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Exhibit 3.14
LIMITED PARTNERSHIP AGREEMENT
OF
CAPSTAR HOUSTON SW PARTNERS, L.P.
Dated: As of October 18, 1996
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LIMITED PARTNERSHIP AGREEMENT
OF
CAPSTAR HOUSTON SW PARTNERS, L.P.
This LIMITED PARTNERSHIP AGREEMENT (this "Agreement") is made as of
October 18, 1996, by and among EQUISTAR ACQUISITION CORPORATION, a Delaware
corporation having an office c/o CapStar Management Company, L.P., 0000
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 ("EquiStar"), as general partner,
and CAPSTAR MANAGEMENT COMPANY, L.P., a Delaware limited partnership having an
office at 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 ("CapStar"), as
limited partner.
WITNESSETH:
WHEREAS, the parties hereto (collectively, the "Partners" and
individually, a "Partner") desire to form a limited partnership for the purposes
hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the respective meanings set forth below:
1.1 "Act" shall mean the Delaware Revised Uniform Limited
Partnership Act, as the same may have been or may be amended.
1.2 "Adjusted Capital Account" shall mean, with respect to any
Partner, such Partner's Capital Account balance, increased by such Partner's
share of Partnership Minimum Gain and Partner Minimum Gain.
1.3 "Code" shall mean the Internal Revenue Code of 1986 as the
same has been and may hereafter be amended.
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1.4 "Depreciation" shall mean, with respect to any year or portion
thereof, an amount equal to the depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for Federal income tax
purposes, except that if the Gross Asset Value of the asset differs from its
adjusted tax basis, Depreciation shall be determined in accordance with the
methods used for Federal income tax purposes and shall equal the amount that
bears the same ratio to the Gross Asset Value of such asset as the depreciation,
amortization or other cost recovery deduction computed for Federal income tax
purposes with respect to such asset bears to the adjusted Federal income tax
basis of such asset; provided, however, that if any such asset that is
depreciable or amortizable has an adjusted Federal income tax basis of zero, the
rate of Depreciation shall be as determined by the Partners.
1.5 "Gross Asset Value" shall mean, with respect to any asset, the
asset's adjusted basis for Federal income tax purposes, except that (i) the
Gross Asset Value of any asset contributed to the Partnership shall be its gross
fair market value at the time of contribution, (ii) the Gross Asset Value of any
asset distributed in kind to any Partner (including upon a liquidation of the
Partnership) shall be the gross fair market value of such asset, and (iii) the
Gross Asset Value of any asset determined pursuant to clause (i) above shall
thereafter be adjusted from time to time by the Depreciation taken into account
with respect to such asset for purposes of determining Net Profit or Net Loss.
1.6 "Net Profit" or "Net Loss" shall mean, with respect to any fiscal
year, the taxable income or loss of the Partnership as determined for Federal
income tax purposes, with the following adjustments:
1.6.1 Such taxable income or loss shall be increased by the
amount, if any, of tax-exempt income received or accrued by the
Partnership;
1.6.2 Such taxable income or loss shall be reduced by the
amount, if any, of all expenditures of the Partnership described in
Section 705(a)(2)(B) of the Code, including
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expenditures treated as described therein under Section
1.704-1(b)(2)(iv)(i) of the Treasury Regulations;
1.6.3 If the Gross Asset Value of any asset is adjusted
pursuant to clause (ii) of the definition of Gross Asset Value, the
amount of such adjustment shall be taken into account, immediately
prior to the event giving rise to such adjustment, as gain or loss from
the disposition of such asset for purposes of computing Net Profit or
Net Loss;
1.6.4 Gain or loss resulting from any disposition of any asset
with respect to which gain or loss is recognized for Federal income tax
purposes shall be computed by reference to the Gross Asset Value of the
asset disposed of, notwithstanding that such Gross Asset Value differs
from the adjusted tax basis of such asset; and
1.6.5 In lieu of the depreciation, amortization, or other cost
recovery deductions taken into account in computing such taxable income
or loss, there shall be taken into account Depreciation for such fiscal
year.
1.7 "Partner" shall mean each of the parties to this Agreement and any
other Person to which an interest in the Partnership is hereafter transferred
and who is admitted to the Partnership in accordance with the terms of this
Agreement.
1.8 "Partner Minimum Gain" means "partner nonrecourse debt minimum
gain," as defined in Treasury Regulations Section 1.704-2(i)(2) and determined
in accordance with Treasury Regulations Section 1.704-2(i)(3).
1.9 "Partner Nonrecourse Debt" shall have the meaning set forth in
Treasury Regulations Section 1.704-2(b)(4).
1.10 "Partner Nonrecourse Deductions" shall have the meaning set forth
in Section 1.704-2(i)(i) of the Treasury Regulations and shall be determined in
accordance with Section 1.704-2(i)(2) of the Treasury Regulations.
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1.11 "Partnership" shall have the meaning set forth in Article 2.
1.12 "Partnership Minimum Gain" shall have the meaning set forth in
Treasury Regulations Section 1.704-2(b)(2) and shall be determined in accordance
with Treasury Regulations Section 1.704-2(d).
1.13 "Percentage Interests" shall have the meaning specified in Section
6.2.
1.14 "Property" shall mean (a) that certain property presently known as
the Hilton Southwest Hotel located at 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx,
and (b) all personal property situated at such property or used or useful in
connection therewith.
1.15 "Regulatory Allocations" has the meaning ascribed thereto in
subsection 7.3.8.
1.16 "Treasury Regulations" means the rules, regulations, orders and
interpretations of rules, regulations and orders validly promulgated by the
Treasury Department under the Code, whether final, temporary or proposed, as in
effect from time to tune.
2. Formation and Name; General and Limited Partners.
2.1 The Partners hereby forma limited partnership (the "Partnership")
pursuant to the provisions of the Act. The business of the Partnership shall be
conducted under the name "CAPSTAR HOUSTON SW PARTNERS, L.P." The General Partner
shall execute and record any limited partnership certificate required by the Act
and any certificate or application necessary to qualify the Partnership in any
state which it transacts business.
2.2 The General Partner of the Partnership is EquiStar. The Limited
Partner of the Partnership is CapStar.
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3. Principal and Registered Offices; Agent for Service of Process.
3.1 The principal place of business of the Partnership, and the address
of the office at which the records of the Partnership shall be maintained, at
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, or at such other
place as may hereafter from time to time be selected by the General Partner.
3.2 The Partnership's registered office shall be at 0000 Xxxxxxxxx
Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000.
3.3 The registered agent of the Partnership for service of process
within the State of Delaware shall be United Corporate Services, 00 Xxxx Xxxxx
Xxxxxx, Xxxxx, Xxxxxxxx 00000. In the event that the person or entity at any
time acting as such agent shall cease to act as such for any reason, the General
Partner shall appoint a substitute agent. Such agent shall be the agent of the
Partnership on which any process, notice or demand required or permitted by law
to be served on the Partnership may be served.
4. Term. The term of the Partnership shall commence upon the execution and
delivery of this Agreement and shall continue until terminated by agreement of
the Partners or as otherwise provided in this Agreement.
5. Purpose. The purpose of the Partnership shall be shall be (a) to acquire
the Property and other property incidental to the ownership and operation of the
Property, (b) to hold, own, operate, lease, finance, mortgage, encumber, alter,
dispose of and in all respects deal as owner of the Property, and (c) to engage
in any activities necessary or incidental to the foregoing. The Partnership
shall not engage in any business other than as set forth in the foregoing
sentence. Nothing in this Agreement shall prohibit the Partnership from entering
into any guaranties or indemnities with respect to obligations of entities which
are affiliates of CapStar Hotel Company or from entering into any mortgages,
deeds of trust, financing statements, cross-collateralization or other security
arrangements with respect thereto (all of the forgoing being collectively
referred to as "Cross-Collateralization Agreements").
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6. Capital Contributions: Percentage Interest
6.1 Simultaneously with the execution and delivery of this Agreement
the Partners are making the following contributions to the capital of the
Partnership:
(a) CapStar $ 99.00
(b) EquiStar $ 1.00
6.2 The Partners' percentage interests in the Partnership ("Percentage
Interests") shall be as follows:
(a) CapStar 99%
(b) EquiStar 1%
6.3 If the Partnership shall require any additional funds after the
date hereof, as determined by the General Partner, the Partners shall contribute
such funds to the Partnership in proportion to their respective Percentage
Interests.
6.4 Except as expressly provided in this Article 6, no Partner shall be
required to make any capital contributions or loans to the Partnership and no
Partner shall make any capital contributions or loans to the Partnership without
the consent of the other Partner.
7. Income and Losses; Distribution of Available Net Income.
7.1 A separate "Capital Account" shall be maintained for each Partner.
Each Partner's Capital Account shall be credited with the amount of such
Partner's capital contributions made in cash and the fair market value (net of
liabilities assumed or taken subject to) of all property contributed by such
Partner and such Partner's allocated share of Net Profit, income and gain of the
Partnership. Each Partner's Capital Account shall be debited with the amount of
any cash distributions to such Partner and the fair market value (net of
liabilities assumed or taken subject to) of all property distributed in kind to
such Partner and such Partner's allocated share of Net Loss of the Partnership.
7.2 From and after the date of this Agreement, all Net Profit and all
Net Loss of the Partnership for each year or fraction thereof (determined after
taking into account any allocation for such
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period under Section 7.3) shall be credited to the Capital Accounts of the
Partners in proportion to their respective Percentage Interests.
7.3 Special Allocations.
7.3 1 Except as otherwise provided in Section 7.3.2, all items
of Partnership income, gain, deduction and loss shall be allocated among the
Partners in the same proportion as they share in the Net Profit and Net Loss to
which such items relate. Any credits against income tax shall be allocated in
accordance with the Partners' Percentage Interests.
7.3.2 Income, gain, loss or deductions of the Partnership
shall, solely for income tax purposes, be allocated among the Partners in
accordance with Section 704(c) of the Code and the Treasury Regulations
promulgated thereunder, so as to take account of any difference between the
adjusted basis of the assets of the Partnership and their respective Gross Asset
Values in accordance with the traditional method set forth in Section 1.704-3(b)
of the Treasury Regulations.
7.3.3 Notwithstanding any other provision of this Article 7,
if there is a net decrease in Partnership Minimum Gain during any year, each
Partner shall be specially allocated items of income and gain for such year
(and, if necessary, subsequent years) in an amount equal to the portion of such
Partner's share of the net decrease in Partnership Minimum Gain, determined in
accordance with Section 1.704-2(g) of the Treasury Regulations. Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Partner pursuant thereto. The items to
be so allocated shall be determined in accordance with Section 1.704-2(f)(6) of
the Treasury Regulations. This Section 7.3.3 is intended to comply with the
minimum gain chargeback requirement in Section 1.704-2(f) of the Treasury
Regulations and shall be interpreted consistently therewith.
7.3.4 Notwithstanding any other provisions of this Article 7,
if there is a net decrease in Partner Minimum Gain attributable to a Partner
Nonrecourse Debt during any year, each Partner who has a share of the Partner
Minimum Gain attributable to such Partner Nonrecourse Debt, determined in
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accordance with Section 1.704-2(i)(5) of the Treasury Regulations, shall be
specially allocated items of income and gain for such year (and, if necessary,
subsequent years) in an amount equal to the portion of such Partner's share of
the net decrease in Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Section 1.704-2(1)(4) of the
Treasury Regulations. Allocations pursuant to the previous sentence shall be
made in proportion to the respective amounts required to be allocated to each
Partner pursuant thereto. The items to be so allocated shall be determined in
accordance with Section 1.704-2(i)(4) of the Treasury Regulations. This Section
7.3.4 is intended to comply with the minimum gain chargeback requirement in
Section 1.704-2(i) of the Treasury Regulations and shall be interpreted
consistently therewith.
7.3.5 Nonrecourse Deductions for any year shall be allocated
as Net Loss pursuant to Section 7.2.
7.3.6 Any Partner Nonrecourse Deductions for any year shall be
specially allocated to the Partner who bears the economic risk of loss with
respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable in accordance with Section 1.704-2(i)(1) of the
Treasury Regulations.
7.3.7 Notwithstanding any other provision of this Article 7,
no Partner shall be allocated in any year of the Partnership any Net Loss to the
extent such allocation would cause or increase a deficit balance in such
Partner's Adjusted Capital Account, taking into account all other allocations to
be made for such year pursuant to this Article 7 and the reasonably expected
adjustments, allocations and distributions described in Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations. Any such Net Loss that would
be allocated to a Partner (the "Deficit Partner") shall instead be allocated to
the other Partner. Moreover, if a Deficit Partner unexpectedly receives an
adjustment, allocation or distribution described in Section 1.704-1(b)(2)(ii)(d)
of the Treasury Regulations which creates or increases a deficit balance in such
Partner's Adjusted Capital Account (computed after all other allocations to be
made for such year pursuant to this Article 7 have been tentatively made as if
this Section 7.3.7 were not in this Agreement), such Deficit Partner shall be
allocated items of
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income and gain in an amount equal to such deficit balance. This Section 7.3.7
is intended to comply with the qualified income offset requirement of Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted
consistently therewith.
7.3.8 The allocations set forth in Sections 7.3.3 through
7.3.7 (the "Regulatory Allocations") shall be taken into account in allocating
items of income, gain, loss and deduction among the Partners so that, to the
extent possible, the net amount of such allocations of other items and the
Regulatory Allocations to each Partner shall be equal to the net amount that
would have been allocated to each such Partner if the Regulatory Allocations had
not occurred.
7.4 Distributions. All distributions of Partnership cash and other
property shall be made to the Partners in proportion to their respective
Percentage Interests; provided, however, that the provisions of this Section 7.4
shall not apply upon the liquidation of the Partnership or upon the sale of all
or substantially all of the Partnership's assets, it being understood that in
such circumstances the provisions of Section 13.4 shall apply.
8. Tax Matters. Federal, state and local income tax returns of the Partnership
shall be prepared and filed, or caused to be prepared and filed, by the General
Partner. The General Partner shall at all times be the "tax matters partner" of
the Partnership for purposes of Section 6231(a)(7) of the Code.
9. Management and Rights. Duties and Obligations of the Partners.
9.1 The management and control of the Partnership's business shall be
exercised, and all decisions to be made by the Partnership shall in each case be
made, by the General Partner. The General Partner shall have the sole right to
bind or otherwise act on behalf of, the Partnership. Without limiting the
foregoing, the General Partner shall have the right, without the consent or
approval of the Limited Partner to acquire, mortgage or otherwise encumber, and
sell or otherwise dispose of the Property or any portion thereof.
9.2 Except as otherwise expressly provided in this Agreement, no
Partner shall have the right to resign from the Partnership or to demand the
return of all or any part of its contribution to the capital
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of the Partnership until the Partnership has been dissolved and terminated, and
then only to the extent provided in this Agreement, nor shall any Partner have
the right to demand or receive property other than cash in return for its
contribution.
10. Transfer of Partners' Interests. No Partner shall sell, assign,
transfer or otherwise dispose of, or mortgage, hypothecate, pledge or otherwise
encumber, or permit or suffer any encumbrance of, all or any part of its
interest in the Partnership, or any interest therein; provided, however, that
each Partner may pledge its interest in the Partnership to any lender making a
loan secured, in whole or in part, by a mortgage or deed of trust on the
Property.
11. Resignation, Expulsion or Bankruptcy of a Partner. In the event of
the resignation, expulsion or bankruptcy of any Partner, the Partnership shall
thereupon be dissolved and terminated and the Partners shall cause a Certificate
of Cancellation in the form required by the Act to be filed with the Secretary
of State of Delaware when the Partnership is dissolved.
12. Termination of the Partnership. Upon the voluntary termination of
the Partnership upon the consent of the Partners, the sale or other transfer of
all or substantially all of the Partnership's assets or any other termination of
the Partnership in accordance with the provisions of this Agreement, the
Partnership shall wind up its affairs and shall then be liquidated as provided
in Article 13.
13. Gain, Loss and Distribution on Liquidation. Upon any termination of
the Partnership each of the following shall be accomplished:
13.1 The Partners shall cause to be prepared a statement
setting forth the assets and liabilities of the Partnership as of the
date of such termination, and such statement shall be furnished to each
Partner.
13.2 The property and assets of the Partnership, if any, shall
be liquidated as promptly as possible, but in an orderly and
businesslike manner so as not to involve undue sacrifice.
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13.3 Any Net Profit or Net Loss realized by the Partnership
upon the sale or other disposition of the property and assets of the
Partnership shall be credited or charged to the capital accounts of the
Partners pursuant to Section 7.2 or 7.3, as applicable.
13.4 The proceeds of sale and all other assets of the
Partnership shall be paid and distributed as follows and in the
following order of priority:
13.4.1 to the payment of the debts and liabilities of
the Partnership and the expenses of liquidation;
13.4.2 to the setting up of any reserves which
EquiStar, L.P. determines are reasonably necessary for any
contingent or unforeseen liabilities or obligations of the
Partnership or the Partners arising out of, or in connection
with, the Partnership; and
13.4.3 to the Partners in proportion to their
respective Capital Account balances.
14. Further Assurances; Consents and Approvals. Each party to this
Agreement agrees to execute, acknowledge, deliver, file and record such further
certificates, amendments, instruments and documents, and to do all such other
acts and things, as may be required by law, or as may, be necessary or advisable
to carry out the intent and purposes of this Agreement.
15. Single Asset Entity.
15.1 Except as may be provided to the contrary in the
Cross-Collateralization Agreements, the Partnership shall at all times
conduct its business and operations in accordance with the following
provisions so as to maintain itself as a single purpose entity:
15.1.1 The Partnership will not assume liability for
the debts of any other person, and the Partnership will not
hold itself out as being liable for the debts of any other
person;
15.1.2 None of the liabilities of the Partnership
shall be paid from the funds of the Partners or any other
person without the Partners being obligated for such
liabilities;
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15.1.3 The Partnership shall not guarantee the debt or the
performance of any obligation of any of its Partners or any other
person;
15.1.4 The Partnership will not pledge any of its assets for
the benefit of any of its Partners or any other person, and no person
shall pledge its assets for the benefit of the Partnership;
15.1.5 The Partnership shall conduct its affairs strictly in
accordance with this Agreement, and shall observe all necessary,
appropriate, and customary limited liability company formalities,
including, but not limited to, maintaining accurate and separate books,
records and accounts (including, but not limited to, transaction
accounts with any affiliate of the Partnership);
15.1.6 The books, records, and accounts of the Partnership
will at all times be maintained in a manner permitting the assets and
liabilities of the Partnership to be easily separated and readily
distinguished from those of any other person;
15.1.7 The Partnership will hold itself out to creditors and
the public as a legal entity separate and distinct from any other
entity, and will not hold itself out to the public or to any of its
individual creditors as being a unified entity with assets and
liabilities in common with any other person; and
15.18 The Partnership shall not commingle its assets or funds
with those of any other person except as may be permitted or required
under the Cross-Collateralization Agreements.
16. Notices. Unless otherwise specified in this Agreement, all notices,
demands, elections, requests or other communications (collectively "notices")
which any Partner may desire or be required to give hereunder shall be in
writing and shall be given by mailing the same by registered or certified mail,
return receipt requested, or by Federal Express or comparable air courier
service, postage prepaid, or by delivering the same by hand, addressed to the
Partners at their addresses first set forth above.
17. Captions. All section and article titles or captions contained in
this Agreement and the table of contents, if any, are for convenience only and
shall not be deemed a part of this Agreement.
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18. Variations of Pronouns. All pronouns and all variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the person(s) or entity(ies) may require.
19. Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original and all of which, when taken together,
shall constitute one agreement.
20. Governing Law. This Agreement is made pursuant to the provisions of
the Act and shall be construed accordingly.
21. Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors and permitted assigns and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, but shall not inure to the benefit of, or be enforceable by,
any other person or entity.
22. Invalidity. If any provision or any portion of any provision of
this Agreement, or the application of any such provision or any portion thereof
to any Partner or circumstance, shall be held invalid or unenforceable, the
remaining portion of such provision and the remaining provisions of this
Agreement, and the application of such provision or such portion to a Partner or
to circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
EQUISTAR ACQUISITION CORPORATION
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Vice President
CAPSTAR MANAGEMENT COMPANY, L.P.
By: CapStar Hotel Company, general partner
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Executive Vice President
