1
Exhibit 3.54
LIMITED LIABILITY COMPANY AGREEMENT
OF
CAPSTAR LEXINGTON COMPANY, L.L.C.
This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is made as
of June 10, 1997, by and among CAPSTAR MANAGEMENT COMPANY II, L.P., a Delaware
limited partnership having an office at 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx,
D C. 20007 ("CapStar"), and EQUISTAR ACQUISITION CORPORATION, a Delaware
corporation having an office c/o CapStar Management Company, L.P., 0000
Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, D C. 20007 ("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.
2
1.5 "Company Minimum Gain" means "partnership minimum
gain," as defined in Treasury Regulations Section
1.704-2(b)(2) and shall be determined in accordance
with Treasury Regulations Section 1.704-2(d).
1.6. "Depreciation" shall mean, with respect to any year
or portion thereof, an amount equal to the
depreciation, amortization or other cost recovery
deduction allowable with respect to an asset for
Federal income tax purposes, except that if the
Gross Asset Value of the asset differs from its
adjusted tax basis, Depreciation shall be determined
in accordance with the methods used for Federal
income tax purposes and shall equal the amount that
bears the same ratio to the Gross Asset Value of such
asset as the depreciation, amortization or other cost
recovery deduction computed for Federal income tax
purposes with respect to such asset bears to the
adjusted Federal income tax basis of 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 determined by the Members.
1.7. "Gross Asset Value" shall mean, with respect to any
asset, the asset's adjusted basis for Federal income
tax purposes, except that (i) the Gross Asset Value
of any asset contributed to the Company shall be its
gross fair market value at the time of contribution,
(ii) the Gross Asset Value of any asset distributed
in kind to any Member (including upon a liquidation
of the Company) shall be the gross fair market value
of such asset, and (iii) the Gross Asset Value of any
asset determined pursuant to clause (i) above shall
thereafter be adjusted from time to time by the
Depreciation taken into account with respect to such
asset for purposes of determining Net Profit or Net
Loss.
1.8. "Member" shall mean each of the parties to this
Agreement and any other Person to which an interest
in the Company is hereafter transferred and who is
admitted to the Company in accordance with the terms
of this Agreement.
1.9. "Member Minimum Gain" means "partner nonrecourse debt
minimum gain," as defined in Treasury Regulations
Section 1.704-2(i)(2) and determined in accordance
with Treasury Regulations Section 1.704-2(i)(3).
1.10. "Member Nonrecourse Debt" means "partner nonrecourse
debt," as defined in Treasury Regulations Section
1.704-2(b)(4).
2
3
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
the purposes of computing Net Profit or Net
Loss;
1.12.4. Gain or loss resulting from any disposition
of any asset with respect to which gain or
loss is recognized for Federal income tax
purposes shall be computed by reference to
the Gross Asset Value of the asset disposed
of, notwithstanding that such Gross Asset
Value differs from the adjusted tax basis of
such asset; and
1.12.5. In lieu of the depreciation, amortization,
or other cost recovery deductions taken into
account in computing such taxable income or
loss, there shall be taken into account
Depreciation for such fiscal year.
1.13. "Percentage Interests" shall have the meaning
specified in Section 6.2
1.14. "Property" shall mean (a) that certain property known
as the Radisson Plaza Hotel located at 000 Xxxx Xxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000-0000 and (b) all
personal property situated at such property or used
or useful in connection herewith.
1.15. "Regulatory Allocations" has the meaning ascribed
thereto in Subsection 7.3.8.
3
4
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 LEXINGTON COMPANY, L.L.C." Xxxx Xxxxxxxx and Xxxx 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 C. 20007, or
at such other place as may hereafter from time to
time be selected by CapStar.
3.2. The Company's registered office shall be at 0000
Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, D C.
20007.
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
4
5
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 agreements with respect thereto (all of the
foregoing being collectively referred to as
"Cross-Collateralization Agreements").
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; Distributions 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 each Member's capital
contributions made in cash and 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
5
6
or taken subject to) of all property distributed in
kind to such Member and such Member's allocated share
of Net Loss of the Company.
7.2. From and after the date of this Agreement, all Net
Profit and all Net Loss of the Company for each year
or fraction thereof (determined after taking into
account any allocation for such period under Section
7.3) 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 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,
as determined in accordance with Section
1.704-2(g) of the Treasury Regulations.
Allocations pursuant to the previous
sentence shall be made in proportion to the
respective amounts required to be allocated
to each member pursuant thereto. The items
to be so allocated shall be determined in
accordance with Section 1.704-2(f)(6) of the
Treasury Regulations. This Section 7.3.3 is
intended to comply with minimum gain
chargeback requirement in Section 1.704-2(f)
of the Treasury Regulations and shall be
interpreted consistently therewith.
6
7
7.3.4. Notwithstanding any other provision of this
Article 7, if there is a net decrease in
Member Minimum Gain attributable to a Member
Nonrecourse Debt during any year, each
Member who has a share of the Member Minimum
Gain attributable to such Member Nonrecourse
Debt, determined in accordance with Section
1.704-2(i)(5) of the Treasury Regulations,
shall be specially allocated items of income
and gain for such year (and, if necessary,
subsequent years) in an amount equal to the
portion of such Member's share of the net
decrease in Member Minimum Gain attributable
to such Member Nonrecourse Debt, determined
in accordance with Section 1.704-2(i)(4) of
the Treasury Regulations. Allocations
pursuant to the previous sentence shall be
made in proportion to the respective amounts
required to be allocated to each Member
pursuant thereto. The items to be so
allocated shall be determined in accordance
with Section 1.704-2(i)(4) of the Treasury
Regulations. This Section 7.3.4 is intended
to comply with the minimum gain chargeback
requirement in Section 1.704-2(i) of the
Treasury Regulations and shall be
interpreted consistently therewith.
7.3.5. Nonrecourse Deductions for any year shall be
allocated as Net Loss pursuant to Section
7.2.
7.3.6. Any Member Nonrecourse Deductions for any
year shall be specially allocated to the
Member who bears the economic risk of loss
with respect to the Member Nonrecourse Debt
to which such Member Nonrecourse Deductions
are attributable in accordance with Section
1.704-2(i)(1) of the Treasury Regulations.
7.3.7. Notwithstanding any other provision of this
Article 7, no Member shall be allocated in
any year of the Company any Net Loss to the
extent such allocation would cause or
increase a deficit balance in such Member's
Adjusted Capital Account, taking into
account all other allocations to be made for
such year pursuant to this Article 7 and the
reasonably expected adjustments, allocations
and distributions described in Section
1.704-1(b)(ii)(d) of the Treasury
Regulations. Any such Net Loss that would be
allocated to a Member (the "Deficit Member")
shall instead be allocated
7
8
to the other Member. Moreover, if a Deficit
Member unexpectedly receives an adjustment,
allocation or distribution described in
Section 1.704-1(b)(ii)(d) of the Treasury
Regulations which creates or increases a
deficit balance in such Member's Adjusted
Capital Account (computed after all other
allocations to be made for such year
pursuant to this Article 7 have been
tentatively made as if this Section 7.3.7
were not in this Agreement), such Deficit
Member shall be allocated items of income
and gain in an amount equal to such deficit
balance. This Section 7.3.7 is intended to
comply with the qualified income offset
requirement of Section 1.704-1(b)(2)(ii)(d)
of the Treasury Regulations and shall be
interpreted consistently herewith.
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
distributed 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
8
9
Company. Without limiting the foregoing, CapStar
shall have the right, without 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, not 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 a 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 Upon Liquidation. Upon any
termination of the Company each of the following shall be
accomplished:
13.1. The Members shall cause to be prepared a statement
setting forth the assets and liabilities of the
Company as of the date of such termination, and such
statement shall be furnished to each Member.
13.2. The property and assets of the Company, if any, shall
be liquidated as promptly as possible, but in an
orderly and businesslike manner so as not to involve
undue sacrifice.
9
10
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 debts an 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
15.1. Except as may be provided to the contrary in the
Cross-Collateralization Agreements, the Company shall
at all tuned 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
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
performance of any obligation of any of its
Members or any other person;
10
11
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 account
(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
or to any of its individual creditors as
being a unified entity with assets and
liabilities in common with any other person;
and
15.1.8. 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 to 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. Variety 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.
11
12
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 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 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 to
circumstances other than those as to which it is held invalid
or unenforceable, shall not be affected hereby.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CAPSTAR MANAGEMENT COMPANY II, L.P.
By: CapStar General Corp., its general partner
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------------
Xxxx X. Xxxxxxx
Executive Vice President
EQUISTAR ACQUISITION CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------------
Xxxx X. Xxxxxxx
Vice President
12
