1
Exhibit 3.78
LIMITED LIABILITY COMPANY AGREEMENT
OF
CAPSTAR INDIANAPOLIS COMPANY, L.L.C.
This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is made as of
February 24, 1997, by and among CAPSTAR MANAGEMENT COMPANY, L.P., a Delaware
limited partnership having an office at 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000 ("CapStar"), and EQUISTAR ACQUISITION CORPORATION, a Delaware
corporation having an office c/o CapStar Management Company, L.P., 0000
Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, X.X. 00000 ("EquiStar").
WITNESSETH
WHEREAS, the parties hereto (collectively, the "Members" and individually,
a "Member") desire to form a limited liability company for the purposes
hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
respective meanings set forth below:
1.1 "Act" shall mean the Limited Liability Act of the State of Delaware,
as the same may have been or may be amended.
1.2 "Adjusted Capital Account" shall mean, with respect to any Member,
such Member's Capital Account balance, increased by such Member's
share of Company Minimum Gain and Member Minimum Gain.
1.3 "Code" shall mean the Internal Revenue Code of 1986 as the same has
been and may hereafter be amended.
1.4 "Company" shall have the meaning set forth in Article 2.
2
1.5 "Company Minimum Gain" means "partnership minimum gain," as defined
in Treasury Regulations Section 1.704-2(b)(2) and shall be
determined in accordance with Treasury Regulations Section
1.704-2(d).
1.6. "Depreciation" shall mean, with respect to any year or portion
thereof, an amount equal to the depreciation, amortization or other
cost recovery deduction allowable with respect to an asset for
Federal income tax purposes, except that if the Gross Asset Value of
the asset differs from its adjusted tax basis, Depreciation shall be
determined in accordance with the methods used for Federal income
tax purposes and shall equal the amount that bears the same ratio to
the Gross Asset Value of such asset as the depreciation,
amortization or other cost recovery deduction computed for Federal
income tax purposes with respect to such asset bears to the adjusted
Federal income tax basis of such asset; provided, however, that if
any such asset that is depreciable or amortizable has an adjusted
Federal income tax basis of zero, the rate of Depreciation shall be
determined by the Members.
1.7. "Gross Asset Value" shall mean, with respect to any asset, the
asset's adjusted basis for Federal income tax purposes, except that
(i) the Gross Asset Value of any asset contributed to the Company
shall be its gross fair market value at the time of contribution,
(ii) the Gross Asset Value of any asset distributed in kind to any
Member (including upon a liquidation of the Company) shall be the
gross fair market value of such asset, and (iii) the Gross Asset
Value of any asset determined pursuant to clause (i) above shall
thereafter be adjusted from time to time by the Depreciation taken
into account with respect to such asset for purposes of determining
Net Profit or Net Loss.
1.8. "Member" shall mean each of the parties to this Agreement and any
other Person to which an interest in the Company is hereafter
transferred and who is admitted to the Company in accordance with
the terms of this Agreement.
1.9 "Member Minimum Gain" means "partner nonrecourse debt minimum gain,"
as defined in Treasury Regulations Section 1.704-2(i)(2) and
determined in accordance with Treasury Regulations Section
1.704-2(1)(3).
1.10 "Member Nonrecourse Debt" means "partner nonrecourse debt," as
defined in Treasury Regulations Section 1.704-2(b)(4).
2
3
1.11. "Member Nonrecourse Deductions" means "partner nonrecourse
deductions," as defined in Section 1.704-2(i)(1) of the Treasury
Regulations and shall be determined in accordance with Section
1.704-2(i)(2) of the Treasury Regulations.
1.12. "Net Profit" or "Net Loss" shall mean, with respect to any fiscal
year, the taxable income or loss of the Company as determined for
Federal income tax purposes, with the following adjustments:
1.12.1. Such taxable income or loss shall be increased by the
amount, if any, of tax-exempt income received or accrued by
the Company;
1.12.2. Such taxable income or loss shall be reduced by the amount,
if any, of all expenditures of the Company described in
Section 705(a)(2)(B) of the Code, including expenditures
treated as described therein under Section
1.704-1(b)(2)(iv)(i) of the Treasury Regulations;
1.12.3 If the Gross Asset Value of any asset is adjusted pursuant
to clause (ii) of the definition of Gross Asset Value, the
amount of such adjustment shall be taken into account,
immediately prior to the event giving rise to such
adjustment, as gain or loss from the disposition of such
asset for the purposes of computing Net Profit or Net Loss;
1.12.4. Gain or loss resulting from any disposition of any asset
with respect to which gain or loss is recognized for Federal
income tax purposes shall be computed by reference to the
Gross Asset Value of the asset disposed of, notwithstanding
that such Gross Asset Value differs from the adjusted tax
basis of such asset; and
1.12.5 In lieu of the depreciation, amortization, or other cost
recovery deductions taken into account in computing such
taxable income or loss, there shall be taken into account
Depreciation for such fiscal year.
1.13 "Percentage Interests" shall have the meaning specified in Section
6.2
1.14. "Property" shall mean (a) that certain property known as the
Doubletree Guest Suites located at 0000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxx 00000 and (b) all personal property situated at such
property or used or useful in connection herewith.
1.15 "Regulatory Allocations" has the meaning ascribed thereto in
Subsection 7.3.8.
3
4
1.16. "Treasury Regulations" means the rules, regulations, orders and
interpretations of rules, regulations and orders validly promulgated
by the Treasury Department under the Code, whether final, temporary
or proposed, as in effect from time to time.
2. Formation and Name. Members hereby form a limited liability company (the
"Company") pursuant to the provisions of the Act. The business of the
Company shall be conducted under the name "CAPSTAR INDIANAPOLIS COMPANY,
L.L.C." Xxxx Xxxxxxxx and Xxxx X. Xxxxxxx are hereby authorized to execute
and record any certificate of formation required by the Act and any
certificate or application necessary to qualify the Company in any
jurisdiction in which it conducts business.
3. Principal and Registered Offices; Agent for Service of Process.
3.1. The principal place of business of the Company, and the address of
the office at which the records of the Company shall be maintained,
shall be 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X.
00000, or at such other place as may hereafter from time to time be
selected by CapStar.
3.2. The Company's registered office shall be at 0000 Xxxxxxxxx Xxxxxx,
X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000.
3.3 The registered agent of the Company for service of process within
the State of Delaware shall be United Corporate Services, 00 Xxxx
Xxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000. In the event that the person or
entity at any time acting as such agent shall cease to act as such
for any reason, CapStar shall appoint a substitute agent. Such agent
shall be the agent of the Company on which any process, notice or
demand required or permitted by law to be served on the Company may
be served.
4. Term. The term of the Company shall commence upon the execution and
delivery of this Agreement and shall continue until terminated by
agreement of the Members or as otherwise provided in this Agreement.
5. Purpose. The purpose of the Company shall be (a) to acquire the Property
and other property incidental to the ownership and operation of the
Property, (b) to hold, own, operate, lease, finance, mortgage, encumber,
alter, dispose of and in all respects deal as
4
5
owner of the Property, and (c) to engage in any activities necessary or
incidental to the foregoing. The Company shall not engage in any business
other than as set forth in the foregoing sentence. Nothing in this
Agreement shall prohibit the Company from entering into any guaranties or
indemnities with respect to obligations of entities which are affiliates
of CapStar Hotel Company or from entering into any mortgages, deeds of
trust, financing statements, cross-collateralization or other security
agreements with respect thereto (all of the foregoing being collectively
referred to as "Cross-Collateralization Agreements").
6. Capital Contributions; Percentage Interests.
6.1. Simultaneously with the execution and delivery of this Agreement the
Members are making the following contributions to the capital of the
Company:
(a) CapStar $99.00
(b) EquiStar $ 1.00
6.2. The Members' percentage interests in the Company ("Percentage
Interests") shall be as follows:
(a) CapStar 99%
(b) EquiStar 1%
6.3 If the Company shall require any additional funds after the date
hereof, as determined by CapStar, the Members shall contribute such
funds to the Company in proportion to their respective Percentage
Interests.
6.4. Except as expressly provided in this Article 6, no Member shall be
required to make any capital contributions or loans to the Company
and no Member shall make any capital contributions or loans to the
Company without the consent of the other Member.
7. Income and Losses; Distributions of Available Net Income.
7.1. A separate "Capital Account" shall be maintained for each Member.
Each Member's Capital Account shall be credited with the amount of
each Member's capital contributions made in cash and fair market
value (net of liabilities assumed or taken subject to ) of all
property contributed by such Member and such Member's allocated
share of Net Profit, income and gain of the Company. Each Member's
Capital Account shall be debited with the amount of any cash
distributions to such Member and the fair market value (net of
liabilities assumed
5
6
or taken subject to) of all property distributed in kind to such
Member and such Member's allocated share of Net Loss of the Company.
7.2. From and after the date of this Agreement, all Net Profit and all
Net Loss of the Company for each year or fraction thereof
(determined after taking into account any allocation for such period
under Section 7.3) shall be credited to the Capital Accounts of the
Members in proportion to their respective Percentage Interests.
7.3. Special Allocations.
7.3.1. Except as otherwise provided in Section 7.3.2., all items of
Company income, gain, deduction and loss shall be allocated
among the Members in the same proportion as they share in
the Net Profit and Net Loss to which such items relate. Any
credits against income tax shall be allocated in accordance
with the Members' Percentage Interests.
7.3.2. Income, gain, loss or deductions of the Company shall,
solely for income tax purposes, be allocated among the
Members in accordance with Section 704(c) of the Code and
Treasury Regulations promulgated thereunder, so as to take
account of any difference between the adjusted basis of the
assets of the Company and their respective Gross Asset
Values in accordance with the traditional method set forth
in Section 1.704-3(b) of the Treasury Regulations.
7.3.3. Notwithstanding any other provision of this Article 7, if
there is a net decrease in Company Minimum Gain during any
year, each Member shall be specially allocated items of
income and gain for such year (and, if necessary, subsequent
years) in an amount equal to the portion of such Member's
share of the net decrease in Company Minimum Gain, as
determined in accordance with Section 1.704-2(g) of the
Treasury Regulations. Allocations pursuant to the previous
sentence shall be made in proportion to the respective
amounts required to be allocated to each member pursuant
thereto. The items to be so allocated shall be determined in
accordance with Section 1.704-2(f)(6) of the Treasury
Regulations. This Section 7.3.3. is intended to comply with
minimum gain chargeback requirement in Section 1.704-2(f) of
the Treasury Regulations and shall be interpreted
consistently therewith.
6
7
7.3.4. Notwithstanding any other provision of this Article 7, if
there is a net decrease in Member Minimum Gain attributable
to a Member Nonrecourse Debt during any year, each Member
who has a share of the Member Minimum Gain attributable to
such Member Nonrecourse Debt, determined in accordance with
Section 1.704-2(i)(5) of the Treasury Regulations, shall be
specially allocated items of income and gain for such year
(and, if necessary, subsequent years) in an amount equal to
the portion of such Member's share of the net decrease in
Member Minimum Gain attributable to such Member Nonrecourse
Debt, determined in accordance with Section 1.704-2(i)(4) of
the Treasury Regulations. Allocations pursuant to the
previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated shall be
determined in accordance with Section 1.704-2(i)(4) of the
Treasury Regulations. This Section 7.3.4 is intended to
comply with the minimum gain chargeback requirement in
Section 1.704-2(i) of the Treasury Regulations and shall be
interpreted consistently therewith.
7.3.5. Nonrecourse Deductions for any year shall be allocated as
Net Loss pursuant to Section 7.2.
7.3.6. Any Member Nonrecourse Deductions for any year shall be
specially allocated to the Member who bears the economic
risk of loss with respect to the Member Nonrecourse Debt to
which such Member Nonrecourse Deductions are attributable in
accordance with Section 1.704-2(i)(1) of the Treasury
Regulations.
7.3.7 Notwithstanding any other provision of this Article 7, no
Member shall be allocated in any year of the Company any Net
Loss to the extent such allocation would cause or increase a
deficit balance in such Member's Adjusted Capital Account,
taking into account all other allocations to be made for
such year pursuant to this Article 7 and the reasonably
expected adjustments, allocations and distributions
described in Section 1.704-1(b)(ii)(d) of the Treasury
Regulations. Any such Net Loss that would be allocated to a
Member (the "Deficit Member") shall instead be allocated
7
8
to the other Member. Moreover, if a Deficit Member
unexpectedly receives an adjustment, allocation or
distribution described in Section 1.704-1(b)(ii)(d) of the
Treasury Regulations which creates or increases a deficit
balance in such Member's Adjusted Capital Account (computed
after all other allocations to be made for such year
pursuant to this Article 7 have been tentatively made as if
this Section 7.3.7 were not in this Agreement), such Deficit
Member shall be allocated items of income and gain in an
amount equal to such deficit balance. This Section 7.3.7 is
intended to comply with the qualified income offset
requirement of Section 1.704-1(b)(2)(ii)(d) of the Treasury
Regulations and shall be interpreted consistently herewith.
7.3.8. The allocations set forth in Sections 7.3.3 through 7.3.7
(the "Regulatory Allocations") shall be taken into account
in allocating items of income, gain, loss and deduction
among the Members so that, to the extent possible, the net
amount of such allocations of other items and the Regulatory
Allocations to each Member shall be equal to the net amount
that would have been distributed to each such Member if the
Regulatory Allocations had not occurred.
7.4. Distributions. All distributions of Company cash and other property
shall be made to the Members in proportion to their respective
Percentage Interests; provided however, that the provisions of this
Section 7.4 shall not apply upon the liquidation of the Company or
upon the sale of all or substantially all of the Company's assets,
it being understood that in such circumstances the provisions of
Section 13.4 shall apply.
8. Tax Matters. Federal, state and local income tax returns of the Company
shall be prepared and filed, or caused to be prepared and filed, by
CapStar. CapStar shall at all times be the "tax matters partner" of the
Company for purposes of Section 6231(a)(7) of the Code.
9. Management and Rights, Duties and Obligations of the Members.
9.1. The management and control of the Company's business shall be
exercised, and all decisions to be made by the Company shall in each
case be made, by CapStar. CapStar shall have the sole right to bind,
or otherwise act on behalf of, the
8
9
Company. Without limiting the foregoing, CapStar shall have the
right, without consent or approval of EquiStar, to acquire, mortgage
or otherwise encumber, and sell or otherwise dispose of the Property
or any portion thereof.
9.2. Except as otherwise expressly provided in this Agreement, no Member
shall have the right to resign from the Company or to demand the
return of all or any part of its contribution to the capital of the
Company until the Company has been dissolved and terminated, and
then only to the extent provided in this Agreement, not shall any
Member have the right to demand or receive property other than
cash in return for its contribution.
10. Transfer of Members' Interests. No Member shall sell, assign, transfer or
otherwise dispose of, or mortgage, hypothecate, pledge or otherwise
encumber, or permit or suffer any encumbrance of, all or any part of its
interest in the Company, or any interest therein; provided, however, that
each Member may pledge its interest in the Company to any lender making a
loan secured, in whole or in part, by a mortgage or deed of trust on the
Property.
11. Resignation, Expulsion or Bankruptcy of a Member. In the event of a
resignation, expulsion or bankruptcy of any Member, the Company shall
thereupon be dissolved and terminated and the Members shall cause a
Certificate of Cancellation in the form required by the Act to be filed
with the Secretary of State of Delaware when the Company is dissolved.
12. Termination of the Company. Upon the voluntary termination of the Company
upon the consent of the Members, the sale or other transfer of all or
substantially all of the Company's assets or any other termination of the
Company in accordance with the provisions of this Agreement, the Company
shall wind up its affairs and shall then be liquidated as provided in
Article 13.
13. Gain, Loss and Distribution Upon Liquidation. Upon any termination of the
Company each of the following shall be accomplished:
13.1. The Members shall cause to be prepared a statement setting forth the
assets and liabilities of the Company as of the date of such
termination, and such statement shall be furnished to each Member.
13.2. The property and assets of the Company, if any, shall be liquidated
as promptly as possible, but in an orderly and businesslike manner
so as not to involve undue sacrifice.
9
10
13.3 Any Net profit or Net Loss realized by the Company upon the sale or
other disposition of the property and assets of the Company shall be
credited or charged to the capital accounts of the Members pursuant
to Section 7.2 or 7.3, as applicable.
13.4. The proceeds of sale and all other assets of the Company shall be
paid and distributed as follows and in the following order of
priority:
13.4.1. to the payment of debts and liabilities of the Company and
the expenses of liquidation;
13.4.2. to the setting up of any reserves which CapStar determines
are reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Company or the members
arising out of, or in connection with, the Company; and
13.4.3. to the Members in proportion to their respective Capital
Account balances.
14. Further Assurances: Consents and Approvals. Each party to this Agreement
agrees to execute, acknowledge, deliver, file and record such further
certificates, amendments, instruments and documents, and to do all such
other acts and things, as may be required by law, or as may, be necessary
or advisable to carry out the intent and purposes of this Agreement.
15. Single Asset Entity
15.1. Except as may be provided to the contrary in the
Cross-Collateralization Agreements, the Company shall at all times
conduct its business and operations in accordance with the following
provisions so as to maintain itself as a single purpose entity:
15.1.1. The Company will not assume liability for debts of any other
person, and the Company will not hold itself out as being
liable for the debts of any other person;
15.1.2. None of the liabilities of the Company shall be paid from
the funds of the Members or any other person without the
Members being obligated for such liabilities;
15.1.3 The Company shall not guarantee the debt or performance of
any obligation of any of its Members or any other person;
10
11
15.1.4. The Company will not pledge any of its assets for the
benefit of any of its Members or any other person, and no
person shall pledge its assets for the benefit of the
Company;
15.1.5. The Company shall conduct its affairs strictly in accordance
with this Agreement, and shall observe all necessary,
appropriate, and customary limited liability company
formalities, including, but not limited to, maintaining
accurate and separate books, records and account (including,
but not limited to, transaction accounts with any affiliate
of the Company);
15.1.6. The books, records, and accounts of the Company will at all
times be maintained in a manner permitting the assets and
liabilities of the Company to be easily separated and
readily distinguished from those of any other person;
15.1.7. The Company will hold itself out to creditors and the public
as a legal entity separate and distinct from any other
entity, and will not hold itself out to the public or to any
of its individual creditors as being a unified entity with
assets and liabilities in common with any other person; and
15.1.8. The Company shall not commingle its assets or funds with
those of any other person except as required under the
Cross-Collateralization Agreements.
16. Notices. Unless otherwise specified in this Agreement, all notices,
demands, elections, requests or other communications (collectively,
"notices") which any Member may desire or to be required to give hereunder
shall be in writing and shall be given by mailing the same by registered
or certified mail, return receipt requested, or by Federal Express or
comparable air courier service, postage prepaid, or by delivering the same
by hand, addressed to the Members at their addresses first set forth
above.
17. Captions. All section and article titles or captions contained in this
Agreement and the table of contents, if any, are for convenience only and
shall not be deemed a part of this Agreement.
18. Variety of Pronouns. All pronouns and all variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural,
as the identity of the person(s) or entity(ies) may require.
11
12
19. Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
20. Governing Law. This Agreement is made pursuant to the Act and shall be
construed accordingly.
21. Successors and Assigns. This Agreement shall be binding upon the parties
hereto and their respective successors and permitted assigns and shall
inure to the benefit of the parties hereto and their respective successors
and permitted assigns, but shall not inure to the benefit of, or be
enforceable by, any other person or entity
22. Invalidity. If any provision or any portion of this Agreement, or the
application of any such provision or any portion thereof to any Member or
circumstance, shall be held invalid or unenforceable, the remaining
portion of such provision and the remaining provisions of this Agreement,
and the application of such provision or such portion to a Member to
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CAPSTAR MANAGEMENT COMPANY, L.P.
By: CapStar Hotel Company, its general partner
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------------
Name and title: Xxxx X. Xxxxxxx, Exec. Vice President
EQUISTAR ACQUISITION CORPORATION
By:/s/ Xxxx X. Xxxxxxx
--------------------------------------------------
Name and title: Xxxx X. Xxxxxxx, Vice President
12
