Carey Watermark Investors

The agreement expressly provides that when conflicts arise between the interests of the General Partner's stockholders and the Limited Partners that cannot be resolved in a manner not adverse to either group, the conflict shall be resolved in favor of the stockholders — not the LPs.

“for so long as the General Partner, owns a controlling interest in the Partnership, any such conflict that cannot be resolved in a manner not adverse to either the stockholders of the General Partner or the Limited Partners shall be resolved in favor of the stockholders.”

Carey Watermark Holdings 2, LLC (Special General Partner), which holds the 10%/15% promote interest in operating and capital proceeds distributions respectively, is affiliated with W. P. Carey Inc. and Watermark Capital Partners, LLC. The Special General Partner may freely transfer its interest to these affiliates without GP consent, creating a structural related-party relationship with the promote/carry economics flowing to parties affiliated with the sponsor.

“the Special General Partner shall have the right, at any time, to transfer its Partnership Interest to the General Partner, an Affiliate of the General Partner, W. P. Carey Inc. ('W. P. Carey'), Watermark Capital Partners, LLC ('Watermark Capital Partners'), or an Affiliate of W. P. Carey or Watermark Capital Partners.”