Exhibit 10.5
FIRST AMENDMENT
TO RESTATED AND AMENDED HOTEL MANAGEMENT AGREEMENT
THIS FIRST AMENDMENT TO RESTATED AND AMENDED HOTEL MANAGEMENT AGREEMENT
("First Amendment" or "Amendment") is entered into and is effective as of the
10th day of July, 1990 between IVY STREET HOTEL LIMITED PARTNERSHIP ("Owner"), a
Georgia limited partnership, and MARRIOTT HOTELS, INC. ("Management Company"), a
Delaware corporation.
R E C I T A L S
A. Owner and Management Company entered into that certain Restated and
Amended Management Agreement as of the 28th day of May, 1985 (the "Management
Agreement") relating to the management and operation of the Atlanta Marriott
Marquis Hotel; and
B. Owner is in the process of refinancing that portion of the Approved
Debt presently described in Exhibit E to the Management Agreement, and
Management Company and Owner have agreed that it is appropriate to amend the
Management Agreement by reflecting or incorporating therein certain of the
terms, conditions and provisions of the refinancing and to otherwise update and
clarify certain terms, conditions and provisions of the Management Agreement.
NOW, THEREFORE, for and in consideration of good and valuable
consideration, the receipt and sufficiency whereof is hereby acknowledged, Owner
and Management Company hereby covenant and agree as follows:
1. Amendments to Section 1.1.
Section 1.1 of the Management Agreement, "Definition of Terms", is
hereby amended as follows:
(a) Clause (i) in the definition of "Approved Debt" is hereby
deleted in its entirety and the following is substituted therefor:
"(i) the financing described in Exhibit E attached hereto and
incorporated herein by this reference;"
(b) The definition of "Assumed Net Cash Flow" is hereby deleted in
its entirety and the following is substituted therefor:
"'Assumed Net Cash Flow' means in any Fiscal Year the excess of
Hotel Profit over the lesser of: (i) the greater of (x) $24,000,000.00 or (y) if
there is a Compulsory Refinancing of all or a portion of the Approved Debt, or
any renewal or replacement thereof, or if additional indebtedness is incurred
due to financing the cost of Major Capital Improvements, which cost exceeds the
amount provided therefor in the Repairs and Equipment Reserve, the total of (a)
actual debt service (including contingent or additiona1 interest) on that
portion of the Approved Debt which is not so refinanced, renewed or replaced and
(b) an amount equal to debt service (including contingent or additional
interest) which would be paid on the principal amount of the refinanced,
renewed, replaced or such additional indebtedness assuming full amortization in
300 equal monthly payments of principal and interest with interest
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payable at the interest rate required at the time such refinancing, renewal,
replacement or additional indebtedness was incurred; or (ii) actual debt
service on Approved Debt (including contingent or additional interest) plus
a ten percent (lO%) annual return on Asset Base less the principal amount of
the Approved Debt. For purposes of this definition, the term 'actual debt
service' when applied to that portion of the Approved Debt described in
Exhibit E shall mean actual debt service calculated at the Interest Rate and
not at the Payment Rate."
(c) The definition of "Marriott Commitment" is hereby deleted in its
entirety and the following is substituted therefor:
"'Marriott Commitment' shall mean collectively (i) that certain loan
commitment letter dated May 28, 1985 pursuant to which Marriott committed
to lend to Owner up to $33,000,000 for the purposes and subject to the
terms and conditions set forth in said commitment letter, and (ii) that
certain Marriott/Ivy Street Loan Agreement dated as of the date hereof by
and between Marriott and Owner concerning the agreement of Marriott to lend
Owner certain funds for the purposes and - subject to the terms and
conditions more fully set forth in said Loan Agreement."
(d) The definition of "Marriott Loans" is hereby deleted in its
entirety and the following is substituted therefor:
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"'Marriott Loans' means those loans made by Marriott to Owner
pursuant to the Marriott Commitments."
(e) The definition of "Net Cash Flow Available for Distribution" is
hereby deleted in its entirety and the following is substituted therefor:
"'Net Cash Flow Available for Distribution' means, for any Fiscal
Year, that amount of cash received by or on behalf of Owner in such Fiscal
Year (other than as a result of Extraordinary Revenues) in excess of the
amount required to pay all operating and fixed expenses of the Hotel
(including payments to cash reserves but excluding depreciation and other
non-cash charges), rentals due under the Land Lease, Incentive Management
Fee, and actual debt service other than debt service on Partner's Loans. For
purposes of this definition, the term 'actual debt service' when applied to
that portion of the Approved Debt described in Exhibit E shall mean actual
debt service calculated at the Interest Rate and not at the Payment Rate."
(f) The definition of "Het Cash Flow Available for Incentive Management
Fee" is hereby deleted in its entirety and the following is substituted
therefor:
"'Net Cash Flow Available for Incentive Management Fee' means, for
any Fiscal Year, that amount of cash received by or on behalf of Owner in
such Fiscal Year (other than as a result of Extraordinary Revenues) in
excess of the amount required to
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pay all operating and fixed expenses of the Hotel (including payments to
cash reserves but excluding depreciation and other non-cash charges) and
actual debt service on Project Indebtedness other than: (i) the Incentive
Management Fee; and (ii) debt service on Partner's Loans. For purposes of
this definition, the term 'actual debt service' when applied to that portion
of the Approved Debt described in Exhibit E shall mean actual debt service
calculated at the Interest Rate and not at the Payment Rate."
(g) The definition of "Opening Date" is hereby deleted in its entirety
and the following is substituted therefor:
"'Opening Date' means July 1, 1985."
(h) The definition of "Partner's Loans" is hereby deleted in its
entirety and the following is substituted therefor:
"'Partner's Loans' means 'Partner Loans' as defined in Section 6 of the
Partnership Agreement."
(i) The definition of "Partnership Agreement" is hereby deleted in its
entirety and the following is substituted therefor:
"'Partnership Agreement' means that certain agreement of limited
partnership of Owner dated as of July 31, 1982, as first restated on May 28,
1985 and again restated on or about the date hereof, and as the same may be
subsequently amended and restated."
(j) The definitions of "ProDerty Leasing Agreement" and "Property
Leasing Fee" are hereby deleted in their entirety, and
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any and all provisions with respect thereto wherever appearing in this Agreement
shall be of no further force and effect.
(k) The following new definitions shall be added in appropriate
alphabetical order to Section 1.1:
"'Horder' means the 'Grantee' as defined in the Deed to Secure Debt
of even date with this Amendment, which Deed to Secure Debt was entered into
by Owner as one of the Grantors thereunder and which secures the financing
described in Exhibit E or any other Holder of Approved Debt of whom
Management Company has received notice.
'Interest Rate' shall have the meaning set forth in the loan
documents evidencing and securing that portion of the Approved Debt
described in Exhibit E.
'Payment Rate' shall have the meaning set forth in the loan
documents evidencing and securing that portion of the Approved Debt
described in Exhibit E."
2. Section 3.7.1 of the Management Agreement is amended by adding the
words "If requested by Landlord," at the beginning of the last sentence thereof.
3. Section 9.3.2 of the Management Agreement is hereby deleted in its
entirety and the following is substituted therefor:
"9.3.2 The procedures governing the operation of any and all bank
accounts of Ivy Street set forth in this Section 9.3
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shall be subject to the requirements of the instruments and agreements
evidencing or securing (a) the financing described in Exhibit E, and (b) the
Approved Line of Credit Financing, if any. In the event of any conflict
between the provisions of this Section 9.3 or the provisions of the
documents evidencing the Approved Line of Credit Financing and the
instruments and agreements evidencing or securing the financing described in
Exhibit E, the instruments evidencing and securing the financing described
in Exhibit E shall govern.
4. Section 11.1 of the Management Agreement is deleted in its entirety
and the following is substituted therefor:
"Management. Owner covenants that so long as Management Company is
not in default under the Agreement, Management Company shall be entitled to
manage the Hotel throughout the Term in accordance with the terms of this
Agreement, and Management Company covenants and agrees that so long as Owner
is not in default under this Agreement, Management Company shall manage the
Hotel throughout the Term in accordance with the terms of this Agreement."
5. Section 12.2.1.1 of the Management Agreement is amended by changing
the period at the end thereof to a comma and adding the following:
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"or such greater percentage in excess of ninety percent (90%) to the extent
required by the Holder of that portion of the Approved Debt described in
Exhibit E."
6. Section 16.1.3 of the Management Agreement is amended by deleting
the word "default" in the fifth (5th) line thereof and substituting the word
"deficiency" therefor.
7. Section 16.1.5 of the Management Agreement is hereby deleted in its
entirety and the following is substituted therefor:
"16.1.5 Owner shall have the right to terminate this Agreement upon fifteen
(15) days' prior Notice if Marriott fails to meet its obligations under the
Marriott Commitment."
8. Section 18.1 of the Management Agreement is hereby deleted in its
entirety and the following is substituted therefor:
"18.1 Assignment by Management Company. Management Company shall
have the right to assign all of its right and interest under this Agreement:
(i) to a subsidiary company provided that the Marriott Corporation shall at
all times own one hundred percent (100%) of all classes of capital stock of
said subsidiary; or (ii) to any successor or assignee of Marriott
Corporation which may result from any merger,
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consolidation or reorganization or to another corporation which acquires all
or substantially all of the business and assets of Marriott Corporation.
Notwithstanding any such assignment, and as a condition thereof, Marriott
Corporation shall continue to be liable for its agreements hereunder and
shall unconditionally guarantee the obligations of such subsidiary,
successor or assignee under a guaranty agreement acceptable to Owner, and
any such subsidiary, successor or assignee shall assume and agree to be
bound by all the provisions and agreements herein. No other assignment of
this Agreement by Management Company or its successors and assignees shall
be effective without the prior written consent of Owner and Holders."
9. Section 20.9 of the Management Agreement is hereby deleted in its
entirety and the following is substituted therefor:
"20.9 Notices. All notices, demands and other communications
required or permitted under the provisions of this Agreement ('Notice')
shall, unless otherwise specified, be in writing, sent by telegram, or telex
or hand delivery, or by certified first-class mail, postage prepaid, return
receipt requested, to the following addresses:
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As to Owner:
Ivy Street Limited Partnership
c/o Atlanta Marriott Marquis Limited Partnership
c/o Marriott Marquis Corporation
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
With a Copy to:
Ivy Street Limited Partnership
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxxx, Xx.
As to Management Company:
Marriott Motels, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Law Department
or to such other address in the United States as the party to whom the
notice is sent shall have designated in writing in accordance with the
provisions of this Section 20.9. The date of service of such notices shall
be the date such notices are delivered to the party to whom the notice is
given. Any party to this Agreement may change its address by giving the
other party written Notice of its new address as herein provided."
10. Section 20.12 of the Management Agreement is hereby amended by
deleting the word "such" in the fourth (4th) line thereof and substituting the
word "sums" therefor.
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11. Section 20.14 of the Management Agreement is hereby amended by
deleting the last sentence thereof and substituting the following therefor:
"Notwithstanding anything to the contrary contained herein, Management
Company and any of its affiliates shall be allowed to continue to manage or
to own an equity interest (to the extent of the equity interest on the date
hereof) in the existing Marriott Hotel located at the intersection of
Courtland Street and International Boulevard in Atlanta, Georgia."
12. Attached to this Amendment are revised Exhibits D and E which
supersede in their entirety Exhibits D and E previously attached to the
Management Agreement.
13. Except as otherwise amended by this First Amendment, all of the
other terms, conditions and provisions of the Management Agreement remain in
full force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the date first written above.
IVY STREET HOTEL LIMITED
PARTNERSHIP ("Owner")
Signed, sealed and
delivered in the presence By: ATLANTA MARRIOTT MARQUIS
of: LIMITED PARTNERSHIP,
/s/ Xxxxxxx Xxxxxx general partner
------------------------
Xxxxxxx Xxxxxx
Witness
/s/ Xxxxxx X. Xxxxxxx
------------------------
Xxxxxx X. Xxxxxxx
Notary Public By: MARRIOTT MARQUIS CORPORATION,
Commission Expiration Date: general partner
10-2-91
------------------------ By: /s/ Xxxxxx X. Xxxxxxx, Xx.
(Notarial Seal) ----------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
XXXXXX X. XXXXXXX
NOTARY PUBLIC, State of New York
No. 00-0000000 /s/ Xxxxxxx XxXxxxx
Qualified in Queens County --------------------------------
Term Expires Oct. 2. 1991 Xxxxxxx XxXxxxx
Assistant Secretary
(corporate seal)
Signed, sealed and
delivered in the presence By: Xxxx X. Xxxxxxx, Xx. (seal)
of: ----------------------------
/s/ Xxxxxxx Xxxxxx XXXX X. XXXXXXX, XX.,
------------------------ general partner
Xxxxxxx Xxxxxx By: Xxxx X. Xxxxx,
Witness Attorney-in-Fact
/s/ Xxxxxx X. Xxxxxxx
------------------------
Xxxxxx X. Xxxxxxx
Notary Public
Commission Expiration Date: 10-2-91
------------------------
(Notarial Seal)
XXXXXX X. XXXXXXX
NOTARY PUBLIC, State of New York
No. 00-0000000
Qualified in Queens County
Term Expires Oct. 2. 1991
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MARRIOTT HOTELS, INC.
Signed, sealed and ("Management Company")
delivered in the presence
of: By: /s/ Xxxxxx X. Xxxxxxx, Xx.
/s/ Xxxxxxx Xxxxxx --------------------------
------------------------ Xxxxxx X. Xxxxxxx, Xx.
Xxxxxxx Xxxxxx Vice President
Witness
/s/ Xxxxxx X. Xxxxxxx ATTEST: /s/ Xxxxxxx XxXxxxx
------------------------ --------------------
Xxxxxx X. Xxxxxxx Xxxxxxx XxXxxxx
Notary Public Asst. Secretary
Commission Expiration Date: 10-2-91
------------------------
(Notarial Seal)
XXXXXX X. XXXXXXX
NOTARY PUBLIC, State of New York
No. 00-0000000
Qualified in Queens Count
Term Expires Oct. 2, 1991
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EXHIBIT "D"
NON-COMPETITION AREA
ATLANTA, XXXXXX COUNTY, GEORGIA
That certain area in the City of Atlanta bounded generally on the north
by North Avenue, on the east by Boulevard, on the south by U.S. Interstate 20
and on the west by Northside Drive.
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EXHIBIT "E"
Certain mortgage financing evidenced by a secured note of the Owner in the
principal amount of $199,000,000, which financing was obtained by Owner from
Marriott/Portman Finance Corporation, pursuant to notes issued by
Marriott/Portman Finance Corporation in accordance with that certain Indenture
entered into on or about the date hereof among Marriott/Portman Finance
Corporation, Marriott Corporation and The Citizens and Southern National Bank,
as collateral trustee.
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