Exhibit 10.4
FIRST AMENDMENT TO MANAGEMENT AGREEMENT
THIS FIRST AMENDMENT TO HOTEL MANAGEMENT AGREEMENT (the "Agreement") made
and entered into as of this 29th day of December 2004, by and between Summit
Hospitality I, LLC a Delaware limited liability company (hereinafter referred to
as "Owner"), and The Summit Group, Inc., a South Dakota corporation, acting on
its own behalf, (hereinafter referred to as "Manager"). All terms not defined
herein shall have the meaning as set forth in the Hotel Management Agreement
dated December 20, 2004.
WHEREAS, Owner and Manager entered into a hotel management agreement as of
December 20, 2004 ("Hotel Management Agreement"); and
WHEREAS, Owner has entered into a certain loan transaction with Xxxxxx
Brothers Bank FSB pursuant to which it made certain representations regarding
the manner in which Manager would manage certain of Owner's cash and investments
("Representations");
WHEREAS, it is the desire of Owner and Manager to incorporate those
Representations into the Hotel Management Agreement through amendment.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree to amend the Hotel Management Agreement as follows:
1. The following sentence is inserted at the end of Section 3(d):
Notwithstanding the above, the parties agree that Manager may hold and
invest Owner's monies in accounts held in Manager's name, pursuant to
the terms and conditions on Exhibit A attached hereto and incorporated
herein by this reference.
2. The page attached hereto as Exhibit A is attached to the Hotel
Management Agreement.
No other terms, conditions or provisions of the Hotel Management Agreement
shall be changed or altered except as set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
OWNER: MANAGER:
SUMMIT HOSPITALITY I, LLC THE SUMMIT GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxxxx
--------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxxxxxxxx Name: Xxxxx X. Xxxxxxxxxxx
Its: President Its: President
0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 0 0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 0
Xxxxx Xxxxx, XX 00000 Xxxxx Xxxxx, XX 00000
Exhibit A
Description of Cash Management Process
The following provides an explanation of the process and procedures concerning
the flow of cash of the Borrower, Summit Hospitality I, LLC. All terms not
defined herein are defined in the Loan Agreement.
1. In payment of services provided, cash and checks are received by each
Individual Property. The cash and checks received are deposited into
one of the Property Accounts. Pursuant to the terms of the Loan
Agreement, any funds in excess of the Peg Amounts remaining in the
Property Accounts after payment of Permitted Automatic Utility Debits
are swept automatically into the Lockbox Account on a weekly basis.
2. In payment of services provided, receipts from credit card sales are
deposited directly by the merchant credit card processor into the
Lockbox Account.
3. The Lender shall make withdrawals from the Lockbox Account pursuant to
Section 3.7, et seq. of the Loan Agreement.
4. Funds distributed to Borrower in accordance with Section 3.7(b)(viii)
of the Loan Agreement shall be deposited by Borrower into a cash
management account ("Cash Management Account").
5. The Cash Management Account shall be managed by and accounted for by
The Summit Group, Inc. ("Summit"). The Cash Management Account shall
also include funds owned by entities which are affiliates of Borrower
and Borrower's sole member.
6. Summit shall account for the funds deposited by and earned by each
entity which deposits funds into the Cash Management Account,
including Borrower.
7. Summit shall credit each entity with funds in the Cash Management
Account for interest or other earnings on the funds in the Cash
Management Account by determining the amount of funds owned by each
entity on a weekly basis and then crediting a pro rata share of
interest or other earnings on the Cash Management Account to such
entity.
8. Summit shall apportion any bank charges, fees or costs of the Cash
Management Account to each entity with funds on deposit in the Cash
Management Account by calculating the amount of funds owned by each
entity on a weekly basis and then debiting a pro rata share of bank
charges, fees or costs incurred by the Cash Management Account to such
entity.
9. On a weekly basis Summit shall debit each entity's funds on deposit in
the Cash Management Account by the amount of withdrawals directly
attributable to such entity.
10. Excess funds may be withdrawn from the Cash Management Account and
deposited into one or more investment accounts ("Investment
Accounts"). Any Investment Account shall be managed by and accounted
for by The Summit Group, Inc. ("Summit"). The Investment Accounts
shall also include funds owned by entities which are affiliates of
Borrower and Borrower's sole member.
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11. Accounting of the funds on deposit in the Investment Accounts shall be
in accordance with paragraphs 6 through 9 above.
12. Immediately upon notice that any entity depositing funds into the Cash
Management Account or Investment Accounts has filed, or may file
bankruptcy or for protection from such entity's creditors, Summit
shall distribute all funds owned by such bankrupt entity immediately
to such bankrupt entity. Thereafter, Summit shall not allow such
bankrupt entity to participate in the Cash Management Account or
Investment Accounts.
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