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Exhibit 3.46
LIMITED LIABILITY COMPANY AGREEMENT
OF
CAPSTAR WASHINGTON COMPANY, L.L.C.
This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is made as of
October 1, 1996, by and among CAPSTAR MANAGEMENT COMPANY, L.P., a Delaware
limited partnership having an office at 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000 ("CapStar"), and 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").
W I T N E S S E T H :
WHEREAS, the parties hereto (collectively, the "Members" and individually,
a "Member") desire to form a limited liability company for the purposes
hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
respective meanings set forth below:
1.1 "Act" shall mean the Limited Liability Act of the State of
Delaware, as the same may have been or may be amended.
1.2 "Adjusted Capital Account" shall mean, with respect to any
Member, such Member's Capital Account balance, increased by such Member's
share of Company Minimum Gain and Member Minimum Gain.
1.3 "Code" shall mean the Internal Revenue Code of 1986 as the
same has been and may hereafter be amended.
1.4 "Company" shall have the meaning set forth in Article 2.
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1.5 "Company Minimum Gain" means "partnership minimum gain," as
defined in Treasury Regulations Section 1.704-2(b)(2) and shall be
determined in accordance with Treasury Regulations Section 1.704-2(d).
1.6 "Depreciation" shall mean, with respect to any year or portion
thereof, an amount equal to the depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for Federal income
tax purposes, except that if the Gross Asset Value of the asset differs
from its adjusted tax basis, Depreciation shall be determined in
accordance with the methods used for Federal income tax purposes and shall
equal the amount that bears the same ratio to the Gross Asset Value of
such asset as the depreciation, amortization or other cost recovery
deduction computed for Federal income tax purposes with respect to such
asset bears to the adjusted Federal income tax basis of such asset;
provided, however, that if any such asset that is depreciable or
amortizable has an adjusted Federal income tax basis of zero, the rate of
Depreciation shall be as determined by the Members.
1.7 "Gross Asset Value" shall mean, with respect to any asset, the
asset's adjusted basis for Federal income tax purposes, except that (i)
the Gross Asset Value of any asset contributed to the Company shall be its
gross fair market value at the time of contribution, (ii) the Gross Asset
Value of any asset distributed in kind to any Member (including upon a
liquidation of the Company) shall be the gross fair market value of such
asset, and (iii) the Gross Asset Value of any asset determined pursuant to
clause (i) above shall thereafter be adjusted from time to time by the
Depreciation taken into account with respect to such asset for purposes of
determining Net Profit or Net Loss.
1.8 "Member" shall mean each of the parties to this Agreement and
any other Person to which an interest in the Company is hereafter
transferred and who is admitted to the Company in accordance with the
terms of this Agreement.
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1.9 "Member Minimum Gain" means "partner nonrecourse debt minimum
gain," as defined in Treasury Regulations Section 1.704-2(i)(2) and
determined in accordance with Treasury Regulations Section 1.704-2(i)(3).
1.10 "Member Nonrecourse Debt" means "partner nonrecourse debt," as
defined in Treasury Regulations Section 1.704-2(b)(4).
1.11 "Member Nonrecourse Deductions" means "partner nonrecourse
deductions," as defined in Section 1.704-2(i)(1) of the Treasury
Regulations and shall be determined in accordance with Section
1.704-2(i)(2) of the Treasury Regulations.
1.12 "Net Profit" or "Net Loss" shall mean, with respect to any
fiscal year, the taxable income or loss of the Company as determined for
Federal income tax purposes, with the following adjustments:
1.12.1 Such taxable income or loss shall be increased by the
amount, if any, of tax-exempt income received or accrued by the
Company;
1.12.2 Such taxable income or loss shall be reduced by the
amount, if any, of all expenditures of the Company described in
Section 705(a)(2)(B) of the Code, including expenditures treated as
described therein under Section 1.704-1(b)(2)(iv)(i) of the Treasury
Regulations;
1.12.3 If the Gross Asset Value of any asset is adjusted
pursuant to clause (ii) of the definition of Gross Asset Value, the
amount of such adjustment shall be taken into account, immediately
prior to the event giving rise to such adjustment, as gain or loss
from the disposition of such asset for purposes of computing Net
Profit or Net Loss;
1.12.4 Gain or loss resulting from any disposition of any
asset with respect to which gain or loss is recognized for Federal
income tax purposes shall be computed by reference to
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the Gross Asset Value of the asset disposed of, notwithstanding that
such Gross Asset Value differs from the adjusted tax basis of such
asset; and
1.12.5 In lieu of the depreciation, amortization, or other
cost recovery deductions taken into account in computing such
taxable income or loss, there shall be taken into account
Depreciation for such fiscal year.
1.13 "Percentage Interests" shall have the meaning specified in
Section 6.2.
1.14 "Property" shall mean (a) that certain property known as the
Embassy Road Hotel and located at 0000 Xxxxxxxxxxxxx Xxxxxx, Xxxxxxxxxx,
X.X. 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 time.
2. Formation and Name.
Members hereby form a limited liability company (the "Company") pursuant
to the provisions of the Act. The business of the Company shall be conducted
under the name "CAPSTAR WASHINGTON COMPANY, L.L.C." Xxxx X. Xxxxxxxx and Xxxxxxx
X. Xxxxxxx are hereby authorized to execute and record any certificate of
formation required by the Act and any certificate or application necessary to
qualify the company in any jurisdiction in which it conducts business.
3. Principal and Registered Offices; Agent for Service of Process.
3.1 The principal place of business of the Company, and the
address of the office at which the records of the Company shall be maintained,
shall be 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 CapStar.
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3.2 The Company's registered office shall be at 0000 Xxxxxxxxx
Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000.
3.3 The registered agent of the Company 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, CapStar
shall appoint a substitute agent. Such agent shall be the agent of the Company
on which any process, notice or demand required or permitted by law to be served
on the Company may be served.
4. Term. The term of the Company shall commence upon the execution and
delivery of this Agreement and shall continue until terminated by agreement of
the Members or as otherwise provided in this Agreement.
5. Purpose. The purpose of the Company shall be (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 Company shall
not engage in any business other than as set forth in the foregoing sentence.
Nothing in this Agreement shall prohibit the Company 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 Interests.
6.1 Simultaneously with the execution and delivery of this
Agreement the Members are making the following contributions to the capital of
the Company:
(a) CapStar $ 99.00
(b) EquiStar $ 1.00
6.2 The Members' percentage interests in the Company ("Percentage
Interests") shall be as follows:
(a) CapStar 99%
(b) EquiStar 1%
6.3 If the Company shall require any additional funds after the
date hereof, as determined by CapStar, the Members shall contribute such funds
to the Company in proportion to their respective Percentage Interests.
6.4 Except as expressly provided in this Article 6, no Member
shall be required to make any capital contributions or loans to the Company and
no Member shall make any capital contributions or loans to the Company without
the consent of the other Member.
7. Income and Losses; Distribution of Available Net Income.
7.1 A separate "Capital Account" shall be maintained for each
Member. Each Member's Capital Account shall be credited with the amount of such
Member's capital contributions made in cash and the fair market value (net of
liabilities assumed or taken subject to) of all property contributed by such
Member and such Member's allocated share of Net Profit, income and gain of the
Company. Each Member's Capital Account shall be debited with the amount of any
cash distributions to such Member and the fair market value (net of liabilities
assumed or taken subject to) of all property distributed in kind to such Member
and such Member's allocated share of Net Loss of the Company.
7.2 From and after the date of this Agreement, all Net Profit and
all Net Loss of the Company for each year or fraction thereof (determined after
taking into account any allocation for
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such period under Section 7.3) shall be credited to the Capital Accounts of the
Members in proportion to their respective Percentage Interests.
7.3 Special Allocations.
7.3.1 Except as otherwise provided in Section 7.3.2, all items
of Company income, gain, deduction and loss shall be allocated among the Members
in the same proportion as they share in the Net Profit and Net Loss to which
such items relate. Any credits against income tax shall be allocated in
accordance with the Members' Percentage Interests.
7.3.2 Income, gain, loss or deductions of the Company shall,
solely for income tax purposes, be allocated among the Members in accordance
with Section 704(c) of the Code and the Treasury Regulations promulgated
thereunder, so as to take account of any difference between the adjusted basis
of the assets of the Company and their respective Gross Asset Values in
accordance with the traditional method set forth in Section 1.704-3 (b) of the
Treasury Regulations.
7.3.3 Notwithstanding any other provision of this Article 7,
if there is a net decrease in Company Minimum Gain during any year, each Member
shall be specially allocated items of income and gain for such year (and, if
necessary, subsequent years) in an amount equal to the portion of such Member's
share of the net decrease in Company Minimum Gain, determined in accordance with
Section 1.704-2(g) of the Treasury Regulations. Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required
to be allocated to each Member pursuant thereto. The items to be so allocated
shall be determined in accordance with Section 1.704-2(f)(6) of the Treasury
Regulations. Thus Section 7.3.3 is intended to comply with the minimum gain
chargeback requirement in Section 1.704-2(f) of the Treasury Regulations and
shall be interpreted consistently therewith.
7.3.4 Notwithstanding any other provisions of this Article 7,
if there is a net decrease in Member Minimum Gain attributable to a Member
Nonrecourse Debt during any year,
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each Member who has a share of the Member Minimum Gain attributable to such
Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of
the Treasury Regulations, shall be specially allocated items of income and gain
for such year (and, if necessary, subsequent years) in an amount equal to the
portion of such Member's share of the net decrease in Member Minimum Gain
attributable to such Member Nonrecourse Debt, determined in accordance with
Section 1.704-2(i)(4) of the Treasury Regulations. Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required
to be allocated to each Member pursuant thereto. The items to be so allocated
shall be determined in accordance with Section 1.704-2(i)(4) of the Treasury
Regulations. This Section 7.3.4 is intended to comply with the minimum gain
chargeback requirement in Section 1.704-2(i) of the Treasury Regulations and
shall be interpreted consistently therewith.
7.3.5 Nonrecourse Deductions for any year shall be allocated
as Net Loss pursuant to Section 7.2.
7.3.6 Any Member Nonrecourse Deductions for any year shall be
specially allocated to the Member who bears the economic risk of loss with
respect to the Member Nonrecourse Debt to which such Member Nonrecourse
Deductions are attributable in accordance with Section 1.7042(i)(1) of the
Treasury Regulations.
7.3.7 Notwithstanding any other provision of this Article 7,
no Member shall be allocated in any year of the Company any Net Loss to the
extent such allocation would cause or increase a deficit balance in such
Member's Adjusted Capital Account, taking into account all other allocations to
be made for such year pursuant to this Article 7 and the reasonably expected
adjustments, allocations and distributions described in Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations. Any such Net Loss that would
be allocated to a Member (the "Deficit Member") shall instead be allocated to
the other Member. Moreover, if a Deficit Member unexpectedly receives an
adjustment, allocation or distribution described in Section 1.704-1(b)(2)(ii)(d)
of the Treasury Regulations which creates
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or increases a deficit balance in such Member's Adjusted Capital Account
(computed after all other allocations to be made for such year pursuant to this
Article 7 have been tentatively made as if this Section 7.3.7 were not in this
Agreement), such Deficit Member shall be allocated items of income and gain in
an amount equal to such deficit balance. This Section 7.3.7 is intended to
comply with the qualified income offset requirement of Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted
consistently therewith.
7.3.8 The allocations set forth in Sections 7.3.3 through
7.3.7 (the "Regulatory Allocations") shall be taken into account in allocating
items of income, gain, loss and deduction among the Members so that, to the
extent possible, the net amount of such allocations of other items and the
Regulatory Allocations to each Member shall be equal to the net amount that
would have been allocated to each such Member if the Regulatory Allocations had
not occurred.
7.4 Distributions. All distributions of Company cash and other
property shall be made to the Members in proportion to their respective
Percentage Interests; provided, however, that the provisions of this Section 7.4
shall not apply upon the liquidation of the Company or upon the sale of all or
substantially all of the Company's assets, it being understood that in such
circumstances the provisions of Section 13.4 shall apply.
8. Tax Matters. Federal, state and local income tax returns of the
Company shall be prepared and filed, or caused to be prepared and filed, by
CapStar. CapStar shall at all times be the "tax matters partner" of the Company
for purposes of Section 6231(a)(7) of the Code.
9. Management and Rights, Duties and Obligations of the Members.
9.1 The management and control of the Company's business shall be
exercised, and all decisions to be made by the Company shall in each case be
made, by CapStar. CapStar shall have the sole right to bind, or otherwise act on
behalf of, the Company. Without limiting the
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foregoing, CapStar shall have the right, without the consent or approval of
EquiStar, to acquire, mortgage or otherwise encumber, and sell or otherwise
dispose of the Property or any portion thereof.
9.2 Except as otherwise expressly provided in this Agreement, no
Member shall have the right to resign from the Company or to demand the return
of all or any part of its contribution to the capital of the Company until the
Company has been dissolved and terminated, and then only to the extent provided
in this Agreement, nor shall any Member have the right to demand or receive
property other than cash in return for its contribution.
10. Transfer of Members' Interests. No Member shall sell, assign,
transfer or otherwise dispose of, or mortgage, hypothecate, pledge or otherwise
encumber, or permit or suffer any encumbrance of, all or any part of its
interest in the Company, or any interest therein; provided, however, that each
Member may pledge its interest in the Company 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 Member. In the event of
the resignation, expulsion or bankruptcy of any Member, the Company shall
thereupon be dissolved and terminated and the Members shall cause a Certificate
of Cancellation in the form required by the Act to be filed with the Secretary
of State of Delaware when the Company is dissolved.
12. Termination of the Company. Upon the voluntary termination of the
Company upon the consent of the Members, the sale or other transfer of all or
substantially all of the Company's assets or any other termination of the
Company in accordance with the provisions of this Agreement, the Company shall
wind up its affairs and shall then be liquidated as provided in Article 13.
13. Gain, Loss and Distribution on Liquidation. Upon any termination of
the Company each of the following shall be accomplished:
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13.1 The Members shall cause to be prepared a statement setting
forth the assets and liabilities of the Company as of the date of such
termination, and such statement shall be furnished to each Member.
13.2 The property and assets of the Company, if any, shall be
liquidated as promptly as possible, but in an orderly and businesslike
manner so as not to involve undue sacrifice.
13.3 Any Net Profit or Net Loss realized by the Company upon the
sale or other disposition of the property and assets of the Company shall
be credited or charged to the capital accounts of the Members pursuant to
Section 7.2 or 7.3, as applicable.
13.4 The proceeds of sale and all other assets of the Company shall
be paid and distributed as follows and in the following order of priority:
13.4.1 to the payment of the debts and liabilities of the
Company and the expenses of liquidation;
13.4.2 to the setting up of any reserves which CapStar
determines are reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Company or the Members arising out
of, or in connection with, the Company; and
13.4.3 to the Members in proportion to their respective
Capital Account balances.
14. Further Assurances; Consents and Approvals. Each party to this
Agreement agrees to execute, acknowledge, deliver, file and record such further
certificates, amendments, instruments and documents, and to do all such other
acts and things, as may be required by law, or as may, be necessary or advisable
to carry out the intent and purposes of this Agreement.
15. Single Asset Entity.
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15.1 Except as may be provided to the contrary in the
Cross-Collateralization Agreements, the Company 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 Company will not assume liability for the debts of
any other person, and the Company will not hold itself out as being liable
for the debts of any other person;
15.1.2 None of the liabilities of the Company shall be paid
from the funds of the Members or any other person without the Members
being obligated for such liabilities;
15.1.3 The Company shall not guarantee the debt or the
performance of any obligation of any of its Members or any other person;
15.1.4 The Company will not pledge any of its assets for the
benefit of any of its Members or any other person, and no person shall
pledge its assets for the benefit of the Company;
15.1.5 The Company 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 Company);
15.1.6 The books, records, and accounts of the Company will at
all times be maintained in a manner permitting the assets and liabilities
of the Company to be easily separated and readily distinguished from those
of any other person;
15.1.7 The Company 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
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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 Company shall not commingle its assets or funds with
those of any other person except as 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 Member may desire or be required to give hereunder shall be in writing
and shall be given by mailing the same by registered or certified mail, return
receipt requested, or by Federal Express or comparable air courier service,
postage prepaid, or by delivering the same by hand, addressed to the Members at
their addresses first set forth above.
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.
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.
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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 Member or circumstance, shall be held invalid or unenforceable, the
remaining portion of such provision and the remaining provisions of this
Agreement, and the application of such provision or such portion to a Member
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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.
CAPSTAR MANAGEMENT COMPANY, L.P.
By: CapStar Hotel Company, general partner
By: /s/ [Illegible Signature]
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EQUISTAR ACQUISITION CORPORATION,
By: /s/ [Illegible Signature]
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