HOTEL CORPORATION OF AMERICA
c/o Sonesta International Hotels Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
April 6, 1995
Marmont Hotel Group, Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
RE: Amended and Restated Agreement of Limited Partnership of the
Soho Hotel Company, L.E. (the "Partnership Agreement"), by and
among Hotel Corporation of America (the "Sonesta GP"), Marmont
Hotel Group, Inc. (the "Xxxxxx XX"), Xxxxx Xxxxxx, and Sonesta
Soho Investment Corp.
Dear Andre:
This letter agreement (the "Letter") will con firm our
understanding with respect to the modification of the terms of the
above-referenced Partnership Agreement (all capitalized terms used herein and
not otherwise defined shall have the respective meanings ascribed thereto in the
Partnership Agreement):
I. The following modifications shall be made to Section 1.7 (a)
to reflect the current understanding of the parties with respect thereto: On
line 31, "$12,000,000" shall be replaced by "$14,000,000". The description of
the Project Budget shall be modified by replacing lines 17 through 28 with the
following language:
"Budget shall include (i) projected hard and soft costs of
constructing, equipping and otherwise preparing the Hotel to be
delivered on a "turn-key" basis to Manager, with a hard cost
contingency amount of at least $600,000 and a soft cost
contingency amount of at least
Mr. Xxxxx Xxxxxx
April 7, 1995
Page 2
$400,000, (ii) at least $600.00 in the aggregate (the "Working
Capital Reserve") for (a) pre-opening expenses to be incurred by
the Partnership and (b) working capital to be used, to the extent
necessary, for working capital after the Completion of the
Project, and (iii) a $500,000 debt service reserve, to be used,
to the extent necessary, for the payment of debt service on Third
Party Loans after the Completion of the Project (the "Debt
Service ReServe," and together with the Working Capital Reserve,
the "Operating Reserve"). It is contemplated"
II. On line 10 of Section 1.7 (b), "$19,000,000" shall be
replaced by $21,000,000". Clause (iii) of the definition of "Determination Date"
contained Section 1.7 (b) shall be amended to read "October 1, 1995." On the
third to last line of Section 1.7 (b), the language "during such 180 day
period," shall be replaced by the language "prior to October 1, 1995,".
III. Notwithstanding anything to the contrary contained in
Section 1.7 (b), a written notice (an "Extension Notice") to the Sonesta GP or
the Xxxxxx XX, as applicable (pursuant to the notice requirements of the
Partnership Agreement), may be sent at any time prior to October 1, 1995 further
extending the Pre-Development Period to December 31, 1995 by (i) the Sonesta GP
if, and only if, the Sonesta GP provides the Xxxxxx XX with evidence reasonably
satisfactory to the Xxxxxx XX that the Sonesta GP is engaged in negotiations
with a bona fide lender reasonably acceptable to the Xxxxxx XX with respect to
the financing of the Construction Capital Requirements required to cause the
Completion of the Project and the funding of the Operating Reserve in accordance
with the terms and conditions of the Partnership Agreement, or (ii) the Xxxxxx
XX for any reason in its sole discretion.
Mr. Xxxxx Xxxxxx
April 6, 1995
Page 3
IV. Prior to and following the delivery of an Extension Notice,
The Xxxxxx XX and the Sonesta GP shall each retain the right to deliver a
Non-Feasibility Notice to one another in accordance with Section 1.7 (b) of the
Partnership Agreement and the terms thereof shall apply with respect thereto.
V. In Section 1.7 (c) of the Partnership Agreement, the Contract
Period and the Closing Period in connection with (x) a Balazs Purchase and (y) a
Third Party Purchase, shall each be extended as follows:
(a) the Contract Period shall be extended to 210 days after
the Non-Feasibility Notice has been given by substituting "210 days" for "120
days" on line 6 of Section 1.7 (c);
(b) the Closing Period shall be extended to 270 days
after the date of the Non-Feasibility Notice was sent by (i) substituting "270
days" for "180 days" on each of lines 21 and 23 of the second paragraph of
Section 1.7 (c) and (ii) substituting "300 days" for "210 days" on line 44 of
Section 1.7 (c).
VI. Notwithstanding anything to the contrary contained in the
Partnership Agreement, the Sonesta GP agrees that prior to the earlier of (a)
the delivery of a Non-Feasibility Notice in accordance with Section 1.7 (b) of
the Partnership Agreement and (b) the opening of the Hotel, the Sonesta GP shall
not retain any agent or representative for the purpose of the financing
(including without limitation the raising of capital by the admission to the
Partnership of Additional Limited Partners) of any portion of its Capital
Contribution to the Partnership as of the date of the termination of the Pre-
Development Period, including without limitation any sums expended prior to such
date with respect to the Pre-Development Capital Requirements; provided,
however that such sums shall not include the cost of the construction of any
elevator(s).
Mr. Xxxxx Xxxxxx
April 6, 1995
Page 4
VII. Notwithstanding anything to the contrary contained in the
Partnership Agreement, (a) the Xxxxxx XX shall have the right to select an
interior design group to design the Project, subject to the absolute veto* of
the Sonesta GP; and (b) the Xxxxxx XX shall assume primary responsibility for
the interior design process of the Project, provided that the final interior
design of the Project shall be subject to the absolute veto* of the Sonesta GP.
*i.e. not subject to Section 11.15 of the Partnership Agreement.
Please indicate your agreement with our understanding of the
foregoing terms by executing a copy of this Letter and returning it to my
attention.
Sincerely yours,
Hotel Corporation of America
By: _________________________
Xxxxx X. Xxxxxxxxx
Vice President
ACCEPTED AND AGREED
Marmont Hotel Group, Inc.
By: ________________________
Xxxxx Xxxxxx
President
