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become a member of a joint venture, or to participate in some
other form of syndication for investment; and to buy, sell,
lease, and deal in services, personal property, and real
property.”
In connection with the formation of Essex Partnership, GHM
and MHM entered into separate representation and marketing
agreements with Essex Partnership. GHM agreed to pay to Essex
Partnership 75 percent of its fees on GHM’s management contracts
on the Gateway Hilton and the Midland Hilton. MHM agreed to pay
to Essex Partnership 30 percent of its management fees from the
operation of the Madison Hotel and 43 percent of the fees from
the operation of the Allentown Hilton. In return, Essex
Partnership agreed to (1) “perform liaison functions” between
certain hotel owners and GHM and MHM in connection with
management contracts between such parties, (2) “perform liaison
functions” between the owners of any additional properties which
it was instrumental in securing for management by GHM or MHM, (3)
“use its best efforts to maintain satisfactory relations” between
the property owners and GHM and MHM “and to maintain sufficient
personnel to properly perform such [management] functions”, and
(4) “use its best efforts to secure management contracts”
satisfactory to GHM and MHM.
Essex Partnership had no offices and no employees. Very
few, if any, capital contributions were made to Essex
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