1
EXHIBIT 3.28
LIMITED LIABILITY COMPANY AGREEMENT
OF
EQUISTAR SCHAUMBURG COMPANY, L.L.C.
Dated: May 1, 1995
2
TABLE OF CONTENTS
Page
1. Definitions ............................................ 1
2 Formation and Name ..................................... 6
3. Principal and Registered Offices; Agent for
Service of Process ..................................... 6
4. Term ................................................... 7
5. Purpose ................................................ 7
6. Capital Contributions; Percentage Interests ............ 7
7. Income and Losses; Distribution of Available Net
Income ................................................. 8
8. Tax Matters ............................................ 13
9. Management and Rights, Duties and Obligations of
the Members ............................................ 13
10. Transfer of Members' Interests ......................... 14
11. Resignation, Expulsion or Bankruptcy of a Member ....... 14
12. Termination of the Company ............................. 14
13. Gain, Loss and Distribution on Liquidation ............. 15
14. Further Assurances; Consents and Approvals ............. 16
15. Notices ................................................ 16
16. Captions ............................................... 16
17. Variations of Pronouns ................................. 17
18. Counterparts ........................................... 17
19. Governing Law .......................................... 17
20. Successors and Assigns ................................. 17
21. Invalidity ............................................. 17
i
3
LIMITED LIABILITY COMPANY AGREEMENT
OF
EQUISTAR SCHAUMBURG COMPANY, L.L.C.
This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is made as
of May 1, 1995, by and among EQUISTAR HOTEL INVESTORS, L.P., a Delaware
partnership having an office c/o CapStar Hotels, Inc., 0000 Xxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000 ("EquiStar, L.P."), and EQUISTAR ACQUISITION
CORPORATION, a Delaware corporation having an office c/o CapStar Hotels, Inc.,
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 ("EquiStar Corp.").
WITNESSETH
WHEREAS, the parties hereto (collectively, the "Members" and
individually, a "Member") desire to form a limited liability company for the
purposes hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the respective meanings set forth below:
1.1 "Act" shall mean the Limited Liability Act of the State of
Delaware, as the same may have been or may be amended.
1.2 "Adjusted Capital Account" shall mean, with respect to any
Member, such Member's Capital Account
4
2
balance, increased by such Member's share of Company Minimum Gain and Member
Minimum Gain.
1.3 "Code" shall mean the Internal Revenue Code of 1986 as the
same has been and may hereafter be amended.
1.4 "Company" shall have the meaning set forth in Article 2.
1.5 "Company Minimum Gain" means "partnership minimum gain,"
as defined in Treasury Regulations Section 1.704-2(b)(2) and shall be determined
in accordance with Treasury Regulations Section 1.704-2(d).
1.6 "Depreciation" shall mean, with respect to any year or
portion thereof, an amount equal to the depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for Federal income tax
purposes, except that if the Gross Asset Value of the asset differs from its
adjusted tax basis, Depreciation shall be determined in accordance with the
methods used for Federal income tax purposes and shall equal the amount that
bears the same ratio to the Gross Asset Value of such asset as the depreciation,
amortization or other cost recovery deduction computed for Federal income tax
purposes with respect to such asset bears to the adjusted Federal income tax
basis of such asset; provided, however, that if any such asset that is
depreciable or amortizable has an adjusted Federal income
5
3
tax basis of zero, the rate of Depreciation shall be as determined by the
Members.
1.7 "Gross Asset Value" shall mean, with respect to any asset,
the asset's adjusted basis for Federal income tax purposes, except that (i) the
Gross Asset Value of any asset contributed to the Company shall be its gross
fair market value at the time of contribution, (ii) the Gross Asset Value of any
asset distributed in kind to any Member (including upon a liquidation of the
Company) shall be the gross fair market value of such asset, and (iii) the Gross
Asset Value of any asset determined pursuant to clause (i) above shall
thereafter be adjusted from time to time by the Depreciation taken into account
with respect to such asset for purposes of determining Net Profit or Net Loss.
1.8 "Member" shall mean each of the parties to this Agreement
and any other Person to which an interest in the Company is hereafter
transferred and who is admitted to the Company in accordance with the terms of
this Agreement.
1.9 "Member Minimum Gain" means "partner nonrecourse debt
minimum gain," as defined in Treasury Regulations Section 1.704-2(i)(2) and
determined in accordance with Treasury Regulations Section 1.704-2(i)(3).
6
4
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
7
5
disposition of such asset for purposes of computing Net Profit or Net Loss;
1.12.4 Gain or loss resulting from any disposition of
any asset with respect to which gain or loss is recognized for Federal income
tax purposes shall be computed by reference to the Gross Asset Value of the
asset disposed of, notwithstanding that such Gross Asset Value differs from the
adjusted tax basis of such asset; and
1.12.5 In lieu of the depreciation, amortization, or
other cost recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for such fiscal
year.
1.13 "Percentage Interests" shall have the meaning specified in
Section 6.2.
1.14 "Property" shall mean that certain property presently known as
the Radisson Hotel and located at 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx, and all personal property situated at such property or used or useful
in connection therewith.
1.15 "Regulatory Allocations" has the meaning ascribed thereto in
subsection 7.3.8.
1.16 "Treasury Regulations" means the rules, regulations, orders and
interpretations of rules, regulations and orders validly promulgated by the
Treasury
8
6
Department under the Code, whether final, temporary or proposed, as in effect
from time to time.
2. Formation and Name. The Members hereby form a limited liability
company (the "Company") pursuant to the provisions of the Act. The business of
the Company shall be conducted under the name "EQUISTAR SCHAUMBURG COMPANY,
L.L.C." Xxxx X. Xxxxxxxx is hereby authorized to execute and record any
certificate of formation required by the Act.
3. Principal and Registered Offices; Agent for Service of Process.
3.1 The principal place of business of the Company, and the
address of the office at which the records of the Company shall be maintained,
shall be in care of CapStar Hotels, Inc., 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 Managing Member.
3.2 The Company's registered office shall be c/o CapStar
Hotels, Inc., 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
9
7
any reason, EquiStar, L.P. 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 to acquire the Property
and other property incidental to the ownership and operation of the Property,
and to hold, own, finance, mortgage, encumber, alter, dispose of and in all
respects deal as owner of the Property, subject to the terms and conditions of
this Agreement.
6. Capital Contributions; Percentage Interests.
6.1 Simultaneously with the execution and delivery of this
Agreement the Members are making the following contributions to the capital of
the Company:
(a) EquiStar, L.P. - $ 99.00
(b) EquiStar Corp. - $ 1.00
6.2 The Members' percentage interests in the Company
("Percentage Interests") shall be as follows:
(a) EquiStar, L.P. - 99%
(b) EquiStar, Corp. - 1%
6.3 If the Company shall require any additional funds after
the date hereof, as determined by
10
8
EquiStar, L.P., 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
11
9
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 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
12
10
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. This Section 7.3.3 is intended to
comply with the minimum gain chargeback requirement in Section 1.704-2(f) of the
Treasury Regulations and shall be interpreted consistently therewith.
7.3.4 Notwithstanding any other provisions of this
Article 7, if there is a net decrease in Member Minimum Gain attributable to a
Member Nonrecourse Debt during any year, each Member who has a share of the
Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in
accordance with Section 1.704-2(i)(5) of the Treasury Regulations, shall be
specially allocated items of income and gain for such year (and, if necessary,
subsequent years) in an amount equal to the portion of such Member's share of
the net decrease in Member Minimum Gain attributable to such Member Nonrecourse
Debt, determined in accordance with Section 1.704-2(1)(4) of the Treasury
Regulations. Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be
13
11
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)(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
14
12
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 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;
15
13
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 EquiStar,
L.P. EquiStar, L.P. shall at all times be the "tax matters partner" of the
Company for purposes of Section 6231(a)(7) of the Code.
9. Management and Rights, Duties and Obligations of the Members.
9.1 The management and control of the Company's business shall
be exercised, and all decisions to be made by the Company shall in each case be
made, by EquiStar, L.P. EquiStar, L.P. shall have the sole right to bind, or
otherwise act on behalf of, the Company. Without limiting the foregoing,
EquiStar, L.P. shall have the right, without the consent or approval of EquiStar
Corp., to acquire, mortgage or otherwise encumber, and sell or otherwise dispose
of the Property or any portion thereof.
9.2 Except as otherwise expressly provided in this Agreement,
no Member shall have the right to resign from the Company or to demand the
return of all or any part
16
14
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.
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.
17
15
13. Gain, Loss and Distribution on Liquidation. Upon any termination of
the Company each of the following shall be accomplished:
13.1 The Members shall cause to be prepared a statement
setting forth the assets and liabilities of the Company as of the date of such
termination, and such statement shall be furnished to each Member.
13.2 The property and assets of the Company, if any, shall be
liquidated as promptly as possible, but in an orderly and businesslike manner so
as not to involve undue sacrifice.
13.3 Any Net Profit or Net Loss realized by the Company upon
the sale or other disposition of the property and assets of the Company shall be
credited or charged to the capital accounts of the Members pursuant to Section
7.2 or 7.3, as applicable.
13.4 The proceeds of sale and all other assets of the Company
shall be paid and distributed as follows and in the following order of priority:
13.4.1 to the payment of the debts and liabilities of
the Company and the expenses of liquidation;
13.4.2 to the setting up of any reserves which
EquiStar, L.P. determines are reasonably necessary for any contingent or
unforeseen liabilities or
18
16
obligations of the Company or the Members arising out of, or in connection with,
the Company; and
13.4.3 to the Members in proportion to their
respective Capital Account balances.
14. Further Assurances; Consents and Approvals. Each party to this
Agreement agrees to execute, acknowledge, deliver, file and record such further
certificates, amendments, instruments and documents, and to do all such other
acts and things, as may be required by law, or as may, be necessary or advisable
to carry out the intent and purposes of this Agreement.
15. Notices. Unless otherwise specified in this Agreement, all notices,
demands, elections, requests or other communications (collectively "notices")
which any Member may desire or be required to give hereunder shall be in writing
and shall be given by mailing the same by registered or certified mail, return
receipt requested, or by Federal Express or comparable air courier service,
postage prepaid, or by delivering the same by hand, addressed to the Members at
their addresses first set forth above.
16. Captions. All section and article titles or captions contained in
this Agreement and the table of contents, if any, are for convenience only and
shall not be deemed a part of this Agreement.
19
17
17. Variations of Pronouns. All pronouns and all variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the person(s) or entity(ies) may require.
18. Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original and all of which, when taken together,
shall constitute one agreement.
19. Governing Law. This Agreement is made pursuant to the provisions of
the Act and shall be construed accordingly.
20. Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors and permitted assigns and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, but shall not inure to the benefit of, or be enforceable by,
any other person or entity.
21. Invalidity. If any provision or any portion of any provision of
this Agreement, or the application of any such provision or any portion thereof
to any Member or circumstance, shall be held invalid or unenforceable, the
remaining portion of such provision and the remaining provisions of this
Agreement, and the application of such provision or such portion to a Member or
to circumstances other
20
18
than those as to which it is held invalid or unenforceable, shall not be
affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
EQUISTAR HOTEL INVESTORS, L.P.,
a Delaware limited partnership
By: Cherwell Investors, Inc.,
a Delaware corporation, general partner
By: /s/ Xxxxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: Vice President
By: Capstar Executive Investors I, L.L.C.,
a Delaware limited liability company,
general partner
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Member
EQUISTAR ACQUISITION CORPORATION,
a Delaware corporation
By: /s/ Xxxx Xxxxxxxx
-----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Pres.
21
AMENDMENT TO
LIMITED LIABILITY COMPANY AGREEMENT
OF
EQUISTAR SCHAUMBURG COMPANY, L.L.C.
This AMENDMENT (this "Amendment") is made as of June 20, 1995, by and
among EQUISTAR HOTEL INVESTORS, L.P., a Delaware limited partnership having an
office c/o CapStar Hotels, Inc., 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000 ("EquiStar, L.P."), and EQUISTAR ACQUISITION CORPORATION, a Delaware
corporation having an office c/o CapStar Hotels, Inc., 0000 Xxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000 ("EquiStar Corp.").
WHEREAS, EquiStar, L.P. and EquiStar Corp. are parties to that certain
Limited Liability Agreement of EquiStar Schaumburg Company, L.L.C., dated as of
May 1, 1995 (the "Agreement").
WHEREAS, EquiStar L.P. and EquiStar Corp. wish to amend the Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Section 5 of the Agreement is hereby modified to read in its
entirety as follows:
"5. Purpose.
5.1 The purpose of the Company is to engage in any
activity which a limited liability company may lawfully engage in under
the Act including, but not limited to, (a) acquiring the Property and
other property incidental to the ownership and operation of the
Property and (b) holding, owning, financing, mortgaging, encumbering,
altering, disposing of and in all respects dealing as owner of the
Property, subject to the terms and conditions of this Agreement.
5.2 Without limiting the generality of Section 5.1,
the Company may (a) enter into a certain loan agreement (the "Loan
Agreement"), dated as of June , 1995, between Salomon Brothers Realty
Corp., the Company and certain other entities, (b) issue a note (the
"Note") pursuant to the Loan Agreement, (c) enter into the other "Loan
Documents" (as defined in the Loan Agreement) and (d) take any and all
actions contemplated by the Loan Agreement, the Note, the Loan
Documents or any other documents related thereto and conduct any other
business incidental thereto.
5.3 Notwithstanding any provision of this Agreement
or any provision of law that otherwise so empowers the Company or its
Members, until the Note shall have been paid in full pursuant to the
Loan Agreement, the Company shall act in such
22
a way as to at all times be a "Single-Purpose Entity" (as defined in
the Loan Agreement) and shall at all times comply with the terms and
conditions of the Loan Agreement applicable to it."
2. As modified hereby, the Agreement is ratified in all respects and
shall continue in effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
EQUISTAR HOTEL INVESTORS, L.P.,
a Delaware limited partnership
By: Cherwell Investors, Inc.,
a Delaware corporation, general partner
By: /s/ Xxxxxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: Vice President
By: CapStar Executive Investors I, L.L.C.,
a Delaware limited liability company,
general partner
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Member
EQUISTAR ACQUISITION CORPORATION,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
2
