Majority-In-Interest of the Class A Limited Partners
given in accordance with Section 11.2 hereof, which Consent shall be obtained
prior to the taking of any action for which it is required by this Agreement and
which shall not be unreasonably withheld or delayed provided all distributions
to the Class A Limited Partners under Section 6.2 hereof are then current.
"Consent of the Limited Partners" shall mean the
written consent of a Majority-In-Interest of the Limited Partners given in
accordance with Section 11.2 hereof, which Consent shall be obtained prior to
the taking of any action for which it is required by this Agreement and may be
given or withheld by a Majority-In-Interest of the Limited Partners, unless
otherwise expressly provided herein, in their sole and absolute discretion.
"Contributed Property" shall mean any property or
other asset in such form as may be permitted by the Act, but excluding cash,
contributed or deemed contributed to the Partnership with respect to the
Partnership Interest held by each Partner.
"Control" shall mean the ability, whether by the
direct or indirect ownership of shares or other equity interests, by contract or
otherwise, to elect a majority of the directors of a corporation, to select the
managing partner of a partnership, or otherwise to select, or have the power to
remove and then select, a majority of those persons exercising governing
authority over an Entity. In the case of a limited partnership, the sole general
partner, all of the general partners to the extent each has equal management
control and authority, or the managing general partner or managing general
partners thereof shall be deemed to have control of such partnership and, in the
case of a trust, any trustee thereof or any Person having the right to select
any such trustee shall be deemed to have control of such trust.
"Depreciation" shall mean, with respect to any asset
of the Partnership for any fiscal year or other period, the depreciation or
amortization, as the case may be,
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allowed or allowable for federal income tax purposes in respect of such asset
for such fiscal year or other period, except that if the Gross Asset Value of an
asset differs from its adjusted tax basis for federal income tax purposes at the
beginning of such fiscal year or other period, Depreciation shall be an amount
that bears the same ratio to such beginning book value as the federal income tax
depreciation, amortization or other cost recovery deduction for such fiscal year
or other period bears to such beginning adjusted tax basis and if such adjusted
tax basis is zero, the Depreciation shall be based on the method of
depreciation, amortization or other cost recovery deduction utilized in
preparing the financial statements of the Partnership.
"Entity" shall mean any general partnership, limited
partnership, limited liability company, corporation, joint venture, trust,
business trust, real estate investment trust or association.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time and as interpreted by the
applicable regulations thereunder (or any corresponding provisions of succeeding
laws and regulations).
"Exchange Rights Agreement" shall mean any Exchange
Rights Agreement by and among SLT and/or SLC and one or more Limited Partners
which is intended to provide for the rights of such Limited Partners to tender
Units in exchange for either Paired Shares, other securities, cash or a
combination of the foregoing.
"Formation Agreement" shall mean that certain
Formation Agreement by and among Starwood Lodging Trust, Starwood Lodging
Corporation, Starwood Capital Group, L.P., Berl Holdings, L.P., Woodstar
Partners I, L.P., Starwood-Apollo Hotel Partners VIII, L.P., Starwood-Apollo
Hotel Partners IX, L.P., Starwood-Nomura Hotel Investors, L.P., Starwood/Wichita
Investors, L.P., and Starwood-Huntington Partners, L.P., and dated as of
November 11, 1994, and any amendments or modifications thereof or side letters
thereto.
"GAAP" shall mean generally accepted accounting
principles in effect from time to time.
"General Partner" shall mean Starwood Lodging
Corporation, a Maryland corporation, its duly admitted successors and assigns as
general partner of the Partnership at the time of reference thereto.
"Gross Asset Value" shall mean, with respect to any
asset of the Partnership, such asset's adjusted basis for federal income tax
purposes, except as follows:
(a) the initial Gross Asset Value of any
asset contributed by a Partner to the Partnership shall be the gross fair market
value of such asset at the time of its contribution as reasonably determined by
the General Partner and the contributing Partner;
(b) the Gross Asset values of all
Partnership assets shall be adjusted to equal their respective gross fair market
values, as reasonably determined by the General Partner, immediately prior to
the following events:
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(i) a Capital Contribution (other
than a de minimis Capital Contribution) to the Partnership by a new or existing
Partner as consideration for a Partnership Interest;
(ii) the distribution by the
Partnership to a Partner of more than a de minimis amount of Partnership
property as consideration for the redemption of a Partnership Interest;
(iii) the liquidation of the
Partnership within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Regulations; and
(iv) any other event as to which
the General Partner reasonably determines that an adjustment is necessary or
appropriate to reflect the relative economic interests of the Partners;
(c) the Gross Asset Values of Partnership
assets distributed to any Partner shall be the gross fair market values of such
assets as reasonably determined by the General Partner as of the date of
distribution; and
(d) the Gross Asset Values of Partnership
assets shall be increased (or decreased) to reflect any adjustments to the
adjusted basis of such assets pursuant to Sections 734(b) or 743(b) of the Code,
but only to the extent that such adjustments are taken into account in
determining Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the
Regulations; provided, however, that Gross Asset Values shall not be adjusted
pursuant to this paragraph to the extent that the General Partner reasonably
determines that an adjustment pursuant to paragraph (b) above is necessary or
appropriate in connection with a transaction that would otherwise result in an
adjustment pursuant to this paragraph (d).
At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Net Income and Net Loss. Any adjustment to the Gross Asset Values of Partnership
property shall require an adjustment to the Partner's Capital Accounts.
"HEI Contribution Agreement" shall mean that certain
Contribution Agreement dated January 15, 1997, by and among the HEI Property
Companies, SLC, the Partnership, SLT Financing Partnership, a Delaware general
partnership, SLT, the Realty Partnership, and certain other parties.
"HEI Contributors" shall have that meaning provided
in Recital J hereto.
"HEI Parties" shall have that meaning provided in
Recital K hereto.
"HEI Property Companies" shall mean Westport Norfolk
Associates Limited Partnership, a Delaware limited partnership, Pruwest Norfolk,
L.L.C., a Delaware limited liability company, Westport BWI, L.L.C., a Delaware
limited liability company,
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Pruwest Baltimore, L.L.C., a Delaware limited liability company, Westport
Raritan, L.L.C., a Delaware limited liability company, Pruwest Edison, L.L.C., a
Delaware limited liability company, Westport Novi, L.L.C., a Delaware limited
liability company, Pruwest Novi, L.L.C., a Delaware limited liability company,
Westport Park Ridge, L.P., a Delaware limited partnership, Westport Park Ridge,
L.L.C., a Delaware limited liability company, Westport Long Beach, L.L.C., a
Delaware limited liability company, Westport Charleston, L.L.C., a Delaware
limited liability company, Westport Santa Xxxx, L.L.C., a Delaware limited
liability company, Westport Crystal City, L.L.C., a Delaware limited liability
company, Prudential, Atlanta Hotel Associates, LP, a Connecticut limited
partnership, Virginia Hotel Associates, L.P., a Delaware limited partnership, BW
Hotel Realty, L.P., a Maryland limited partnership, Edison Hotel Associates,
L.P., a New Jersey limited partnership, Novi Hotel Associates, L.P., a Delaware
limited partnership, Park Ridge Hotel Associates, L.P., a Delaware limited
partnership, Long Beach Hotel Associates, L.L.C., a New Jersey limited liability
company, Charleston Hotel Associates, L.L.C., a New Jersey limited liability
company, Santa Xxxx Hotel Associates, L.L.C., a New Jersey limited liability
company, Crystal City Hotel Associates, L.L.C., a New Jersey limited liability
company, and Prudential HEI Joint Venture, a joint venture.
"HEI Property Company Interests" shall have the
meaning set forth in the HEI Contribution Agreement.
"HICN" shall mean Hotel Investors Corporation of
Nevada, a Nevada corporation.
"HICN Partnership" shall have the meaning provided in
Section 4.1(f) hereof.
"HIR" shall have that meaning provided in Recital G
hereto.
"HSR" shall have that meaning provided in Recital E
hereto.
"Immediate Family" shall mean, with respect to any
Person, such Person's spouse (then current or former), parents, parents-in-law,
descendants, brothers and sisters (whether by whole or half-blood), first
cousins, brothers-in-law and sisters-in-law (whether by whole or half-blood),
ancestors and lineal descendants.
"Indemnitee" shall mean any Person who is, or at any
time on or after December 15, 1994 was, a (i) General Partner, (ii) employee,
trustee, director, officer, stockholder or Liquidating Trustee of the
Partnership or the General Partner or (iii) member of the Management Committee.
"Inns Ancillary Notes" shall have the meaning
provided in Paragraph 2(f) of that certain Bond Purchase Agreement by and among
The First National Bank of Boston, HSR, HIR, the Realty Partnership and the
Partnership and dated February 26, 1996.
"Issuance Percentage" shall mean the relative values
of SLT and SLC,
16
each stated as a percentage of the sum of the values of SLT and SLC, and as most
recently determined by SLT and SLC.
"Lien" shall mean any liens, security interests,
mortgages, deeds of trust, pledges, options, rights of first offer or first
refusal and any other similar encumbrances of any nature whatsoever.
"Limited Partners" shall mean those Persons listed
under the heading "Limited Partners" on the signature page hereto in their
respective capacities as limited partners of the Partnership, their permitted
successors or assigns as limited partners hereof, and any Person who, at the
time of reference thereto, is a limited partner of the Partnership. Such terms
shall include Class A Limited Partners except where the context otherwise
requires.
"Liquidating Trustee" shall mean such individual or
Entity which is selected as the Liquidating Trustee hereunder by the General
Partner, which individual or Entity may include the General Partner or an
Affiliate of the General Partner, provided that such Liquidating Trustee agrees
in writing to be bound by the terms of this Agreement. The Liquidating Trustee
shall be empowered to give and receive notices, reports and payments in
connection with the dissolution, liquidation and/or winding up of the
Partnership and shall hold and exercise such other rights and powers granted to
the General Partner herein or under the Act as are necessary or required to
conduct the winding-up and liquidation of the Partnership's affairs and to
authorize all parties to deal with the Liquidating Trustee in connection with
the dissolution, liquidation and/or winding-up of the Partnership.
"Majority-In-Interest of the Class A Limited
Partners" shall mean Class A Limited Partner(s) who hold in the aggregate more
than fifty (50) percent of the Percentage Interests then allocable to and held
by the Class A Limited Partners, as a class (but excluding any Partnership
Interest acquired by the General Partner, or any Person holding as a nominee of
a General Partner or any Person controlled by a General Partner).
"Majority-In-Interest of the Limited Partners" shall
mean Limited Partner(s) who hold in the aggregate more than fifty (50) percent
of the Percentage Interests then allocable to and held by the Limited Partners,
as a class (but excluding any Partnership Interests acquired by the General
Partner, or any Person holding as a nominee of a General Partner or any Person
controlled by a General Partner).
"Minimum Gain Attributable to Partner Nonrecourse
Debt" shall mean "partner nonrecourse debt minimum gain" as determined in
accordance with Section 1.704-2(i)(2) of the Regulations.
"Net Cash Flow" shall mean, with respect to any
fiscal period of the Partnership, the excess, if any, of "Receipts" over
"Expenditures." For purposes hereof, the term "Receipts" means the sum of all
cash receipts of the Partnership from all sources for such period and any
amounts held as reserves as of the last day of such period which the General
Partner reasonably deems to be in excess of reserves as determined below. The
term
17
"Expenditures" means the sum of (a) all cash expenditures of the Partnership for
any purpose, including operating expenses and capital expenditures for such
period, (b) the amount of all payments of principal, premium, if any, and
interest on account of any indebtedness of the Partnership, and (c) such
additions to cash reserves as of the last day of such period as the General
Partner deems necessary or appropriate for any capital, operating or other
expenditure, including, without limitation, contingent liabilities; but the term
"Expenditures" shall not include amounts paid from cash reserves previously
established by the Partnership.
"Net Income" or "Net Loss" shall mean, for each
fiscal year or other applicable period, an amount equal to the Partnerships'
net income or loss for such year or period as determined for federal income tax
purposes by the Accountants, determined in accordance with Section 703(a) of the
Code (for this purpose, all items of income, gain, loss or deduction required to
be stated separately pursuant to Section 703(a) of the Code shall be included in
taxable income or loss), with the following adjustments: (a) by including as an
item of gross income any tax-exempt income received by the Partnership; (b) by
treating as a deductible expense any expenditure of the Partnership described in
Section 705(a)(2)(B) of the Code (including amounts paid or incurred to organize
the Partnership (unless an election is made pursuant to Section 709(b) of the
Code) or to promote the sale of interests in the Partnership and by treating
deductions for any losses incurred in connection with the sale or exchange of
Partnership property disallowed pursuant to Section 267(a)(1) or Section 707(b)
of the Code as expenditures described in Section 705(a)(2)(B) of the Code); (c)
in lieu of depreciation, depletion, amortization and other cost recovery
deductions taken into account in computing total income or loss, there shall be
taken into account Depreciation; (d) gain or loss resulting from any disposition
of Partnership property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of such property rather than its adjusted tax basis; (e) in the event of
an adjustment of the Gross Asset Value of any Partnership asset which requires
that the Capital Accounts of the Partnership be adjusted pursuant to Sections
1.704-1(b)(2)(iv)(e), (f) and (m) of the Regulations, the amount of such
adjustment is to be taken into account as additional Net Income or Net Loss
pursuant to Section 6.1 hereof; and (f) excluding any items specially allocated
pursuant to Section 6.1(b) hereof.
"Nonrecourse Deductions" shall have the meaning set
forth in Sections 1.704-2(b)(1) and (c) of the Regulations and shall be
determined in accordance with Section 1.704-2(c) of the Regulations.
"Nonrecourse Liabilities" shall have the meaning set
forth in Section 1.704-2(b)(3) of the Regulations.
"Original Agreement" shall have the meaning set forth
in Recital A hereof.
"Paired Share Closing Price" shall mean, with respect
to a particular date, the last reported sales price regular way on such date or,
in case no such reported sale takes place on such date, the average of the
reported closing bid and asked prices regular way on such date, in either case
on the New York Stock Exchange, or if the Paired Shares are not
18
then listed or admitted to trading on such Exchange, on the principal national
securities exchange on which the Paired Shares are then listed or admitted to
trading or, if not then listed or admitted to trading on any national securities
exchange, the closing sale price on such date of the Paired Shares or, in case
no reported sale takes place on such date then, the average of the closing bid
and asked prices on such date, on NASDAQ or any comparable system. If the Paired
Shares are not then quoted on NASDAQ or any comparable system, the Board of
Trustees of SLT and the Board of Directors of SLC shall in good faith determine
the Paired Share Closing Price.
"Paired Shares" shall mean one Share and one common
share of beneficial interest of SLT that are subject to a pairing agreement
between the General Partner and SLT.
"Partner Nonrecourse Debt" shall have the meaning set
forth in Section 1.704-2(b)(4) of the Regulations.
"Partner Nonrecourse Deductions" shall have the
meaning set forth in Section 1.704-2(i)(2) of the Regulations and the amount of
Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt shall
be determined in accordance with the rules of Section 1.704-2(i) of the
Regulations.
"Partners" shall mean the General Partner and the
Limited Partners, their duly admitted successors or assigns or any Person who is
a partner of the Partnership at the time of reference thereto.
"Partnership" shall mean the limited partnership
formed under the Act pursuant to the Original Agreement and as continued
pursuant to this Agreement and any successor thereto.
"Partnership Interest" shall mean the ownership
interest of a Partner in the Partnership from time to time, including each
Partner's Percentage Interest and such Partner's Units.
"Partnership Minimum Gain" shall have the meaning set
forth in Section 1.704-2(b)(2) of the Regulations and the amount of Partnership
Minimum Gain (and any net increase or decrease thereof) for a fiscal year or
other period shall be determined in accordance with the rules of Section
1.704-2(d) of the Regulations.
"Partnership Record Date" means the record date
established by the General Partner for distribution of Net Cash Flow pursuant to
Section 6.2 hereof, which record date shall be the same as the record date
established by the General Partner for distribution to its shareholders of some
or all of its portion of such distribution.
"Percentage Interest" shall mean, with respect to any
Partner, the percentage ownership interest of such Partner in such items of the
Partnership as to which the term "Percentage Interests" is applied in this
Agreement, as provided in Section 4.3 hereof.
19
"Person" shall mean any natural person or Entity.
"Property" shall mean any property acquired by or
contributed to the Partnership or any property owned by an Entity in which the
Partnership has an ownership interest.
"Purchase Rights" shall have the meaning set forth in
Section 4.4 hereof.
"Realty Agreement" shall mean the Second Amended and
Restated Limited Partnership Agreement of the Realty Partnership, as the same
may be amended from time to time.
"Realty Partnership" shall mean SLT Realty Limited
Partnership, a Delaware limited partnership.
"Registration Rights Agreement" shall mean any
Registration Rights Agreement by and among SLT and/or SLC and one or more
Limited Partners, which is intended to set forth the rights of such Limited
Partner or Limited Partners or other holders of Units, and the obligations of
SLT and/or SLC, to cause the registration of certain securities pursuant to the
Securities Act of 1933, as amended.
"Regulations" shall mean the income tax regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations), and may, in the
sole discretion of the General Partner, include temporary and/or proposed income
tax regulations.
"Regulatory Allocations" shall have the meaning set
forth in Section 6.1(b)(viii) hereof.
"REIT" shall mean a real estate investment trust as
defined in Section 856 of the Code.
"REIT Requirements" shall mean the requirements for
SLT to: (a) qualify as a REIT under the Code and Regulations; (b) avoid any
federal income or excise tax liability; (c) retain its status as grandfathered
pursuant to Section 136(c)(3) of the Deficit Reduction Act of 1984; and (d)
retain the benefits of that certain private letter ruling issued by the Internal
Revenue Service to SLT dated as of January 4, 1980. "REIT Requirements" shall
also include the ownership limitation provisions set forth in Article VI of the
Declaration of Trust of SLT, dated August 25, 1969, as amended and restated as
of June 6, 1988, and as the same may be further amended, modified, supplemented,
restated or superseded from time to time, and in TENTH Article of the Articles
of Incorporation.
"Restricted Entity" shall mean any "employee benefit
plan" as defined in and subject to ERISA, any "plan" as defined in and subject
to Section 4975 of the Code, or any entity any portion or all of the assets of
which are deemed pursuant to United States Department of Labor Regulation
Section 2510.3-101 or otherwise pursuant to ERISA or the
20
Code to be, for any purpose of ERISA or Section 4975 of the Code, assets of any
such "employee benefit plan" or "plan" which invests in such entity.
"Rights" shall mean the rights of a Limited Partner
as set forth in an Exchange Rights Agreement and/or a Registration Rights
Agreement. No provision of this Agreement shall be interpreted as granting any
Partner or holder of Units any Rights or any rights or interest in or to the
Exchange Rights Agreement or the Registration Rights Agreement.
"SEC" shall mean the United States Securities and
Exchange Commission.
"Section 704(c) Tax Items" shall have the meaning set
forth in Section 6.1(c)(iii) hereof.
"Shares" shall mean the common stock, par value $0.01
per share, of the General Partner.
"SLT" shall mean Starwood Lodging Trust, a Maryland
real estate investment trust.
"Special Class A Distribution" shall mean, with
respect to a Class A Unit, the fair market value, in cash, of any operating or
liquidating distribution in cash or other property made by the Realty
Partnership with respect to a Unit of the Realty Partnership. Special Class A
Distributions may only be made with respect to Class A Units and shall be due at
the same time as such operating or liquidating distributions are made by the
Realty Partnership.
"Suites Ancillary Notes" shall have the meaning
provided in Paragraph 2(f) of that certain Bond Purchase Agreement by and among
the First National Bank of Boston, HSR, HIR, the Realty Partnership and the
Partnership and dated February 26, 1996.
"Tax Items" shall have the meaning set forth in
Section 6.1(c)(i) hereof.
"Tax Payment Loan" shall have the meaning set forth
in Section 6.7(a) hereof.
"Units" shall have the meaning set forth in Section
4.1(c) hereof, and such term shall include Class A Units except where the
context otherwise requires.
"Withholding Tax Act" shall have the meaning set
forth in Section 6.7(a) hereof.
ARTICLE 2
21
Continuation and Business of the Partnership
2.1 Continuation. The parties hereto do hereby continue the
limited partnership formed pursuant to the Original Agreement and pursuant to
the provisions of the Act and upon the terms and conditions set forth herein.
The parties hereto agree that the rights and liabilities of the Partners shall
be as provided herein. The parties hereto shall immediately execute and deliver
all certificates and other documents and do all filings, recording and
publishing and other acts as in the judgment of the General Partner may be
appropriate to comply with all of the requirements for the continuation of the
Partnership as a limited partnership under the Act and the qualification of the
Partnership in any jurisdiction in which the Partnership owns property or
conducts business.
2.2 Name. The name of the Partnership shall be SLC Operating
Limited Partnership, or such other name as shall be chosen from time to time by
the General Partner in its sole and absolute discretion; provided, however, that
the General Partner may not choose the name (or any derivative thereof) of any
Limited Partner without the prior written consent of such Limited Partner.
2.3 Character of the Business. The purpose of the Partnership
shall be to acquire, hold, own, develop, redevelop, construct, improve,
maintain, operate, manage, sell, lease, rent, transfer, encumber, mortgage,
convey, exchange and otherwise dispose of or deal with the Properties and any
other real and personal property of all kinds; to undertake such other
activities as may be necessary, desirable or appropriate to the business of the
Partnership; to engage in such other activities as shall be necessary, desirable
or appropriate to effectuate the foregoing purposes; and to otherwise engage in
any enterprise or business in which a limited partnership may engage or conduct
under the Act. The Partnership shall have all powers necessary, desirable or
appropriate to accomplish the purposes enumerated. In connection with the
foregoing, but subject to the terms and conditions of this Agreement, the
Partnership shall have full power and authority to enter into, perform and carry
out contracts of any kind, to borrow money and to issue evidences of
indebtedness, whether or not secured by Liens, and, directly or indirectly, to
acquire and construct additional Properties necessary or useful in connection
with its business.
2.4 Location of Principal Place of Business. The location of
the principal place of business of the Partnership shall be at 0000 Xxxx
Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, or such other location as
shall be selected from time to time by the General Partner in its sole and
absolute discretion; provided, however, that the General Partner shall notify
the Partners of any change in the location of the principal place of business of
the Partnership within thirty (30) days thereafter.
2.5 Registered Agent and Registered Office. The registered
agent of the Partnership shall be The Corporation Trust Company or such other
Person as the General Partner may select in its sole and absolute discretion.
The registered office of the Partnership in the State of Delaware shall be c/o
The Corporation Trust Company, Corporation Trust Center, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000 or such other location as the
General Partner may from time to time select in its sole discretion; provided,
22
however, that the General Partner shall notify the Limited Partners of any
change in the registered office or registered agent of the Partnership within
thirty (30) days thereafter.
2.6 Restatement of Agreement. This Agreement amended and
restates the Original Restated Agreement, including the amendments thereto, in
its entirety effective as of the date first above written and, effective as of
such date, the Original Restated Agreement and the amendment thereto shall be of
no further force or effect.
ARTICLE 3
Term
3.1 Commencement. The Partnership's term commenced upon the
filing of the Certificate with the Secretary of State of Delaware on December
15, 1994.
3.2 Dissolution. The Partnership shall continue until
dissolved and terminated upon the occurrence of the earliest of the following
events:
(a) the death, dissolution, termination, withdrawal,
retirement, expulsion or Bankruptcy of the General Partner, unless the
Partnership's business is continued as provided in Section 9.1 hereof;
(b) the election to dissolve the Partnership made in
writing by the General Partner;
(c) the sale or other disposition of all or
substantially all of the assets of the Partnership unless the General Partner
elects to continue the Partnership business for the purpose of the receipt and
the collection of indebtedness or the collection of any other consideration to
be received in exchange for the assets of the Partnership (which activities
shall be deemed to be part of the winding up of the affairs of the Partnership);
(d) the entry of a decree of judicial dissolution of
the Partnership pursuant to the provisions of the Act, which decree is final and
not subject to appeal; or
(e) December 31, 2094.
ARTICLE 4
Capital Contributions
4.1 Capital Contributions; Units.
(a) As of the date first above written, the Partners
have the Percentage Interests in the Partnership as set forth in Exhibit A which
Percentage Interests
23
shall be adjusted to the extent necessary to reflect properly exchanges,
redemptions or conversions of Partnership Interests, Capital Contributions, the
issuance of additional Partnership Interests or any other event having an effect
on a Partner's Percentage Interest, in each case to the extent permitted by and
in accordance with this Agreement. Except to the extent specifically set forth
in this Agreement with respect to the General Partner, the Partners shall have
no obligation to make any additional Capital Contributions or loans to the
Partnership, even if the failure to do so could result in the Bankruptcy or
insolvency of the Partnership or any other adverse consequence to the
Partnership.
(b) The General Partner shall, from time to time,
contribute cash or Property to the Partnership such that the Percentage Interest
of the General Partner shall at all times be at least one (1) percent and the
Capital Account balance of the General Partner shall be at least the lesser of
$500,000 or one (1) percent of the total positive Capital Account balances for
the Partnership.
(c) The interest of a Partner (or an assignee of a
Partner) in capital, allocations of Net Income, Net Loss and distributions shall
be evidenced by the issuance to such Partner (or assignee) of one or more
"Units." Notwithstanding the foregoing, the interest of a Class A Limited
Partner (or an assignee of a Class A Limited Partner) in capital, allocations of
Net Income, Net Loss and distributions, including Special Class A Distributions,
and Class A Preferred Return, if any, shall be evidenced by the issuance to such
Class A Limited Partner (or assignee) of one or more "Class A Units." The
aggregate total of all Units and Class A Units outstanding and the ownership of
such Units and Class A Units by each Partner and Class A Limited Partner are as
set forth on Exhibit A and Exhibit A-1 hereto, respectively, which Exhibits
shall be updated by the General Partner to reflect changes in the holdings of
Units and Class A Units by the Partners.
(d) From time to time, the General Partner may cause
the Partnership to issue additional Partnership Interests to existing or
newly-admitted Partners in exchange for additional Capital Contributions
(including Capital Contributions pursuant to Section 4.1(b)). If the General
Partner contributes to the Partnership the net proceeds to the General Partner
from any offering or sale of Paired Shares (including, without limitation, any
issuance of Paired Shares pursuant to the exercise of options, warrants,
convertible securities, or similar rights to acquire Paired Shares), the
Partnership shall issue to the General Partner Units equal in number to the
number of Paired Shares issued in such offering or sale. If the General Partner
or SLT issues Paired Shares to any Person in exchange for services, the
Partnership shall issue an equal number of Units to the General Partner
effective no later than the date on which the value of the Paired Shares is
includable in the gross income of such Person.
(e) The General Partner is hereby authorized to cause
the Partnership to issue Partnership Interests in one or more classes or one or
more series of any of such classes, with such designations, preferences and
relative, participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to the then-existing Partnership
Interests and Units, as shall be determined by the General Partner in its sole
and absolute discretion, including (i) the allocation of items of Partnership
income, gain, loss, deduction and credit to each such class or series of
Partnership Interests and (ii) the
24
rights of each such class or series of Partnership Interests to share in
Partnership distributions (including liquidating distributions); provided,
however, that no such additional Partnership Interests shall be issued to the
General Partner unless (x) the additional Partnership Interests are issued in
connection with an issuance of shares of the General Partner, which shares have
designations, preferences and other rights, all such that the economic interests
of such shares are substantially similar to the designations, preferences and
other rights of the additional Partnership Interests issued to the General
Partner in accordance with this Section 4.1(e) and (y) the General Partner
contributes to the Partnership an amount equal to the net proceeds received by
the General Partner in connection with the issuance of such shares.
(f) As of the date first above written, HICN shall be
issued the number of Units set forth on Exhibit A hereto. On or before December
31, 1998, HICN or the General Partner, as appropriate, shall make contributions
to the Partnership described in Section 6.3 of the Formation Agreement.
(g) In the event of any change in the outstanding
number of Paired Shares by reason of any share dividend, split, reverse split,
recapitalization, merger, consolidation or combination, the number of Units held
by each Partner (or assignee) shall be proportionately adjusted such that, to
the extent possible, one Unit remains the equivalent of one Share without
dilution. It is the intent of the Partners that, to the extent possible, the
number of Units held by the General Partner shall at all times equal the number
of issued and outstanding Paired Shares.
(h) No fractional Units shall remain outstanding. In
lieu of issuing a fractional Unit to a holder of Units, the number of Units to
be held by such holder shall be rounded to the nearest whole Unit, or, at the
option of the General Partner, the holder shall be paid cash equal to the fair
market value of such fractional Unit.
4.2 Redemption of Units Held by Limited Partner. The General
Partner is hereby authorized to cause the Partnership to redeem all or any
portion of the Units held by any Limited Partner whenever the General Partner,
in its sole discretion, believes such redemption to be reasonably necessary or
appropriate in order to prevent the Partnership from being characterized as a
"publicly traded partnership" pursuant to Section 7704 of the Code and the
Regulations thereunder. Any redemption of Units pursuant to this Section 4.2
shall be made from the Limited Partners in reverse order of their respective
ownership of Units, that is, first from the Limited Partner or Limited Partners
with the fewest Units, and, second, if required, from the Limited Partner or
Limited Partners with the next fewest Units, et cetera. Notwithstanding the
previous sentence, the General Partner is hereby authorized to cause the
Partnership to redeem all of the Units held by a particular Limited Partner,
including a Class A Limited Partner, who, because of the number of such Limited
Partner's direct or indirect beneficial owners or its structure, in the judgment
of the General Partner in its sole discretion, and whether or not in conjunction
with any other Partner (whether redeemed pursuant to this Section 4.2 or not),
may cause the Partnership to be characterized as a "publicly traded partnership"
pursuant to Section 7704 of the Code and the Regulations thereunder. The
redemption price of any Unit redeemed pursuant to this Section 4.2 shall be
equal to the product of (a) 115% of the average of the Paired Share Closing
Price for the ten (10) trading
25
day period ending five (5) days prior to the date of such redemption, multiplied
by (b) the then Issuance Percentage of SLC. Any redemption of a Limited Partner
shall be effective upon the date specified in a Notice to such Limited Partner,
or, if later, five (5) days after such Notice. No redemption pursuant to this
Section 4.2 shall be made unless the Realty Partnership concurrently effects a
comparable redemption.
4.3 Percentage Interests. The Percentage Interest of a Partner
shall be equal to the percentage obtained by dividing (a) the number of Units
held by such Partner (including Units held by assignees of such Partner who have
not been admitted as Partners) by (b) the total number of issued and outstanding
Units.
4.4 Purchase Rights. If the General Partner grants, issues or
sells any options, convertible securities or rights to purchase shares,
warrants, or other property pro rata to the record holders of Shares
(collectively, "Purchase Rights"), then the Partners shall, to the extent
practicable and consistent with the other provisions of this Agreement, be
entitled to acquire from the Partnership interests in the Partnership that are
substantially similar in amount, tone and tenor to the Purchase Rights to which
such Partners would be entitled if such Partners had converted their Partnership
Interests into Paired Shares immediately prior to the grant, issue or sale of
the Purchase Rights.
4.5 Redemption of Units Held by the General Partner. If the
General Partner shall redeem any of its outstanding Shares (including the
issuance of cash in lieu of fractional Shares or in the event of the forfeiture
or cancellation of Shares issued in exchange for services), the Partnership
shall concurrently therewith redeem an equal number of Units held by the General
Partner for the same price as paid by the General Partner for the redemption,
forfeiture or cancellation of such Shares. Similar redemptions of interests of
the General Partner in the Partnership shall occur if any other outstanding
securities of the General Partner are redeemed or otherwise retired.
4.6 No Third Party Beneficiaries. No creditor or other third
party shall have the right to enforce any right or obligation of any Partner to
make Capital Contributions or loans or to pursue any other right or remedy
hereunder or at law or in equity, it being understood and agreed that the
provisions of this Agreement shall be solely for the benefit of, and may be
enforced solely by, the parties hereto and their respective successors and
assigns. None of the rights or obligations of the Partners herein set forth to
make Capital Contributions or loans to the Partnership shall be deemed an asset
of the Partnership for any purpose by any creditor or other third party, nor may
such rights or obligations be sold, transferred or assigned by the Partnership
or pledged or encumbered by the Partnership to secure any debt or other
obligation of the Partnership or of any of the Partners.
4.7 No Interest on or Return of Capital Contribution. No
Partner shall be entitled to interest on its Capital Contribution or Capital
Account. Except as provided herein or by law, no Partner shall have any right to
demand or receive the return of its Capital Contribution.
26
ARTICLE 5
Indemnification
5.1 Indemnification of the General Partner.
(a) To the fullest extent permitted by law, the
Partnership shall and does hereby indemnify an Indemnitee from and against any
and all losses, claims, damages, liabilities, joint or several, expenses
(including reasonable legal fees and expenses), judgments, fines, settlements,
and other amounts arising from any and all claims, demands, actions, suits or
proceedings (including arbitration and mediation proceedings), civil, criminal,
administrative or investigative, that relate, directly or indirectly, to the
formation, business or operations of the Partnership in which any Indemnitee may
be involved, or is threatened to be involved, as a party, witness or otherwise,
by reason of the fact that such Person was an Indemnitee, whether or not the
same shall proceed to judgment or be settled or otherwise be brought to a
conclusion, except only if and to the extent that it is finally adjudicated that
the act or omission of the Indemnitee was material to the matter giving rise to
the proceeding and was committed with fraud, gross negligence or willful
misconduct. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 5.1(a). Any indemnification
pursuant to this Section 5.1 shall be made only out of the assets of the
Partnership and no Partner shall have any personal liability therefor. The
provisions of this Section 5.1 are for the benefit of the Indemnitees, their
heirs, successors, assigns, personal representatives and administrators, and
shall not be deemed to create any rights for the benefit of any other Persons.
The foregoing notwithstanding, the General Partner (or any former General
Partner) shall not be entitled to indemnification from the Partnership with
respect to matters provided for in Sections 9.1 and 9.2 of the Formation
Agreement.
(b) Reasonable expenses incurred by an Indemnitee who
is a party or witness in a proceeding shall be paid or reimbursed by the
Partnership in advance of the final disposition of the proceeding upon receipt
by the Partnership of (i) a written affirmation by the Indemnitee of the
Indemnitee's good faith belief that the standard of conduct necessary for
indemnification by the Partnership, as authorized in this Section 5.1, has been
met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay
the amount paid or reimbursed if it shall ultimately be determined that such
Indemnitee is not entitled to be indemnified hereunder.
(c) The indemnification provided by this Section 5.1
shall be in addition to any other rights to which an Indemnitee may be entitled
under any agreement, as a matter of law or otherwise, and shall continue as to
an Indemnitee who has ceased to serve in such capacity. The Partnership shall
purchase and maintain insurance, on behalf of the Indemnitees, against any
liability that may be asserted against or expenses that may be incurred by such
Person in connection with the Partnership's activities, regardless of whether
the Partnership would have the power to indemnify such Person against such
liability under the provisions of this Agreement. An Indemnitee shall not be
denied indemnification in whole or in part under this Section 5.1 solely because
the Indemnitee had an interest in the transaction with
27
respect to which the indemnification applies.
(d) For purposes of this Section 5.1, the Partnership
shall be deemed to have requested an Indemnitee to serve as fiduciary of an
employee benefit plan whenever the performance by it of its duties to the
Partnership also imposes duties on, or otherwise involves services by, it to the
plan or participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 5.1; and actions taken
or omitted by the Indemnitee with respect to an employee benefit plan in the
performance of its duties for a purpose reasonably believed by it to be in the
interest of the participants and beneficiaries of the plan shall be deemed to be
for a purpose which is not opposed to the best interests of the Partnership.
5.2 Indemnification of Limited Partners.
(a) From and after the date hereof, the Partnership
shall indemnify and hold harmless each Limited Partner, its Affiliates,
employees, officers, directors and agents against and from all liability,
demands, claims, actions or causes of action, assessments, losses, fines,
penalties, costs, damages and expenses (including, without limitation,
reasonable attorneys' and accountants' fees and expenses) sustained or incurred
by such Limited Partner or Affiliate or any assignee or successor thereof
(including, without limitation, any permitted assignee of a Limited Partner
under Article 9 hereof) as a result of or arising out of any action, suit or
proceeding (including mediation and arbitration proceedings) (i) arising out of
or relating to the operation of the Partnership's business or the Limited
Partner being a Partner in the Partnership (excluding, specifically, actions,
suits or proceedings arising out of actual or alleged breaches of a Partner's
representations, warranties or covenants hereunder or pursuant to the Formation
Agreement or arising out of acts by a Limited Partner other than in its capacity
as such) and (ii) naming a Limited Partner or any of its Affiliates as a party
to such proceeding. Any indemnification pursuant to this Section 5.2(a) shall be
made only out of the assets of the Partnership and no Partner shall have any
personal liability therefor. The provisions of this Section 5.2(a) are for the
benefit of the Limited Partners, their Affiliates, employees, officers,
directors and agents, and shall not be deemed to create any rights for the
benefit of any other Persons.
(b) The foregoing notwithstanding, the Partnership
shall indemnify the Class A Limited Partners in respect of all federal or state
income tax consequences to them arising from the Special Class A Distributions
and the distribution described in Section 8.2(a)(iii) hereof being subject to
federal or state income tax in a manner that is less favorable than comparable
distributions with respect to Units in the Realty Partnership. Any
indemnification pursuant to the preceding sentence shall be computed on a
cumulative basis from and after February 14, 1997, and shall be grossed up for
any income tax consequences of such indemnification so as to put the Class A
Limited Partners in the same after-tax position they would have been in had they
been Partners in the Realty Partnership as to such distributions. All
calculations of the indemnification payments shall be computed as if the Class A
Limited Partners had no sources of income, loss or gain other than from the
comparable distributions with respect to Units in the Realty Partnership and pay
tax at the
28
highest applicable federal and state tax rates. The provisions of this Section
5.2(b) shall be in addition to and not in limitation of the indemnification
provided to Limited Partners pursuant to Section 5.2(a) above.
(c) Also notwithstanding the foregoing, the
Partnership shall indemnify and hold harmless the HEI Parties of and from
liabilities of the HEI Property Companies whose HEI Property Company Interests
have been acquired by the Partnership except for any undisclosed material
liability of such Property Company as of February 14, 1997 (collectively, the
"Excluded Liabilities"); provided, however, that the Excluded Liabilities shall
not include:
(i) any liability incurred in the ordinary
course of operating the applicable Hotel prior to February 14,
1997;
(ii) any liability disclosed by the
Transaction Documents, the Schedules or Exhibits thereto, any
supplement to such schedules or exhibits delivered to the
Starwood Parties prior to February 14, 1997, the agreements,
reports or other documents referred to in any of the
foregoing, the Financial Statements, the financial statements
prepared in connection with the Net Working Capital adjustment
provided for in Article IV of the Contribution Agreement;
(iii) any Liability of which the Starwood
Parties otherwise had Knowledge prior to February 14, 1997; or
(iv) any Liability incurred on or after
February 14, 1997;
and the Partnership shall be obligated to hold the HEI Parties harmless from all
such enumerated liabilities. The provisions of this Section 5.2(c) shall be in
addition to and not in limitation of the indemnifications provided to Limited
Partners pursuant to Section 5.2(a) and 5.2(b) above. Any capitalized term in
this Section 5.2(c) not otherwise defined in this Agreement shall have the
meaning set forth in the HEI Contribution Agreement.
5.3 Notice of Claims. If any Person believes that it is
entitled to indemnification under this Article 5, such Person shall so notify
the Partnership promptly in writing describing such claim for indemnification,
the amount thereof, if known, and the method of computation, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such claim shall have occurred; provided, however, that the
omission by such indemnified party to give notice as provided herein shall not
relieve the Partnership of its indemnification obligation under this Article 5
except to the extent that the Partnership is materially damaged as a result of
such failure to give notice. If any action at law or suit in equity is
instituted by or against a third party with respect to which any of the Persons
entitled to indemnification under this Article 5 intends to make a claim for
indemnification under this Article 5, any such Person shall promptly notify the
Partnership of such action or suit. Any Person entitled to indemnification
hereunder shall use reasonable efforts to minimize the amount of any claim for
indemnification hereunder.
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5.4 Third Party Claims. In the event of any claim for
indemnification hereunder resulting from or in connection with any claim or
legal proceeding by a third party, the indemnified Person shall give such notice
thereof to the Partnership not later than twenty (20) Business Days prior to the
time any response to the asserted claim is required, if possible, and in any
event within fifteen (15) Business Days following the date such indemnified
Person has actual knowledge thereof; provided, however, that the omission by
such indemnified Person to give notice as provided herein shall not relieve the
Partnership of its indemnification obligation under this Article 5 except to the
extent that the Partnership is materially damaged as a result of such failure to
give notice. In the event of any such claim for indemnification resulting from
or in connection with a claim or legal proceeding by a third party, the
Partnership may, at its sole cost and expense, assume the defense thereof;
provided, however, that counsel for the Partnership, who shall conduct the
defense of such claim or legal proceeding, shall be reasonably satisfactory to
the indemnified Person; and provided, further, that if the defendants in any
such actions include both the indemnified Persons and the Partnership and the
indemnified Persons shall have reasonably concluded that there may be legal
defenses or rights available to them which have not been waived and are in
actual or potential conflict with those available to the Partnership, the
indemnified Persons shall have the right to select one law firm reasonably
acceptable to the Partnership to act as separate counsel, on behalf of such
indemnified Persons, at the expense of the Partnership. Unless the indemnified
Persons are represented by separate counsel pursuant to the second proviso of
the immediately preceding sentence, if the Partnership assumes the defense of
any such claim or legal proceeding, it shall not consent to entry of any
judgment, or enter into any settlement, that (a) is not subject to
indemnification in accordance with the provisions in this Article 5, (b)
provides for injunctive or other non-monetary relief affecting the indemnified
Persons or (c) does not include as an unconditional term thereof the giving by
each claimant or plaintiff to such indemnified Persons of a release from all
liability with respect to such claim or legal proceeding, without the prior
written consent of the indemnified Persons (which consent, in the case of
clauses (b) and (c), shall not be unreasonably withheld or delayed); and
provided, further, that, unless the indemnified Persons are represented by
separate counsel pursuant to the second proviso of the immediately preceding
sentence, the indemnified Persons may, at their own expense, participate in any
such proceeding with the counsel of their choice without any right of control
thereof. So long as the Partnership is in good faith defending such claim or
proceeding, the indemnified Persons shall not compromise or settle such claim or
proceeding without the prior written consent of the Partnership, which consent
shall not be unreasonably withheld or delayed. If the Partnership does not
assume the defense of any such claim or litigation in accordance with the terms
hereof, the indemnified Persons may defend against such claim or litigation in
such manner as they may deem appropriate, including, without limitation,
settling such claim or litigation (after giving prior written notice of the same
to the Partnership and obtaining the prior written consent of the Partnership,
which consent shall not be unreasonably withheld or delayed) on such terms as
the indemnified Persons may deem appropriate, and the Partnership will promptly
indemnify the indemnified Persons in accordance with the provisions of this
Article 5.
5.5 Indemnification Pursuant to Formation Agreement. If any
obligation pursuant to the indemnification provisions of Article IX of the
Formation Agreement would otherwise require the indemnifying Person to make a
cash payment to the indemnified Person
30
then, subject to Article 9 hereof, in lieu of making all or any portion of such
cash payment, the indemnifying Person may transfer Units of equivalent value to
the indemnified Person. For purposes of the preceding sentence, the value of a
Unit shall be treated as equal to five (5) percent of the average closing price
of a Paired Share for the ten (10) trading day period commencing fifteen (15)
trading days prior to the date the indemnifying Person would otherwise be
required to pay cash to the indemnified Person. Indemnification through the
transfer of Units pursuant to this Section 5.5 may only made if (a)
indemnification through the transfer of an equal number of units of the Realty
Partnership is being made pursuant to Section 5.5 of the Second Amended and
Restated Limited Partnership Agreement of SLT Realty Limited Partnership or (b)
the indemnifying Person otherwise makes arrangements for the transfer to the
indemnified Person (or its designee) of an equal number of units of the Realty
Partnership.
ARTICLE 6
Allocations, Distributions and Other Tax and Accounting Matters
6.1 Allocations. The Net Income, Net Loss and other
Partnership items shall be allocated pursuant to the provisions of this Section
6.1 hereto.
(a) Allocation of Net Income and Net Loss.
(i) Net Income. Except as otherwise provided
herein, Net Income for any fiscal year or other applicable period shall be
allocated in the following order and priority:
(A) first, to the General Partner,
until the cumulative Net Income allocated pursuant to this clause (i)(A) for the
current and all prior periods equals the cumulative Net Loss allocated pursuant
to the last sentence of clause (ii) hereof for all prior periods; and
(B) second, to the holders of
Units, including Class A Units, in proportion to and in reverse order of their
prior allocations of Net Loss (other than pursuant to the last sentence of
clause (ii) hereof) until the cumulative Net Income allocated pursuant to this
clause (i)(B) for the current and all prior periods equals the cumulative Net
Loss allocated to such holders (other than pursuant to the last sentence of
clause (ii) hereof) for all prior periods;
(C) third, to the holders of Class
A Units until each holder of Class A Units has been allocated Net Income
pursuant to this clause (i)(C) in an amount equal to its Class A Preferred
Return for the current and all prior periods;
(D) fourth, to the holders of Class
A Units until each holder of Class A Units has been allocated Net Income
pursuant to this clause (i)(D) in an amount equal to the Net Income (as defined
in Article I of the Realty Agreement) allocated to a
31
Unit of the Realty Partnership for all prior periods (or portions thereof) from
and after February 14, 1997 pursuant to Section 6.1(a)(i)(B) of the Realty
Agreement, multiplied by the number of Class A Units held by such holder; and
(E) thereafter, the balance of Net
Income, if any, shall be allocated to the holders of Units, including Class A
Units, in accordance with their respective holdings of Units.
(ii) Net Loss. Except as otherwise provided
herein, Net Loss of the Partnership for each fiscal year or other applicable
period shall be allocated in the following order and priority;
(A) first, to the holders of Units,
including Class A Units, in proportion to their prior allocations of Net Income
pursuant to clause (i)(E) until the cumulative Net Loss allocated pursuant to
this clause (ii)(A) for the current and all prior periods equals the cumulative
Net Income allocated to such holders pursuant to clause (i)(E) for all prior
periods;
(B) second, to the holders of Class
A Units in proportion to their prior allocations of Net Income pursuant to
clause (i)(D) until the cumulative Net Loss allocated pursuant to this clause
(ii)(B) for the current and all prior periods equals the cumulative Net Income
allocated to such holders pursuant to clause (i)(D) for all prior periods; and
(C) thereafter, to the holders of
Units, including Class A Units, in accordance with their respective holdings of
Units.
Clause (ii)(C) notwithstanding, to the extent any Net Loss allocated to a holder
would cause such a holder to have an Adjusted Capital Account Deficit as of the
end of the fiscal year to which such Net Loss relates, such Net Loss shall not
be allocated to such holder and instead shall be allocated to the General
Partner.
(b) Special Allocations. Notwithstanding any
provisions of Section 6.1(a) hereof, the following special allocations shall be
made in the following order:
(i) Minimum Gain Chargeback. Notwithstanding
any other provision of this Article 6, if there is a net decrease in Partnership
Minimum Gain for any Partnership fiscal year (except as a result of conversion
or refinancing of Partnership indebtedness, certain capital contributions or
revaluation of the Partnership property as further outlined in Section
1.704-2(f) of the Regulations), each holder of Units shall be specially
allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to that holder's share of the net decrease
in Partnership Minimum Gain as determined under Section 1.704-2(g) of the
Regulations. The items to be so allocated shall be determined in accordance with
Section 1.704-2(f) of the Regulations. This clause (i) is intended to comply
with the minimum gain chargeback requirement in said section of the Regulations
and shall be interpreted consistently therewith. Allocations pursuant to this
clause
32
(i) shall be made in proportion to the respective amounts required to be
allocated to each holder of Units pursuant hereto.
(ii) Minimum Gain Chargeback Attributable to
Partner Nonrecourse Debt. Notwithstanding any other provision of this Article 6,
if there is a net decrease in Minimum Gain Attributable to Partner Nonrecourse
Debt during any fiscal year (other than due to the conversion, refinancing or
other change in the debt instrument causing it to become partially or wholly
nonrecourse, certain capital contributions, or certain revaluations of
Partnership property (as further outlined in Section 1.704-2(i)(4) of the
Regulations), each holder of Units shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent years)
in an amount equal to the holder's share of the net decrease in the Minimum Gain
Attributable to Partner Nonrecourse Debt as determined under Section 1.704-2(i)
of the Regulations. The items to be so allocated shall be determined in
accordance with Sections 1.704-2(i)(4) and (j)(2) of the Regulations. This
clause (ii) is intended to comply with the minimum gain chargeback requirement
with respect to Partner Nonrecourse Debt contained in said section of the
Regulations and shall be interpreted consistently therewith. Allocations
pursuant to this clause (ii) shall be made in proportion to the respective
amounts required to be allocated to each holder of Units.
(iii) Qualified Income Offset. In the event
a holder of Units unexpectedly receives any adjustments, allocations or
distributions described in Section 1.704-1(b)(2)(ii) (d)(4), (5), or (6) of the
Regulations, and such holder has an Adjusted Capital Account Deficit, items of
Partnership income and gain shall be specially allocated to such holder in an
amount and manner sufficient to eliminate the Adjusted Capital Account Deficit
as quickly as possible, provided that an allocation pursuant to this Section
6.1(b)(iii) shall be made only if and to the extent that such holder would have
Adjusted Capital Account Deficit after all other allocations provided for in
this Article VI have been tentatively made as if this Section 6.1(b)(iii) were
not in the Agreement. This clause (iii) is intended to constitute a "qualified
income offset" under Section 1.704-1(b)(2)(ii) (d) of the Regulations and shall
be interpreted consistently therewith.
(iv) Gross Income Allocation. In the event
any holder of Units has a deficit Capital Account at the end of any fiscal year
which is in excess of the sum of (x) the amount such holder is obligated to
restore pursuant to any provision of this Agreement, and (y) the amount such
holder is deemed to be obligated to restore pursuant to the penultimate
sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, each
such holder shall be specially allocated items of Partnership income and gain in
the amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 6.1(b)(iv) shall be made only if and to the extent that
such holder would have a Capital Account Deficit in excess of such sum after all
other allocations provided for in this Article 6 have been made as if Section
6.1(b)(iii) hereof and this Section 6.1(b)(iv) were not in the Agreement.
(v) Nonrecourse Deductions. Nonrecourse
Deductions for any fiscal year or other applicable period shall be allocated to
the holders of Units in accordance with their respective holdings of Units. For
purposes of Section 1.752-3(a) (3) of the Regulations, "excess nonrecourse
liabilities" shall be allocated among the holders of Units
33
in proportion to their respective holdings of Units.
(vi) Partner Nonrecourse Deductions. Partner
Nonrecourse Deductions for any fiscal year or other applicable period shall be
specially allocated to the holder of Units that bears the economic risk of loss
with respect to the Partner Nonrecourse Debt in respect of which such Partner
Nonrecourse Deductions are attributable (as determined under Sections
1.704-2(b)(4) and (i) (1) of the Regulations).
(vii) Section 754 Adjustments. To the extent
an adjustment to the adjusted tax basis of any Partnership asset pursuant to
Section 734(b) or Section 743(b) of the Code is required, pursuant to Section
1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4) of the Regulations,
to be taken into account in determining Capital Accounts, the amount of such
adjustment to Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to
holders of Units in accordance with their interests in a manner consistent with
the manner in which their Capital Accounts are required to be adjusted pursuant
to such sections of the Regulations.
(viii) Curative Allocations. The Regulatory
Allocations shall be taken into account in allocating other items of income,
gain, loss, and deduction among the holders of Units so that, to the extent
possible, the cumulative net amount of allocations of Partnership items under
Sections 6.1(a) and (b) hereof shall be equal to the net amount that would have
been allocated to each holder of Units if the Regulatory Allocations had not
occurred. This subparagraph (viii) is intended to minimize to the extent
possible and to the extent necessary any economic distortions which may result
from application of the Regulatory Allocations and shall be interpreted in a
manner consistent therewith. For purposes hereof, "Regulatory Allocations" shall
mean the allocations provided under this Section 6.1(b) (other than this
subparagraph) and allocations pursuant to the last sentence of Section
6.1(a)(ii) hereof.
(ix) Varying Interests. In the event the
number of Units outstanding during a fiscal year changes, the allocations
pursuant to this Article 6 shall be made by the General Partner to take such
varying interests into account in any reasonable manner permitted under the Code
and the Regulations.
(c) Tax Allocations.
(i) Generally. Subject to clauses (ii) and
(iii) hereof, items of income, gain, loss, deduction and credit to be allocated
for income tax purposes (collectively, "Tax Items") shall be allocated among the
holders of Units on the same basis as their respective book items.
(ii) Sections 1245/1250 Recapture. If any
portion of gain from the sale of property is treated as gain which is ordinary
income by virtue of the application of Sections 1245 or 1250 of the Code
("Affected Gain"), then (A) such Affected Gain shall be allocated among the
holders of Units in the same proportion that the depreciation
34
and amortization deductions giving rise to the Affected Gain were allocated and
(B) other Tax Items of gain of the same character that would have been
recognized, but for the application of Sections 1245 and/or 1250 of the Code,
shall be allocated away from those holders of Units who are allocated Affected
Gain pursuant to clause (A) so that, to the extent possible, the other holders
of Units are allocated the same amount, and type, of capital gain that would
have been allocated to them had Sections 1245 and/or 1250 of the Code not
applied. For purposes hereof, in order to determine the proportionate
allocations of depreciation and amortization deductions for each fiscal year or
other applicable period, such deductions shall be deemed allocated on the same
basis as Net Income or Net Loss for such respective period.
(iii) Allocations Respecting Section 704(c)
of the Code and Revaluations. Property contributed to the Partnership shall be
subject to Section 704(c) of the Code and the Regulations thereunder so that,
notwithstanding paragraph (b) hereof, taxable gain from disposition, taxable
loss from disposition and tax depreciation with respect to Partnership property
that is subject to Section 704(c) of the Code and/or Section
1.704-1(b)(2)(iv)(f) of the Regulations (collectively "Section 704(c) Tax
Items") shall be allocated on a property by property basis in accordance with
said Code Section and/or the Regulations thereunder, as the case may be. The
allocation of Section 704(c) Tax Items shall be made pursuant to any reasonable
method selected by the General Partner in its discretion authorized under
Section 1.704-3 of the Regulations. Allocations pursuant to this Section
6.1(c)(iii) are solely for purposes of federal, state, and local taxes and shall
not affect, or in any way be taken into account in computing, the Capital
Account or share of Net Income, Net Loss, other items, or distributions of any
holder of Units pursuant to any provision of this Agreement.
(iv) Tax Credits and Other Items. Tax
credits and other items shall be allocated in accordance with the holdings of
Units to the extent permitted under Section 1.704-1(b)(4)(ii) of the Regulations
or other applicable provision of the Code and Regulations and otherwise in
accordance with such provisions.
(v) Ancillary Notes. Income, gain, loss or
correlative adjustments, if any, relating to the Suites Ancillary Notes or the
disposition thereof shall be specially allocated to HSR (or its assignees or
successors-in-interest). Income, gain, loss or correlative adjustments, if any,
relating to the Inns Ancillary Notes or the disposition thereof shall be
specially allocated to HSR (or its assignees or successors-in-interest).
(vi) Allocations on Liquidation. If the
distributions to holders of Units pursuant to Section 8.2(a) hereof would
otherwise not be in accordance with the positive balances in their Capital
Accounts (after taking into account all adjustments to such Capital Accounts for
all periods), then items of gross income and gross deduction for the fiscal year
with respect to which such distributions are being made (and, if necessary, for
prior fiscal years for which amended tax returns can and shall be filed) shall
be reallocated among the holders of Units such that the distributions to holders
of Units pursuant to Section 8.2(a) hereof are in accordance with the positive
balances in their Capital Accounts (after taking into account all adjustments to
such Capital Accounts for all periods).
6.2 Distributions. The General Partner shall cause the
Partnership to
35
distribute all, or such portion as the General Partner may in its reasonable
discretion determine, of Net Cash Flow to the holders of Units, including Class
A Units, who are holders on the Partnership Record Date with respect to such
distribution. Distributions of Net Cash Flow shall be made in the following
priority:
(a) first, to the holders of Class A Units, pro rata
in an amount equal to the excess, if any, of (i)(x) the cumulative Class A
Preferred Return from February 14, 1997 to the end of such fiscal year or other
applicable period ending on the Partnership Record Date, over (y) the sum of all
prior distributions to the holders of Class A Units pursuant to this Section
6.2(a)(i), and then (ii)(x) the cumulative Special Class A Distributions from
February 14, 1997 to the end of such fiscal year or other applicable period
ending on the Partnership Record Date, over (y) the sum of all prior
distributions to the holders of Class A Units pursuant to this Section
6.2(a)(ii), treating the distributed amounts as paying the oldest amounts due
first; and
(b) thereafter, to the holders of Units, including
Class A Units, pro rata in accordance with the holders' ownership of Units,
including Class A Units.
6.3 Books of Account. At all times during the continuance of
the Partnership, the General Partner shall maintain or cause to be maintained
full, true, complete and correct books of account in accordance with GAAP, using
the calendar year as the fiscal and taxable year of the Partnership. In
addition, the Partnership shall keep all records required to be kept pursuant to
the Act.
6.4 Reports. The General Partner shall cause to be sent to the
Partners promptly after receipt of the same from the Accountants and in no event
later than 105 days after the close of each fiscal year of the Partnership,
copies of Audited Financial Statements for the Partnership, or of the General
Partner if such statements are prepared solely on a consolidated basis with the
General Partner, for the immediately preceding fiscal year of the Partnership.
The Partnership shall also cause to be prepared such reports and/or information
as are necessary for SLT to determine its qualification as a REIT and its
compliance with REIT Requirements.
6.5 Tax Elections and Returns. All elections required or
permitted to be made by the Partnership under any applicable tax law shall be
made by the General Partner in its sole and absolute discretion, except that the
General Partner shall, if requested by a Limited Partner, file an election on
behalf of the Partnership pursuant to Section 754 of the Code to adjust the
basis of the Partnership property in the case of a transfer of a Partnership
Interest or distribution from the Partnership, including transfers made in
connection with the exercise of the Rights, made in accordance with the
provisions of the Agreement. The General Partner shall be responsible for
preparing and filing all federal and state tax returns for the Partnership and
furnishing copies thereof to the Partners, together with required Partnership
schedules showing allocations of tax items, copies of all within the period of
time prescribed by law. The General Partner shall use reasonable efforts to make
available to the holders of Units final K-1's not later than September 15 of
each year.
6.6 Tax Matters Partner. The General Partner is hereby
designated as the
36
Tax Matters Partner within the meaning of Section 6231(a)(7) of the Code (and
any corresponding provisions of state and local law) for the Partnership;
provided, however, that (a) in exercising its authority as Tax Matters Partner,
the General Partner shall be limited by the provisions of this Agreement
affecting tax aspects of the Partnership; and (b) the General Partner shall give
prompt notice to any notice partners under Section 6231 of the Code of the
receipt of any written notice that the Internal Revenue Service intends to
examine or audit Partnership income tax returns for any year, receipt of written
notice of the beginning of an administrative proceeding at the Partnership level
relating to the Partnership under Section 6223 of the Code, receipt of written
notice of the final Partnership administrative adjustment relating to the
Partnership pursuant to Section 6223 of the Code, and receipt of any request
from the Internal Revenue Service for waiver of any applicable statute of
limitations with respect to the filing of any tax return by the Partnership.
6.7 Withholding Payments Required By Law.
(a) Unless treated as a Tax Payment Loan (as
hereinafter defined), any amount paid by the Partnership for or with respect to
any holder of Units on account of any withholding tax or other tax payable with
respect to the income, profits or distributions of the Partnership pursuant to
the Code, the Regulations, or any state or local statute, regulation, notice,
ruling or ordinance requiring such payment (a "Withholding Tax Act") shall be
treated as a distribution to such holder for all purposes of this Agreement,
consistent with the character or source of the income, profits or cash which
gave rise to the payment or withholding obligation. To the extent that the
amount required to be remitted by the Partnership under the Withholding Tax Act
exceeds the amount then otherwise distributable to such holder, unless and to
the extent that funds shall have been provided by such holder pursuant to the
last sentence of this Section 6.7(a), the excess shall constitute a loan from
the Partnership to such holder (a "Tax Payment Loan") which shall be payable
upon demand and shall bear interest, from the date that the Partnership makes
the payment to the relevant taxing authority, at the rate announced from time to
time by Citibank, N.A. (or any successor thereto) as its "prime rate", plus four
(4) percent per annum, compounded monthly (but in no event higher than the
highest interest rate permitted by applicable law). So long as any Tax Payment
Loan to any holder of Units or the interest thereon remains unpaid, the
Partnership shall make future distributions due to such holder under this
Agreement by applying the amount of any such distributions first to the payment
of any unpaid interest on such Tax Payment Loan and then to the repayment of the
principal thereof, and no such future distributions shall be paid to such holder
until all of such principal and interest has been paid in full. If the amount
required to be remitted by the Partnership under the Withholding Tax Act exceeds
the amount then otherwise distributable to a holder of Units, the Partnership
shall notify such holder at least five (5) Business Days in advance of the date
upon which the Partnership would be required to make a Tax Payment Loan under
this Section 6.7(a) (the "Tax Payment Loan Date") and provide such holder the
opportunity to pay to the Partnership, on or before the Tax Payment Loan Date,
all or a portion of such deficit.
(b) The General Partner shall have the authority to
take all actions necessary to enable the Partnership to comply with the
provisions of any Withholding Tax Act applicable to the Partnership and to carry
out the provisions of this Section 6.7. Nothing in this Section 6.7 shall create
any obligation on the General Partner to advance funds to the
37
Partnership or to borrow funds from third parties in order to make any payments
on account of any liability of the Partnership under a Withholding Tax Act.
(c) In the event that a Tax Payment Loan is not paid
by a holder of Units within thirty (30) days after written demand therefor is
made by the General Partner, the General Partner may cause all distributions
that would otherwise be made to such holder to be retained by the Partnership,
or sell such holder's Units for sale proceeds, in each case up to the amount
necessary to repay such Tax Payment Loan, including all accrued and unpaid
interest therein, and such retained distributions or sale proceeds shall be
applied against, first, the accrued interest on and, second, the principal of,
such Tax Payment Loan.
ARTICLE 7
Rights, Duties and Restrictions of the General Partner
7.1 Powers and Duties of the General Partner.
(a) Subject to Section 7.11 hereof, the General
Partner shall be responsible for the management of the Partnership's business
and affairs. Except as otherwise herein expressly provided, the General Partner
shall have, and is hereby granted, full and complete power, authority and
discretion to take such action for and on behalf of the Partnership and in its
name as the General Partner shall, in its sole and absolute discretion, deem
necessary or appropriate to carry out the Partnership's business and the
purposes for which the Partnership was organized. Except as otherwise expressly
provided herein, the General Partner shall, on behalf of, and at the expense of,
the Partnership, have the right, power and authority:
(i) to manage, control, invest, reinvest,
acquire by purchase, lease or otherwise, sell, contract to purchase or sell,
grant, obtain, or exercise options to purchase, options to sell or conversion
rights, assign, transfer, convey, deliver, endorse, exchange, pledge, mortgage,
abandon, improve, repair, maintain, insure, lease for any term and otherwise
deal with any and all property of whatsoever kind and nature, and wheresoever
situated, in furtherance of the business or purposes of the Partnership;
(ii) to acquire, directly or indirectly,
interests in real estate of any kind and of any type, and any and all kinds of
interests therein (including, without limitation, Entities investing therein),
and to determine the manner in which title thereto is to be held; to manage
(directly or through property managers), insure against loss, protect and
subdivide any of the real estate, interests therein or parts thereof; to
improve, develop or redevelop any such real estate; to participate in the
ownership and development of any property; to dedicate for public use, to vacate
any subdivisions or parts thereof, to resubdivide, to contract to sell, to grant
options to purchase or lease, to sell on any terms; to convey, mortgage, pledge
or otherwise encumber said property, or any part thereof; to lease said property
or any part thereof from time to time, upon any terms and for any period of
time, and to renew or extend leases, to amend, change or modify the terms and
provisions of any leases and to grant options to lease and options to renew
leases and options to purchase; to partition
38
or to exchange said real property, or any part thereof, for other real or
personal property; to grant easements or charges of any kind; to release, convey
or assign any right, title or interest in or about or easement appurtenant to
said property or any part thereof; to construct and reconstruct, remodel, alter,
repair, add to or take from buildings on any property in which the Partnership
owns an interest; to insure any Person having an interest in or responsibility
for the care, management or repair of such property; to direct the trustee of
any land trust to mortgage, lease, convey or contract to convey the real estate
held in such land trust or to execute and deliver deeds, mortgages, notes and
any and all documents pertaining to the property subject to such land trust or
in any matter regarding such trust; and to execute assignments of all or any
part of the beneficial interest in such land trust;
(iii) to employ, engage, indemnify or
contract with or dismiss from employment or engagement Persons to the extent
deemed necessary or appropriate by the General Partner for the operation and
management of the Partnership business, including but not limited to
contractors, subcontractors, engineers, architects, surveyors, mechanics,
consultants, accountants, attorneys, insurance brokers, real estate brokers and
others;
(iv) to enter into contracts on behalf of
the Partnership, and to cause all Administrative Expenses to be paid;
(v) to borrow or loan money, obtain or make
loans and advances from and to any Person for Partnership purposes and to apply
for and secure from or accept and grant to any Person credit or accommodations;
to contract liabilities and obligations (including interest rate swaps, caps and
xxxxxx) of every kind and nature with or without security; and to repay,
collect, discharge, settle, adjust, compromise or liquidate any such loan,
advance, obligation or liability; provided, however, without the Consent of a
Majority-In-Interest of the Class A Limited Partners, the Partnership shall not
borrow from the Realty Partnership or SLT such that neither the Realty
Partnership nor SLT has lending capacity under Section 856(c)(5)(B) of the Code
to lend an amount to the Partnership to allow the Partnership to discharge its
and the General Partner's obligations to the Class A Limited Partners under this
Agreement and under that certain Class A Exchange Rights Agreement dated
February 14, 1997, by and among SLC, the Partnership, and the Class A Limited
Partners;
(vi) to grant security interests, mortgage,
assign, deposit, deliver, enter into sale and leaseback arrangements or
otherwise give as security or as additional or substitute security or for sale
or other disposition any and all Partnership property, tangible or intangible,
including, but not limited to, personal property and real estate and interests
in land trusts, and to make substitutions thereof, and to receive any proceeds
thereof upon the release or surrender thereof; to sign, execute and deliver any
and all assignments, deeds, bills of sale and contracts and instruments in
writing; to authorize, give, make, procure, accept and receive moneys, payments,
property notices, demands, protests and authorize and execute waivers of every
kind and nature; to enter into, make, execute, deliver and receive agreements,
undertakings and instruments of every kind and nature; and generally to do any
and all other acts and things incidental to any of the foregoing or with
reference to any dealings or transactions which the General Partner may deem
necessary, proper or
39
advisable to effect or accomplish any of the foregoing or to carry out the
business and purposes of the Partnership;
(vii) to acquire and enter into any contract
of insurance (including, without limitation, general partner liability and
partnership reimbursement insurance policies) which the General Partner may deem
necessary or appropriate;
(viii) to conduct any and all banking
transactions on behalf of the Partnership; to adjust and settle checking,
savings and other accounts with such institutions as the General Partner shall
deem appropriate; to draw, sign, execute, accept, endorse, guarantee, deliver,
receive and pay any checks, drafts, bills of exchange, acceptances, notes,
obligations, undertakings and other instruments for or relating to the payment
of money in, into or from any account in the Partnership's name; to make
deposits into and withdrawals from the Partnership's bank accounts and to
negotiate or discount commercial paper, acceptances, negotiable instruments,
bills of exchange and dollar drafts;
(ix) to demand, xxx for, receive and
otherwise take steps to collect or recover all debts, rents, proceeds,
interests, dividends, goods, chattels, income from property, damages and all
other property, to which the Partnership may be entitled or which are or may
become due the Partnership from any Person; to commence, prosecute or enforce,
or to defend, answer or oppose, contest and abandon all legal proceedings in
which the Partnership is or may hereafter be interested; and to settle,
compromise or submit to arbitration any accounts, debts, claims, disputes and
matters which may arise between the Partnership and any other Person and to
grant an extension of time for the payment or satisfaction thereof on any terms,
with or without security;
(x) to acquire interests in and contribute
money or property to any limited or general partnerships, joint ventures,
subsidiaries or other entities as the General Partner deems desirable;
(xi) to maintain or cause to be maintained
the Partnership's books and records;
(xii) to prepare and deliver, or cause to be
prepared and delivered, all financial and other reports with respect to the
operations of the Partnership, and preparation and filing of all tax returns and
reports;
(xiii) to do all things which are necessary
or advisable for the protection and preservation of the Partnership's business
and assets, and to execute and deliver such further instruments and undertake
such further acts as may be necessary or desirable to carry out the intent and
purposes of this Agreement and as are not inconsistent with the terms hereof;
(xiv) subject to Section 7.4 hereof, to
lease real or personal property from the Realty Partnership or its Affiliates or
to any other Person on such terms and conditions as the General Partner may from
time to time determine; and
40
(xv) in general, to exercise all of the
general rights, privileges and powers permitted to be had and exercised under
the Act.
To the extent the duties of the General Partner require expenditures of funds to
be paid to third parties, the General Partner shall not have any obligations
hereunder except to the extent that Partnership funds are reasonably available
to it for the performance of such duties, and nothing herein contained shall be
deemed to require the General Partner, in its capacity as such, to expend its
individual funds for payment to third parties or to undertake any specific
liability or litigation on behalf of the Partnership.
(b) Notwithstanding the provisions of Section 7.1(a)
hereof, the Partnership shall not take any action which (or fail to take any
action, the omission of which) the General Partner believes, in its sole and
absolute discretion, (i) could adversely affect the ability of SLT to qualify or
continue to qualify as a REIT, (ii) could subject SLT to any additional taxes
under Section 857 or Section 4981 of the Code or other potentially adverse
consequences under the Code, (iii) could otherwise cause SLT to violate the REIT
Requirements or (iv) could violate any law or regulation of any governmental
body or agency having jurisdiction over the General Partner or its securities,
unless such action (or inaction) shall have been specifically consented to by
the General Partner in writing.
(c) Notwithstanding the provisions of Section 7.1(a)
hereof, the Partnership shall not commingle its funds with those of any
Affiliate or other entity; funds and other assets of the Partnership shall be
separately identified and segregated; all of the Partnership's assets shall at
all times be held by or on behalf of the Partnership, and, if held on behalf of
the Partnership by another entity, shall at all times be kept identifiable (in
accordance with customary usages) as assets owned by the Partnership; and the
Partnership shall maintain its own separate bank accounts, payroll and books of
account.
(d) Without the consent of the Limited Partners, the
General Partner shall have no power to do any act in contravention of this
Agreement or possess any Partnership property for other than a partnership
purpose.
7.2 Reimbursement of the General Partner.
(a) Except as provided in this Section 7.2 and
elsewhere in this Agreement (including the provisions of Articles 5, 6 and 8
hereof regarding distributions, payments and allocations to which it may be
entitled), the General Partner shall not receive payments from or be compensated
for its services as general partner of the Partnership.
(b) The General Partner shall be reimbursed on a
monthly basis, or such other basis as the General Partner may determine in its
sole and absolute discretion, for all expenses it incurs relating to the
ownership and operation of, or for the benefit of, the Partnership, including,
without limitation, the Administrative Expenses. Such reimbursements shall be in
addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 5.1 hereof.
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(c) The General Partner shall also be reimbursed for
all expenses incurred relating to the organization and formation of the
Partnership, the General Partner's share of public offerings of Paired Shares by
the General Partner and SLT to the extent included in Administrative Expenses,
and any other issuance of additional Partnership Interests.
7.3 Outside Activities of the General Partner. The General
Partner shall not directly or indirectly enter into or conduct any business
other than (a) the ownership, acquisition and disposition of Partnership
Interests as the General Partner or Limited Partner and the management of the
business of the Partnership, and (b) such activities as are incidental thereto,
including the General Partner's ownership directly or through a wholly-owned
subsidiary of an interest in a partnership or limited liability company in which
the Partnership is a partner or member. All future acquisitions of real estate
or of leasehold interests in hotels or management of hotels by the General
Partner shall be made through and for the benefit of the Partnership. The
General Partner agrees that the net proceeds of all offerings of securities by
the General Partner shall be contributed to the Partnership (in the case of
equity offerings) or loaned to the Partnership (in the case of debt offerings).
This Section 7.3 shall not apply to HICN or the General Partner's activities
with respect to HICN prior to the earlier of the date it contributes its assets
to the Partnership or January 1, 1999. The foregoing notwithstanding, this
Section 7.3 shall not restrict the activities or investments of the General
Partner if the General Partner makes such arrangements as are reasonably
necessary to avoid such activities or investments having a material adverse
impact on the Limited Partners and to assure that the Limited Partners share in
the economic benefits of such activities or investments in a fair and equitable
manner.
7.4 Contracts with Affiliates. The Partnership may engage in
transactions, enter into contracts with Affiliates, and lend money to or borrow
money from Affiliates which are on terms fair and reasonable to the Partnership
and no less favorable to the Partnership than would be obtained from
unaffiliated third parties. The Partners hereby agree that the Partnership's
leases and loans with the Realty Partnership, as in effect on the date first
above written, are on terms fair and reasonable to the Partnership and such
terms are no less favorable to the Partnership than would be obtained from
unaffiliated third parties.
7.5 Title to Partnership Assets. Title to Partnership assets,
whether real, personal or mixed and whether tangible or intangible, shall be
deemed to be owned by the Partnership as an entity, and no Partner, individually
or collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby acknowledges and confirms that any Partnership assets
for which legal title is held in the name of the General Partner or any nominee
or Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal
42
title to such Partnership assets is held.
7.6 Reliance by Third Parties. Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially. In no event
shall any Person dealing with the General Partner or its representatives be
obligated to ascertain that the terms of this Agreement have been complied with
or to inquire into the necessity or expedience of any act or action of the
General Partner or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner
shall be conclusive evidence in favor of any and every Person relying thereon or
claiming thereunder that (i) at the time of the execution and delivery of such
certificate, document or instrument, this Agreement was in full force and
effect, (ii) the Person executing and delivering such certificate, document or
instrument was duly authorized and empowered to do so for and on behalf of the
Partnership and (iii) such certificate, document or instrument was duly executed
and delivered in accordance with the terms and provisions of this Agreement and
is binding upon the Partnership.
7.7 Liability of the General Partner.
(a) Notwithstanding anything to the contrary set
forth in this Agreement, the General Partner shall not be liable for monetary or
other damages to the Partnership, any of the Partners or any assignee of any
interest of any Partner for losses sustained or liabilities incurred as a result
of errors in judgment or of any act or omission if the General Partner acted
without fraud, gross negligence or willful misconduct.
(b) The Limited Partners expressly acknowledge (i)
that the General Partner is acting on behalf of the Partnership and the General
Partner's shareholders collectively, (ii) that, subject to the terms and
conditions of this Agreement, the General Partner may, but is under no
obligation to, consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited Partners or any
assignees thereof except as provided in this Agreement) in deciding whether to
cause the Partnership to take (or decline to take) any actions, and (iii) that
the General Partner shall not be liable for monetary damages for losses
sustained, liabilities incurred, or benefits not derived by Limited Partners in
connection with such decisions, provided that the General Partner acted without
fraud, gross negligence or willful misconduct.
(c) Subject to its obligations and duties as General
Partner set forth in Section 7.1 hereof, the General Partner may exercise any of
the powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through agents. The General Partner
shall not be responsible for any fraud, willful misconduct or gross negligence
on the part of any such agent appointed by it without fraud, gross negligence or
willful misconduct.
43
(d) Any amendment, modification or repeal of this
Section 7.7 or any provision hereof shall be prospective only and shall not in
any way affect the limitations on the General Partner's liability to the
Partnership and the Partners under this Section 7.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may be
asserted.
7.8 Other Matters Concerning the General Partner.
(a) The General Partner may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, or other document reasonably believed by
it to be genuine and to have been signed or presented by the proper party or
parties.
(b) The General Partner may consult with legal
counsel, accountants, appraisers, management consultants, investment bankers and
other consultants and advisers selected by it, and any act taken or omitted to
be taken in reliance upon the advice or opinion of such Persons as to matters
which the General Partner reasonably believes to be within such Person's
professional or expert competence and in accordance with such advice or opinion
shall be prima facie evidence that such actions have been done or omitted in
good faith.
(c) The General Partner shall have the right, in
respect of any of its powers or obligations hereunder, to act through any of its
duly authorized officers and any attorney or attorneys-in-fact duly appointed by
the General Partner. Each such attorney shall, to the extent provided by the
General Partner in the power of attorney, have full power and authority to do
and perform all and every act and duty which is permitted or required to be done
by the General Partner hereunder.
7.9 Operation of SLT in Accordance with REIT Requirements.
(a) The Partners acknowledge and agree that the
ability of SLT to satisfy the REIT Requirements is a material inducement for the
Realty Partnership to lease its real and personal property to the Partnership
and that the failure of SLT to satisfy the REIT Requirements is likely to have a
material adverse effect on the Partnership. The Partners therefore acknowledge
and agree that, in addition to the other provisions of this Agreement, so long
as SLT desires to elect to be taxed as a REIT, the Partnership shall be operated
in a manner that will enable SLT to (i) satisfy the REIT Requirements and (ii)
avoid the imposition of any federal income or excise tax liability on SLT. So
long as SLT desires to elect to be taxed as a REIT, the Partnership shall avoid
taking any action which would result in SLT ceasing to satisfy the REIT
Requirements or would result in the imposition of any federal income or excise
tax liability on SLT.
(b) Without the prior consent of the General Partner,
no Limited Partner or holder of Units or any Affiliate shall take any action,
including acquiring, directly or indirectly, an interest in any tenant of a
property owned by the Realty Partnership or by an Entity owned by the Realty
Partnership (including, but not limited to, the Operating
44
Partnership, SLC or the Affiliates of either), which would have, through the
actual or constructive ownership of any tenant of any property, the effect of
causing the percentage of the gross income of SLT that fails to be treated as
"rents from real property" within the meaning of Section 856(d)(2) of the Code
to exceed such percentage on the date hereof. Each Limited Partner and holder of
Units shall use its best efforts to notify the General Partner on a timely basis
of any direct or indirect acquisition or potential direct or indirect
acquisition of Paired Shares by such Limited Partner or holder or any Affiliate
or direct or indirect owner of an interest in such Limited Partner or holder
that could reasonably be expected to have such effect.
7.10 Replacement of General Partner. In the event the General
Partner is no longer a Partner (whether in accordance with the provisions of
this Agreement or otherwise), a successor General Partner shall be appointed by
a vote of a Majority-in-Interest of the Limited Partners.
ARTICLE 8
Dissolution, Liquidation and Winding-Up
8.1 Accounting. In the event of the dissolution, liquidation
and winding-up of the Partnership, a proper accounting shall be made of the
Capital Account of each holder of Units and of the Net Income or Net Loss of the
Partnership from the date of the last previous accounting to the date of
dissolution.
8.2 Distribution on Dissolution.
(a) In the event of the dissolution and liquidation
of the Partnership for any reason, the assets of the Partnership shall be
liquidated for distribution in the following rank and order:
(i) payment of creditors of the Partnership,
including creditors who are Partners or former Partners;
(ii) establishment of reserves as provided
by the Liquidating Trustee to provide for contingent liabilities, if any;
(iii) to the holders of Class A Units in an
amount equal to the excess, if any, of (x) the cumulative distributions under
Section 8.2(a) of the Realty Agreement for an equivalent number of Units in the
Realty Partnership from February 14, 1997 to the date on which a distribution
under this Section 8.2(a) is made, over (y) the sum of all prior distributions
to the holders of Class A Units pursuant to this Section 8.2(a)(iii); and
(iv) to the holders of Units, including
Class A Units, in accordance with their respective holdings of Units.
45
Whenever the Liquidating Trustee reasonably determines that any reserves
established pursuant to paragraph (ii) above are in excess of the reasonable
requirements of the Partnership, the amount determined to be excess shall be
distributed to the Partners in accordance with the provisions of this Section
8.2(a). No Partner or holder of Units shall be liable to any other Partner or
holder of Units for a deficit balance in its Capital Account.
(b) Notwithstanding the provisions of Section 8.2(a)
hereof which require liquidation of the assets of the Partnership, but subject
to the order of priorities set forth therein, if prior to or upon dissolution of
the Partnership the Liquidating Trustee determines that an immediate sale of
part or all of the Partnership's assets would be impractical or would cause
undue loss to the Partners, the Liquidating Trustee may, in its sole and
absolute discretion, defer for a reasonable time liquidation of any assets
except those necessary to satisfy liabilities of the Partnership (including to
those Partners which are creditors of the Partnership) and/or, with the Consent
of the Limited Partners, distribute to the Partners, in lieu of cash, as tenants
in common and in accordance with the provisions of Section 8.2(a) hereof,
undivided interests in such Partnership assets as the Liquidating Trustee deems
not suitable for liquidation. Any such distributions in kind shall be made only
if, in the good faith judgment of the Liquidating Trustee, such distributions in
kind are in the best interest of the Partners, and shall be subject to such
conditions relating to the disposition and management of such properties as the
Liquidating Trustee deems reasonable and equitable and to any agreements
governing the operation of such properties at such time. The Liquidating Trustee
shall determine the fair market value of any property distributed in kind using
such reasonable method of valuation as it may adopt.
8.3 Documentation of Liquidation. Upon the completion of the
dissolution and liquidation of the Partnership, the Partnership shall terminate
and the Liquidating Trustee shall have the authority to execute and record any
and all documents or instruments required to effect the dissolution, liquidation
and termination of the Partnership.
ARTICLE 9
Transfer
9.1 General Partner. Except to the extent permitted pursuant
to Section 4.5, the General Partner shall not withdraw from the Partnership and
shall not sell, assign, pledge, encumber or otherwise dispose of all or any
portion of its Partnership Interest or Units without the Consent of the Limited
Partners, which consent may be given or withheld in each Limited Partner's sole
and absolute discretion. Upon any transfer of a Partnership Interest in
accordance with the provisions of this Section 9.1, the transferee General
Partner shall become vested with the powers and rights of the transferor General
Partner, and shall be liable for all obligations and responsible for all duties
of the General Partner under this Agreement, once such transferee has executed
such instruments as may be necessary to effectuate such admission and to confirm
the agreement of such transferee to be bound by all the terms and provisions of
this Agreement with respect to the Partnership interest so acquired. It shall be
a condition to any transfer permitted hereunder that the transferee assumes by
express agreement (or pursuant
46
to a statutory merger or consolidation wherein all obligations and liabilities
of the General Partner are assumed by a successor trust or corporation by
operation of law) all of the obligations of the transferor General Partner under
this Agreement with respect to such transferred Partnership Interest and no such
transfer (other than pursuant to a statutory merger or consolidation wherein all
obligations and liabilities of the transferor General Partner are assumed by a
successor trust or corporation by operation of law) shall relieve the transferor
General Partner of its obligations under this Agreement without the Consent of
the Limited Partners. In connection with any such permitted transfer, the
successor General Partner shall be deemed admitted as such immediately prior to
the effective time of the transfer from the transferor General Partner and shall
continue the business of the Partnership without dissolution. If the General
Partner withdraws or retires from the Partnership, in violation of this
Agreement or otherwise, or dissolves, terminates or upon the Bankruptcy of the
General Partner, within 90 days thereafter, at least a Majority-in-Interest of
the Limited Partners may elect to continue the Partnership business by selecting
a substitute General Partner, which substitute General Partner accepts such
election and agrees to serve as General Partner. Such successor General Partner
shall thereupon succeed to the rights and obligations of the General Partner as
provided in this Section 9.1.
9.2 Transfers by Limited Partners.
(a) No Limited Partner shall have the right, directly
or indirectly, to transfer all or any part of his Partnership Interest or Units
to any Person without the prior written consent of the General Partner, which
consent may be given or withheld by the General Partner in its sole and absolute
discretion. The foregoing notwithstanding, the General Partner hereby grants the
consents described in this Section 9.2 to transfers of Partnership Interests
pursuant to an exercise of Rights, provided that any such transfer otherwise
complies with all of the other provisions of this Article 9 (including, but not
limited to, any additional consents required hereunder).
(b) It shall be a condition to any transfer by a
Limited Partner (other than a pledge, encumbrance, hypothecation or mortgage)
otherwise permitted hereunder that the transferee assume by operation of law or
express agreement all of the obligations of the transferor under this Agreement
(including, without limitation, under Article 9 hereof) with respect to such
transferred Partnership Interest or Units and no such transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor are assumed by a successor corporation by
operation of law) shall relieve the transferor of its obligations under this
Agreement without the approval of the General Partner, in its reasonable
discretion (it being understood that a transferor shall be deemed relieved from
such obligations, without the necessity of any such approval, in respect of
Partnership Interests transferred to the General Partner or the Partnership
pursuant to an Exchange Rights Agreement). Upon such transfer, the transferee of
a Partnership Interest shall be admitted as a Limited Partner and shall succeed
to all of the rights of the transferor Limited Partner under this Agreement in
the place and stead of such transferor Limited Partner (which succession, in the
event of a pledge, may be entered into and become effective at the time of
foreclosure or other realization of such pledge). The foregoing notwithstanding,
a transferee of a Unit shall not be admitted as a substituted Limited Partner
unless the General Partner consents, which consent may be given or withheld by
the General Partner in its sole and absolute discretion.
47
Any transferee, whether or not admitted as a substituted Limited Partner, shall
succeed to the obligations of the transferor hereunder (unless such transfer is
a pledge, encumbrance, hypothecation or mortgage or except as otherwise provided
herein).
(c) In addition to any other restrictions on transfer
provided herein, no Partnership Interest or Units shall be transferable by a
Limited Partner unless the transferor gives written notice of the proposed
transfer which notice shall state to the best of its knowledge that such
transfer will not violate any of the restrictions set forth in Section 9.3
hereof.
(d) Any permitted transferee under Section 9.2 who is
not admitted as a Limited Partner in accordance with this Article 9 or a
transferee who only holds Units shall be considered an assignee for purposes of
this Agreement. An assignee shall be deemed to have had assigned to it, and
shall be entitled to receive, distributions from the Partnership and the share
of Net Income, Net Loss, and any other items of income, gain, loss, deduction
and credit of the Partnership and rights attributable to the Partnership
Interests assigned to such transferee, but shall not be deemed to be a holder of
Partnership Interests for any other purpose under this Agreement, and shall not
be entitled to vote such Partnership Interests in any matter presented to the
Limited Partners for a vote. In the event any such transferee desires to make a
further assignment of any such Partnership Interests, such transferee shall be
subject to all the provisions of this Article 9 to the same extent and in the
same manner as any Limited Partner desiring to make an assignment of Partnership
Interests.
(e) The Limited Partners acknowledge that neither the
Partnership Interests nor the Units have been registered under any federal or
state securities laws and, as a result thereof, they may not be sold or
otherwise transferred, except in compliance with such laws. Notwithstanding
anything to the contrary contained in this Agreement, no Partnership Interest or
Units may be sold or otherwise transferred unless such transfer is exempt from
registration under any applicable securities laws or such transfer is registered
under such laws, it being acknowledged that the Partnership has no obligation to
take any action which would cause any such Partnership Interests or Units to be
registered.
9.3 Certain Restrictions on Transfer. In addition to any other
restrictions on transfer herein contained, except with the consent of the
General Partner, in no event may any transfer of a Partnership Interest or Units
by any Person be made (a) to any person or Entity that lacks the legal right,
power or capacity to own a Partnership Interest or Units; (b) in the event such
transfer would cause SLT to cease to comply with the REIT Requirements; (c) if
such transfer would cause a termination of the Partnership for federal income
tax purposes; (d) if such transfer would, in the opinion of counsel to the
Partnership, cause the Partnership to cease to be classified as a Partnership
for federal income tax purposes; (e) if such transfer would result in the
Partnership being treated as a "publicly traded partnership" or is effectuated
through an "established securities market" or a "secondary market (or the
substantial equivalent thereof)" within the meaning of Section 7704 of the Code
and the Regulations thereunder; (f) in violation of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976; (g) if the General Partner reasonably
believes that such transfer may (i) cause any portion or all of the assets of
the Partnership to be deemed pursuant to United States Department of Labor
48
Regulation Section 2510.3-101 or otherwise pursuant to ERISA or the Code to be
for any purpose of ERISA or Section 4975 of the Code assets of any Restricted
Entity, or (ii) cause a "prohibited transaction" (as defined in Section 4975(c)
of the Code or within the meaning of Section 406 of ERISA) to occur, or (iii)
cause the Partnership to become with respect to any Restricted Entity a "party
in interest" (as defined in Section 3(14) of ERISA) or a "disqualified person"
(as defined in Section 4975(e) of the Code) or (iv) cause the Partnership to be
jointly and severally liable for any obligation arising under ERISA or the Code
with respect to any "employee benefit plan" as defined in and subject to ERISA
or any "plan" as defined in Section 4975 of the Code; or (h) if the intended
transferee is a Restricted Entity. Any purported transfer described in this
Section 9.3 shall be void ab initio.
9.4 Effective Dates of Transfers.
(a) Transfers pursuant to this Article 9 may be made
on any day, but for purposes of this Agreement, the effective date of any such
transfer shall be (i) the first day of the month in which such transfer occurred
if such transfer occurred on or prior to the fifteenth calendar day of a month,
or (ii) the first day of the month immediately following the month in which such
transfer occurred, if such transfer occurred after the fifteenth calendar day of
a month, or such other date determined by the General Partner pursuant to such
convention as may be administratively feasible and consistent with applicable
law.
(b) If any Partnership Interest or Unit is
transferred or assigned in compliance with the provisions of this Article 9, on
any day other than the first day of a calendar year, then Net Income, Net Loss,
each item thereof and all other items attributable to such Partnership Interest
or Unit for such year shall be allocated to the transferor, and, in the case of
a transfer or assignment other than a redemption, to the transferee, by taking
into account their varying interests during such year in accordance with Section
706(d) of the Code, using any method permitted thereunder. All distributions
pursuant to Section 6.2 hereof attributable to such transferred Partnership
Interests or Units (A) with respect to which the Partnership Record Date is
before the effective date of such transfer (other than a pledge, encumbrance,
hypothecation or mortgage) shall be made to the transferor, (B) with respect to
the first Partnership Record Date after the effective date of such transfer
(other than a pledge, encumbrance, hypothecation or mortgage) shall be paid to
the transferor and to the transferee, ratably in accordance with their
respective periods of ownership of the Partnership Interest or Units transferred
during the period with respect to which such distribution is made, and (C) all
distributions after those described in (A) and (B) shall be made to the
transferee.
9.5 Transfer.
(a) The term "transfer," when used in this Article 9
with respect to a Partnership Interest, shall be deemed to refer to a
transaction by which a Person purports to assign its Partnership Interest or any
portion thereof (including Units) to another Person, and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any
other disposition by law or otherwise.
(b) No Partnership Interest or Unit shall be
transferred, in whole or
49
in part, except in accordance with the terms and conditions set forth in this
Article 9. Any transfer or purported transfer of a Partnership Interest not made
in accordance with this Article 9 shall be null and void.
9.6 Nevada Gaming Control Act.
(a) Notwithstanding anything to the contrary
expressed or implied in this Agreement, the sale, assignment, transfer, pledge
or other disposition of any interest in the Partnership is void unless approved
in advance by the Commission. If at any time the commission finds that an
individual owner of any interest in the Partnership is unsuitable to hold that
interest, the Commission shall immediately notify the Partnership of that fact.
The Partnership shall, within ten (10) days from the date that it receives the
notice from the Commission, return to the unsuitable owner the amount of his
capital account as reflected on the books of the Partnership. Beginning on the
date when the Commission serves notice of a determination of unsuitability,
pursuant to the preceding sentence, on the Partnership, it is unlawful for the
unsuitable owner: (i) to receive any share of the profits or distributions of
any cash or other property other than a return of capital as described above;
(ii) to exercise, directly or through any trust or nominee, any voting right
conferred by such interest; or (iii) to receive any remuneration in any form
from the Partnership for services rendered or otherwise.
(b) Any Limited Partner granted a delayed licensing
by the Commission which Limited Partner is later found unsuitable by the
Commission shall return all evidence of any ownership in the Partnership to the
Partnership, at which time the Partnership shall refund to the unsuitable
Limited Partner no more than the amount that such Limited Partner paid for his
ownership interest in the Partnership, and the unsuitable Limited Partner shall
no longer have any direct or indirect interest in the Partnership.
(c) This Section 9.6 shall apply only if the
Partnership applies for and obtains a Nevada state gaming license and only while
such license is in effect. No such license shall be applied for or obtained by
the Partnership without the Consent of the Limited Partners.
ARTICLE 10
Rights and Obligations of the Limited Partners
10.1 No Participation in Management. No Limited Partner, in
its capacity as such, shall take part in the management of the Partnership's
business, transact any business in the Partnership's name or have the power to
sign documents for or otherwise bind the Partnership. Any rights expressly
granted to the Limited Partners in this Agreement shall not be deemed to be
rights relating to the management of the Partnership's business.
10.2 Bankruptcy of a Limited Partner. The Bankruptcy of any
Limited Partner shall not cause a dissolution of the Partnership, but the rights
of such Limited Partner to share in the Net Profits or Net Losses of the
Partnership and to receive distributions of
50
Partnership funds shall, on the happening of such event, devolve on its
successors or assigns, subject to the terms and conditions of this Agreement,
and the Partnership shall continue as a limited partnership. In no event,
however, shall such assignee(s) become a substituted Limited Partner except in
accordance with Article 9 hereof.
10.3 No Withdrawal. No Limited Partner may withdraw from the
Partnership without the prior written consent of the General Partner, other than
as provided in Article 9 hereof.
10.4 Conflicts. The Partners recognize that the Limited
Partners and their Affiliates have or may have other business interests,
activities and investments, some of which may be in conflict or competition with
the business of the Partnership, and that such Persons are entitled to carry on
such other business interests, activities and investments. In deciding whether
to take any actions in such capacity, such Limited Partners and their Affiliates
may, but shall be under no obligation to, consider the separate interests of the
Partnership and shall have no fiduciary obligations to the Partnership and shall
not be liable for monetary damages for losses sustained, liabilities incurred or
benefits not derived by the other Partners in connection with such actions
except for damages for losses sustained or liabilities incurred which result
from a Limited Partner breaching a representation, warranty or covenant
hereunder or to the extent provided in the Formation Agreement; nor shall the
Partnership or the General Partner be under any obligation to consider the
separate interests of the Limited Partners and their Affiliates in such capacity
or have any fiduciary obligations to the Limited Partners and their Affiliates
in such capacity or be liable for monetary damages for losses sustained,
liabilities incurred or benefits not derived by the Limited Partners and their
Affiliates in such capacity arising from actions or omissions taken by the
Partnership. The Limited Partners and their Affiliates may engage in or possess
an interest in any other business or venture of any kind, independently or with
others, on their own behalf or on behalf of other entities with which they are
affiliated or associated, and such persons may engage in any activities, whether
or not competitive with the Partnership, without any obligation to offer any
interest in such activities to the Partnership or to any Partner. Neither the
Partnership nor any Partner shall have any right, by virtue of this Agreement,
in or to such activities, or the income or profits derived therefrom, and the
pursuit of such activities, even if competitive with the business of the
Partnership, shall not be deemed wrongful or improper. Notwithstanding the
foregoing, the provisions of this Section 10.4 shall not negate or impair any
other written agreement between one or more of the Limited Partners and the
General Partner or the Partnership (including Section 6.6 of the Formation
Agreement) or any duties which a Limited Partner may have in such Limited
Partner's capacity as an officer or director of the General Partner.
10.5 Provision of Information.
(a) With respect to any information required to be
provided to the Limited Partners pursuant to Section 17-305 (or any successor
thereto) of the Act: (i) the cost of preparing or providing any such information
(including, without limitation, fees paid to any person or entity in connection
therewith) shall be paid by the requesting Partner and in no event shall such
information be required to be given to the requesting Partner until such
51
payment has been made to the Partnership; (ii) in no event shall any financial
statements of the Partnership be required to be provided except for such
statements as have already been prepared or are otherwise required to be
provided to the Limited Partners under this Agreement and in no event shall any
statements which have been prepared be required to be audited, reviewed or
otherwise examined by a certified public accountant, if the statements are not
otherwise required to be so audited, reviewed or examined pursuant to the
provisions of this Agreement; and (iii) in no event shall such information be
required to be furnished until forty-five (45) days after such request and
unless the information is already in the possession of the Partnership.
(b) In addition to other rights provided by this
Agreement or by the Act, each Limited Partner shall have the right, for a
purpose reasonably related to such Limited Partner's interest as a limited
partner in the Partnership, upon written demand with a statement of the purpose
of such demand and at such Limited Partner's own expense (excluding copying and
administrative expenses of the General Partner):
(i) to obtain a copy of the most recent
annual and quarterly reports and current reports on Form 8-K filed with the SEC
by the General Partner pursuant to the Securities Exchange Act of 1934;
(ii) to obtain a copy of the Partnership's
federal, state and local income tax returns for each fiscal year of the
Partnership;
(iii) to obtain a current list of the name
and last known business, residence or mailing address of each Partner; and
(iv) to obtain a copy of this Agreement and
the Certificate, together with executed copies of all powers of attorney
pursuant to which this Agreement and the Certificate have been executed.
(c) Notwithstanding any other provision of this
Section 10.5, the General Partner may keep confidential from the Limited
Partners, for such period of time as the General Partner determines in its sole
and absolute discretion to be reasonable, any information that is not material
to the Limited Partners and that (i) the General Partner reasonably believes to
be in the nature of trade secrets or other information the disclosure of which
the General Partner in good faith believes is not in the best interests of the
Partnership or could damage the Partnership or its business or (ii) the
Partnership is required by law or by agreements with an unaffiliated third party
to keep confidential.
10.6 Power of Attorney.
(a) Each Limited Partner constitutes and appoints the
General Partner, any Liquidating Trustee and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorney-in-fact,
with full power and authority in its name, place and stead to: execute, swear
to, acknowledge, deliver, file and record in the appropriate public offices (i)
all
52
certificates, documents and other instruments (including, without limitation,
this Agreement and the Certificate and all amendments or restatements thereof)
that the General Partner or the Liquidating Trustee deems appropriate or
necessary to form, qualify or continue the existence or qualification of the
Partnership as a limited partnership (or a partnership in which the limited
partners have limited liability) in the State of Delaware and in all other
jurisdictions in which the Partnership may conduct business or own property;
(ii) all instruments that the General Partner deems appropriate or necessary to
reflect any amendment, change, modification or restatement of this Agreement in
accordance with its terms; (iii) all conveyances and other instruments or
documents that the General Partner deems appropriate or necessary to reflect the
dissolution and liquidation of the Partnership pursuant to the terms of this
Agreement, including, without limitation, a certificate of cancellation; and
(iv) all instruments relating to the admission, withdrawal, removal or
substitution of any Partner pursuant to the provisions of this Agreement or the
Capital Contribution of any Partner.
(b) The foregoing power of attorney is irrevocable
and a power coupled with an interest, in recognition of the fact that each of
the Limited Partners will be relying upon the power of the General Partner to
act as contemplated by this Agreement in any filing or other action by it on
behalf of the Partnership, and it shall survive the death or incompetency of a
Limited Partner to the effect and extent permitted by law, subsequent incapacity
of any Limited Partner and the transfer of all or any portion of such Partner's
Partnership Interests and shall extend to such Limited Partner's heirs,
successors, assigns and personal representatives.
(c) Nothing contained in this Section 10.6 shall be
construed as authorizing the General Partner to amend this Agreement except in
accordance with Article 11 hereof.
10.7 Ownership of Paired Shares.
(a) Each Limited Partner and holder of Units hereby
agrees to provide the General Partner within fifteen (15) days of any written
request therefor, a statement, to the best of its knowledge, describing the
number of Paired Shares actually or constructively owned by such Limited Partner
or holder of Units and all direct and indirect owners of such Limited Partner or
holder for purposes of the REIT Requirements as determined under Section 318(a)
of the Code, as modified by Section 856(d)(5) of the Code, or Section 544 of the
Code, as modified by Section 856(h) of the Code.
(b) Each Limited Partner and holder of Units (i)
hereby covenants that, without the prior written consent of the General Partner
(which consent shall not be unreasonably withheld or delayed) it will not
acquire and it will use all reasonable efforts to cause its direct or indirect
owners not to acquire any Paired Shares or any rights to acquire Paired Shares
and (ii) except to the extent that the General Partner provides prior written
consent, hereby represents, warrants and covenants that (I) it is not and will
not become a Restricted Entity, (II) no "prohibited transaction" (as defined in
Section 4975(c) of the Code or within the meaning of Section 406 of ERISA) has
occurred or will occur that would not have occurred or occur if the Limited
Partner or holder of Units and its Affiliates were not Limited
53
Partners and were not holders of Units, (III) the Partnership has not become and
will not become with respect to any Restricted Entity a "party in interest" (as
defined in Section 3(14) of ERISA) or a "disqualified person" (as defined in
Section 4975(e) of the Code) which the Partnership would not have become or be
if the Limited Partner or holder of Units and its Affiliates were not Limited
Partners and were not holders of Units, and (IV) the Partnership has not and
will not become jointly and severally liable for any obligations arising under
ERISA or the Code with respect to any "employee benefit plan" as defined in and
subject to ERISA or any "plan" as defined in the Code for which the Partnership
has not become or would not be liable if the Limited Partner or holder of Units
and its Affiliate were not Limited Partners and were not holders of Units.
10.8 Waiver of Fiduciary Duty. Each Limited Partner and holder
of Units hereby waives, to the maximum extent permitted under law, any and all
fiduciary duties of the General Partner to each, all or any combination of them
and hereby agrees that the General Partner may, but is under no obligation to,
take their interests into account in performing or refraining from performing
any act permitted under this Agreement.
ARTICLE 11
Amendment of Partnership Agreement, Meetings
11.1 Amendments.
(a) This Agreement may not be amended unless such
amendment is approved by the General Partner with the Consent of the Limited
Partners, except as provided below in this Section 11.1.
(b) Notwithstanding Section 11.1(a), the General
Partner shall have the power, without the Consent of the Limited Partners but
after five (5) Business Days notice to the Limited Partners, to amend this
Agreement as may be required to facilitate or implement any of the following
purposes:
(1) to add to the obligations of the General
Partner for the benefit of the Limited Partners;
(2) to reflect the admission, substitution,
termination or withdrawal of Partners after the date hereof in accordance with
Section 4.1(d) or Article 9 of this Agreement, provided that the General Partner
shall not be required to give the notice referred to in the first paragraph of
this subsection (b) in respect of the transactions described in this Paragraph
(2);
(3) to set forth the rights, powers, duties,
and preferences of the holders of any additional Partnership Interests issued
pursuant to Article 4 hereof;
(4) to reflect a change that is of an
inconsequential nature and
54
does not materially adversely affect the Limited Partners, or to cure any
ambiguity, correct or supplement any provision of this Agreement not
inconsistent with law or with other provisions, or make other changes with
respect to matters arising under this Agreement that will not be inconsistent
with law or with the provisions of this Agreement;
(5) to satisfy any requirements, conditions,
or guidelines contained in any order, directive, opinion, ruling or regulation
of a federal or state agency or contained in federal or state law;
(6) to prevent all or any portion of the
assets of the Partnership from being deemed pursuant to United States Department
of Labor Regulation Section 2510.3-101 or otherwise pursuant to ERISA or the
Code to be, for any purpose of ERISA or Section 4975 of the Code, assets of any
Restricted Entity;
(7) to prevent the Partnership from being
characterized as a "publicly traded partnership" pursuant to Section 7704 of the
Code and Regulations;
(8) to enable SLT to satisfy the REIT
Requirements; and
(9) to maintain the Partnership's
characterization as a partnership for tax purposes.
(c) Notwithstanding Sections 11.1(a) and (b) hereof,
this Agreement shall not be amended without the prior written consent of each
Partner adversely affected if such amendment would (i) convert a Limited
Partner's interest in the Partnership into a general partner's interest, (ii)
modify the limited liability of a Limited Partner, (iii) alter rights of the
Partners to receive allocations and distributions pursuant to Article 6 or
Section 8.2 hereof (except as permitted pursuant to Article 4 and Sections
11.1(b)(3) and 11.1(d) hereof), (iv) alter or modify the Rights set forth in an
Exchange Rights Agreement or a Registration Rights Agreement except in
compliance therewith, (v) except in furtherance of Sections 11.1(b)(7), (8) or
(9) hereof, alter such Partner's rights to transfer its Partnership Interest;
(vi) amend Section 7.7, 7.8 or 10.7 hereof or (vii) amend Section 11.1(c) or
11.1(d) hereof.
(d) Notwithstanding Section 11.1(c) hereof and
subject to (but not in limitation of) the rights granted to the General Partner
pursuant to Article 4 and this Article 11, this Agreement may be amended to (i)
alter the rights of any or all of the Partners to receive allocations and
distributions pursuant to Article 6 or Section 8.2 hereof or (ii) alter the
rights of any or all of the Partners to transfer their Partnership Interests if
such amendment is approved by the prior written consent of a majority of each
class or group of Partnership Interests that is treated in a uniform or pro rata
basis by such amendment.
11.2 Meetings of the Partners; Notices to Partners.
(a) Meetings of Partners may be called by the General
Partner or by Limited Partners holding at least 1% of the Percentage Interests
to act on any matter specified herein or in the Act to be voted on or consented
to by the Partners. The call shall state the
55
nature of the business to be transacted. Notice of any such meeting shall be
given to all Partners not less than seven (7) Business Days prior to the date of
such meeting. Partners may vote in person or by proxy at such meeting. Whenever
the vote or Consent of the Limited Partners is permitted or required under this
Agreement, such vote or consent may be given at a meeting of Limited Partners or
may be given in accordance with the procedure prescribed in Section 11.2(b)
hereof.
(b) Any action required or permitted to be taken at a
meeting of the Partners may be taken without a meeting if a written consent
setting forth the action so taken is signed by the General Partner and such
percentage or number of the Limited Partners as is expressly required by this
Agreement. Such consent may be in one instrument or in several instruments, and
shall have the same force and effect as a vote of the Partners. Such consent
shall be filed with the General Partner and copies thereof delivered to all
Partners. An action so taken shall be deemed to have been taken at a meeting
held on the effective date so certified.
(c) Each Limited Partner may authorize any Person or
Persons to act for him by proxy on all matters in which a Limited Partner is
entitled to participate, including waiving notice of any meeting, or voting or
participating at a meeting. Every proxy must be signed by the Limited Partner or
his attorney-in-fact. No proxy shall be valid after the expiration of eleven
(11) months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Limited Partner executing it. No
such proxy and no such revocation shall be effective unless a copy thereof has
been delivered to the General Partner.
(d) Whenever the Consent of the Limited Partners is
required hereunder, the General Partner shall provide a notice to each Partner
who is a Limited Partner on the date the notice is given setting forth the
matter(s) as to which it proposes to seek such consent at least five (5)
Business Days in advance of the date upon which such consent is sought.
ARTICLE 12
General Provisions
12.1 No Liability of Directors and Others. Notwithstanding
anything to the contrary contained herein, no recourse shall be had by the
Partnership or any Partner against any trustee, director, shareholder, officer,
employee, agent or attorney of the General Partner for any act or omission of
the General Partner or any obligation or liability of the General Partner under
this Agreement, and none of the foregoing shall have any personal liability for
or with respect to any of the foregoing; provided that the foregoing shall not
relieve any trustee, officer or director of the General Partner of any liability
in his capacity as such.
12.2 Notices. All notices, offers or other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and may be personally served, sent by United States mail, or sent via facsimile.
A notice shall be deemed to have
56
been given when delivered in person or, if sent by United States mail, three
business days after deposit in United States mail, registered or certified,
postage prepaid, and properly addressed, by or to the appropriate party, or, if
sent via facsimile, upon receipt by the sending party of verification of
transmission. For purposes of this Section 12.2, the addresses of the parties
hereto shall be as set forth on Exhibit B hereto. The address of any party
hereto may be changed by a notice in writing given in accordance with the
provisions hereof.
12.3 Controlling Law. This Agreement and all questions
relating to its validity, interpretation, performance and enforcement
(including, without limitation, provisions concerning limitations of actions),
shall be governed by and construed in accordance with the laws of the State of
Delaware, notwithstanding any conflict-of-laws doctrines of such state or other
jurisdiction to the contrary. Each of the parties hereto irrevocably submits and
consents to the jurisdiction of the United States District Court for the
Southern District of New York and the United States District Court for the
District of Arizona in connection with any action or proceeding arising out of
or relating to this Agreement and irrevocably waives any immunity from
jurisdiction thereof and any claim of proper venue, forum non conveniens or any
similar basis to which it might otherwise be entitled in any such action or
proceeding.
12.4 Execution of Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
as against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
12.5 Severability. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
12.6 Entire Agreement. This Agreement (together with the
Exhibits hereto) and the Formation Agreement contain the entire understanding
among the parties hereto with respect to the subject matter hereof, and
supersede all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as herein
contained. The parties hereto intend that this Agreement be treated as a
separate and distinct agreement and as not being part of any other agreement
(other than the Formation Agreement), arrangement, partnership or joint venture.
The express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof. This Agreement may
not be modified or amended other than by an agreement in writing.
12.7 Paragraph Headings. The paragraph headings in this
Agreement are for convenience and they form no part of this Agreement and shall
not affect its interpretation.
12.8 Gender, Etc. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any other
number, singular or
57
plural, and any other gender, masculine, feminine or neuter, as the context
indicates is appropriate. The term "including" shall mean "including, but not
limited to."
12.9 Number of Days. In computing the number of days (other
than Business Days and Trading Days) for purposes of this Agreement, all days
shall be counted, including Saturdays, Sundays and holidays; provided, however,
that if the final day of any time period falls on a Saturday, Sunday or holiday
on which national banks are or may elect to be closed, then the final day shall
be deemed to be the next day which is not a Saturday, Sunday or such holiday.
12.10 Partners Not Agents. Nothing contained herein shall be
construed to constitute any Partner the agent of another Partner, except as
specifically provided herein, or in any manner to limit the Limited Partners in
the carrying on of their own respective businesses or activities.
12.11 Assurances. Each of the Partners shall hereafter execute
and deliver such further instruments and do such further acts and things as may
be reasonably required or useful to carry out the intent and purpose of this
Agreement and as are not inconsistent with the terms hereof.
12.12 Waiver of Partition. Each Partner hereby waives any
right such Partner may have to partition its interest in the Partnership or any
property of the Partnership.
58
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused this Agreement to be executed on their behalf as of the date
first above written.
GENERAL PARTNER:
STARWOOD LODGING CORPORATION, a
Maryland corporation
By: ____________________________________
Name:
Title:
LIMITED PARTNERS:
STARWOOD HOTEL INVESTORS II, L.P.
By: STARWOOD CAPITAL GROUP I, L.P.
By: BSS CAPITAL PARTNERS, L.P.,
General Partner
By: STERNLICHT HOLDINGS II, Inc.
General Partner
By: ____________________________________
Name:
Title:
FIREBIRD CONSOLIDATED PARTNERS, L.P.
By: ____________________________________
Name:
Title: General Partner
APPOLLO REAL ESTATE INVESTMENT
FUND, L.P.
By: APPOLLO REAL ESTATE ADVISORS,
L.P.
By: APPOLLO REAL ESTATE
MANAGEMENT, INC.
59
By: ____________________________________
Name:
Title:
PHILADELPHIA HSR LIMITED
PARTNERSHIP
By: ____________________________________
Name:
Title: General Partner
STARWOOD OPPORTUNITY FUND II, L.P.
By: STARWOOD CAPITAL GROUP I, L.P.
General Partner
By: BSS CAPITAL PARTNERS, L.P.,
General Partner
By: STERNLICHT HOLDINGS II, Inc.
General Partner
By: ____________________________________
Name:
Title:
________________________________________
XXXXXX X. XXXXXXX
ZIFF INVESTORS PARTNERSHIP, X.X. XX
By: ____________________________________
Name:
Title: General Partner
MONTROSE CORPORATION
By: ____________________________________
Name:
Title:
60
HARVEYWOOD HOTEL INVESTORS, L.P.
By: ____________________________________
Name:
Title: General Partner
STAR INVESTORS, G.P.
By: ____________________________________
Name:
Title:
MERIDIAN INVESTMENT GROUP
By: ____________________________________
Name:
Title:
THE HERMITAGE, L.P.
By: HERMITAGE OF NASHVILLE, INC.
General Partner
By: ____________________________________
Name:
Title:
BURDEN DIRECT INVESTMENT FUND I,
L.P.
By: ____________________________________
Name:
Title: General Partner
XXXXXXXX HOLDINGS, INC.
By: ____________________________________
Name:
Title:
KJJ REVOCABLE TRUST
61
By: ____________________________________
Name:
Title: Trustee
________________________________________
XXXXX X. XXXXXXXXXX
THE XXXXX X. XXXXXXXXXX FAMILY
SPRAY TRUST I
By: ____________________________________
Name:
Title: Trustee
THE XXXXX X. XXXXXXXXXX FAMILY
SPRAY TRUST II
By: ____________________________________
Name:
Title: Trustee
THE XXXXX X. XXXXXXXXXX FAMILY
SPRAY TRUST III
By: ____________________________________
Name:
Title: Trustee
________________________________________
XXXX XXXX
THE XXXX FAMILY PARTNERSHIP
By: ____________________________________
Name:
Title: General Partner
________________________________________
MADISON X. XXXXX
62
THE MADISON X. XXXXX IRREVOCABLE
INSURANCE TRUST
By: ____________________________________
Name:
Title: Trustee
________________________________________
XXX X. XXXXXXX
________________________________________
XXXXXXX X. XXXXXXX
________________________________________
XXXXXX X. XXXXX
________________________________________
XXXXX X. XXXXX
________________________________________
XXXXX XXXXX
________________________________________
XXXXXX X. XXXXXXX
________________________________________
XXXX XXXXXXXX
________________________________________
XXX XXXXXXXX
________________________________________
XXXX X. XXXXXX
________________________________________
XXXXXX X. XXXXXX
63
________________________________________
XXXXXXXX X. XXXXX
________________________________________
XXXXXXX XXXXXXX
________________________________________
XXXXX XXXXXX XXXXXXX
________________________________________
XXXXXX XXXXXXXXX XXXXXXX
________________________________________
XXXXX X. XXXX, III
LAMBSTER PARTNERS LIMITED
PARTNERSHIP
By: ____________________________________
Name:
Title: General Partner
________________________________________
XXXX XXXXXXX
________________________________________
XXXXXXXX BEER
________________________________________
XXXXXXX X. XXXXXXX, M.D.
________________________________________
XXXXXX X. XXXXX
________________________________________
64
XXXXXXX XXXXX
________________________________________
XXXXXXXX XXXXXX
________________________________________
XXXXX X. XXXXXXX, M.D., PC
________________________________________
XXXXX X. XXXXXXX
________________________________________
J. XXXXX XXXXXXXXX
________________________________________
XXXX X. XXXXXXX
________________________________________
XXXXX XXXXXX
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, on behalf of Prudential
Property Investment Separate Account II
By: ____________________________________
Name:
Title:
XXXXXXX XXXXXXX, AS TRUSTEE OF THE
XXXX XXXXXXX FAMILY TRUST
By: ____________________________________
Name: Xxxxxxx Xxxxxxx
Title: Trustee
________________________________________
XXXX XXXXXXX
65
________________________________________
XXXXX-XX XXXXXXX
________________________________________
XXXXXXX XXXXXXX
________________________________________
XXXXXX X. XXXXXXXX
________________________________________
XXXXXX XXX XX
WESTPORT HOSPITALITY, INC.
By: ____________________________________
Name:
Title:
ZAPCO HOLDINGS, INC.
By: ____________________________________
Name:
Title:
ZAPCO HOLDINGS, INC. DEFERRED
COMPENSATION PLAN TRUST
By: ____________________________________
Name:
Title: Trustee
________________________________________
XXXX X. XXXXXXX
________________________________________
XXXXXX XXXXX
66
________________________________________
XXXXXXX XXXX
________________________________________
XXXX XXXXXXXX
________________________________________
XXXXX XXXXXXXX
________________________________________
XXXX XXXXX
________________________________________
XXXXX XXXXXXXX
________________________________________
XXXXXX CLEARWATER
________________________________________
XXXXXX XXXXX
________________________________________
XXXXX XXXXXXXX
CLASS "A" PARTNERS
Signature Blocks
________________________________________
XXXX XXXXXXX
________________________________________
XXXXXXX XXXXXXX
________________________________________
XXXXXX X. XXXXXXXX
67
________________________________________
XXXXXX XXX XX
WESTPORT HOSPITALITY, INC.
By: ____________________________________
Name:
Title:
68
EXHIBIT A
LIST OF PARTNERS, PERCENTAGE INTERESTS AND UNITS
Date: As of __________, 1997
Name of Partner Percentage Interest Units
--------------- ------------------- -----
Starwood Lodging Corporation 72.4510% 40,078,698
Ziff Investors Partnership, XX XX 4.0850% 2,259,732
Firebird Consolidated Partners, LP 2.2069% 1,220,820
Starwood Opportunity Fund II, LP 1.7047% 943,000
Montrose Corporation 1.3435% 743,226
Harveywood Hotel Investors, LP 1.1756% 650,338
Star Investors, G.P. 1.0748% 594,582
Xxxxx X. Xxxxxxxxxx 0.6275% 347,104
Apollo Real Estate Investment Fund, LP 0.5334% 295,078
Starwood Hotel Investors II, LP 0.5212% 288,334
Meridian Investment Group 0.4798% 265,422
Burden Direct Investment Fund I, LP 0.3915% 216,564
Xxxx Xxxx 0.2150% 118,916
Xxxxxxxx Holdings, Inc. 0.1578% 87,310
JDE Revocable Trust 0.1511% 83,596
Xxx X. Xxxxxxx 0.1382% 76,430
Xxxx Xxxxxxx 0.0997% 55,170
Philadelphia HSR, LP 0.0985% 54,461
The Xxxxx X. Xxxxxxxxxx Family Spray Trust I 0.0970% 53,672
The Xxxxx X. Xxxxxxxxxx Family Spray Trust II 0.0970% 53,672
The Xxxxx X. Xxxxxxxxxx Family Spray Trust III 0.0970% 53,672
Xxxxxx X. Xxxxx 0.0899% 49,746
69
Madison X. Xxxxx 0.0777% 43,004
Xxxxx X. Xxxxx 0.0729% 40,328
Xxxxx Xxxxx 0.0568% 31,434
Hospitality Partners 0.0550% 30,414
The Xxxx Family Partnership 0.0537% 29,730
The Madison X. Xxxxx
Irrevocable Insurance Trust 0.0501% 27,726
Xxxxxx X. Xxxxxxx 0.0409% 22,616
Xxxx Xxxxxxxx 0.0403% 22,298
Xxx Xxxxxxxx 0.0383% 21,212
Philadelphia HIR, LP 0.0328% 18,140
Xxxx X. Xxxxxx 0.0317% 17,550
Xxxxxx X. Xxxxxx 0.0299% 16,516
Xxxxxxxx X. Xxxxx 0.0274% 15,150
Xxxxxxx Xxxxxxx 0.0270% 14,932
Xxxxx Xxxxxxx 0.0269% 14,866
Xxxxxx Xxxxxxx 0.0269% 14,866
Xxxxx X. Xxxx, III 0.0262% 14,508
Xxxxxx X. Xxxxxxx 0.0199% 11,011
Lambster Partners Limited Partnership 0.0153% 8,486
Xxxxxxx Beer 0.0134% 7,434
Xxxx Xxxxxxx 0.0064% 3,542
Geoff Beer 0.0042% 2,306
Xxxxxxx X. Xxxxxxx, MD 0.0025% 1,394
Xxxxxx X. Xxxxx 0.0022% 1,190
Xxxxxxx Xxxxx 0.0016% 900
Xxxxxxxx Xxxxxx 0.0016% 882
Xxxxx X. Xxxxxxx, MD, PC 0.0014% 774
70
Xxxxx X. Xxxxxxx 0.0011% 634
J. Xxxxx Xxxxxxxxx 0.0009% 494
Xxxx X. Xxxxxxx 0.0007% 378
Xxxxx Xxxxxx 0.0004% 224
The Prudential Insurance Company of America,
on behalf of Prudential Property Investment
Separate Account II 8.1872% 4,529,007
Xxxxxxx Xxxxxxx, as Trustee of the Xxxx Xxxxxxx
Family Trust 0.9143% 505,778
Xxxx Xxxxxxx 0.0652% 36,078
Xxxxx-Xx Xxxxxxx 0.9429% 521,617
Xxxxxxx Xxxxxxx 0.0366% 20,239
Xxxxxx X. Xxxxxxxx 0.4637% 256,511
Xxxxxx Xxx XX 0.0550% 30,415
Wesport Hospitality, Inc. 0.0193% 10,656
Zapco Holdings, Inc. 0.5989% 331,291
Zapco Holdings, Inc. Deferred Compensation
Plan Trust 0.0328% 18,126
Xxxx X. Xxxxxxx 0.0379% 20,962
Xxxxxx Xxxxx 0.0045% 2,505
Xxxxxxx Xxxx 0.0024% 1,321
Xxxx Xxxxxxxx 0.0023% 1,253
Xxxxx Xxxxxxxx 0.0023% 1,252
Xxxx Xxxxx 0.0039% 2,161
Xxxxx Xxxxxxxx 0.0068% 3,767
Xxxxxx Clearwater 0.0009% 497
Xxxxxx Xxxxx 0.0004% 224
Xxxxx Xxxxxxxx 0.0004% 224
--------- ----------
TOTAL 100.0000% 55,318,336
71
EXHIBIT A-1
LIST OF CLASS A LIMITED PARTNERS, PERCENTAGE INTEREST AND UNITS
Date: As of __________, 1997
Name of Partner Percentage Interest Units
--------------- ------------------- -----
Xxxx Xxxxxxx 36.8623% 93,756
Xxxxxxx Xxxxxxx 36.8623% 93,756
Xxxxxx X. Xxxxxxxx 16.5746% 42,156
Xxxxxx Xxx XX 1.3753% 3,498
Westport Hospitality, Inc. 8.3254% 21,175
-------- -------
TOTAL 100.0000% 254,341
72
EXHIBIT B
Notice Address of Partners
Name of Partner Notice Address
--------------- --------------
Starwood Lodging Corporation 0000 Xxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: General Counsel
Ziff Investors Partnership, XX XX 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn. Xx. Xxx Xxxxx
Firebird Consolidated Partners, LP c/o Starwood Capital Group
Three Pickwick Plaza, Suite 250
Greenwich, Connecticut 06830
Attention: Madison X. Xxxxx, Esq.
Starwood Opportunity Fund II, LP c/o Starwood Capital Group
Three Pickwick Plaza, Suite 250
Greenwich, Connecticut 06830
Attention: Madison X. Xxxxx, Esq.
Montrose Corporation c/o The Xxxx Disney Corporation
000 X. Xxxxx Xxxxx
Team Disney 301J
Xxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxx
Harveywood Hotel Investors, LP c/o Starwood Capital Group, General
Partner
Three Pickwick Plaza, Suite 250
Greenwich, Connecticut 06830
Attention: Xxxxxx X. Xxxxxx
Star Investors, G.P. c/o Penguin Group, L.P.
000 Xxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Mr, Xxxxx Xxxxxxx
Xxxxx X. Xxxxxxxxxx c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
73
Apollo Real Estate Investment Fund. LP c/o Starwood Capital Group
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Attn: Madison X. Xxxxx
Starwood Hotel Investors II, LP c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Madison X. Xxxxx, Esq.
Meridian Investment Group c/o Penguin Group, L.P.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Mr, Xxxxx Xxxxxxx
Burden Direct Investment Fund I, LP 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Mr. Xxxx Xxxxx
Xxxx Xxxx c/o Odyssey Partners, L.P.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxxx Holdings, Inc. c/o Lake Asset Management, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxxxx Xxxxxxxxx
JDE Revocable Trust c/o Starwood Capital Group
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Attn: Madison X. Xxxxx
Xxx X. Xxxxxxx c/o Normura Securities
0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Xxxx Xxxxxxx c/o Starwood Capital Group
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Philadelphia HSR, LP c/o The Beacon Companies
00 Xxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
74
The Xxxxx X. Xxxxxxxxxx Family Spray Trust I c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
The Xxxxx X. Xxxxxxxxxx Family Spray Trust II c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
The Xxxxx X. Xxxxxxxxxx Family Spray Trust III c/o Starwood Capital Group
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Xxxxxx X. Xxxxx c/o Starwood Capital Group
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Madison X. Xxxxx c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxx c/o Texas Pacific Group
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxxx Xxxxx c/o Xx. Xxxxxx Xxxxx
Star & Co.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Hospitality Partners 0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
The Xxxx Family Partnership c/o Odyssey Partners, L.P.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx Xxxx
The Madison X. Xxxxx Irrevocable Insurance Trust c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx c/o Starwood Lodging Trust
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxx Xxxxxxxx c/o Bear Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
75
Xxx Xxxxxxxx c/o Starwood Capital Group
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Philadelphia HIR, LP c/o The Beacon Companies
00 Xxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Xxxx X. Xxxxxx c/o The Blackstone Group
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxxx c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Xxxxxxxx X. Xxxxx c/o Beacon Group
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxx Xxxxxxx c/o Starwood Lodging Trust
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxx Xxxxxxx c/o Xxxxxx Holdings
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Ms. Dot Xxxxxx
Xxxxxx Korsant c/o Xxxxxx Holdings
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxx
Xxxxx X Xxxx, III c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx c/o Bristol Hotel Management Operations
0000 Xxxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xxxx Xxxxx
76
Lambster Partners Limited Partnership x/x Xxxxxx Xxxxxx Xxxxxxx, X.X.X.
000 X. Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Mr. Xxxx Xxxxx
Xxxxxxx Beer c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Xxxx Xxxxxxx c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Geoff Beer c/o Starwood Capital Group
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Xxxxxxx X. Xxxxxxx, MD 00000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxx c/o Lexer Capital, Ltd.
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxxxx Xxxxx c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Xxxxxxxx Xxxxxx c/o Starwood Capital Group
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxx, MD, PC c/o Starwood Capital Group
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Attn: Madison X. Xxxxx
Xxxxx X. Xxxxxxx c/x Xxxxxxx & Associates
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
J. Xxxxx Xxxxxxxxx c/o Starwood Asset Management
Three Pickwick Plaza, 3rd Floor
Greenwich, CT 06830
00
Xxxx X. Xxxxxxx x/x Xx Xxxxx Partners
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxxxx c/o Starwood Asset Management
Three Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
The Prudential Insurance Company of America, c/o Prudential Real Estate Investors
on behalf of Prudential Property Investment 8 Campus Drive
Separate Account II Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxx
Xxxxxxx Xxxxxxx, as Trustee of the Xxxx Xxxxxxx c/o Xxxxxxx Xxxxxxx, Trustee
Family Trust 0 Xxx Xxxxxx
Xxxxxx, XX 00000
Xxxx Xxxxxxx 00 Xxxxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxx-Xx Xxxxxxx 00 Xxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxxx Xxxxxxx 00 Xxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxxx 00 Xxxxxxx Xxxx
Xxxxxx Xxxxxxx, XX 00000
Xxxxxx X. Xxx XX 00 Xxxxx Xxxx
Xxxxxxx, XX 00000
Westport Hospitality, Inc. 00 Xxxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Zapco Holdings, Inc. Deferred Compensation c/o Xxxx Xxxxxxx
Plan Trust Intertech Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000
Xxxx X. Xxxxxxx 000 0xx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxx 00 Xxxxxx Xxxxx
Xxxxxx, XX 00000
78
Xxxxxxx X. Xxxx 000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Xxxx X. Xxxxxxxx 00 Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Xxxxx X. Xxxxxxxx 00 Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Xxxx Xxxxx 00 Xxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxx X. Caccioto, Jr. 00 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Xxxxxx Clearwater 00 Xxxxxxxxx Xxxxx
Xxx Xxxxxx, XX 00000
Xxxxxx Xxxxx 000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Xxxxx Xxxxxxxx 00 Xxxx Xxxx Xxxx
Xxxxxxxxxxxx, XX 00000
79
EXHIBIT B
Notice Addresses of Class A Partners
Name of Partner Notice Address
--------------- --------------
Xxxx Xxxxxxx 00 Xxxxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxxxx Xxxxxxx 00 Xxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxxx 00 Xxxxxxx Xxxx
Xxxxxx Xxxxxxx, XX 00000
Xxxxxx X. Xxx XX 00 Xxxxx Xxxx
Xxxxxxx, XX 00000
Westport Hospitality, Inc. 00 Xxxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
80
CERTIFICATE OF ADMISSION
OF SLC OPERATING LIMITED PARTNERSHIP
THIS CERTIFICATE OF ADMISSION OF SLC OPERATING LIMITED
PARTNERSHIP ("Certificate of Admission") is made effective January 2, 1998, by
Starwood Lodging Corporation, a Maryland corporation, as the General Partner of
SLC Operating Limited Partnership, a Delaware limited partnership
("Partnership"), which was formed pursuant to the provisions of that certain
Limited Partnership Agreement of the Partnership dated as of December 15, 1994
and amended and restated as of June 29, 1995 and again as of November 14, 1997
and subsequently amended as of January 1, 1998 (as such agreement may hereafter
be amended from time to time, "Partnership Agreement"). All capitalized terms
not defined herein shall have the same meaning set forth in the Partnership
Agreement.
R E C I T A L S
WHEREAS, as of September 8, 1997, that certain Transaction
Agreement ("Transaction Agreement") was entered into among the General Partner,
the Partnership, SLT, the Realty Partnership, Westin Hotels & Resorts Worldwide,
Inc. ("Westin Worldwide"), a Delaware corporation, W&S Atlanta Corp.
("Atlanta"), a Delaware corporation, Westin St. Xxxx Hotel Company, Inc. ("St.
Xxxx"), a U.S. Virgin Islands corporation, and the other parties thereto;
WHEREAS, pursuant to the Transaction Agreement, it is
contemplated that, among other things, the Persons whose names appear below the
General Partner's name on the signature pages of this Certificate of Admission
(each a "Contributing Party" and, collectively, the "Contributing Parties") will
contribute to the Partnership certain of the outstanding shares of capital stock
of Atlanta and St. Xxxx in exchange for Class B Units described below;
WHEREAS, pursuant to Section 4.1(e) of the Partnership
Agreement, the General Partner is authorized to cause the Partnership to issue
additional Partnership Interests in one or more classes or one or more series of
any of such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties, including
rights, powers and duties senior to the then-existing Partnership Interests and
Units, as shall be determined by the General Partner in its sole and absolute
discretion; and
WHEREAS, pursuant to Section 11.1(b)(3) and (4) of the
Partnership Agreement, the General Partner is authorized to amend the
Partnership Agreement without the Consent of the Limited Partners, and in
accordance with Section 11.1(b) of the Partnership Agreement, the Limited
Partners have received five Business Days' notice of this Certificate of
Admission.
NOW THEREFORE, the undersigned certifies that all appropriate
actions have been
- 1 -
81
taken to admit the Contributing Parties to the Partnership upon the terms and
conditions set forth below:
SECTION 1. Each Contributing Party is hereby admitted as a Limited
Partner of the Partnership and shall receive, inter alia, its share of a maximum
total of 393,156 Class B Units(1) to be issued pursuant to the Transaction
Agreement. The number of Class B Units received by each Contributing Party is
set forth next to each such Contributing Party's signature block below. The
General Partner hereby consents to each such admission. If the number of Class B
Units to be received by any Contributing Party shall be adjusted after the date
hereof in accordance with the terms of or in connection with the Transaction
Agreement, the General Partner shall amend this Certificate of Admission to
reflect such adjustment.
SECTION 2. Each Contributing Party has agreed to comply with and to be
bound by the terms and conditions of the Partnership Agreement. Each
Contributing Party has represented that, to the best of its knowledge, its
admission as a Limited Partner does not violate any of the restrictions set
forth in Section 9.3 of the Partnership Agreement.
SECTION 3. The Partnership Agreement is hereby amended such that each
and every reference to the "Limited Partners" or to a "Limited Partner" includes
each Contributing Party.
SECTION 4. Exhibit A to the Partnership Agreement is hereby amended to
reflect this Certificate of Admission.
SECTION 5. Exhibit B to the Partnership Agreement is hereby amended to
reflect this Certificate of Admission. The notice address of each Contributing
Party is set forth on Exhibit A to this Certificate of Admission.
SECTION 6. Section 1.1 of the Partnership Agreement is hereby amended
by the addition of the following defined terms:
"Class B Certificate of Admission" shall mean the
Certificate of Admission of SLC Operating Limited Partnership dated as
of January 2, 1998 that authorizes the issuance of Class B Units.
"Class B Limited Partners" shall mean those Persons
admitted to the Partnership pursuant to the Class B Certificate of
Admission, and any Person who, at the time of reference thereto, is a
Class B Limited Partner of the Partnership.
"Class B Liquidation Preference Distribution" shall
mean, with respect to a Class B Unit, an amount equal to the "fair
market value" of one RP Ordinary Unit,
--------
(1) The exact number of Class B Units to be issued to each Contributing Party
will be determined on or about December 29, 1997 in a manner consistent with the
Transaction Agreement.
- 2 -
82
which shall be payable only in the event of the dissolution and
liquidation of the Partnership not preceded or accompanied by a
liquidation and dissolution of the Realty Partnership. Such fair market
value shall be determined in good faith by the General Partner as of
the effective date of such liquidation and dissolution or, if no such
effective date applies, as of the date of the first liquidating
distribution pursuant to Section 8.2. In the event of any change in (i)
the nature or amount of securities constituting a unit of Paired Shares
under the pairing agreement between the General Partner and SLT, (ii)
the correspondence of the number of non-preferred Units in the
Partnership to the number of Paired Shares outstanding or (iii) the
correspondence of the number of RP Ordinary Units to the number of
Paired Shares outstanding, the amount of the Class B Liquidation
Preference that shall accrue with respect to each Class B Unit as a
function of the fair market of each RP Ordinary Unit shall be equitably
adjusted.
"Class B OP Special Distribution" shall mean, with
respect to a Class B Unit, an amount equal to the sum, in cash, of the
fair market value of all operating and liquidating distributions by the
Realty Partnership with respect to RP Ordinary Units on or after
January 2, 1998 (whether pursuant to Section 6.2 or 8.2 of the Realty
Agreement) in an amount per Class B Unit equal to the amount so
distributed in respect of each RP Ordinary Unit. In the event of any
change in (i) the nature or amount of securities constituting a unit of
Paired Shares under the pairing agreement between the General Partner
and SLT, (ii) the correspondence of the number of non-preferred Units
in the Partnership to the number of Paired Shares outstanding or (iii)
the correspondence of the number of RP Ordinary Units to the number of
Paired Shares outstanding, the amount of the Class B OP Special
Distribution that shall accrue with respect to each Class B Unit as a
function of the amount of the corresponding distribution on the RP
Ordinary Units shall be equitably adjusted. Class B OP Special
Distributions may only be made with respect to Class B Units and shall
be due at the same time as such operating or liquidating distributions
are made by the Realty Partnership.
"Class B Units" shall mean, collectively, the
interests of the Class B Limited Partners in capital, allocations of
Net Income, Net Loss and distributions, including Class B OP Special
Distributions and Class B Liquidation Preference Distributions, if any.
The number of Class B Units owned by each Class B Limited Partner is
set forth on Exhibit A hereto.
"RP Ordinary Units" shall mean units of the Realty
Partnership other than units entitled to receive priority distributions
under the Realty Agreement such as the Class A Units (as such term is
defined in the Realty Agreement).
"Units" shall have the meaning set forth in Section
4.1(c) hereof, and such terms shall include Class A Units and Class B
Units except where the context otherwise requires.
- 3 -
83
SECTION 7. The definition of "Special Class A Distribution" in Section
1.1 of the Partnership Agreement is hereby amended and restated in its entirety
as follows:
"Special Class A Distribution" shall mean, with respect to a
Class A Unit, the fair market value, in cash, of any operating or
liquidating distribution in cash or other property made by the Realty
Partnership with respect to an RP Ordinary Unit. Special Class A
Distributions may only be made with respect to Class A Units and shall
be due at the same time as such operating or liquidating distributions
are made by the Realty Partnership.
SECTION 8. Section 6.1(a) of the Partnership Agreement is hereby
amended and restated in its entirety as follows:
(a) Allocation of Net Income and Net Loss.
(i) Net Income. Except as
otherwise provided herein, Net Income for any fiscal year or other
applicable period shall be allocated in the following order and
priority:
(A) first, to the
General Partner, until the cumulative Net Income allocated pursuant to
this Section 6.1(a)(i)(A) for the current and all prior periods equals
the cumulative Net Loss allocated pursuant to Section 6.1(a)(ii)(E) for
all prior periods;
(B) second, to the
holders of Units, including Class A Units and Class B Units, to the
extent of, in proportion to and in reverse order of their prior
allocations of Net Loss pursuant to Section 6.1(a)(ii)(D) until the
cumulative Net Income allocated pursuant to this Section 6.1(a)(i)(B)
for the current and all prior periods equals the cumulative Net Loss
allocated to such holders pursuant to Section 6.1(a)(ii)(D) for all
prior periods;
(C) third, to the holders
of Class A Units until each holder of Class A Units has been allocated
Net Income pursuant to this Section 6.1(a)(i)(C) in an amount equal to
its Class A Preferred Return for the current and all prior periods;
(D) fourth, to the holders
of Class A Units until each holder of Class A Units has been allocated
Net Income pursuant to this Section 6.1(a)(i)(D) in an amount equal to
the Net Income (as defined in Section 1.1 of the Realty Agreement)
allocated to an RP Ordinary Unit for all prior periods (or portions
thereof) from and after February 14, 1997 pursuant to Section
6.1(a)(i)(E) and (F) of the Realty Agreement, multiplied by the number
of Class A Units held by such holder;
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84
(E) fifth, to the holders
of Class B Units until each holder of Class B Units has been allocated
Net Income pursuant to this Section 6.1(a)(i)(E) in an amount equal to
its accrued Class B OP Special Distributions, if any;
(F) sixth, to the holders
of Class B Units until each holder of Class B Units has been allocated
Net Income pursuant to this Section 6.1(a)(i)(F) in an amount equal to
the excess of its accrued Class B Liquidation Preference Distribution,
if any, over the portion of such holder's initial Capital Account
balance allocable to the Class B Liquidation Preference;
(G) seventh, to the extent
the Partnership has made distributions pursuant to Section 6.2(d) to
the holders of Units, including Class A Units and Class B Units, in
accordance with and in proportion to distributions made under Section
6.2(d); and
(H) thereafter, to the
holders of Units, including Class A Units and Class B Units, in
accordance with and in proportion to their respective holdings of
Units.
(ii) Net Loss. Except as
otherwise provided herein, Net Loss of the Partnership for each fiscal
year or other applicable period shall be allocated in the following
order and priority;
(A) first, to the holders
of Units, including Class A Units and Class B Units, to the extent of,
in proportion to, and in the reverse order of, Net Income previously
allocated to the Partners pursuant to Section 6.1(a)(i)(H), until the
cumulative Net Loss allocated pursuant to this Section 6.1(a)(ii)(A)
for the current and all prior periods equals the cumulative Net Income
allocated pursuant to Section 6.1(a)(i)(H) for all prior periods;
(B) second, to the holders
of Class B Units to the extent of and in proportion to their prior
allocations of Net Income pursuant to Section 6.1(a)(i)(E) and (F)
until the cumulative Net Loss allocated pursuant to this Section
6.1(a)(ii)(B) for the current and all prior periods equals the
cumulative Net Income allocated to such holders pursuant to Section
6.1(a)(i)(E) and (F) for all prior periods;
(C) third, to the holders
of Class A Units to the extent of and in proportion to their prior
allocations of Net Income pursuant to Section 6.1(a)(i)(C) and (D)
until the cumulative Net Loss allocated pursuant to this Section
6.1(a)(ii)(C) for the current and all prior periods equals the
cumulative Net Income allocated to such holders pursuant to Section
6.1(a)(i)(C) and (D) for all prior periods;
- 5 -
85
(D) fourth, to the holders
of Units, including Class A Units and Class B Units, in accordance with
their respective holdings of Units, provided that Net Losses shall not
be allocated pursuant to this Section 6.1(a)(ii)(C) to the extent such
allocations would cause any Limited Partner to have an Adjusted Capital
Account Deficit as of the end of the fiscal year to which such Net Loss
relates; and
(E) the balance, if any, to
the General Partner.
SECTION 9. Section 6.2 of the Partnership Agreement is hereby amended
and restated in its entirety as follows:
6.2 Distributions. The General Partner shall cause
the Partnership to distribute all, or such portion as the General
Partner may in its reasonable discretion determine, of Net Cash Flow to
the holders of applicable Units, including Class A Units and Class B
Units, who are holders on the Record Date with respect to such
distribution. Distributions of Net Cash Flow shall be made in the
following priority:
(a) first, to the holders of Class A
Units, pro rata in accordance with holders' ownership of Class A Units,
in an amount equal to the excess, if any, of (i)(x) the cumulative
Class A Preferred Return from February 14, 1997 to the end of such
fiscal year or other applicable period ending on the Partnership Record
Date, over (y) the sum of all prior distributions to the holders of
Class A Units pursuant to this Section 6.2(a)(i), and then (ii)(x) the
cumulative Special Class A Distributions from February 14, 1997 to the
end of such fiscal year or other applicable period ending on the
Partnership Record Date, over (y) the sum of all prior distributions to
the holders of Class A Units pursuant to this Section 6.2(a)(ii),
treating the distributed amounts as paying the oldest amounts due
first;
(b) second, to the holders of Class B
Units, pro rata in accordance with holders' ownership of Class B Units,
in an amount equal to the excess, if any, of (i) the total of all Class
B OP Special Distributions that have accrued as of the date of payment
of such distribution, less (ii) the total of all previous distributions
to the holders of Class B Units in respect of such Class B OP Special
Distributions pursuant to Section 8.2(a)(v), if any, and this Section
6.2(b);
(c) third, except as otherwise provided
in Sections 6.2(d), to the holders of Units, including Class A Units
and Class B Units, who are holders on the Partnership Record Date with
respect to such distribution pro rata in accordance with the holders'
ownership of Units, including Class A Units and Class B Units; and
(d) when the General Partner declares a
distribution to holders of Shares and the amount otherwise determined
to be distributable to each holder of a Unit, including Class A Units
and Class B Units, under Section 6.2(c) results in an
- 6 -
86
amount that is less than the amount distributable to each holder of a
Share (on a per Share to per Unit basis), the General Partner shall
cause the Partnership to distribute sufficient amounts to holders of
Units, including Class A Units and Class B Units, as of the Partnership
Record Date so that such holders of Units, including Class A Units and
Class B Units, will receive an amount per Unit equal to the related
distributions to holders of Shares (on a per Share to per Unit basis).
The General Partner shall accomplish this by reducing the amounts
otherwise distributable to it under Section 6.2(c) and increasing the
amount otherwise distributable to holders of Units, including Class A
Units and Class B Units, under Section 6.2(c) and, to the extent
necessary, by contributing additional capital to the Partnership.
SECTION 10. Section 8.2(a) of the Partnership Agreement is hereby
amended and restated in its entirety as follows:
8.2 Distributions on Dissolution.
(a) In the event of the dissolution and liquidation
of the Partnership for any reason, the assets of the Partnership shall
be liquidated for distribution in the following rank and order:
(i) payment of creditors of the Partnership,
including creditors who are Partners or former Partners;
(ii) establishment of reserves as provided by the
Liquidating Trustee to provide for contingent liabilities, if any;
(iii) to the holders of Class A Units, pro rata in
accordance with the holders' ownership of Class A Units, in an amount
equal to the excess, if any, of (x) the cumulative distributions under
Section 8.2(a) of the Realty Agreement for an equivalent number of RP
Ordinary Units in the Realty Partnership from February 14, 1997 to the
date on which a distribution under this Section 8.2(a) is made, over
(y) the sum of all prior distributions to the holders of Class A Units
pursuant to this Section 8.2(a)(iii);
(iv) to the holders of Class B Units, pro rata in
accordance with the holders' ownership of Class B Units, in an amount
equal to the excess, if any, of (x) the Class B Liquidation Preference
Distribution, over (y) the sum of all prior distributions to holders of
Class B Units pursuant to this Section 8.2(a)(iv);
(v) to the holders of Class B Units, pro rata in
accordance with the holders' ownership of Class B Units, in an amount
equal to the excess, if any, of (x) the total of all Class B OP Special
Distributions that have accrued as of the date of payment of such
liquidating distribution, less (y) the total of all previous
distributions to the holders of Class B Units in respect of such Class
B OP Special Distributions pursuant to Section 6.2(a) and this Section
8.2(a)(iv); and
- 7 -
87
(vi) to the holders of Units, including Class A Units
and Class B Units, in accordance with their respective holdings of
Units.
Whenever the Liquidating Trustee reasonably determines that any
reserves established pursuant to paragraph (ii) above are in excess of
the reasonable requirements of the Partnership, the amount determined
to be excess shall be distributed to the Partners in accordance with
the provisions of this Section 8.2(a). No Partner or holder of Units
shall be liable to any other Partner or holder of Units for a deficit
balance in its Capital Account.
SECTION 11. As provided for in this Certificate of Admission and as
otherwise necessary or appropriate to reflect the admission of the Contributing
Parties to the Partnership, the Partnership Agreement is hereby amended
effective as of the date first written above. Except as otherwise provided in
this Certificate of Admission, each and every provision of the Partnership
Agreement remains in full force and effect.
IN WITNESS WHEREOF, the party hereto has executed this
Certificate of Admission or caused this Certificate of Admission to be executed
on its behalf as of the date first above written.
STARWOOD LODGING CORPORATION, a
Maryland corporation
By: /s/ Xxxx X. Xxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President and
Corporate Controller
IN WITNESS WHEREOF, the Contributing Parties hereby agree to
and acknowledge the terms of this Certificate of Admission.
77,825 Units WHWE L.L.C.
By: Whitehall Street Real Estate
Limited Partnership V,
Member and Manager
By:
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88
By:
By: /s/ Xxxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Attorney-in-fact
147,012 Units Woodstar Investor Partnership
By: Marswood Investors, L.P.,
General Partner
By: Starwood Capital Group, L.P.,
General Partner
By: BSS Capital Partners, L.P.,
General Partner
By: Sternlicht Holdings II, Inc.,
General Partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Attorney-in-fact
87,904 Units Nomura Asset Capital Corporation
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
- 9 -
89
- 10 -
90
EXHIBIT A
1) If to WHWE L.L.C., to:
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Telecopier: (000) 000-0000
2) If to Woodstar Investor Partnership, to:
Three Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx
Telecopier: (000) 000-0000
3) If to Nomura Asset Capital Corporation, to:
Two World Xxxxxxxxx Xxxxxx, Xxxxxxxx X
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
- 11 -
91
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT OF
SLC OPERATING LIMITED PARTNERSHIP
THIS FIRST AMENDMENT TO THE SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT OF SLC OPERATING LIMITED PARTNERSHIP ("Amendment")
is made and entered into effective as of January 1, 1998, by and among Starwood
Lodging Corporation, a Maryland corporation, as the General Partner, and the
Limited Partners of SLC Operating Limited Partnership, a Delaware limited
partnership ("Operating Partnership"), which was formed pursuant to the
provisions of that certain Limited Partnership Agreement of the Operating
Partnership dated as of December 15, 1994, and amended and restated as of June
29, 1995 and again as of November 14, 1997 ("Operating Partnership Agreement").
All capitalized terms not defined herein shall have the same meaning set forth
in the Operating Partnership Agreement.
R E C I T A L S
WHEREAS, as of September 8, 1997, that certain Transaction
Agreement ("Transaction Agreement") was entered into by and among the General
Partner, the Realty Partnership, SLT, the Operating Partnership, Westin Hotels &
Resorts Worldwide, Inc. ("Westin Worldwide"), a Delaware corporation, and
others;
WHEREAS, as of November 12, 1997, the Amended and Restated
Agreement and Plan of Merger ("Merger Agreement") was entered into by and among
the General Partner, Chess Acquisition Corp., a Nevada corporation,, SLT and ITT
Corporation ("ITT"), a Nevada corporation;
WHEREAS, pursuant to the Transaction Agreement and Merger
Agreement, it is contemplated that, among other things, the General Partner will
directly hold certain assets previously held by Westin Worldwide and the stock
of ITT;
WHEREAS, the General Partner believes that it may enter into
transactions in the future that may also result in it owning material assets or
entering into or conducting a business ("Non-Operating Partnership Business")
other than the ownership, acquisition and disposition of Partnership Interests
as the General Partner or Limited Partner and the management of the business of
the Partnership;
WHEREAS, Section 7.3 of the Operating Partnership Agreement
provides that if the General Partner directly or indirectly enters into or
conducts Non-Operating Partnership Businesses, the General Partner shall make
arrangements that are reasonably necessary to prevent such Non-Operating
Partnership Businesses from having a material adverse impact on the Limited
Partners and that assure that the Limited Partners share in the economic
benefits of such Non- Operating Partnership Businesses in a fair and equitable
manner;
92
WHEREAS, the General Partner desires to amend the Operating
Partnership Agreement as set forth in this Amendment to ensure that any and all
Non-Operating Partnership Businesses it conducts will not have a material
adverse impact on the Limited Partners and that any economic benefits related to
such Non-Operating Partnership Businesses will be shared with Limited Partners
in a fair and equitable manner; and
WHEREAS, the Limited Partners have been informed and do hereby
unconditionally consent to such amendments;
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
SECTION 1. Effective as of the date first above written, Section 6.1(a)
is hereby amended and restated in its entirety as follows:
6.1 Allocations. The Net Income, Net Loss and other
Partnership items shall be allocated pursuant to the provisions of this
Section 6.1 hereto.
(a) Allocation of Net Income and Net
Loss.
(i) Net Income. Except as
otherwise provided herein, Net Income for any fiscal year or other
applicable period shall be allocated in the following order and
priority:
(A) first, to the
General Partner, until the cumulative Net Income allocated pursuant to
this Section 6.1(a)(i)(A) for the current and all prior periods equals
the cumulative Net Loss allocated pursuant to Section 6.1(a)(ii)(D) for
all prior periods;
(B) second, to the
holders of Units, including Class A Units, to the extent of, in
proportion to and in reverse order of their prior allocations of Net
Loss pursuant to Section 6.1(a)(ii)(C) until the cumulative Net Income
allocated pursuant to this Section 6.1(a)(i)(B) for the current and all
prior periods equals the cumulative Net Loss allocated to such holders
pursuant to Section 6.1(a)(ii)(C) for all prior periods;
(C) third, to the holders
of Class A Units until each holder of Class A Units has been allocated
Net Income pursuant to this Section 6.1(a)(i)(C) in an amount equal to
its Class A Preferred Return for the current and all prior periods;
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93
(D) fourth, to the holders
of Class A Units until each holder of Class A Units has been allocated
Net Income pursuant to this Section 6.1(a)(i)(D) in an amount equal to
the Net Income (as defined in Article I of the Realty Agreement)
allocated to a Unit of the Realty Partnership for all prior periods (or
portions thereof) from and after February 14, 1997 pursuant to Section
6.1(a)(i)(B) and (C) of the Realty Agreement, multiplied by the number
of Class A Units held by such holder;
(E) fifth, to the extent
the Partnership has made distributions pursuant to Section 6.2(c), to
the holders of Units, in accordance with and in proportion to
distributions made under Section 6.2(c); and
(F) thereafter, to the
holders of Units, including Class A Units, in accordance with and in
proportion to their respective holdings of Units.
(ii) Net Loss. Except as
otherwise provided herein, Net Loss of the Partnership for each fiscal
year or other applicable period shall be allocated in the following
order and priority;
(A) first, to the
holders of Units, including Class A Units, to the extent of, in
proportion to, and in the reverse order of, Net Income previously
allocated to the Partners pursuant to Section 6.1(a)(i)(F), until the
cumulative Net Loss allocated pursuant to this Section 6.1(a)(ii)(A)
for the current and all prior periods equals the cumulative Net Income
allocated pursuant to Section 6.1(a)(i)(F) for all prior periods;
(B) second, to the
holders of Class A Units to the extent of and in proportion to their
prior allocations of Net Income pursuant to Section 6.1(a)(i)(C) and
(D) until the cumulative Net Loss allocated pursuant to this Section
6.1(a)(ii)(B) for the current and all prior periods equals the
cumulative Net Income allocated to such holders pursuant to Section
6.1(a)(i)(C) and (D) for all prior periods;
(C) third, to the
holders of Units in accordance with their respective holdings of Units,
including Class A Units, provided that Net Losses shall not be
allocated pursuant to this Section 6.1(a)(ii)(C) to the extent such
allocations would cause any Limited Partner to have an Adjusted Capital
Account Deficit as of the end of the fiscal year to which such Net Loss
relates; and
(D) the balance, if
any, to the General Partner.
SECTION 2. Effective as of the date first above written, Section 6.2 is
hereby amended and restated in its entirety as follows:
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94
6.2 Distributions. The General Partner shall cause
the Partnership to distribute all, or such portion as the General
Partner may in its reasonable discretion determine, of Net Cash Flow to
the holders of Units, including Class A Units, who are holders on the
Partnership Record Date with respect to such distribution in the
following priority:
(a) First, to the holders of Class A
Units, pro rata in an amount equal to the excess, if any, of (i)(x) the
cumulative Class A Preferred Return from February 14, 1997 to the end
of such fiscal year or other applicable period ending on the
Partnership Record Date, over (y) the sum of all prior distributions to
the holders of Class A Units pursuant to this Section 6.2(a)(i), and
then (ii)(x) the cumulative Special Class A Distributions from February
14, 1997 to the end of such fiscal year or other applicable period
ending on the Partnership Record Date, over (y) the sum of all prior
distributions to the holders of Class A Units pursuant to this Section
6.2(a)(ii), treating the distributed amounts as paying the oldest
amounts due first;
(b) Thereafter, except as otherwise
provided in Section 6.2(c), to the holders of Units, including Class A
Units, pro rata in accordance with the holders' ownership of Units,
including Class A Units; and
(c) When the General Partner declares
a dividend to holders of Shares and the amount otherwise determined to
be distributable to each holder of a Unit, including Class A Units,
under Section 6.2(b) results in an amount that is less than the amount
distributable to each holder of a Share (on a per Share to per Unit
basis), the General Partner shall cause the Partnership to distribute
sufficient amounts to holders of Units, including Class A Units, as of
the Partnership Record Date so that such holders of Units, including
Class A Units, will receive an amount per Unit equal to the related
distributions to holders of Shares (on a per Share to per Unit basis).
The General Partner shall accomplish this by reducing the amounts
otherwise distributable to it under Section 6.2(b) and increasing the
amount otherwise distributable to holders of Units, including Class A
Units, under Section 6.2(b) and, to the extent necessary, by
contributing additional capital to the Partnership.
- 4 -
95
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused this Agreement to be executed on their behalf as of the date
first above written.
GENERAL PARTNER:
STARWOOD LODGING CORPORATION, a
Maryland corporation
By: /s/ Xxx X. Xxxxxxxx
------------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Vice President and Secretary
LIMITED PARTNERS:
STARWOOD HOTEL INVESTORS II, L.P.
By: STARWOOD CAPITAL GROUP I, L.P.
By: BSS CAPITAL PARTNERS, L.P.,
General Partner
By: STERNLICHT HOLDINGS II, Inc.
General Partner
By: /s/ Madison X. Xxxxx
------------------------------------------
Name: Madison X. Xxxxx
Title: EVP
FIREBIRD CONSOLIDATED PARTNERS, L.P.
By: /s/ Madison X. Xxxxx
------------------------------------------
Name: Madison X. Xxxxx
Title: Authorized Signatory for
General Partner
APPOLLO REAL ESTATE INVESTMENT
FUND, L.P.
By: APPOLLO REAL ESTATE ADVISORS, L.P.
By: APPOLLO REAL ESTATE MANAGEMENT,
- 5 -
96
INC.
By:
----------------------------------------
Name:
Title:
PHILADELPHIA HSR LIMITED PARTNERSHIP
By:
----------------------------------------
Name:
Title: General Partner
STARWOOD OPPORTUNITY FUND II, L.P.
By: STARWOOD CAPITAL GROUP I, L.P.
General Partner
By: BSS CAPITAL PARTNERS, L.P.,
General Partner
By: STERNLICHT HOLDINGS II, Inc.
General Partner
By: /s/ Madison X. Xxxxx
----------------------------------------
Name: Madison X. Xxxxx
Title: EVP
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
XXXXXX X. XXXXXXX
ZIFF INVESTORS PARTNERSHIP, X.X. XX
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: PBK Holdings, Inc.
Title: General Partner
By: Xxxxxx X. Xxxxxxx--President
MONTROSE CORPORATION
By:
----------------------------------------
- 6 -
97
Name:
Title:
HARVEYWOOD HOTEL INVESTORS, L.P.
By: /s/ Madison X. Xxxxx
----------------------------------------
Name: Madison X. Xxxxx
Title: Authorized Signatory for
General Partner
STAR INVESTORS, G.P.
By:
----------------------------------------
Name:
Title:
MERIDIAN INVESTMENT GROUP
By:
----------------------------------------
Name:
Title:
THE HERMITAGE, L.P.
By: HERMITAGE OF NASHVILLE, INC.
General Partner
By:
----------------------------------------
Name:
Title:
BURDEN DIRECT INVESTMENT FUND I
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President & CEO,
Burden Brothers Inc.,
General Partner,
Xxxxxxx A.M. Burden & Co., XX
XXXXXXXX HOLDINGS, INC.
- 7 -
98
By:
----------------------------------------
Name:
Title:
KJJ REVOCABLE TRUST
By: /s/ Xxxxxxxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Trustee
----------------------------------------
XXXXX X. XXXXXXXXXX
THE XXXXX X. XXXXXXXXXX FAMILY SPRAY
TRUST I
By:
----------------------------------------
Name:
Title: Trustee
THE XXXXX X. XXXXXXXXXX FAMILY SPRAY
TRUST II
By:
----------------------------------------
Name:
Title: Trustee
THE XXXXX X. XXXXXXXXXX FAMILY SPRAY
TRUST III
By:
----------------------------------------
Name:
Title: Trustee
/S/ Xxxx Xxxx
----------------------------------------
XXXX XXXX
- 8 -
99
THE XXXX FAMILY PARTNERSHIP
By: /s/ Xxxxxx Xxxx
----------------------------------------
Name: Xxxxxx Xxxx
Title: General Partner
/s/ Madison X. Xxxxx
----------------------------------------
MADISON X. XXXXX
THE MADISON X. XXXXX IRREVOCABLE
INSURANCE TRUST
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Trustee
----------------------------------------
XXX X. XXXXXXX
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
XXXXXXX X. XXXXXXX
----------------------------------------
XXXXXX X. XXXXX
/s/ Xxxxx X. Xxxxx
----------------------------------------
XXXXX X. XXXXX
/s/ Xxxxx Xxxxx
----------------------------------------
XXXXX XXXXX
----------------------------------------
XXXXXX X. XXXXXXX
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100
/s/ Xxxx Xxxxxxxx
----------------------------------------
XXXX XXXXXXXX
/s/ Xxx Xxxxxxxx
----------------------------------------
XXX XXXXXXXX
/s/ Xxxx X. Xxxxxx
----------------------------------------
XXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
----------------------------------------
XXXXXX X. XXXXXX
/s/ Xxxxxxxx X. Xxxxx
----------------------------------------
XXXXXXXX X. XXXXX
----------------------------------------
XXXXXXX XXXXXXX
/s/ Xxxxx Xxxxxxxx
----------------------------------------
XXXXX XXXXXX XXXXXXX TRUST
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Trustee
By: /s/ Xxxx Xxxx
------------------------------------
Name: Xxxx Xxxx
Title: Trustee
/s/ Xxxxx Xxxxxxxx
----------------------------------------
XXXXXX XXXXXXXXX XXXXXXX TRUST
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Trustee
By: /s/ Xxxx Xxxx
------------------------------------
Name: Xxxx Xxxx
Title: Trustee
/s/ Xxxxx X. Xxxx, III
----------------------------------------
XXXXX X. XXXX, III
LAMBSTER PARTNERS LIMITED
PARTNERSHIP
By:
----------------------------------------
Name:
Title: General Partner
- 10 -
101
/s/ Xxxx Xxxxxxx
----------------------------------------
XXXX XXXXXXX
----------------------------------------
XXXXXXXX BEER
----------------------------------------
XXXXXXX X. XXXXXXX, M.D.
----------------------------------------
XXXXXX X. XXXXX
/s/ Xxxxxxx Xxxxx
----------------------------------------
XXXXXXX XXXXX
/s/ Xxxxxxxx Xxxxxx
----------------------------------------
XXXXXXXX XXXXXX
----------------------------------------
XXXXX X. XXXXXXX, M.D., PC
/s/ Xxxxx X. Xxxxxxx
----------------------------------------
XXXXX X. XXXXXXX
/s/ J. Xxxxx Xxxxxxxxx
----------------------------------------
J. XXXXX XXXXXXXXX
----------------------------------------
XXXX X. XXXXXXX
/s/ Xxxxx Xxxxxx
----------------------------------------
XXXXX XXXXXX
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102
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, on behalf of Prudential Property
Investment Separate Account II
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President/Managing Director
XXXXXXX XXXXXXX, AS TRUSTEE OF THE
XXXX XXXXXXX FAMILY TRUST
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Trustee
/s/ Xxxx Xxxxxxx
----------------------------------------
XXXX XXXXXXX
/s/ Xxxxx-Xx Xxxxxxx
----------------------------------------
XXXXX-XX XXXXXXX
/s/ Xxxxxxx Xxxxxxx
----------------------------------------
XXXXXXX XXXXXXX
----------------------------------------
XXXXXX X. XXXXXXXX
/s/ Xxxxxx Xxx XX
----------------------------------------
XXXXXX XXX XX
WESTPORT HOSPITALITY, INC.
- 12 -
103
By: /s/ Xxxx Xxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxx
Title: President
ZAPCO HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
ZAPCO HOLDINGS, INC. DEFERRED
COMPENSATION PLAN TRUST
By: /s/ Xxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Trustee
/s/ Xxxx X. Xxxxxxx
----------------------------------------
XXXX X. XXXXXXX
----------------------------------------
XXXXXX XXXXX
----------------------------------------
XXXXXXX XXXX
----------------------------------------
XXXX XXXXXXXX
----------------------------------------
XXXXX XXXXXXXX
/s/ Xxxx Xxxxx
----------------------------------------
XXXX XXXXX
- 13 -
104
----------------------------------------
XXXXX XXXXXXXX
/s/ Xxxxxx Clearwater
----------------------------------------
XXXXXX CLEARWATER
----------------------------------------
XXXXXX XXXXX
----------------------------------------
XXXXX XXXXXXXX
CLASS "A" PARTNERS
Signature Blocks
/s/ Xxxx Xxxxxxx
----------------------------------------
XXXX XXXXXXX
/s/ Xxxxxxx Xxxxxxx
----------------------------------------
XXXXXXX XXXXXXX
----------------------------------------
XXXXXX X. XXXXXXXX
/s/ Xxxxxx Xxx XX
----------------------------------------
XXXXXX XXX XX
WESTPORT HOSPITALITY, INC.
By: /s/ Xxxx Xxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxx
Title: President
- 14 -
105
CERTIFICATE OF ADMISSION
OF SLT REALTY LIMITED PARTNERSHIP
THIS CERTIFICATE OF ADMISSION OF SLT REALTY LIMITED
PARTNERSHIP ("Certificate of Admission") is made effective January 2, 1998, by
Starwood Lodging Trust, a Maryland real estate investment trust, as the General
Partner of SLT Realty Limited Partnership, a Delaware limited partnership
("Partnership"), which was formed pursuant to the provisions of that certain
Limited Partnership Agreement of the Partnership dated as of December 15, 1994
and amended and restated as of June 29, 1995 and again as of November 14, 1997
and subsequently amended as of January 1, 1998 (as such agreement may be
hereafter amended from time to time, "Partnership Agreement"). All capitalized
terms not defined herein shall have the same meaning set forth in the
Partnership Agreement.
R E C I T A L S
WHEREAS, as of September 8, 1997, that certain Transaction
Agreement ("Transaction Agreement") was entered into among the General Partner,
the Partnership, SLC, the Operating Partnership, Westin Hotels & Resorts
Worldwide, Inc. ("Westin Worldwide"), a Delaware corporation, W&S Seattle Corp.
("Seattle"), a Delaware corporation, W&S Lauderdale Corp. ("Lauderdale"), a
Delaware corporation, W&S Denver Corp. ("Denver"), a Delaware corporation, and
the other parties thereto;
WHEREAS, pursuant to the Transaction Agreement, it is
contemplated that, among other things, the Persons whose names appear below the
General Partner's name on the signature pages of this Certificate of Admission
(each a "Contributing Party" and, collectively, the "Contributing Parties") will
contribute to the Partnership certain of the outstanding shares of capital stock
of Seattle, Lauderdale and Denver in exchange for Class A Units described below;
WHEREAS, pursuant to Section 4.1(e) of the Partnership
Agreement, the General Partner is authorized to cause the Partnership to issue
additional Partnership Interests in one or more classes or one or more series of
any of such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties, including
rights, powers and duties senior to the then-existing Partnership Interests and
Units, as shall be determined by the General Partner in its sole and absolute
discretion; and
WHEREAS, pursuant to Section 11.1(b)(3) and (4) of the
Partnership Agreement, the General Partner is authorized to amend the
Partnership Agreement without the Consent of the Limited Partners, and in
accordance with Section 11.1(b) of the Partnership Agreement, the Limited
Partners have received five Business Days' notice of this Certificate of
Admission.
NOW THEREFORE, the undersigned certifies that all appropriate
actions have been
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106
taken to admit the Contributing Parties to the Partnership upon the terms and
conditions set forth below:
SECTION 1. Each Contributing Party is hereby admitted as a Limited
Partner of the Partnership and shall receive, inter alia, its share of a maximum
total of 597,844 Class A Units(1) to be issued pursuant to the Transaction
Agreement. The number of Class A Units received by each Contributing Party is
set forth next to each such Contributing Party's signature block below. The
General Partner hereby consents to each such admission. If the number of Class A
Units to be received by any Contributing Party shall be adjusted after the date
hereof in accordance with the terms of or in connection with the Transaction
Agreement, the General Partner shall amend this Certificate of Admission to
reflect such adjustment.
SECTION 2. Each Contributing Party has agreed to comply with and to be
bound by the terms and conditions of the Partnership Agreement. Each
Contributing Party has represented that, to the best of its knowledge, its
admission as a Limited Partner does not violate any of the restrictions set
forth in Section 9.3 of the Partnership Agreement.
SECTION 3. The Partnership Agreement is hereby amended such that each
and every reference to the "Limited Partners" or to a "Limited Partner" includes
each Contributing Party.
SECTION 4. Exhibit A to the Partnership Agreement is hereby amended to
reflect this Certificate of Admission.
SECTION 5. Exhibit B to the Partnership Agreement is hereby amended to
reflect this Certificate of Admission. The notice address of each Contributing
Party is set forth on Exhibit A to this Certificate of Admission.
SECTION 6. Section 1.1 of the Partnership Agreement is hereby amended
by the addition of the following defined terms:
"Class A Certificate of Admission" shall mean the
Certificate of Admission of SLT Realty Limited Partnership, dated as of
January 2, 1998, that authorizes the issuance of the Class A Units.
"Class A Limited Partners" shall mean those Persons
admitted to the Partnership pursuant to the Class A Certificate of
Admission, and any Person who, at the time of reference thereto, is a
Class A Limited Partner of the Partnership.
"Class A Liquidation Preference Distribution" shall
mean, with respect to a Class A Unit, an amount equal to the "fair
market value" of one OP Ordinary Unit,
--------
(1) The exact number of Class A Units to be issued to each Contributing Party
will be determined on or about December 29, 1997 in a manner consistent with the
Transaction Agreement.
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which shall be payable only in the event of the dissolution and
liquidation of the Partnership not preceded or accompanied by a
liquidation and dissolution of the Operating Partnership. Such fair
market value shall be determined in good faith by the General Partner
as of the effective date of such liquidation and dissolution or, if no
such effective date applies, as of the date of the first liquidating
distribution pursuant to Section 8.2. In the event of any change in (i)
the nature or amount of securities constituting a unit of Paired Shares
under the pairing agreement between the General Partner and SLC, (ii)
the correspondence of the number of non-preferred Units in the
Partnership to the number of Paired Shares outstanding or (iii) the
correspondence of the number of OP Ordinary Units to the number of
Paired Shares outstanding, the amount of the Class A Liquidation
Preference that shall accrue with respect to each Class A Unit as a
function of the fair market of each OP Ordinary Unit shall be equitably
adjusted.
"Class A RP Special Distribution" shall mean, with
respect to a Class A Unit, an amount equal to the sum, in cash, of the
fair market value of all operating and liquidating distributions by the
Operating Partnership with respect to OP Ordinary Units on or after
January 2, 1998 (whether pursuant to Section 6.2 or 8.2 of the
Operating Partnership Agreement) in an amount per Class A Unit equal to
the amount so distributed in respect of each OP Ordinary Unit. In the
event of any change in (i) the nature or amount of securities
constituting a unit of Paired Shares under the pairing agreement
between the General Partner and SLC, (ii) the correspondence of the
number of non- preferred Units in the Partnership to the number of
Paired Shares outstanding or (iii) the correspondence of the number of
OP Ordinary Units to the number of Paired Shares outstanding, the
amount of the Class A Special Distribution that shall accrue with
respect to each Class A Unit as a function of the amount of the
corresponding distribution on the OP Ordinary Units shall be equitably
adjusted. Class A RP Special Distributions may only be made with
respect to Class A Units and shall be due at the same time as such
operating or liquidating distributions are made by the Realty
Partnership.
"Class A Units" shall mean, collectively, the
interests of Class A Limited Partners in capital, allocations of Net
Income, Net Loss and distributions, including Class A RP Special
Distributions and Class A Liquidation Preference Distributions, if any.
The number of Class A Units owned by each Class A Limited Partner is
set forth on Exhibit A hereto.
"OP Ordinary Units" shall mean units of the Operating
Partnership other than units entitled to receive priority distributions
under the Operating Partnership Agreement such as the Class A Units and
Class B Units (as those terms are defined in the Operating Partnership
Agreement).
"Operating Partnership Agreement" shall mean that
certain Limited Partnership Agreement of the Operating Partnership
dated as of December 15, 1994 and amended and restated as of June 29,
1995 and again as of November 14, 1997 and
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subsequently amended as of January 1, 1998 pursuant to the First
Amendment to Second Amended and Restated Limited Partnership Agreement
of SLC Operating Limited Partnership Agreement and as of January 2,
1998 pursuant to the Certificate of Admission of SLC Operating Limited
Partnership, and as may hereafter be further amended, supplemented or
restated from time to time.
"Units" shall have the meaning set forth in Section
4.1(c) hereof, and such term shall include Class A Units except where
the context otherwise requires.
SECTION 7. Section 6.1(a) of the Partnership Agreement is hereby
amended and restated in its entirety as follows:
(a) Allocation of Net Income and Net Loss.
(i) Net Income. Except as
otherwise provided herein, Net Income for any fiscal year or other
applicable period shall be allocated in the following order and
priority:
(A) first, to the
General Partner, until the cumulative Net Income allocated pursuant to
this Section 6.1(a)(i)(A) for the current and all prior periods equals
the cumulative Net Loss allocated pursuant to Section 6.1(a)(ii)(D) for
all prior periods;
(B) second, to the
holders of Units, including Class A Units, to the extent of, in
proportion to and in reverse order of their prior allocations of Net
Loss pursuant to Section 6.1(a)(ii)(C) until the cumulative Net Income
allocated pursuant to this Section 6.1(a)(i)(B) for the current and all
prior periods equals the cumulative Net Loss allocated to such holders
pursuant to Section 6.1(a)(ii)(C) for all prior periods;
(C) third, to the holders
of Class A Units until each holder of Class A Units has been allocated
Net Income pursuant to this Section 6.1(a)(i)(C) in an amount equal to
its accrued Class A Special Distributions, if any;
(D) fourth, to the holders
of Class A Units until each holder of Class A Units has been allocated
Net Income pursuant to this Section 6.1(a)(i)(D) in an amount equal to
the excess of its accrued Class A Liquidation Preference Distributions,
if any, over the portion of such holder's initial Capital Account
balance allocable to the Class A Liquidation Preference;
(E) fifth, to the extent
the Partnership has made distributions pursuant to Section 6.2(c) to
the holders of Units, including Class A Units, in accordance with and
in proportion to distributions made under Section 6.2(c); and
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109
(F) thereafter, to the
holders of Units, including Class A Units, in accordance with and in
proportion to their respective holdings of Units.
(ii) Net Loss. Except as
otherwise provided herein, Net Loss of the Partnership for each fiscal
year or other applicable period shall be allocated in the following
order and priority;
(A) first, to the
holders of Units, including Class A Units, to the extent of, in
proportion to, and in the reverse order of, Net Income previously
allocated to the Partners pursuant to Section 6.1(a)(i)(F), until the
cumulative Net Loss allocated pursuant to this Section 6.1(a)(ii)(A)
for the current and all prior periods equals the cumulative Net Income
allocated pursuant to Section 6.1(a)(i)(F) for all prior periods;
(B) second, to the
holders of Class A Units to the extent of and in proportion to their
prior allocations of Net Income pursuant to Section 6.1(a)(i)(C) and
(D) until the cumulative Net Loss allocated pursuant to this Section
6.1(a)(ii)(B) for the current and all prior periods equals the
cumulative Net Income allocated to such holders pursuant to Section
6.1(a)(i)(C) and (D) for all prior periods;
(C) third, to the
holders of Units, including Class A Units, in accordance with their
respective holdings of Units, provided that Net Losses shall not be
allocated pursuant to this Section 6.1(a)(ii)(C) to the extent such
allocations would cause any Limited Partner to have an Adjusted Capital
Account Deficit as of the end of the fiscal year to which such Net Loss
relates; and
(D) the balance, if
any, to the General Partner.
SECTION 8. Section 6.2 of the Partnership Agreement is hereby amended
and restated in its entirety as follows:
6.2 Distributions. The General Partner shall cause
the Partnership to distribute all, or such portion as the General
Partner may in its reasonable discretion determine, of Net Cash Flow in
accordance with the distribution rules described below to the holders
of applicable Units who are holders on the Record Date with respect to
such distribution; provided that the General Partner shall be at all
times authorized to cause the Partnership to distribute to the holders
of Units pro rata in accordance with the holders' ownership of Units,
sufficient amounts to enable the General Partner to pay shareholder
dividends that will satisfy the REIT Requirements. For such purposes,
Net Cash Flow shall be distributed:
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(a) first, to the holders of Class A
Units, pro rata in accordance with the holders' ownership of Class A
Units, in an amount equal to the excess, if any, of (i) the total of
all Class A RP Special Distributions that have accrued as of the date
of payment of such distribution, less (ii) the total of all previous
distributions to the holders of Class A Units in respect of such Class
A RP Special Distributions pursuant to Section 8.2(a)(iv), if any, and
this Section 6.2(a);
(b) except as otherwise provided in
Sections 6.2(c), to the holders of Units, including Class A Units, who
are holders on the Partnership Record Date with respect to such
distribution pro rata in accordance with the holders' ownership of
Units, including Class A Units; and
(c) when the General Partner declares
a distribution to holders of Shares and the amount otherwise determined
to be distributable to each holder of a Unit, including Class A Units,
under Section 6.2(b) results in an amount that is less than the amount
distributable to each holder of a Share (on a per Share to per Unit
basis), the General Partner shall cause the Partnership to distribute
sufficient amounts to holders of Units, including Class A Units, as of
the Partnership Record Date so that such holders of Units, including
Class A Units, will receive an amount per Unit equal to the related
distributions to holders of Shares (on a per Share to per Unit basis).
The General Partner shall accomplish this by reducing the amounts
otherwise distributable to it under Section 6.2(b) and increasing the
amount otherwise distributable to holders of Units, including Class A
Units, under Section 6.2(b) and, to the extent necessary, by
contributing additional capital to the Partnership.
SECTION 9. Section 8.2(a) of the Partnership Agreement is hereby
amended and restated in its entirety as follows:
8.2 Distributions on Dissolution.
(a) In the event of the dissolution and liquidation
of the Partnership for any reason, the assets of the Partnership shall
be liquidated for distribution in the following rank and order:
(i) payment of creditors of the Partnership,
including creditors who are Partners or former Partners;
(ii) establishment of reserves as provided by the
Liquidating Trustee to provide for contingent liabilities, if any;
(iii) to the holders of Class A Units, pro rata in
accordance with the holders' ownership of Class A Units, in an amount
equal to the excess, if any, of (x) the Class A Liquidation Preference
Distribution, over (y) the sum of all prior distributions to
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111
holders of Class A Units pursuant to this Section 8.2(a)(iii);
(iv) to the holders of Class A Units, pro rata in
accordance with the holders' ownership of Class A Units, in an amount
equal to the excess, if any, of (x) the total of all Class A RP Special
Distributions that have accrued as of the date of payment of such
liquidating distribution, less (y) the total of all previous
distributions to the holders of Class A Units in respect of such Class
A RP Special Distributions pursuant to Section 6.2(a) and this Section
8.2(a)(iv); and
(v) to the holders of Units, including Class A Units,
in accordance with the positive balances in their Capital Accounts
after giving effect to all contributions, distributions and allocations
for all periods.
Whenever the Liquidating Trustee reasonably determines that any
reserves established pursuant to paragraph (ii) above are in excess of
the reasonable requirements of the Partnership, the amount determined
to be excess shall be distributed to the Partners in accordance with
the provisions of this Section 8.2(a). No Partner or holder of Units
shall be liable to any other Partner or holder of Units for a deficit
balance in its Capital Account.
SECTION 10. Notwithstanding Section 6.16(d) of the Transaction
Agreement, no restrictions on the transfer of the shares of Denver, Seattle or
Lauderdale shall be enforced if and only to the extent that such restriction
would cause Denver, Seattle or Lauderdale to fail to meet the requirements of
Section 856(a)(2) of the Code.
SECTION 11. As provided for in this Certificate of Admission and as
otherwise necessary or appropriate to reflect the admission of the Contributing
Parties to the Partnership, the Partnership Agreement is hereby amended
effective as of the date first written above. Except as otherwise provided in
this Certificate of Admission, each and every provision of the Partnership
Agreement remains in full force and effect.
IN WITNESS WHEREOF, the party hereto has executed this
Certificate of Admission or caused this Certificate of Admission to be executed
on its behalf as of the date first above written.
STARWOOD LODGING TRUST, a Maryland real
estate investment trust
By: /s/ Xxxxxx X. Xxxxx
__________________________________
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President and
Chief Financial Officer
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112
IN WITNESS WHEREOF, the Contributing Parties hereby agree to
and acknowledge the terms of this Certificate of Admission.
117,036 Units WHWE L.L.C.
By: Whitehall Street Real Estate
Limited Partnership V,
Member and Manager
By:
By:
By: /s/ Xxxxxxxx Xxxxxx
___________________________
Name: Xxxxxxxx Xxxxxx
Title: Attorney-in-fact for
Whitehall Street Real
Estate Limited
Partnership V
221,081 Units Woodstar Investor Partnership
By: Marswood Investors, L.P.,
General Partner
By: Starwood Capital Group, L.P.,
General Partner
By: BSS Capital Partners, L.P.,
General Partner
By: Sternlicht Holdings II, Inc.,
General Partner
By: /s/ Xxxxxx X. Xxxxx
_________________________
Name: Xxxxxx X. Xxxxx
Title: Attorney-in-fact
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113
132,192 Units Nomura Asset Capital Corporation
By: /s/ Xxxxxx X. Xxxxxx
_________________________
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
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