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Exhibit 10.1
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
INTERSTATE HOTELS, LLC
Dated as of June 18, 1999
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS.........................................................................2
ARTICLE 2
FORMATION, DURATION AND PURPOSES....................................................8
Section 2.1 Formation.........................................................8
Section 2.2 Name; Registered Agent and Registered Office......................9
Section 2.3 Principal Office..................................................9
Section 2.4 Purposes and Business.............................................9
Section 2.5 Future Business..................................................10
ARTICLE 3
RIGHTS AND OBLIGATIONS OF MEMBERS..................................................11
Section 3.1 Limited Liability................................................11
Section 3.2 Admission of Members.............................................11
Section 3.3 Bankruptcy of a Member...........................................11
Section 3.4 No Withdrawal....................................................11
Section 3.5 Remuneration to Members..........................................11
Section 3.6 Duties and Conflicts.............................................11
ARTICLE 4
MANAGEMENT.........................................................................12
Section 4.1 Management by the Managing Member; Members.......................12
Section 4.2 Bank Accounts....................................................12
Section 4.3 Liability; Indemnification.......................................13
Section 4.4 Limitations on Sale of Assets; Indemnification...................13
Section 4.5 Allocation of Costs and Expenses.................................14
Section 4.6 Resolution of Disputes Regarding Shared Expenses.................15
ARTICLE 5
BOOKS AND RECORDS..................................................................16
Section 5.1 Books and Records................................................16
Section 5.2 Accounting and Fiscal Year.......................................16
Section 5.3 Reports..........................................................16
Section 5.4 The Company Accountant...........................................18
ARTICLE 6
CONTRIBUTIONS......................................................................18
Section 6.1 Initial Capital Contributions....................................18
Section 6.2 Additional Capital Contributions.................................18
Section 6.3 No Third Party Beneficiary.......................................19
Section 6.4 Capital Accounts.................................................19
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Section 6.5 Withdrawal of Capital............................................19
Section 6.6 Negative Capital Accounts........................................20
Section 6.7 Satisfaction of Indemnity Obligations Under
Distribution Agreement...........................................20
ARTICLE 7
ALLOCATION OF PROFITS AND LOSSES; TAX MATTERS......................................20
Section 7.1 Profits and Losses...............................................20
Section 7.2 Regulatory Allocations...........................................20
Section 7.3 Tax Allocations..................................................21
Section 7.4 Tax Matters Member...............................................22
Section 7.5 Tax Elections....................................................22
ARTICLE 8
DISTRIBUTIONS......................................................................22
Section 8.1 Cash Available for Distributions.................................22
ARTICLE 8A
COMPANY'S INTEREST IN INTERCARP....................................................23
ARTICLE 9
TRANSFER...........................................................................24
Section 9.1 No Transfer of Interests.........................................24
Section 9.2 Permitted Transfers of Interests; Right of First Offer...........24
Section 9.3 Transferees......................................................25
Section 9.4 Admission of Additional Members..................................26
ARTICLE 10
TERMINATION........................................................................26
Section 10.1 Dissolution......................................................26
Section 10.2 Termination......................................................27
Section 10.3 Acts in Furtherance of Liquidation...............................28
ARTICLE 11
TAG-ALONG AND DRAG-ALONG RIGHTS....................................................28
Section 11.1 Notice of Proposed Transaction...................................28
Section 11.2 Tag-Along and Drag-Along Rights..................................29
Section 11.3 Terms............................................................29
Section 11.4 Closing..........................................................31
ARTICLE 12
GENERAL PROVISIONS.................................................................31
Section 12.1 Covenants, Representations and Warranties of the Members.........31
Section 12.2 Notices..........................................................32
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Section 12.3 Governing Laws; Jurisdiction; Venue..............................34
Section 12.4 Entire Agreement.................................................34
Section 12.5 Waiver...........................................................34
Section 12.6 Severability.....................................................35
Section 12.7 Terminology......................................................35
Section 12.8 Action by the Members............................................35
Section 12.9 Amendments.......................................................35
Section 12.10 Binding Agreement................................................35
Section 12.11 Further Assurances..............................................S-1
SCHEDULES & EXHIBITS:
Schedule 1.1 - Initial Capital Contributions, Capital Account Balances
Schedule 1.2 - Existing Subsidiaries
Schedule 2.4.1 - List of Existing Contracts
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AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
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THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT (this "AGREEMENT"), made and entered into as of this 18th day of June,
1999 by and between Northridge Holdings, Inc., a Delaware Corporation (together
with its permitted successors and assigns hereunder "NORTHRIDGE HOLDINGS"), and
PAH-Interstate Holdings, Inc., a Delaware corporation (together with its
permitted successors and assigns hereunder "PAH"), amends and restates in its
entirety the Limited Liability Company Agreement dated as of June 2, 1998 by and
between Interstate Hotels Corporation, a Maryland corporation, f/k/a Interstate
Hotels Management, Inc., (together with its permitted successors and assigns
hereunder "IHC") and PAH (the "ORIGINAL AGREEMENT"). Northridge Holdings and PAH
are each sometimes referred to herein individually as a "MEMBER" and
collectively as the "MEMBERS".
R E C I T A L S
WHEREAS, Patriot American Hospitality, Inc. ("PATRIOT REIT") formed a
limited liability company with the name "Interstate Hotels, LLC" (the "COMPANY")
under the Act (as defined below) by the filing of a Certificate of Formation
(the "CERTIFICATE OF FORMATION") with the Delaware Secretary of State on March
23, 1998;
WHEREAS, on June 2, 1998, Interstate Hotels Company, a Pennsylvania
corporation ("INTERSTATE"), merged with and into Patriot REIT (the "INTERSTATE
MERGER");
WHEREAS, immediately following the Interstate Merger, Patriot REIT
caused Interstate Hotels Corporation, a Pennsylvania corporation and a
wholly-owned subsidiary of Interstate, to merge with and into the Company;
WHEREAS, Patriot REIT subsequently contributed on June 2, 1998 a 65%
non-managing member interest in the Company to PAH and a 35% managing member
interest in the Company to IHC;
WHEREAS, pursuant to a Distribution Agreement, dated as of June 18,
1999, by and among Patriot REIT, Wyndham International, Inc. ("WYNDHAM" and,
together with Patriot REIT, "PATRIOT/WYNDHAM"), IHC and the Company (the
"DISTRIBUTION AGREEMENT"), Patriot/Wyndham has agreed to contribute additional
assets to the Company through PAH and IHC such that, following such
contributions, PAH will own a 55% non-managing member interest in the Company
and IHC will own a 45% managing member interest in the Company;
WHEREAS, of even date herewith IHC has contributed all of its right,
title and interest in and to the Company to Northridge Holdings, a wholly
owned-subsidiary of IHC,
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following which contribution Northridge Holdings owns a 45% sole managing member
interest in the Company and is a Substitute Member (as defined below); and
WHEREAS, the Members now desire to amend and restate the Original
Agreement in its entirety so as to govern the operations of the Company and the
rights and obligations of the Members.
NOW, THEREFORE, in consideration of the recitals and the covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Members hereby
agree as follows:
ARTICLE 1
DEFINITIONS
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For purposes of this Agreement, initially capitalized terms used herein
shall have the following meanings:
"AAA" as defined in subsection 4.6.1.
"ACQUIROR" as defined in Section 11.1.
"ACT" as defined in Section 2.1.
"ADDITIONAL CAPITAL CONTRIBUTION" as defined in Section 6.4.
"ADDITIONAL MEMBER" as defined in subsection 9.4.2.
"AFFILIATE" means, when used with respect to any Person, any other
Person controlling or controlled by or under common control with such Person.
For purposes of this definition, the term "CONTROL", with respect to any Person,
means possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or of other beneficial interests or by contract
or otherwise.
"AGREEMENT" as defined in the Preamble.
"APPRAISER" as defined in Section 11.3.
"ASSET PURCHASE AGREEMENT" as defined in subsection 4.4.1.
"BANKRUPTCY" means, with respect to any Person, (i) the commencement by
such Person of a proceeding seeking relief under any provision or chapter of the
Bankruptcy Code or any other federal or state law relating to insolvency,
bankruptcy or reorganization; (ii) an
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adjudication that such Person is insolvent or bankrupt; (iii) the entry of an
order for relief under the Bankruptcy Code with respect to such Person; (iv) the
filing of any such petition or the commencement of any such case or proceeding
against such Person, unless such petition and the case or proceeding initiated
thereby are dismissed within seventy-five (75) days from the date of such
filing; (v) the filing of an answer by such Person admitting the material
allegations of any such petition; (vi) the appointment of a trustee, receiver or
custodian for all or substantially all of the assets of such Person unless such
appointment is vacated or dismissed within seventy-five (75) days from the date
of such appointment but not less than five (5) days before the proposed sale of
any assets of such Person; (vii) the insolvency of such Person or the execution
by such Person of a general assignment for the benefit of creditors; (viii) the
convening by such Person of a meeting of its creditors, or any class thereof,
for purposes of effecting a moratorium upon or composition of its debts or an
extension of its debts; (ix) the failure of such Person to pay its debts
generally as they mature; (x) the levy, attachment, execution or other seizure
of substantially all of the assets of such Person where such seizure is not
discharged within ten (10) days thereafter; or (xi) the admission by such Person
in writing of its inability to pay its debts generally as they mature or that it
is generally not paying its debts as they become due.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BOOK DEPRECIATION" means, for each fiscal year, an amount equal to the
depreciation, amortization or other cost recovery deduction allowable with
respect to an asset for such year, except that if the Book Value of an asset
differs from its adjusted basis for federal income tax purposes at the beginning
of such year, Book Depreciation shall be an amount that bears the same ratio to
such beginning Book Value as the federal income tax depreciation, amortization
or other cost recovery deduction for such year bears to such beginning adjusted
tax basis; provided, however, that if the adjusted basis for federal income tax
purposes of an asset at the beginning of such year is zero, Book Depreciation
shall be determined with reference to such beginning Book Value using a method
reasonably selected by the Managing Member pursuant to Section 7.5.
"BOOK VALUE" means, with respect to any asset of the Company, the
asset's adjusted basis for federal income tax purposes, except as follows:
(i) the initial Book Value of any asset contributed by a Member to the
Company shall be the gross fair market value of such asset as determined by the
Members;
(ii) the Book Values of all Company assets shall be adjusted to equal
their respective fair market values as permitted pursuant to Section
1.704-1(b)(2)(iv)(f) of the Treasury Regulations;
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(iii) the Book Value of any asset of the Company distributed to any
Member shall be adjusted to equal the gross fair market value of such asset as
of the date of distribution as determined by the Members; and
(iv) the Book Value of Company assets shall be increased (or decreased)
to reflect any adjustments to the adjusted basis of such assets pursuant to Code
Section 734(b) or 743(b) to the extent such adjustments are taken into account
in determining Capital Accounts and are not otherwise reflected in an adjustment
made pursuant to this definition of "Book Value".
If the Book Value of an asset has been determined or adjusted pursuant
to this definition of Book Value, then such Book Value shall thereafter be
adjusted by Book Depreciation taken into account with respect to such asset for
purposes of computing Profits and Losses.
"BUSINESS DAY" means any day other than a Legal Holiday.
"BUYER" as defined in Section 11.3.
"CAPITAL ACCOUNT" means, with respect to any Member, the separate
"book" account which the Company shall establish and maintain for such Member in
accordance with Section 704(b) of the Code and Regulations Section
1.704-1(b)(2)(iv) and such other provisions of Section 1.704-1(b) of the
Regulations as must be complied with in order for the Capital Accounts to be
determined in accordance with the provisions of said Regulations. In furtherance
of the foregoing, the Capital Accounts shall be maintained in compliance with
Section 1.704-1(b)(2)(iv) of the Regulations, and the provisions hereof shall be
interpreted and applied in a manner consistent therewith.
"CAPITAL CALL DUE DATE" as defined in subsection 6.2.2.
"CAPITAL CALL NOTICE" as defined in subsection 6.2.2.
"CAPITAL CONTRIBUTIONS" as defined in subsection 6.2.1.
"CERTIFICATE OF FORMATION" as defined in the Recitals.
"CODE" means the Internal Revenue Code of 1986, as amended, and as
hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code at the date hereof and any
successor provision of the Code.
"COMPANY" as defined in the Recitals.
"COMPANY ACCOUNTANT" as defined in Section 5.4.
"DISTRIBUTION AGREEMENT" as defined in the Recitals.
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"EBITDA" as defined in Section 11.3.
"EXISTING CONTRACTS" means those agreements held by the Company or the
Existing Subsidiaries, each as more fully identified on Schedule 2.4.1 hereto.
"EXISTING SUBSIDIARY CONTRACTS" means those agreements held by the
Existing Subsidiaries, each as more fully identified on Schedule 2.4.1 hereto.
"EXISTING SUBSIDIARIES" means those entities listed on Schedule 1.2
hereto.
"FAIR MARKET VALUE" as defined in Section 11.3.
"FIRST OFFER NOTICE" as defined in subsection 9.2.2.1.
"FIRST OFFER PRICE" as defined in subsection 9.2.2.1.
"IHC" as defined in the Preamble.
"INITIAL CAPITAL CONTRIBUTIONS" as defined in Section 6.1.
"INTEREST" means, with respect to any Member at any time, the interest
of such Member in the Company at such time, including the right of such Member
to any and all of the benefits to which such Member may be entitled as provided
in this Agreement, together with the obligations of such Member to comply with
all of the terms and provisions of this Agreement.
"INTERSTATE COMMON STOCK" as defined in Section 11.1.
"INTERSTATE MERGER" as defined in the Recitals.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York are authorized by law, regulation or
executive order to remain closed. If a date is a Legal Holiday, the date set for
any action hereunder shall be the next succeeding day that is not a Legal
Holiday.
"LIQUIDATING MEMBER" means the Managing Member; provided, however, if
the Managing Member's Bankruptcy, withdrawal or liquidation or the Guarantor's
Bankruptcy, withdrawal or liquidation shall have preceded the liquidation of the
Company, the Non-Managing Member shall be the Liquidating Member.
"MANAGING MEMBER" means Northridge Holdings, and any successor to
Northridge Holdings appointed as Managing Member in accordance with the
provisions of this Agreement.
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"MEMBER" or "MEMBERS" means, prior to the date hereof, PAH and IHC, and
on the date hereof, the Persons identified as Members in the preamble to this
Agreement, and thereafter "Members" shall include any Person admitted as a
Substitute Member or an Additional Member.
"NECESSARY COSTS" as defined in subsection 6.2.3.
"NET CAPITAL PROCEEDS" means (i) the net cash proceeds arising out of
the refinancing or refunding of any Company indebtedness or any additional
indebtedness, and (ii) gross receipts (including condemnation and casualty
insurance proceeds) from the sale, exchange or other disposition (excluding
leasing in the ordinary course of business) of any Company assets, less (A) any
indebtedness relating to or secured by such assets which is paid out of such
gross receipts, (B) the costs and expenses of the sale, exchange or disposition
including brokerage commissions, and (C) in the case of condemnation or
casualty, the cost of any collection, repair or restoration.
"NET OPERATING CASH FLOW" means, for any period, the excess of cash
receipts of all kinds for that period (including disbursements from reserves
previously established by the Managing Member) over cash disbursements of all
kinds for that period (including reasonable reserves established by the Managing
Member), but excluding Net Capital Proceeds.
"NON-MANAGING MEMBER" means PAH, and any successor to PAH as permitted
in accordance with the terms of this Agreement.
"NORTHRIDGE HOLDINGS" as defined in the Preamble.
"OFFERED PERCENTAGE INTEREST" as defined in subsection 9.2.2.1.
"ORIGINAL AGREEMENT" as defined in the Preamble.
"PAH" as defined in the Preamble.
"PATRIOT REIT" as defined in the Recitals.
"PATRIOT/WYNDHAM" as defined in the Recitals.
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"PERCENTAGE INTEREST" means, with respect to each Member, the
percentage set forth below opposite its name, in each case, subject to
adjustment as provided in this Agreement:
Northridge Holdings 45%
PAH 55%
Upon the making of any additional Capital Contribution each Member's Percentage
Interest shall thereafter be adjusted in accordance with Section 6.2.
"PERMITTED TRANSFER" means any Transfer expressly permitted by the
terms of this Agreement.
"PERSON" means any individual, partnership, limited partnership, trust,
estate, association, corporation, limited liability company, or other entity
whether domestic or foreign.
"PROFITS"and "LOSSES" means, for each fiscal year or other period, an
amount equal to the Company's taxable income or loss for such year or period,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(a) any depreciation, amortization and/or cost recovery
deductions with respect to any asset shall be deemed to be equal to the
Book Depreciation available with respect to such asset;
(b) any income or gain of the Company that is exempt from
federal income tax and not otherwise taken into account in computing
Profits or Losses shall be added to such taxable income or loss;
(c) any expenditures of the Company described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise
taken into account in computing Profits or Losses, shall be subtracted
from such taxable income or loss;
(d) to the extent an adjustment to the adjusted tax basis of
any Company asset pursuant to Section 734(b) or 743(b) of the Code is
required to be taken into account in determining Capital Accounts as a
result of a distribution other than in liquidation of a Member's
Interest, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases the basis of the asset) from the disposition
of the asset and shall be taken into account for purposes of computing
Profits or Losses;
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(e) in the event the Book Value of any Company asset is
adjusted pursuant to the definition of Book Value, the amount of such
adjustment shall be taken into account as gain or loss from the
disposition of such asset for purposes of computing Profits or Losses;
(f) gain or loss resulting from any disposition of property
with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Book Value of the
property disposed of, notwithstanding that the adjusted tax basis of
such property differs from its Book Value; and
(g) any items of income, gain, loss or deduction that are
individually specially allocated pursuant to the provisions of Section
7.2 shall not be taken into account in computing Profits and Losses for
any taxable year.
"REIT" as defined in subsection 4.4.1.
"REMAINING MEMBERS" as defined in subsection 10.1.1.
"REQUIRED FUNDS" as defined in subsection 6.2.2.
"SALE NOTICE" as defined in Section 11.1.
"SECURITIES ACT" as defined in subsection 12.1.6.
"SECURITIES LAWS" as defined in subsection 12.1.6.
"SETTLEMENT AGREEMENT" means that certain agreement by and among
Patriot REIT, Wyndham, Interstate Hotels Corporation, Interstate, and Marriott
International, Inc., dated as of May 27, 1998, as amended by that certain First
Amendment to Settlement Agreement dated the 26th day of August, 1998, as further
amended by that certain Second Amendment to Settlement Agreement dated as of
October 29, 1998, as further amended by that certain Third Amendment to
Settlement Agreement dated as of January 6, 1999, as further amended by that
certain Fourth Amendment to Settlement Agreement dated as of March 11, 1999, as
further amended by that certain Fifth Amendment to Settlement Agreement dated as
of April 23, 1999, and as further amended by that certain Sixth Amendment to
Settlement Agreement dated as of May 14, 1999.
"SHARED EXPENSES" as defined in Section 4.5.
"SPECIAL TRANSFER EVENT" as defined in subsection 9.2.2.
"SUBSTITUTE MEMBER" as defined in Section 9.3.
"TAX MATTERS MEMBER" as defined in Section 7.4.
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"TRANSACTION" as defined in Section 11.1.
"TRANSFER" as defined in subsection 9.1.1.
"TREASURY REGULATIONS" means the income tax regulations promulgated
under the Code, whether temporary, proposed or finalized, as such regulations
may be amended from time to time (including corresponding provisions of
succeeding regulations).
"WYNDHAM" as defined in the Recitals.
ARTICLE 2
FORMATION, DURATION AND PURPOSES
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SECTION 2.1 FORMATION. Pursuant to the Delaware Limited Liability
Company Act, codified in the Delaware Code Annotated, Title 6, Sections 18-101
to 18-1109, as the same may be amended from time to time (the "ACT"), the
Members have formed a limited liability company by filing the Certificate of
Formation with the Secretary of State of the State of Delaware. The rights and
liabilities of the Members, and the operation of the Company, shall be governed
by and determined pursuant to the Act and this Agreement. To the extent the
rights and obligations of any Member are different by reason of any provision of
this Agreement than they would be in the absence of such provision, this
Agreement, to the extent permitted by the Act, shall control.
SECTION 2.2 NAME; REGISTERED AGENT AND REGISTERED OFFICE. The name of
the Company, and the name under which the business of the Company shall be
conducted shall be Interstate Hotels, LLC or such other name as hereafter may be
adopted by the Managing Member. The Registered Agent of the Company shall be The
Corporation Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or
such other Person as may be selected from time to time by the Managing Member.
The registered office of the Company shall be c/o The Corporation Trust Company,
0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
SECTION 2.3 PRINCIPAL OFFICE. The principal place of business and
office of the Company shall be located c/o Interstate Hotels Corporation, Xxxxxx
Plaza Ten, 000 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or at such
other place as may be determined by the Managing Member.
SECTION 2.4 PURPOSES AND BUSINESS.
2.4.1 The purpose and nature of the business of the Company shall
be:
(i) to directly or indirectly own, hold, manage, terminate,
extend, amend, amend and restate or otherwise modify,
or renew or replace (provided such renewal or
replacement relates solely to
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the hotels referenced in the Existing Contracts) the
Existing Contracts and any such renewals or
replacements;
(ii) to own and hold ownership interests in the Existing
Subsidiaries of the Company for the purpose of causing
said subsidiaries to (a) own, hold, manage, terminate,
extend, amend, amend and restate or otherwise modify,
or renew or replace (provided such renewal or
replacement relates solely to the hotels referenced in
the Existing Subsidiary Contracts) the Existing
Subsidiary Contracts to which they are a party and (b)
provide certain ancillary services to the hotels
subject to the Existing Contracts and the Existing
Subsidiary Contracts and any such renewals or
replacements;
(iii) to exercise the rights and perform the obligations of
the Company and to cause the Existing Subsidiaries to
exercise their respective rights and perform their
respective obligations under and pursuant to the
Existing Contracts, including to act as managers and
franchisees under such Existing Contracts or any
renewals or replacements thereof with respect to the
hotels referenced in such Existing Contracts;
(iv) to own and hold ownership interests in entities owning
and managing The Xxxxxxx Hotel Complex in Cambridge,
Massachusetts; and
(v) to conduct all activities necessary or desirable to
accomplish the foregoing purposes, including retaining
such employees as the Managing Member deems reasonably
necessary.
2.4.2 The Company shall not:
(i) enter into or permit any Existing Subsidiary to enter
into any contract or agreement other than as permitted
under subsection 2.4.1;
(ii) enter into or permit any Existing Subsidiary to enter
into or conduct any business, other than as set forth
under subsection 2.4.1;
(iii) create, acquire or retain any equity interest in any
legal entity, other than the Existing Subsidiaries;
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(iv) make any loans, investments or other similar payments
other than loans, investments or other similar payments
made for the benefit of the Company or the Existing
Subsidiaries (which may include indirect benefits such
as the renewal of an Existing Contract or an Existing
Subsidiary Contract); or
(v) permit any Person other than the Company to have any
ownership interest in any Existing Subsidiary.
SECTION 2.5 FUTURE BUSINESS. The Members acknowledge and agree that
they intend for all management and franchise activities, other than franchise or
management activities permitted under subsection 2.4.1 or relating to the hotels
currently managed under the Existing Contracts, to be conducted by Northridge
Holdings or IHC, as opposed to the Company, and neither the Managing Member nor
the Non-Managing Member shall have any obligation, fiduciary or otherwise, to
offer or bring to the Company any opportunities relating to any business
activities not contemplated in subsection 2.4.1. It is anticipated that all such
opportunities not contemplated by subsection 2.4.1 shall belong to Northridge
Holdings or IHC.
ARTICLE 3
RIGHTS AND OBLIGATIONS OF MEMBERS
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SECTION 3.1 LIMITED LIABILITY. Except as required under the Act or as
expressly set forth in this Agreement, the debts, obligations and liabilities of
the Company, whether arising in contract, tort or otherwise, will be solely the
debts, obligations and liabilities of the Company, and no Member will be
obligated personally for any debt, obligation or liability of the Company solely
by reason of being a member of the Company.
SECTION 3.2 ADMISSION OF MEMBERS. Northridge Holdings and PAH are
Members of the Company and shall be shown as such on the books and records of
the Company. Except as expressly permitted by this Agreement, no other Person
will be admitted as a member of the Company, and no additional Interests will be
issued, without the approval of Northridge Holdings and PAH.
SECTION 3.3 BANKRUPTCY OF A MEMBER. Except as provided in Section 10.1,
the Bankruptcy of any Member shall not cause a dissolution of the Company, and
the rights of such Member to share in the profits or losses of the Company and
to receive distributions of Company funds shall, on the happening of such event,
devolve on its successors or assigns, subject to the terms and conditions of
this Agreement, and the Company shall continue as a limited liability company.
However, in no event shall any such assignee become a substitute Member or
succeed to any right to vote or participate in the management of the business,
property and affairs of the Company or to exercise any rights of a Member,
unless such
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assignee shall otherwise be entitled to become a Substitute Member under the
terms of this Agreement.
SECTION 3.4 NO WITHDRAWAL. No Member may withdraw from the Company
without the prior consent of the other Members (which may be granted or withheld
in the sole discretion of such Members), other than as expressly provided in
this Agreement.
SECTION 3.5 REMUNERATION TO MEMBERS. Except as expressly otherwise
authorized in, or pursuant to, this Agreement, no Member shall be entitled to
remuneration for acting in the Company business.
SECTION 3.6 DUTIES AND CONFLICTS. Notwithstanding anything to the
contrary contained in this Agreement, (i) each Member recognizes that the other
Member and its Affiliates have or may have other business interests, activities
and investments, some of which may be in conflict or competition with the
business of the Company, and that such Persons are entitled to carry on such
other business interests, activities and investments; (ii) the Members and their
Affiliates may engage in or possess an interest in any other business or venture
of any kind, independently or with others, on their own behalf or on behalf of
other entities with which they are affiliated or associated, and such Persons
may engage in any activities, whether or not competitive with the Company,
without any obligation to offer any interest in such activities to the Company
or to any Member; and (iii) neither the Company nor any Member shall have any
right, by virtue of this Agreement, in or to such activities, or the income or
profits derived therefrom, and the pursuit of such activities, even if
competitive with the business of the Company, shall not be deemed wrongful or
improper.
ARTICLE 4
MANAGEMENT
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SECTION 4.1 MANAGEMENT BY THE MANAGING MEMBER; MEMBERS.
4.1.1 MANAGEMENT BY THE MANAGING MEMBER. The overall
management and control of the business and affairs of the Company shall
be overseen by the Managing Member, in the form and manner described
below. Except as otherwise expressly provided in this Agreement, the
Managing Member shall have the exclusive power and authority to take
such action for and on behalf of the Company as the Managing Member
shall from time to time deem necessary or appropriate to carry on the
Company business and to carry out the purposes for which the Company
was organized. The Managing Member shall in good faith use reasonable
efforts to extend or renew the Existing Contracts (including leases)
with the respective third party owners and shall cause the Existing
Subsidiaries to use good faith efforts to extend or renew the Existing
Subsidiary Contracts (including leases) with the respective third party
owners, in each case upon the expiration thereof, shall in good faith
use
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reasonable efforts to provide and promote the ancillary services
provided by the Existing Subsidiaries that are not parties to hotel
management contracts, and shall not allow or cause, directly or
indirectly, Northridge Holdings or any other affiliate of Northridge
Holdings (other than the Company) to become the Manager of the hotels
currently managed under the Existing Contracts.
4.1.2 INVOLVEMENT IN COMPANY BUSINESS. The Managing Member
shall devote such time to the Company business as it deems to be
necessary or desirable in connection with its respective duties and
responsibilities hereunder.
4.1.3 LIMITATIONS ON POWERS OF THE MEMBERS. Notwithstanding
the foregoing provisions of this Section 4.1 or any other provision of
this Agreement to the contrary, the Members shall not be empowered to,
and shall not (i) undertake any act in violation of this Agreement;
(ii) possess or take title to any assets of the Company; or (iii) take
any action that makes it illegal or impossible for the Company to carry
on its business.
SECTION 4.2 BANK ACCOUNTS. The Managing Member shall open and
thereafter maintain, for the Company, a commercial checking account and such
other accounts at one or more banks or trust companies organized and existing
under the laws of the United States or any state thereof, each having combined
capital and surplus aggregating at least $500,000,000 and none of which is an
Affiliate of any Member, which accounts shall be interest bearing to the extent
practicable. All funds of the Company shall be promptly deposited in said
accounts.
SECTION 4.3 LIABILITY; INDEMNIFICATION. Except as set forth in Section
4.4, no Member (including the Managing Member) shall be liable to the Company or
any Member for any act or omission by it in the conduct of its duties as a
Managing Member or Member, as the case may be, that is within the scope of such
Person's authority hereunder and that is performed or omitted in good faith and
without gross negligence or willful misconduct on its part. The Company shall
indemnify, defend and hold harmless each such Person and its respective
Affiliates and agents from and against any personal liability, claim, loss,
damage, cost or expenses, including attorneys' fees and expenses, incurred or
sustained by such Person or such Affiliate or agent by reason of any act or
omission by it that is within the scope of its authority hereunder and that is
performed or omitted in good faith and without gross negligence or willful
misconduct on its part. The indemnification provided under this Section 4.3
shall be in addition to, and shall not limit or diminish, the coverage of any
such Person or Affiliate or agent under any insurance covering the Company. The
provisions of this Section 4.3 shall survive any termination of the Company or
this Agreement.
SECTION 4.4 LIMITATIONS ON SALE OF ASSETS; INDEMNIFICATION.
4.4.1 The Members acknowledge that if any or all of the Existing
Contracts or other assets of the Company were sold or
otherwise transferred or disposed of by the Company, or if the
Company were merged with or acquired by another entity or
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otherwise engaged in a corporate transaction in which taxable
gain could be recognized in whole or in part, PAH would suffer
significant adverse tax consequences. The Members also
acknowledge that the stock of PAH is held by an entity that is
a "real estate investment trust" for Federal income tax
purposes (a "REIT") that must comply with certain requirements
to continue to qualify as a REIT, including legislation
adopted in 1998 affecting the operations and activities of
"stapled" REITs entitled to grandfathering relief under
Section 269B of the Code. Accordingly, without the prior
written consent of PAH, the Company shall not, and the
Managing Member shall cause the Company not to, (i) sell or
otherwise dispose of any of the Existing Contracts or other
assets of the Company or the Existing Subsidiaries (except for
sale or disposals of the Existing Contracts or other assets
pursuant to the performance of obligations of the Company that
are required (as distinguished from permitted) under the
Existing Contracts), (ii) merge with, be acquired by or enter
into a corporate acquisition or reorganization transaction
with any other person or entity, or to allow any of the
Existing Subsidiaries to merge with, be acquired by or enter
into a corporate acquisition or reorganization transaction
with any other person or entity, (iii) knowingly cause PAH to
recognize any of the "built-in gain" with respect to its
interest in the Company or the Company's assets, (iv) acquire
any real property or other interests in real estate (including
leasehold interests), or acquire interests in, or
substantially all of the assets of, any other person or entity
(other than the Existing Subsidiaries), or to allow any of the
Existing Subsidiaries to acquire any real property or other
interests in real estate, or acquire interests in, or
substantially all of the assets of, any other person or entity
(including leasehold interests), or (v) change the nature of
the Company's business, or allow any of the Existing
Subsidiaries to change the nature of any of the Existing
Subsidiaries' business, in a manner not contemplated by this
Agreement; provided, however, that (a) nothing in this Section
4.4.1 or elsewhere in this Agreement shall prohibit the
Company from selling its interests in The Xxxxxxx Hotel
Complex in Cambridge, Massachusetts pursuant to an Asset
Purchase Agreement, dated as of May 7, 1999, by and among
IHC/Chaz Corporation, PAH-Management Corporation and F&H
Realty LLC (the "ASSET PURCHASE AGREEMENT") and (b) the
indemnification obligations under Section 4.4.2 below shall
not apply in connection with any such sale of interests in The
Xxxxxxx Hotel Complex.
4.4.2 The Company and the Managing Member, jointly and severally,
hereby indemnify and hold harmless PAH, its shareholders,
officers, directors, agents and other indirect owners, and
their successors in interest, from and against any personal
liability, claim, loss, damage, cost or expenses, including
attorneys' fees and expenses, incurred or sustained by any
breach of the obligations set forth in subsections 4.4.1(i)
through 4.4.1(iii), including the amount of any such adverse
tax consequences.
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SECTION 4.5 ALLOCATION OF COSTS AND EXPENSES. The Company and
Northridge Holdings acknowledge that certain employees, equipment and services
may be provided by the Company for the benefit of Northridge Holdings (including
any subsidiary of Northridge Holdings, other than the Company), or vice versa.
All costs and expenses relating to services provided by one party for, in whole
or in part, the benefit of the other (the "SHARED EXPENSES") shall be allocated
between the Company and Northridge Holdings, based on generally accepted
accounting principles consistently applied, on the basis of which party
benefited from the expenditure of such Shared Expenses. To the extent the
allocation of any Shared Expenses cannot be fairly or equitably apportioned
(including general and administrative expenses), the Company and Northridge
Holdings shall allocate Shared Expenses based on respective gross revenues so
that each party's profit margins are substantially the same for similar
services. The Managing Member and the Non-Managing Member may mutually agree in
writing to apportion Shared Expenses between the Company and Northridge Holdings
other than as set forth above. The Managing Member shall regularly (not less
frequently than quarterly) provide all Members with a breakdown of such
allocation of Shared Expenses, which breakdown shall be reviewed by the Company
Accountant. The Chief Financial Officer of Northridge Holdings (and IHC, if IHC
has a Chief Financial Officer different than that of Northridge Holdings) shall
certify quarterly to the Non-Managing Member that the allocation of Shared
Expenses for the immediately preceding quarter complies with the allocation
methodology set forth in this Section 4.5.
SECTION 4.6 RESOLUTION OF DISPUTES REGARDING SHARED EXPENSES.
4.6.1 All disputes, claims, or controversies relating to the
allocation of Shared Expenses pursuant to Section 4.5 shall be
resolved solely and exclusively by binding arbitration to be
conducted before the American Arbitration Association ("AAA")
or its successor. The arbitration shall be held in New York,
New York before a single arbitrator to be selected by the
Members or, if the Members are unable to agree on a single
arbitrator, before a panel of three arbitrators appointed by
AAA, and the arbitration shall be conducted in accordance with
the rules and regulations promulgated by AAA, unless
specifically modified herein. The parties covenant and agree
that the arbitration shall commence within sixty (60) days of
the date on which a written demand for arbitration is filed by
any Member with AAA. In connection with the arbitration
proceeding, the arbitrator shall have the power to order the
production of documents by each party and any third-party
witnesses; however, the arbitrator shall not have the power to
order the taking of depositions, the answering of
interrogatories or the response to requests for admission. In
connection with any arbitration, each party shall provide to
the other, no later than seven business days before the date
of the arbitration, the identity of all persons that may
testify at the arbitration and a copy of all documents that
may be introduced at the arbitration or considered or used by
a party's witness or expert. The arbitrator's decision and
award shall be made and delivered within six (6) months of the
selection of the arbitrator and judgment on the award may
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be entered by any court having competent jurisdiction. The
arbitrator's decision shall set forth a reasoned basis for its
findings. The Members covenant and agree that they will
participate in the arbitration in good faith and that they
will share equally its costs except as otherwise provided
herein. This clause applies equally to requests for temporary,
preliminary or permanent injunctive relief, except that in the
case of temporary or preliminary injunctive relief any Member
may proceed in court without prior arbitration for the limited
purpose of avoiding immediate and irreparable harm. The
provisions of this Section 4.6 shall be enforceable in any
court of competent jurisdiction, and the parties shall bear
their own costs in the event of any proceeding to enforce this
Agreement except as otherwise provided herein. The arbitrator
may in his or her discretion assess costs and expenses
(including the reasonable legal fees and expenses of the
prevailing party) against any party to a proceeding. Any party
unsuccessfully refusing to comply with an order of the
arbitrators shall be liable for costs and expenses, including
attorneys' fees, incurred by the other party in enforcing the
award.
4.6.2 The Members agree not to institute, join in, or cooperate in
any litigation, lawsuit, claim or action against the Company
or any Member regarding the allocation of Shared Expenses,
other than by the means provided for in Section 4.6.1 of this
Agreement.
4.6.3 Each of the Members irrevocably and unconditionally consents
to the exclusive jurisdiction of AAA to resolve all disputes,
claims or controversies arising out of or relating to the
allocation of Shared Expenses, and further consents to the
jurisdiction of the courts of the State of New York for the
purposes of enforcing the arbitration provisions of Section
4.6.1 of this Agreement. Each Member further irrevocably
waives any objection to proceeding before AAA based upon lack
of personal jurisdiction or to the laying of venue and further
irrevocably and unconditionally waives and agrees not to make
a claim in any court that arbitration before AAA has been
brought in an inconvenient forum.
ARTICLE 5
BOOKS AND RECORDS
-----------------
SECTION 5.1 BOOKS AND RECORDS. The Managing Member shall maintain or
cause to be maintained, at the expense of the Company, in a manner customary and
consistent with good accounting principles, practices and procedures, a
comprehensive system of office records, books and accounts (which records, books
and accounts shall be and remain the property of the Company) in which shall be
entered fully and accurately each and every financial transaction with respect
to the operations of the Company. Bills, receipts and vouchers shall be
maintained on file by the Company. The Managing Member shall maintain or cause
to be maintained said books and accounts in a safe manner and separate from any
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records not having to do directly with the Company. The Managing Member shall
cause audits to be performed and audited financial statements and income tax
returns to be prepared as it deems necessary. Such books and records of account
shall be prepared and maintained by the Managing Member at a location or
locations designated by the Managing Member. Each Member or its duly authorized
representative shall have the right to inspect, examine and copy such books and
records of account at the Company's office during reasonable business hours.
SECTION 5.2 ACCOUNTING AND FISCAL YEAR. The books of the Company shall
be kept on the accrual basis and the Company shall report its operations for tax
purposes on the accrual method. The taxable year of the Company shall end on
December 31 of each year, unless a different taxable year shall be required by
the Code.
SECTION 5.3 REPORTS.
5.3.1 The Managing Member shall prepare, or cause to be
prepared, at Company expense, the financial reports and other
information, including, without limitation, audited financial
statements, that the Managing Member may determine are appropriate. The
Managing Member shall prepare or cause to be prepared at the expense of
the Company and shall furnish to each of the Members the following:
5.3.1.1 Within sixty (60) calendar days after the
close of each calendar year of the Company, audited financial
statements, including, without limitation, related notes to financial
statements, a balance sheet of the Company dated as of the end of the
calendar year, a related statement of income and expense, a statement
of cash flow and a statement of changes in Members' capital for the
Company for the calendar year, information for the calendar year as to
the balance in each Member's Capital Account, and all other information
deemed reasonably necessary by the Managing Member, or as reasonably
requested by the Non-Managing Member, certified by an independent
accounting firm as being, to the best of its knowledge, true and
correct and prepared in accordance with generally accepted accounting
principles applied on a consistent basis, and all of which shall
otherwise be certified in such manner as is customary;
5.3.1.2 Within twenty (20) calendar days after the
close of each calendar quarter of the Company (other than the last
calendar quarter in any calendar year), a balance sheet of the Company
dated as of the end of the calendar quarter, a related statement of
income and expense, a statement of cash flow and a statement of changes
in Members' capital for the calendar quarter, and information for the
calendar quarter as to the balance in each Member's Capital Account,
and all other information, including a market update, as is deemed
reasonable by the Managing Member, or as reasonably requested by the
Non-Managing Member, all of which shall be certified by the Person
preparing or responsible for preparing such statements as being, to the
best of its knowledge, true and correct;
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5.3.1.3 Within twenty (20) calendar days after the
end of each calendar month, an income statement (with budget variance
explanations) and statement of cash flow; and
5.3.1.4 Promptly after the end of each calendar
year and after the end of each calendar quarter, the Managing Member
will use its best efforts to have the Company Accountant prepare and
deliver to each Member a report setting forth in sufficient detail all
such information and data with respect to business transactions
effected by or involving the Company during the calendar year as will
enable the Company and each Member to timely prepare its federal, state
and local income tax returns (including with respect to quarterly
estimated tax payments) in accordance with the laws, rules and
regulations then prevailing. The Managing Member will use its
reasonable efforts to have the Company Accountant also prepare federal,
state and local tax returns required of the Company and to submit those
returns to the Company for its approval no later than 30 calendar days
prior to the date required for the filing thereof (including any
extensions granted) and will file the tax returns after they have been
made available to the Members for review and approved by the Managing
Member. In the event the Managing Member shall not desire or be able to
approve any such tax return prior to the date required for the filing
thereof (including any extensions granted), the Company will timely
obtain an extension of such date if such extension is available under
applicable law. In all cases, tax returns shall be prepared and filed
in accordance with applicable law and with the provisions of this
Agreement.
5.3.2 All decisions as to accounting principles shall be made
by the Managing Member subject to the provisions of this Agreement.
SECTION 5.4 THE COMPANY ACCOUNTANT. The Company shall retain as the
regular accountant and auditor for the Company (the "COMPANY ACCOUNTANT") a
nationally-recognized accounting firm or any other accounting firm acceptable to
the Managing Member in its sole discretion. The fees and expenses of the Company
Accountant shall be a Company expense.
ARTICLE 6
CONTRIBUTIONS
-------------
SECTION 6.1 INITIAL CAPITAL CONTRIBUTIONS. The "INITIAL CAPITAL
CONTRIBUTIONS" of the Members and initial Capital Account balances shall be as
described on Schedule 1.1 attached hereto.
SECTION 6.2 ADDITIONAL CAPITAL CONTRIBUTIONS.
6.2.1 Except as otherwise provided herein, no Member shall be
obligated to make any additional contributions of capital (all
contributions of capital to the
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Company, including the Initial Capital Contributions, "CAPITAL
CONTRIBUTIONS") to the Company (including upon dissolution and
liquidation of the Company). Upon the making of any additional Capital
Contributions, each Member's Percentage Interest shall thereafter be
equal to the ratio, expressed as a percentage, equal to the aggregate
Capital Contributions made by such Member divided by the aggregate
Capital Contributions made by all Members to the Company.
6.2.2 The Managing Member shall monitor the finances of the
Company in an attempt to determine whether or not, and when, the cash
receipts of the Company are insufficient to pay all costs and expenses
of the Company (such costs and expenses, the "NECESSARY COSTS"). Prior
to the Managing Member contributing any capital to the Company (other
than the Managing Member's Initial Capital Contribution), the Managing
Member shall issue capital calls to the Members to fund shortfalls
related to the Company (the "CAPITAL CALL NOTICE"). Such Capital Call
Notice shall set forth the amount of the required funds (the "REQUIRED
FUNDS") and a list of Necessary Costs, and shall specify a date (the
"CAPITAL CALL DUE DATE") for contribution of such funds. Upon receipt
of the Capital Call Notice, the Non-Managing Member shall have the
right, but not the obligation, to fund its proportionate share (based
on its respective Percentage Interest) of the total funds specified in
the Capital Call Notice. The Capital Call Due Date shall be at least
thirty (30) days after receipt of the Capital Call Notice unless a
shorter time is agreed to by the Non-Managing Member. All additional
Capital Contributions shall be made by wire transfer of immediately
available funds to an account of the Company.
6.2.3 To the extent the Non-Managing Member elects not to fund
its proportional share of the Required Funds, the Managing Member shall
have the right, but not the obligation, to contribute the unfunded
amount to the Company. Should the Managing Member elect to fund such
amount, then the Members' Percentage Interests will be adjusted as
described in subsection 6.2.1.
SECTION 6.3 NO THIRD PARTY BENEFICIARY. The provisions hereof are
intended for the benefit of the Members and the Company only and shall not
confer any right or claim upon, or otherwise inure to the benefit of, any
officer or creditor of, or other third party having dealings with, the Company.
SECTION 6.4 CAPITAL ACCOUNTS. A Capital Account shall be maintained for
each Member. Initially, the Capital Account of each Member shall be credited
with the amounts referred to in Schedule 1.1. Thereafter, each Member's Capital
Account shall be credited with such Member's share of Profits, any individual
items of income and gain allocated to such Member pursuant to the provisions of
Article 7, the amount of additional cash, and the Book Value of any asset (net
of any liabilities assumed by the Company and liabilities to which the asset is
subject), contributed to the Company by such Member (an "ADDITIONAL CAPITAL
CONTRIBUTION"), and shall be debited with the Member's share of Losses, any
individual items of deduction and loss allocated to such Member pursuant to the
provisions of Article 7, the
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amount of any cash distributed to such Member and the Book Value of any asset
distributed to such Member (net of any liabilities assumed by the Member and
liabilities to which the asset is subject). Each Member's Capital Account shall
also be credited with the amount of Company liabilities assumed by such Member
or that are secured by any property distributed to such Member, and each
Member's Capital Account shall be debited with the amount of any liabilities of
such Member assumed by the Company or that are secured by any property
contributed by such Member to the Company. In the event that all or a portion of
an interest in the Company is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor
to the extent it related to the transferred interest.
The provisions of this Section 6.4 and the other provisions in this
Agreement relating to maintenance of Capital Accounts are intended to comply
with Treasury Regulations Section 1.704-1(b) and shall be interpreted in a
manner consistent therewith.
SECTION 6.5 WITHDRAWAL OF CAPITAL. Except as provided herein, (i) no
Member shall be entitled to withdraw any part of its Capital Account, (ii) no
Member shall be entitled to receive any interest on its Capital Account or
distributions from the Company, and (iii) no Member shall be entitled to demand
or receive any property from the Company other than cash.
SECTION 6.6 NEGATIVE CAPITAL ACCOUNTS. In no event shall any Member be
obligated to make any capital contribution to the Company solely as a result of
the existence at any time of a negative Capital Account balance for such Member.
SECTION 6.7 SATISFACTION OF INDEMNITY OBLIGATIONS UNDER DISTRIBUTION
AGREEMENT. Payments made to the Company by PAH or its affiliates, or by the
Company to PAH or its affiliates, in satisfaction of indemnity or "true-up"
obligations under the Distribution Agreement or the Settlement Agreement shall,
except as specifically set forth in this Agreement, be treated as made by the
Member that contributed the asset related to the indemnity claim or true-up
obligation on a pro rata basis in proportion to the Member's initial Percentage
Interests. The Members shall cooperate to execute any documents reasonably
requested by PAH in furtherance of the foregoing. Any such payments made
pursuant to the Distribution Agreement or Settlement Agreement shall be neither
credited nor charged to the Capital Accounts of any of the Members.
ARTICLE 7
ALLOCATION OF PROFITS AND LOSSES; TAX MATTERS
---------------------------------------------
SECTION 7.1 PROFITS AND LOSSES. Profits and Losses for each fiscal year
of the Company shall be allocated to the Members in accordance with their
respective Percentage Interests as determined from time to time. The Percentage
Interests of the Members shall be
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appropriately adjusted to reflect any disproportionate contribution made by one
or more of the Members.
SECTION 7.2 REGULATORY ALLOCATIONS.
7.2.1 Notwithstanding subsection 7.1, the following special
allocations shall be made each taxable year, to the extent required, in the
following order:
(i) Minimum Gain Chargebacks and Qualified Income Offset.
Items of Company income and gain shall be allocated
to the extent of, and in an amount sufficient to
satisfy, the "minimum gain chargeback" requirements
of Treasury Regulations Section 1.704-2(f) and (i)(4)
and the "qualified income offset" requirement of
Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(3).
(ii) Nonrecourse and Partner Nonrecourse Deductions.
"Nonrecourse deductions" of the Company (within the
meaning of Treasury Regulations Section
1.704-2(b)(1)) shall be allocated among the Members
in proportion to their respective Percentage
Interests. "Partner nonrecourse deductions" (within
the meaning of Treasury Regulations Section
1.704-2(i)) shall be allocated to the Member who
bears the economic risk of loss associated with such
deductions, in accordance with Treasury Regulations
Section 1.704-2(i).
(iii) Any Other Allocations of Items That Cannot Have
Economic Effect. Unless otherwise required by Code
Section 704(b) or the Treasury Regulations
promulgated thereunder or otherwise provided in this
subsection 7.2.2, any allocations of Company items of
income, gain, loss, deduction or credit that cannot
have "economic effect" (within the meaning of
Treasury Regulations Section 1.704-1 and 1.704-2)
shall be allocated among the Members in proportion to
their respective Percentage Interests.
(iv) Curative Allocations. The allocations set forth in
this Section 7.2.1 (the "Regulatory Allocations") are
intended to comply with certain requirements of the
Treasury Regulations. It is the intention of the
Members that, to the extent possible, all Regulatory
Allocations shall be offset either with other
Regulatory Allocations or with special allocations
pursuant to this Section 7.2. Therefore,
notwithstanding, any other provision of this
Agreement (other than the Regulatory Allocations),
offsetting special allocations of Company income,
gain, loss or deduction shall be made as appropriate
so that, taking into account such special
allocations, each Member's Capital Account balance
is, to the extent possible, equal to the Capital
Account balance
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such Member would have had if the Regulatory
Allocations were not part of this Agreement; provided
that such offsetting special allocations shall take
into account future Regulatory Allocations that are
likely to offset other Regulatory Allocations
previously made.
7.2.2 Maintenance of Percentage Interests. It is the intention
of the parties that the Capital Account balances of the Members reflect their
respective Percentage Interests. In furtherance of the foregoing, from time to
time and to the extent necessary, items of Company income, gain, loss or
deduction shall be allocated to the Members to the extent possible to ensure
that each Member's Capital Account balance properly reflects its Percentage
Interest relative to the Capital Account balances of the other Member(s).
SECTION 7.3 TAX ALLOCATIONS. The Company's ordinary income and losses
and capital gain as determined for tax purposes (and each item of income, gain,
loss or deduction entering into the computation thereof) shall be allocated to
the Members in the same proportions as the corresponding "book" items are
allocated pursuant to Sections 7.1 and 7.2 of this Agreement. Notwithstanding
the foregoing, tax items relating to property with an adjusted tax basis that is
different from its Book Value shall be allocated among the Members in accordance
with Section 704(c) of the Code and the Treasury Regulations issued thereunder.
Items described in this Section 7.3 shall neither be credited nor charged to the
Member's Capital Accounts.
SECTION 7.4 TAX MATTERS MEMBER. The Managing Member is hereby
designated as the "TAX MATTERS MEMBER" for the Company (as such term is defined
in Section 6231(a)(7) of the Code), and all federal, state and local tax audits
and litigation shall be conducted under the direction of the Tax Matters Member.
Any action taken by the Tax Matters Member shall be made as a fiduciary with
respect to the interests of all Members notwithstanding any other provision
contained herein.
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SECTION 7.5 TAX ELECTIONS. All elections required or permitted to be
made by the Code or other applicable tax laws, and all material decisions with
respect to the calculation of taxable income or tax loss under the Code or any
other applicable tax laws, shall be made by the Tax Matters Member; provided
that the Tax Matters Member shall consult with and obtain the consent of the
other Member(s) (such consent not to be unreasonably withheld) to the extent
that any such election or decision could adversely impact the other Member(s).
Notwithstanding the foregoing, the Non-Managing Member shall be entitled to
determine whether the Company will elect installment sale treatment under
Section 453 of the Code with respect to property contributed to the Company by
the Non-Managing Member. In addition, the Members agree that the Company will
use the "traditional method" of allocations under Section 704(c) of the Code and
the Treasury Regulations issued thereunder with respect to all assets held or to
be held by the Company as of the date of this Agreement. In the event that one
or more of the Members desires to make additional contributions to the Company
of assets that would be subject to Section 704(c) of the Code, the Members shall
agree on a Section 704(c) methodology that will apply to such assets.
ARTICLE 8
DISTRIBUTIONS
-------------
SECTION 8.1 CASH AVAILABLE FOR DISTRIBUTIONS.
8.1.1 At such times as are determined by the Managing Member
(but no less frequently than quarterly), the Company shall make a
distribution of Net Operating Cash Flow of the Company (to the extent
positive). Net Operating Cash Flow distributions shall be made pro rata
to the Members, in accordance with their Percentage Interests.
8.1.2 Except upon the liquidation of the Company (in which
event Net Capital Proceeds shall be distributed pursuant to Section
10.2) and as provided in Article 8A, any Net Capital Proceeds shall be
distributed by the Company to the Members pro rata in accordance with
their Percentage Interests, within thirty (30) days following receipt.
8.1.3 Except as provided in subsection 8.1.1 and subsection
8.1.2 above, no portion of any capital contribution made by any Member
to the Company may be withdrawn or distributed at any time.
8.1.4 If the Percentage Interests of the Members are adjusted
effective at any time or times during any fiscal year of the Company,
all distributions of cash made to the Members during such fiscal year
(without regard to the actual timing of such distributions) shall be
allocated to each portion of such fiscal year during which different
Percentage Interests are in effect in the proportion that the number of
days in such portion bears to the total number of days in such fiscal
year except with respect to
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Net Capital Proceeds, in which case such proceeds shall be distributed
in accordance with the Percentage Interests on the date of the
applicable transaction. The amounts so allocated to each such portion
of said fiscal year shall be divided among the Members in proportion to
their respective Percentage Interests in effect during each such
portion of the fiscal year in question. Such allocations to such
portions of a fiscal year, and the adjustments, if any, of such cash
distributions made during such year, shall be determined with
reasonable promptness after the close of each such fiscal year by the
Company Accountant. The Members will promptly make any adjusting
payments between them as may be required in order to effect any
adjustments of such cash distributions as determined by the Company
Accountant.
8.1.5 Pursuant to and to the extent required by the Settlement
Agreement, the Company shall make a special distribution of cash or
cash equivalent to the Managing Member in the amount of the Adjusted
Positive Net Working Capital (as defined in the Settlement Agreement),
which distribution shall cause an adjustment to the Managing Member's
Capital Account as required by Section 6.4 but which shall not affect
the Managing Member's Percentage Interest. Notwithstanding anything to
the contrary, immediately prior to the distribution of the Company's
assets upon the liquidation or termination of the Company pursuant to
Section 10.4 of this Agreement, the Managing Member shall be specially
allocated an amount of gross income or gain, or the Non-Managing Member
shall be specially allocated an amount of loss or deduction, such that
the relative Capital Account balances of the Members will be in
proportion upon liquidation to their respective Percentage Interests.
ARTICLE 8A
COMPANY'S INTEREST IN INTERCARP
-------------------------------
The Members acknowledge that the Company holds certain interests in
Intercarp Limited Partnership (the "INTERCARP INTERESTS") which are subject to
the Asset Purchase Agreement, pursuant to which such interests are expected to
be sold to F&H Realty LLC. If the Intercarp Interests are sold pursuant to the
Asset Purchase Agreement, as such Asset Purchase Agreement may be amended from
time to time, (i) any cash received at the closing of the transaction shall not
be distributed to the Members pursuant to this Agreement, notwithstanding
Section 8.1.2, and shall instead be used by the Company to pay current
liabilities, and (ii) with respect to any note in an amount not to exceed $5.75
million received at the closing of the transaction, all interest income and
principal payments with respect to such note shall be distributed to the
Managing Member; provided that this clause (ii) shall not apply if Northridge
Holdings, IHC, or any of their affiliates (other than the Company or any
subsidiary of the Company) fails to make a loan to F&H Realty LLC with a
principal amount of at least $2.5 million as required pursuant to the Asset
Purchase Agreement.
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ARTICLE 9
TRANSFER
--------
SECTION 9.1 NO TRANSFER OF INTERESTS.
9.1.1 Except as expressly permitted or contemplated by this
Agreement, no Member may sell, assign, give, hypothecate, pledge,
encumber or otherwise transfer ("TRANSFER") all or any portion of its
Interest, whether directly or indirectly (including the transfer of
interests in the Managing Member), without the written consent of the
other Members.
9.1.2 Any Transfer by a Member of its Interest in
contravention of this Article 9 shall be null and void. No Member shall
withdraw from the Company except in connection with a Permitted
Transfer or in accordance with Section 3.4.
SECTION 9.2 PERMITTED TRANSFERS OF INTERESTS; RIGHT OF FIRST OFFER.
9.2.1 The Non-Managing Member, from time to time and in its
sole discretion, without the consent of the Managing Member, may
Transfer its Interest in whole, or in part, to any party, provided such
transferee agrees to be bound by all the terms, conditions and
provisions of this Agreement (including the provisions of this Article
9). Any Transfer of the Non-Managing Member's Interest to a third party
shall be deemed a Permitted Transfer, and if such transferee acquires
all of the Non-Managing Member's Interest, such transferee shall be
admitted as a Substitute Member pursuant to Section 9.3.
9.2.2 Notwithstanding the foregoing, in the event of a
proposed transfer of all or part of the Non-Managing Member's Interest
to a third-party that is not an affiliate of PAH in a transaction that
would cause PAH to recognize any of the "built-in gain" with respect to
its interest in the Company or the assets of the Company (a "SPECIAL
TRANSFER EVENT"), the following procedures shall apply:
9.2.2.1 The Non-Managing Member shall, prior to any
transfer permitted under subsection 9.2.1, offer in writing
(the "FIRST OFFER NOTICE") to sell to the Managing Member all
or any part of its Percentage Interest (the "OFFERED
PERCENTAGE INTEREST"). The Managing Member shall notify the
Non-Managing Member within fifteen (15) Business Days of
receipt of the First Offer Notice that the Managing Member
either: a) is willing to purchase the Offered Percentage
Interest at a given price (the "FIRST OFFER PRICE"), or b) is
unwilling to purchase the Offered Percentage Interest. A
failure to respond to a First Offer Notice within such fifteen
(15) Business-Day period shall be deemed to be an election not
to purchase the Percentage Interest.
9.2.2.2 If the Managing Member has timely offered
elected to
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purchase the Percentage Interest specified in the First Offer
Notice, then the Non-Managing Member may: a) sell the Offered
Percentage Interest to the Managing Member at the First Offer
Price (which, the sale shall be without recourse,
representation or warranty, except that the Non-Managing
Member shall represent and warrant that it has authority to
sell, and owns the Interest free and clear of liens or claims
of third parties) or b) elect to market and sell the Offered
Percentage Interest to third parties within 180 days of
receiving the First Offer Price at a price not less than
ninety-eight percent (98%) of the First Offer Price. If the
Non-Managing Member does not transfer its interest within such
180 day period, then prior to any transfer which would result
in a Special Transfer Event, the Non-Managing Member shall
again comply with the terms of this subsection 9.2.2.
9.2.3 Any Permitted Transfer shall not relieve the transferor
of any of its obligations prior to such Transfer. Nothing contained in
this Article 9 shall prohibit a Transfer indirectly of a Member's
Interest in the Company if a direct Transfer would otherwise be
permitted under this Section 9.2. Subject to Section 9.3, any
transferee of a direct Interest pursuant to this Section 9.2 shall
become a Substitute Member of the Company. Each Member and its
permitted transferees shall be treated as one Member for all purposes
of this Agreement. The provisions of this Section 9.2 will not apply to
or be deemed to authorize or permit any collateral transfer of, or
grant of a security interest in, a Member's interest in the Company or
in any asset of the Company (which transfer or grant shall be subject
to the other provisions of this Agreement).
SECTION 9.3 TRANSFEREES. Notwithstanding anything to the contrary
contained in this Agreement, no transfer of all or any part of any Interest
shall be made if, as a result thereof, any income of the Company will be subject
to corporate federal income tax. No transferee of all or any portion of any
Interest shall be admitted as a Member unless such Interest is transferred in
compliance with the applicable provisions of this Agreement, such transferee
shall have furnished evidence of satisfaction of the requirements of Section 9.2
reasonably satisfactory to the remaining Members, and such transferee shall have
executed and delivered to the Company such instruments necessary to effectuate
the admission of such transferee as a Member and to confirm the agreement of
such transferee to be bound by all of the terms and provisions of this Agreement
with respect to such Interest. At the request of the remaining Members prior to
such transfer, each such transferee shall also cause to be delivered to the
Company, at the transferee's sole cost and expense, a favorable opinion of legal
counsel reasonably acceptable to the Company, to the effect that such transferee
has the legal right, power and capacity to own the Interest proposed to be
transferred. As promptly as practicable after the admission of any Person as a
Member, the books and records of the Company shall be changed to reflect such
admission. Upon satisfaction of the requirements of this Section 9.3 and any
other applicable provisions of this Agreement), such transferee shall be a
substitute Member (a "SUBSTITUTE MEMBER") of the Company. All reasonable costs
and expenses
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incurred by the Company in connection with any Transfer of any Interest and, if
applicable, the admission of any transferee as a Member shall be paid by such
transferee.
SECTION 9.4 ADMISSION OF ADDITIONAL MEMBERS.
9.4.1 No person may be admitted as an additional Member of the
Company (in contrast with admission as a Substitute Member in
connection with a Permitted Transfer) without the prior written consent
of the Members.
9.4.2 Any additional Member admitted to the Company shall
execute and deliver documentation in form satisfactory to the Managing
Member or the Members, as the case may be, accepting and agreeing to be
bound by this Agreement, and such other documentation as the Managing
Member or the Members, as the case may be, shall require in order to
effect such person's admission as an additional Member. The admission
of any person as an additional Member (an "ADDITIONAL MEMBER") shall
become effective as of the date upon which the name of such person is
recorded on the books and records of the Company following the consent
of the Managing Member or the Members, as the case may be, to such
admission.
ARTICLE 10
TERMINATION
-----------
SECTION 10.1 DISSOLUTION. The Company shall be dissolved and its
business wound up upon the happening of any of the following events, whichever
shall first occur:
10.1.1 the Bankruptcy of any Member, if within ninety (90)
days thereafter a majority in interest of the remaining Members (the
"REMAINING MEMBERS") shall not have elected to continue the Company,
which right of election is hereby granted to them;
10.1.2 entry of a decree of judicial dissolution of the
Company; or
10.1.3 the termination of all of the Existing Contracts and
any renewals or replacements thereof entered into in accordance with
subsection 2.4.1.
In no event shall the Company dissolve prior to the occurrence of one of the
events set forth above.
SECTION 10.2 TERMINATION. In cases of dissolution of the Company, the
business of the Company shall be wound up and the Company terminated (and the
Company shall cause the Existing Subsidiaries to be wound up and the business of
the Existing Subsidiaries to be
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terminated) as promptly as practicable thereafter, and each of the following
shall be accomplished:
10.2.1 The Liquidating Member shall cause to be prepared a
statement setting forth the assets and liabilities of the Company (as
consolidated with the Existing Subsidiaries) as of the date of
dissolution, a copy of which statement shall be furnished to all of the
Members.
10.2.2 The property and assets of the Company (including those
held by the Existing Subsidiaries) shall be liquidated by the
Liquidating Member as promptly as possible, but in an orderly and
businesslike and commercially reasonable manner. The Liquidating Member
may, in the exercise of its business judgment and if commercially
reasonable, determine not to sell all or any portion of the property
and assets of the Company, in which event such property and assets
shall be distributed in kind pursuant to subsection 10.2.4 below.
10.2.3 Any income, gain, profit or loss realized by the
Company upon the sale or other disposition of its property pursuant to
subsection 10.2.2 shall be allocated to the Members as and to the
extent required by Article 7 hereof.
10.2.4 The proceeds of sale and all other assets of the
Company shall be applied and distributed as follows and in the
following order of priority:
(i) To the payment of the Company's outstanding
liabilities, which shall be set forth on a statement
as provided in subsection 10.2.1.
(ii) To the setting up of any reserves that the
Liquidating Member shall determine to be reasonably
necessary for contingent, unliquidated or unforseen
liabilities or obligations of the Company or the
Members arising out of or in connection with the
Company. Such reserves, may, in the discretion of the
Liquidating Member, be paid over to a national bank
or national title with the Company as escrowee for
the purposes of disbursing such reserves to satisfy
the liabilities and obligations described above, and
at the expiration of such period as the Liquidating
Member may reasonably deem advisable, distribute any
remaining balance in the manner set forth below.
(iii) To each Member in accordance with their respective
Capital Account balances.
No payment or distribution in any of the foregoing categories shall be
made until all payments in each prior category shall have been made in
full. If the payments due to be made in any of the foregoing categories
exceed the remaining assets available for such purpose, such payment
shall be made to the Persons entitled to receive the same pro
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rata in accordance with the respective amount due to each such Person.
Payments described in clause (ii) above may be made in cash or in
assets of the Company in kind. Any asset distributed in kind shall be
distributed pro-rata unless the Members otherwise agree in writing and
shall be valued at its fair market value and for all purposes of this
Agreement shall be treated as if such asset had been sold at such value
and the net cash proceeds therefrom distributed to the Members. Without
limiting the foregoing, with respect to any assets distributed in kind,
there shall be a calculation of the amount of income, gain, profit or
loss that would have been realized by the Company with respect to such
assets if such assets had been sold at fair market value.
SECTION 10.3 ACTS IN FURTHERANCE OF LIQUIDATION. Each Member, upon the
request of the Liquidating Member, shall promptly execute, acknowledge and
deliver all documents and other instruments as the Liquidating Member shall
reasonably request to effectuate the proper dissolution and termination of the
Company, including the winding up of the business of the Company.
ARTICLE 11
TAG-ALONG AND DRAG-ALONG RIGHTS
-------------------------------
SECTION 11.1 NOTICE OF PROPOSED TRANSACTION. If the Board of Directors
of either Managing Member or IHC votes to approve or to recommend that
stockholders of Managing Member or IHC consider and approve a transaction that,
together with any other transactions within the preceding twelve (12) months,
would result in (i) a Person and its Affiliates, or a group of Persons within
the meaning of Section 13(d)(3) of the Exchange Act, (an "ACQUIROR") acquiring
beneficial ownership of 50% or more of the outstanding common stock, par value
$.01 per share, of Managing Member or IHC (the "INTERSTATE COMMON STOCK") or
(ii) the sale, exchange or other disposition of all or substantially all of the
assets of Managing Member or IHC (in either case, a "TRANSACTION"), then
Managing Member shall give written notice of such vote (a "SALE NOTICE") to
Non-Managing Member not less than two (2) business days following the date of
such vote. The date of such Sale Notice shall not be less than ten (10) business
days prior to the closing of the Transaction to which it relates. The Sale
Notice shall set forth in reasonable detail the name of the parties to the
proposed Transaction, the terms and conditions of the Transaction (including the
purchase price and any other material economic terms) and the scheduled date of
the Transaction. In addition, Managing Member shall provide Non-Managing Member
with additional information reasonably requested by Non-Managing Member relating
to the Transaction or the Acquiror.
SECTION 11.2 TAG-ALONG AND DRAG-ALONG RIGHTS.
(a) In the event that the Board of Directors of Managing
Member or IHC votes to approve any Transaction or to recommend that the
stockholders of Managing Member or IHC consider any Transaction, Managing Member
shall, at the written election of Non-Managing Member given within five (5)
business days of the later of the date of the applicable
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Sale Notice or the date on which Non-Managing Member learns of the Transaction
(in which case Managing Member shall promptly deliver a Sale Notice to
Non-Managing Member), use its best efforts to cause the terms and conditions of
the proposed Transaction to include an offer to purchase Non-Managing Member's
Interest in accordance with the provisions set forth below. In the event that
Managing Member is unable to cause the terms and conditions of the Transaction
to include an offer to purchase Non-Managing Member's Interest in accordance
with the provisions set forth below, Managing Member shall be deemed to have
elected to purchase Non-Managing Member's Interest on the terms set forth below.
(b) In the event that Managing Member has given a Sale Notice
to Non-Managing Member, and Non-Managing Member does not elect to participate in
the Transaction within the five (5) business day period set forth above,
Managing Member may, at its option (i) proceed with the Transaction on its
original terms or (ii) by written notice to Non-Managing Member given within
five (5) business days after the five (5) business day period set forth in (a)
above, require Non-Managing Member to sell its Interest to the Acquiror or
Managing Member on the terms set forth below.
SECTION 11.3 TERMS.
(a) If, at any time on or prior to June 18, 2002, Non-Managing
Member elects to sell, or Managing Member or Acquiror (such Person, the "BUYER")
elects to buy, as the case may be, Non-Managing Member's Interest, in either
case, pursuant to Section 11.2, the purchase price for Non-Managing Member's
Interest for purposes of this Article 11 shall be calculated on the following
basis. The value of the Transaction shall be determined, with appropriate
adjustment if less than all of the Interstate Common Stock or assets of Managing
Member or IHC are being purchased in the Transaction, and taking into account
all cash and non-cash consideration (including any deferred consideration), less
out of pocket expenses paid by Managing Member in the transaction (such as
legal, financial advisory and similar fees). A multiple of Managing Member's
earnings before interest, taxes, depreciation and amortization ("EBITDA") for
the twelve full months immediately preceding the month in which the Board of
Directors of Managing Member (or IHC, as applicable) voted to approve the
Transaction or to recommend that the stockholders of Managing Member (or IHC, as
applicable) consider the Transaction shall then be calculated by dividing the
value of the Transaction by such EBITDA. A value for the Company shall then be
calculated by multiplying the Company's EBITDA for the twelve full months
immediately preceding the month in which the Board of Directors of Managing
Member (or IHC, as applicable) voted to approve the Transaction or to recommend
that the stockholders of Managing Member (or IHC, as applicable) consider the
Transaction by the multiple calculated in accordance with the preceding
sentence. The purchase price for Non-Managing Member's Interest shall be equal
to the value of the Company calculated in accordance with the preceding sentence
multiplied by Non-Managing Member's Percentage Interest. Non-Managing Member
shall be obligated to pay only expenses incurred by Non-Managing Member in the
sale, and shall not be obligated for any transfer fees or taxes, financial
advisory fees or other amounts unless contracted for by PAH or Patriot REIT.
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(b) If, at any time after June 18, 2002, Non-Managing Member
elects to sell, or a Buyer elects to buy, as the case may be, Non-Managing
Member's Interest, in either case, pursuant to Section 11.2, the purchase price
for Non-Managing Member's Interest for purposes of this Article 11 shall be
negotiated between Non-Managing Member and the Buyer within five (5) business
days. If the Buyer and Non-Managing Member are unable to reach agreement on the
purchase price within such time period, then either Managing Member or
Non-Managing Member may demand that the purchase price be determined in the
following manner. Within five (5) business days of such demand, Non-Managing
Member and Managing Member shall select a nationally-recognized investment bank
or other nationally-recognized independent appraiser; provided that such bank or
appraiser must have experience valuing hotel management companies (such bank or
appraiser, an "APPRAISER"). If Managing Member and Non-Managing Member are
unable to select an Appraiser, then, within an additional five (5) business
days, each such party shall select an Appraiser and the two (2) Appraisers so
selected shall, within an additional five (5) business days, select a third
Appraiser. Each Appraiser shall, in good faith, determine a fair market value
(the "FAIR MARKET VALUE") for Non-Managing Member's Interest taking into account
all relevant factors, utilizing methodology typically employed in valuing hotel
management companies. If one Appraiser is hired, the purchase price for
Non-Managing Member's Interest shall equal the Fair Market Value; if more than
one Appraiser is hired, then the purchase price for Non-Managing Member's
Interest shall equal the average of each such determination of Fair Market
Value. The determination of the purchase price in such manner shall be binding
upon the parties and shall not be subject to dispute or appeal. Non-Managing
Member shall be obligated to pay one-half the expenses of each Appraiser and
expenses incurred by Non-Managing Member in the sale, and shall not be obligated
for any transfer fees or taxes, financial advisory fees or other amounts unless
contracted for by PAH or Patriot REIT.
(c) If Managing Member is acquiring Non-Managing Member's
Interest, the agreement for the purchase and sale of Non-Managing Member's
Interest shall be on substantially the same terms and conditions as the
agreement relating to the acquisition of the stock or assets of Managing Member
or IHC by the Acquiror, with appropriate modifications to reflect that
Non-Managing Member is a passive investor in the Company and has no independent
knowledge of the Company's assets or business.
(d) Managing Member and Non-Managing Member agree that a
breach of any of the terms, conditions or other obligations under this Article
11 may result in irreparable harm to the non-breaching party, and shall give
rise to a right of the non-breaching party to seek enforcement of the provisions
of this Article 11 in a court of equity by a decree of specific performance.
This remedy is intended to be cumulative and in addition to any other remedy a
party may have.
SECTION 11.4 CLOSING. The closing of any purchase of Non-Managing
Member's Interest pursuant to this Article 11 shall occur simultaneously with
the closing of the Transaction which gave rise to such purchase, whether such
purchase is made by an Acquiror or by Managing Member.
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ARTICLE 12
GENERAL PROVISIONS
------------------
SECTION 12.1 COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE MEMBERS.
Each Member represents and warrants to the other Members as follows:
12.1.1 It is duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation with all
requisite power and authority to enter into this Agreement.
12.1.2 This Agreement constitutes the legal, valid and binding
obligation of the Member enforceable in accordance with its terms,
subject to the application of principles of equity and laws governing
insolvency and creditors' rights generally.
12.1.3 No consents or approvals are required from any
governmental authority or other Person for the Member to enter into
this Agreement. All limited liability company, corporate or partnership
action on the part of the Member necessary for the authorization,
execution and delivery of this Agreement, and the consummation of the
transactions contemplated under this Agreement, have been duly taken.
12.1.4 The execution and delivery of this Agreement by the
Member, and the consummation of the transactions contemplated under
this Agreement, do not conflict with or contravene the provision of the
Member's organizational documents or any agreement or instrument by
which it or its properties are bound or any law, rule, regulations,
order or decree to which it or its properties are subject.
12.1.5 No Member has retained any broker, finder or other
commission or fee agent, and no such person has acted on its behalf in
connection with the execution and delivery of this Agreement.
12.1.6 Each Member is acquiring its interest in the Company
for investment, solely for its own account, with the intention of
holding such interest for investment and not with a view to, or for
resale in connection with, any distribution or public offering or
resale of any portion of such interest within the meaning of the
Securities Act of 1933 (the "SECURITIES ACT") or any other applicable
federal or state securities law, rule or regulation ("SECURITIES
LAWS").
12.1.7 Each Member acknowledges that it is aware that its
interest in the Company has not been registered under the Securities
Act or under any other Securities Law in reliance upon exemption
contained therein. Each Member understands and acknowledges that its
representations and warranties contained herein are being relied upon
by the Company, the other Members and the constituent owners of such
other
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Members as the basis for exemption of the issuance of interest in the
Company from registration requirements of the Securities Act and other
Securities Laws. Each Member acknowledges that the Company will not and
has no obligation to register any interest in the Company under the
Securities Act or other Securities Laws.
12.1.8 Each Member acknowledges that prior to its execution of
this Agreement, it received a copy of this Agreement and that it
examined this document or caused this document to be examined by its
representative or attorney. Each Member further acknowledges that it or
its representative or attorney is familiar with this Agreement, and
with the business and affairs of the Company, and that except as
otherwise specifically provided in this Agreement, it does not desire
any further information or data relating to the Company, the Assets or
the other Members. Each Member acknowledges that it understands that
the acquisition of its interest in the Company is a speculative
investment involving a high degree of risk and represents that it has a
net worth sufficient to bear the economic risk of its investment in the
Company and to justify its investing in a highly speculative Company of
this type.
SECTION 12.2 NOTICES. All notices, demands, approvals, consents or
requests provided for or permitted to be given pursuant to this Agreement must
be in writing.
12.2.1 All notices, demands, approvals, consents and requests
to be sent to the Company pursuant to the terms hereof shall be deemed
to have been properly given or served by personal delivery or by a
nationally recognized overnight courier or by registered or certified
mail, return receipt requested, postage prepaid and addressed as
follows:
If to the Company:
c/o Interstate Hotels Corporation
000 Xxxxxxxx Xxxxx, Xxxxxx Xxxxx Ten
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
With a copy to:
c/o Interstate Hotels Corporation
000 Xxxxxxxx Xxxxx, Xxxxxx Xxxxx Ten
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
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With a copy to:
c/o PAH - Interstate Holdings, Inc.
c/o Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: General Counsel
If to Northridge Holdings:
c/o Interstate Hotels Corporation
000 Xxxxxxxx Xxxxx, Xxxxxx Xxxxx Ten
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx, Esq.
If to PAH:
c/o PAH - Interstate Holdings, Inc.
c/o Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: General Counsel
12.2.2 All notices, demands and requests shall be effective
upon personal delivery or upon the date of receipt by the addressee as
shown on the return receipt or upon the date of acknowledgment or
confirmation of receipt with respect to delivery by or nationally
recognized overnight courier. Rejection or other refusal to accept or
the inability to deliver because of changed address of which no notice
was given shall be deemed to be receipt of the notice, demand or
request sent.
12.2.3 By giving to the other parties at least ten (10) days
prior written notice thereof, the parties hereto and their respective
successors and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective
addresses.
SECTION 12.3 GOVERNING LAWS; JURISDICTION; VENUE.
12.3.1 GOVERNING LAWS. This Agreement and the obligations of
the Members hereunder shall be interpreted, construed and enforced in
accordance with the laws of the State of Delaware without regard to
conflicts of law principles.
12.3.2 JURISDICTION; VENUE. Each of the Members hereby
irrevocably submits to the exclusive jurisdiction of any state court
located in the City of Wilmington, Delaware and any federal court in
the State of Delaware and any other court with jurisdiction to hear
appeals from such courts for the purposes of any suit,
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action or other proceeding of any type whatsoever arising out of this
Agreement or the subject matter hereof, and to the extent permitted by
applicable law, hereby waives, and agrees not to assert, by way of
motion, as a defense, or otherwise, in any such suit, action or
proceeding any claim that it is not personally subject to the
jurisdiction of the above-named courts, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement or the
subject matter hereof may not be enforced in or by such court.
SECTION 12.4 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties hereto relative to the formation and operation of
the Company. No variations, modifications, or changes herein or hereof shall be
binding upon any party hereto unless set forth in a document duly executed by or
on behalf of such party.
SECTION 12.5 WAIVER. No consent or waiver, express or implied, by any
Member to or of any breach or default by any other Member in the performance by
the other Member of its obligations hereunder shall be deemed or construed to be
a consent or waiver to or of any other breach or default in the performance by
such other Member of the same or any other obligations of such other Member
hereunder. Failure on the part of any Member to complain of any act or failure
to act of any of the other Members or to declare any of the other Members in
default, irrespective of how long such failure continues, shall not constitute a
waiver by such Member of its rights hereunder.
SECTION 12.6 SEVERABILITY. If any provision of this Agreement or the
application thereof to any Person or circumstance shall be invalid or
enforceable to any extent, the remainder of this Agreement and the application
of such provisions to other Persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
SECTION 12.7 TERMINOLOGY. All personal pronouns used in this Agreement,
whether used in the masculine, feminine, or neuter gender, shall include all
other genders; the singular shall include the plural, and vice versa and shall
refer solely to the parties signatory thereto except where otherwise
specifically provided. Titles of Articles and Sections are for convenience only,
and neither limit nor amplify the provisions of the Agreement itself, and all
references herein to Articles, Sections or subdivisions thereof shall refer to
the corresponding Articles, Sections or subdivisions thereof of this Agreement
unless specific reference is made to such Articles, Sections or subdivisions of
another document or instrument. Any use of the words "INCLUDING" or "INCLUDE"
herein shall, unless the context clearly requires otherwise, be deemed to mean
"WITHOUT LIMITATION."
SECTION 12.8 ACTION BY THE MEMBERS. No approval, consent, designation
or other action by a Member shall be binding upon such Member unless the same is
in writing and executed on behalf of such Member by a duly authorized
representative of such Member.
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SECTION 12.9 AMENDMENTS. No change, modification or amendment of this
Agreement shall be valid or binding unless such change, modification or
amendment shall be in writing and duly executed by all of the Members.
SECTION 12.10 BINDING AGREEMENT. Subject to the restrictions on
transfers and encumbrances set forth herein, this Agreement shall inure to the
benefit of and be binding upon the undersigned Members and their respective
heirs, executors, legal representatives, successors and assigns. Whenever, in
this instrument, a reference to any party or Member is made, such reference
shall be deemed to include a reference to the heirs, executors, legal
representatives, successors and assigns of such party or Member.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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SECTION 12.11 FURTHER ASSURANCES. Each of the Members shall hereafter
execute and deliver such further instruments and do such further acts and things
as may be reasonably necessary to carry out the intent and purpose of this
Agreement and as are not inconsistent with the terms hereof.
IN WITNESS WHEREOF, this Agreement is executed effective as of the date
first set forth above.
NORTHRIDGE HOLDINGS, INC.
a Delaware corporation
By: /s/ XXXXXXX X. XXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Secretary
PAH-INTERSTATE HOLDINGS, INC.
a Delaware corporation
By: /s/ XXXXXXX X. XXXXX, III
--------------------------------
Name: Xxxxxxx X. Xxxxx, III
Title: Executive Vice President
S-1
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SCHEDULE 1.1
------------
INITIAL CAPITAL ACCOUNTS
------------------------
Northridge Holdings, Inc. $60,950,094
PAH-Interstate Holdings, Inc. $74,494,560
Sch.1.1
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SCHEDULE 1.2
------------
EXISTING SUBSIDIARIES
---------------------
Cambridge Hotel Associates
CHR Consulting Company, L.L.C.
CHR Services Company, L.L.C.
Colony de Mexico, S.A. de C.V.
Colony Hotels and Resorts Company
Colony International Management Company, L.L.C.
Continental Design & Supplies Company, L.L.C.
Crossroads Future Company, L.L.C.
Crossroads Future Financing Company, L.L.C.
Crossroads Hospitality Company, L.L.C.
Crossroads Hospitality Tenant Company, L.L.C.
Crossroads/Memphis Company, L.L.C.
Crossroads/Memphis Financing Company, L.L.C.
Crossroads/Memphis Financing Company II, L.L.C.
Crossroads/Memphis Partnership, L.P.
Equity Bluefield, Inc.
Hilltop Equipment Leasing Company, L.P.
IHC International Development (U.K.) L.L.C.
IHC/Moscow Corporation
IHC Services Company, L.L.C.
Intercarp Limited Partnership
Northridge Insurance Company
Oak Hill Catering Company, Inc.
PAH-Cambridge Holdings, LLC
PAH-Hilltop GP, LLC
State College BBQ/Concord Joint Venture
Sch.1.2
44
SCHEDULE 2.4.1
--------------
LIST OF EXISTING CONTRACTS
(INCLUDING EXISTING SUBSIDIARY CONTRACTS)
(See attached)
Sch. 2.4.1
45
INTERSTATE HOTELS PORTFOLIO PROPOSED SPINCO
================================================================================================================
HOTEL # OF ROOMS DIVISION
================================================================================================================
Pittsburgh Green Tree Marriott 467 IHC
----------------------------------------------------------------------------------------------------------------
Charlotte Marriott Executive Park 297 IHC
----------------------------------------------------------------------------------------------------------------
The Xxxxxxx Hotel in Harvard Square 296 IHC
----------------------------------------------------------------------------------------------------------------
(intentionally omitted)
----------------------------------------------------------------------------------------------------------------
Sheraton Biscayne Bay 598 IHC
----------------------------------------------------------------------------------------------------------------
Fort Lauderdale Marriott North 321 IHC
----------------------------------------------------------------------------------------------------------------
Boca Raton Marriott 256 IHC
----------------------------------------------------------------------------------------------------------------
Memphis Marriott 320 IHC
----------------------------------------------------------------------------------------------------------------
Marriott at Sawgrass Resort 510 IHC
----------------------------------------------------------------------------------------------------------------
San Francisco Marriott Fisherman's Wharf 285 IHC
----------------------------------------------------------------------------------------------------------------
Orlando Airport Marriott 484 IHC
----------------------------------------------------------------------------------------------------------------
Parsippany Hilton 510 IHC
----------------------------------------------------------------------------------------------------------------
St. Louis Marriott West 300 IHC
----------------------------------------------------------------------------------------------------------------
San Francisco Holiday Inn Golden Gateway 498 IHC
----------------------------------------------------------------------------------------------------------------
Xxx XxXxx Resort and Beach Club 345 IHC
----------------------------------------------------------------------------------------------------------------
Seattle Crowne Plaza 415 IHC
----------------------------------------------------------------------------------------------------------------
Lexington Hotel 180 IHC
----------------------------------------------------------------------------------------------------------------
Lisle Radisson 242 IHC
----------------------------------------------------------------------------------------------------------------
Toronto Colony Hotel 717 IHC
----------------------------------------------------------------------------------------------------------------
Warner Center Marriott 463 IHC
----------------------------------------------------------------------------------------------------------------
Lawai Beach Resort 171 IHC
----------------------------------------------------------------------------------------------------------------
Golden Eagle Resort 89 CHC
----------------------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx Xxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxxx Xxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Sch. 2.4.1
46
INTERSTATE HOTELS PORTFOLIO PROPOSED SPINCO
================================================================================================================
HOTEL # OF ROOMS DIVISION
================================================================================================================
Brookstown Inn 71 CHC
----------------------------------------------------------------------------------------------------------------
Xxxxxx House 53 IHC
----------------------------------------------------------------------------------------------------------------
Harbor View Hotel 124 IHC
----------------------------------------------------------------------------------------------------------------
(intentionally omitted)
----------------------------------------------------------------------------------------------------------------
Marriott's Laguna Cliffs Resort 346 IHC
----------------------------------------------------------------------------------------------------------------
Virginia Beach Xxxx Xxx Xxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Waterford Marriott 197 IHC
----------------------------------------------------------------------------------------------------------------
Denver Hilton South 305 IHC
----------------------------------------------------------------------------------------------------------------
Flagstaff Super 8 Motel 86 CHC
----------------------------------------------------------------------------------------------------------------
Canton Best Western University Inn 102 CHC
----------------------------------------------------------------------------------------------------------------
Vicksburg Fairfield Inn by Xxxxxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Hotel Tverskaya 122 IHC
----------------------------------------------------------------------------------------------------------------
Point Pleasant 110 CHC
----------------------------------------------------------------------------------------------------------------
Comfort Inn Xxxxxx Xxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Westin Bonaventure 1,354 IHC
----------------------------------------------------------------------------------------------------------------
San Xxxx Radisson Airport Plaza Hotel 185 IHC
----------------------------------------------------------------------------------------------------------------
Schaumburg Embassy Suites 209 IHC
----------------------------------------------------------------------------------------------------------------
Courtyard by Xxxxxxxx Xxxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Toronto Delta Meadowvale 374 IHC
----------------------------------------------------------------------------------------------------------------
The Inn at Great Neck 85 IHC
----------------------------------------------------------------------------------------------------------------
Pittsburgh Marriott City Center 401 IHC
----------------------------------------------------------------------------------------------------------------
Chambersburg Fairfield Inn by Xxxxxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Embassy Suites Phoenix North 314 IHC
----------------------------------------------------------------------------------------------------------------
Residence Inn by Marriott Xxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Residence Inn by Xxxxxxxx Xxxxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Sch. 2.4.1
47
INTERSTATE HOTELS PORTFOLIO PROPOSED SPINCO
================================================================================================================
HOTEL # OF ROOMS DIVISION
================================================================================================================
Residence Inn by Marriott Tinton Falls 96 CHC
----------------------------------------------------------------------------------------------------------------
Residence Inn by Xxxxxxxx Xxxxxxxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Sarasota 97 CHC
----------------------------------------------------------------------------------------------------------------
The Inn at Wilksboro 101 CHC
----------------------------------------------------------------------------------------------------------------
Comfort Inn Trolley Square 104 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Beckley 106 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Morgantown 106 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Gastonia 109 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Xxxx Burnie 115 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Knoxville Airport 118 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Columbus Airport 119 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Louisville 119 CHC
----------------------------------------------------------------------------------------------------------------
Holiday Inn Oak Hill 119 CHC
----------------------------------------------------------------------------------------------------------------
Residence Inn by Marriott Xxxxx 120 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn State College 120 CHC
----------------------------------------------------------------------------------------------------------------
Holiday Inn Bluefield 120 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Austin North 121 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Jacksonville 122 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Fayetteville 122 CHC
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxxxxxxxx/Xxxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Homewood Suites San Antonio 123 CHC
----------------------------------------------------------------------------------------------------------------
Homewood Suites Phoenix 124 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Meriden 125 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Detroit 125 CHC
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxxx Xxxxx Xxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Sch. 2.4.1
48
INTERSTATE HOTELS PORTFOLIO PROPOSED SPINCO
================================================================================================================
HOTEL # OF ROOMS DIVISION
================================================================================================================
Hampton Inn Garland 125 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Xxxxxxxxxx-Xxx Xxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Traverse City 000 XXX
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxxxxxxxxxxx XX 129 CHC
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Chicago/Naperville 130 CHC
----------------------------------------------------------------------------------------------------------------
Homewood Suites Hartford/Windsor Locks 132 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Xxxxxxx/Xxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxxxxxx Xxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxxxxxxxx Xxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxx Xxxxx Xxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Xxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Holiday Inn Xx. Xxxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Xxxxxxx-Xxxxx Xxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Chattanooga 168 CHC
----------------------------------------------------------------------------------------------------------------
Comfort Inn Jacksonville Beach 177 CHC
----------------------------------------------------------------------------------------------------------------
Residence Inn by Xxxxxxxx Xxxxxxxx Xxxxxxx Xxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Residence Inn by Xxxxxxxx Xxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Residence Inn by Xxxxxxxx Xxxxxxxx Xxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
(intentionally omitted)
----------------------------------------------------------------------------------------------------------------
Holiday Inn Fishkill 156 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Savannah 129 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Norfolk 119 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Xxxxxxxx Xxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Sch. 2.4.1
49
INTERSTATE HOTELS PORTFOLIO PROPOSED SPINCO
================================================================================================================
HOTEL # OF ROOMS DIVISION
================================================================================================================
Hampton Inn Collierville 90 CHC
----------------------------------------------------------------------------------------------------------------
Embassy Suites Chicago 358 IHC
----------------------------------------------------------------------------------------------------------------
Roosevelt Hotel 1,033 IHC
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxxxxxxx Xxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Xxxxxxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Germantown Homewood Suites 92 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Memphis-Sycamore 117 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Kansas City 120 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Xxxxxxxxx-Xxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxxxxxxx Xxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Xx. Xxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxxxxx Xxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Birmingham-Vestavia Hills 123 CHC
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx Xxxxx Xxxxxx Xxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Xxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Madison Heights 124 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Charleston 125 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Memphis-Poplar 126 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Colorado Springs 128 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Xxxxxxx-Xxxxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Dallas-Richardson 130 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Aurora 132 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Dallas-Addison 160 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Livermore 78 CHC
----------------------------------------------------------------------------------------------------------------
The Cadillac Hotel 271 CHC
----------------------------------------------------------------------------------------------------------------
Sch. 2.4.1
50
INTERSTATE HOTELS PORTFOLIO PROPOSED SPINCO
================================================================================================================
HOTEL # OF ROOMS DIVISION
================================================================================================================
Augusta Homewood Suites 65 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Birmingham-Mt. Brook 131 CHC
----------------------------------------------------------------------------------------------------------------
Moscow Marriott Grand Hotel 392 IHC
----------------------------------------------------------------------------------------------------------------
Austin Doubletree 155 CHC
----------------------------------------------------------------------------------------------------------------
Residence Inn by Xxxxxxxx Xxxxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Courtyard by Xxxxxxxx Xxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Ontario Airport Marriott 299 IHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn White River Junction 96 CHC
----------------------------------------------------------------------------------------------------------------
Philadelphia Xxxxxxx Xxx Xxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Courtyard by Xxxxxxxx Xxxxxxxxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Holiday Inn Express Pittston 100 CHC
----------------------------------------------------------------------------------------------------------------
Courtyard by Xxxxxxxx Xxxx Xxxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn Miami-South Beach/Surfcomber 185 CHC
----------------------------------------------------------------------------------------------------------------
Radisson Hotel Los Angeles Westside 368 IHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn San Antonio 169 CHC
----------------------------------------------------------------------------------------------------------------
Sharonville Homewood Suites 111 CHC
----------------------------------------------------------------------------------------------------------------
Residence Inn by Marriott Portland 168 CHC
----------------------------------------------------------------------------------------------------------------
Residence Inn by Xxxxxxxx Xxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Residence Inn by Xxxxxxxx Xxxxxxxxxx Xxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hampton Inn and Suites Xxxxxxxx 125 CHC
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Sleep Inn 80 CHC
----------------------------------------------------------------------------------------------------------------
Columbus Embassy Suites 220 IHC
----------------------------------------------------------------------------------------------------------------
AmeriSuites Hotel Ontario 128 IHC
----------------------------------------------------------------------------------------------------------------
Moscow Marriott Royale 232 IHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Cleveland Downtown 194 CHC
----------------------------------------------------------------------------------------------------------------
Sch. 2.4.1
51
INTERSTATE HOTELS PORTFOLIO PROPOSED SPINCO
================================================================================================================
HOTEL # OF ROOMS DIVISION
================================================================================================================
Homewood Suites Seattle 161 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Fishkill 156 CHC
----------------------------------------------------------------------------------------------------------------
The Pillars Hotel aka Medical Inn Buffalo 100 CHC
----------------------------------------------------------------------------------------------------------------
Courtyard by Xxxxxxxx Xx. Xxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Manhattan Courtyard by Xxxxxxxx Xxxxx Xxxxxx Xxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Danbury Radisson Suites 76 CHC
----------------------------------------------------------------------------------------------------------------
Southaven Fairfield Inn by Xxxxxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Colorado Springs Hilton Xxxxxx Xxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Fairfield Inn by Xxxxxxxx Xxxxxxx 00 XXX
----------------------------------------------------------------------------------------------------------------
Fremont Hampton Inn 100 CHC
----------------------------------------------------------------------------------------------------------------
Homewood Suites Chicago 233 CHC
----------------------------------------------------------------------------------------------------------------
Homewood Suites Orlando 252 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn South San Francisco 90 CHC
----------------------------------------------------------------------------------------------------------------
Xxxxxxx Radisson 160 CHC
----------------------------------------------------------------------------------------------------------------
Hampton Inn Albuquerque 131 CHC
----------------------------------------------------------------------------------------------------------------
Residence Inn by Xxxxxxxx Xxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Hilton Garden Inn Chicago 357 CHC
----------------------------------------------------------------------------------------------------------------
Jacksonville Xxxxxxx Xxx & Xxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Courtyard by Xxxxxxxx Xxxxxxxxx 000 XXX
----------------------------------------------------------------------------------------------------------------
Xxxx Marriott 350 IHC
================================================================================================================
TOTAL PROPERTIES 166
----------------------------------------------------------------------------------------------------------------
TOTAL ROOMS 31,049
================================================================================================================
Sch. 2.4.1
