AMENDMENT TO REIMBURSEMENT AGREEMENT
AND RATIFICATION OF GUARANTIES
THIS AMENDMENT TO REIMBURSEMENT AGREEMENT AND RATIFICATION OF
GUARANTIES (this "Amendment") is made as of the 29th day of January, 1999, by
and among EL CONQUISTADOR PARTNERSHIP L.P., a Delaware limited partnership,
having an address at 0000 Xx Xxxxxxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxx, Xxxxxx
Xxxx 00000 ("Borrower"), PATRIOT AMERICAN HOSPITALITY, INC., a Delaware
corporation. having an address at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Guarantor"), and CITICORP REAL ESTATE, INC., a Delaware corporation, having an
address at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Lender").
RECITALS:
A. Lender is the owner and holder of certain reimbursement obligations in
the principal amount of $90,000,000 (collectively, the "Reimbursement
Obligations") which are outstanding pursuant to that certain Letter of Credit
and Reimbursement Agreement, dated as of February 7, 1991, by and between The
Bank of Tokyo-Mitsubishi, Ltd. (f/k/a The Mitsubishi Bank, Limited) ("BTM") and
the Borrower (as amended by the Modification Agreement (as hereinafter defined)
and the Amendment Agreement (as hereinafter defined) and as otherwise heretofore
amended, the "Reimbursement Agreement").
B. The Reimbursement Obligations are secured, in part, by certain
Collateral Pledge Agreements more particularly described in the Reimbursement
Agreement and by certain other notes, deeds of mortgage, assignments, guaranties
and other documents and instruments executed in connection with the
Reimbursement Agreement (including those documents executed in connection with
that certain Assignment and Modification Agreement dated as of August 3, 1998 by
and among the Borrower, the Lender, the Puerto Rico Industrial, Medical,
Educational and Environmental Pollution Control Facilities Financing Authority,
Banco Popular de Puerto Rico, as trustee, and BTM (the "Modification
Agreement")) or otherwise with respect to the Reimbursement Obligations. The
term "L/C Documents", as used herein, shall have the meaning ascribed thereto in
the Reimbursement Agreement.
C. The Reimbursement Obligations are guaranteed by Guarantor pursuant to a
Guaranty dated as of August 3, 1998 in favor of Lender (the "Patriot Guaranty")
and that certain Guaranty, dated as of May 5, 1992, made by WMS Industries Inc.,
Xxxx Xxxxxxx, Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx for the benefit of BTM,
as assumed in part by Guarantor pursuant to that certain Assumption of Guaranty,
dated as of March 31, 1998, executed by Guarantor, and that certain guaranty by
Guarantor dated as of March 31, 1998 to assume the obligations of KGC under
paragraph 4 of the First Amendment to Letter of Credit and Reimbursement
Agreement (the "Deficiency Loan Guaranty"; the Patriot Guaranty and the
Deficiency Loan Guaranty are hereinafter sometimes collectively referred to as
the "Guaranties").
D. The Reimbursement Agreement has been amended by that certain Amendment
to Reimbursement Agreement and Ratification of Guaranties, dated as of November
3, 1998, by and among the Borrower, the Guarantor and Lender (the "Amendment
Agreement").
E. The Reimbursement Obligations are due and payable in full no later than
January 29, 1999 (the "First Extended Maturity Date") and Borrower has requested
that Lender extend the First Extended Maturity Date to March 31, 1999 (the
"Second Extended Maturity Date") and provide the Borrower with the option to
extend the Second Extended Maturity Date to June 30, 1999 (the "Third Extended
Maturity Date") upon satisfaction of certain conditions as more particularly
provided herein; and
F. Lender has agreed to extend the First Extended Maturity Date to the
Second Extended Maturity Date, to provide such extension option and to make
certain other modifications to the Reimbursement Agreement and the other L/C
Documents, but only on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Lender, Borrower and Guarantor hereby agree as
follows:
1. Recitals; Definitions. The recitals set forth herein are true and
accurate and are incorporated herein by reference. Capitalized terms not
otherwise defined herein shall have the meaning ascribed thereto in the
Reimbursement Agreement.
2. Maturity Date; Extension Option.
a. Section 1 of the Reimbursement Agreement is hereby amended to add the
following defined terms:
JANUARY 1999 AMENDMENT AGREEMENT shall mean that certain Amendment to
Reimbursement Agreement and Ratification of Guaranties dated as of
January 29, 1999 by and among the Company, the Bank and Patriot.
SECOND EXTENDED MATURITY DATE shall mean March 31, 1999.
THIRD EXTENDED MATURITY DATE shall mean June 30, 1999.
b. Section 1 of the Reimbursement Agreement is hereby amended to delete
the term "Maturity Date" and to substitute the following in lieu thereof:
MATURITY DATE shall mean the earlier to occur of (a) the Second
Extended Maturity Date, or, if extended pursuant to Section 3A hereof,
the Third Extended Maturity Date, or (b) any earlier date on which the
entire Reimbursement Amount is required to be paid in full, by
acceleration or otherwise, under this Agreement or any of the other L/C
Documents.
c. Section 3A(e) of the Reimbursement Agreement is hereby deleted in
its entirety and the following is hereby substituted in lieu thereof:
(e) Provided that (i) on the Notice Date (defined below) and on March
31, 1999, interest payable on the Reimbursement Amount shall be
current and the indebtedness outstanding hereunder shall be in full
force and effect, (ii) on the Notice Date and on March 31, 1999, no
Event of Default or Default shall exist and no "event of default"
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under any of the L/C Documents, shall exist, (iii) on or before
March 30, 1999, the Company shall have entered into a written
agreement with GDB, in form and substance reasonably satisfactory to
the Bank ("GDB Agreement"), pursuant to which GDB shall have agreed
to release the mortgage and all other security documents encumbering
the Hotel (or any portion thereof) which are securing the GDB Loan
upon the issuance of the Refunding Bonds, (iv) on or before the Notice
Date, the Company shall have provided to the Bank evidence reasonably
satisfactory to the Bank that (1) there has been no material adverse
change in the financial condition of the Company or any of the
Guarantors and no such change shall have occurred between the Notice
Date and March 31, 1999, (2) the term of each of the loans evidenced
by or made pursuant to the terms of the Patriot Loan Agreement has
been unconditionally extended to a date not earlier than June 30,
1999, and (3) Definitive Equity Agreements (as such term is defined
in the Patriot Loan Agreement) have been executed and delivered in
accordance with and satisfying the terms of the Patriot Loan
Agreement, and (v) on or before March 30, 1999, the Company shall
have made or caused to be made the additional deposits with the Bank
as required under Section 6.b. of the January 1999 Amendment
Agreement, then the Company shall have the one time option and right
of extending the Second Extended Maturity Date until the Third
Extended Maturity Date by notifying the Bank in writing of the
Company's desire to exercise its option to extend the Second
Extended Maturity Date until the Third Extended Maturity Date, which
notice must be given, if at all, on or before March 15, 1999. The date
on which such notice is given is called the "Notice Date". The Company
shall pay all costs incurred by the Bank in connection with the
extension of the Second Extended Maturity Date to the Third Extended
Maturity Date including, without limitation, reasonable attorneys'
fees and expenses incurred by the Bank, and all costs and expenses in
verifying that the Company has satisfied each of the conditions to the
extension as described in this Section 3A(e). Upon confirmation in
writing from the Bank to the Company that all of the above conditions
have been fully and timely satisfied, the Second Extended Maturity
Date shall be automatically extended to the Third Extended Maturity
Date.
3. Extension Fee. In connection with and as a condition to the extension of
the First Extended Maturity Date to the Second Extended Maturity Date and the
other modifications being made herein, Borrower shall pay to Lender an extension
fee in the amount of $90,000 (the "Extension Fee"). The Extension Fee shall be
deemed fully earned by Lender upon receipt and shall be non-refundable to
Borrower under all circumstances.
4. Bank Rate. Section 1 of the Reimbursement Agreement is hereby amended to
delete the term "Bank Rate" and to substitute the following in lieu thereof:
BANK RATE shall mean (a) from August 3, 1998 until the first day of
September, 1998, a rate equal to 7.91% per annum; (b) from the first
day of September, 1998 until January 31, 1999, an interest rate per
annum equal to the sum of (i) the LIBOR Rate plus (ii) 225 basis points
(rounded upwards, if necessary, to the nearest one-eighth percent
(.125%)); and (c) from February 1, 1999 until the Maturity Date, an
interest rate per annum equal to the sum of (i) the LIBOR Rate plus
(ii) 275 basis points (rounded upwards, if necessary, to the nearest
one-eighth percent (.125%)). The Bank Rate shall be adjusted on each
LIBOR Determination Date to account for any changes in the LIBOR Rate,
which
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adjustment shall be effective on the commencement of the next
succeeding LIBOR Reference Period.
5. Cash Flow Reserve.
a. Deposits. Commencing on February 10, 1999 and on the tenth (10th)
day of each calendar month thereafter (each such date being referred to herein
as a "Cash Flow Deposit Date"), Borrower shall deposit with Lender an amount
(each, a "Cash Flow Deposit" and collectively, the "Cash Flow Reserve") equal to
the amount, if any, that (i) one hundred percent (100%) of all Cash Flow (as
defined below) for the previous calendar month exceeds (ii) the amount set forth
on Schedule 1 hereto with respect to such previous calendar month. Borrower's
failure to deposit with Lender any Cash Flow Deposit on the applicable Cash Flow
Deposit Date shall constitute an Event of Default under the Reimbursement
Agreement without notice or demand and without the benefit of any grace period
provided for in any L/C Document. Except as expressly provided in Section 6.b.
hereof, no portion of the Cash Flow Reserve shall be advanced to Borrower until
such time as the Reimbursement Obligations have been repaid and satisfied in
full and all other amounts and obligations of the Borrower under the
Reimbursement Agreement and the other L/C Documents have been fully repaid and
satisfied.
b. Cash Flow Reserve Fund. Lender shall deposit the Cash Flow Reserve
in an interest-bearing escrow account (the "Cash Flow Reserve Fund"). Borrower
hereby acknowledges and confirms that (i) the Cash Flow Reserve shall not
constitute a trust fund and may be commingled with other monies held by Lender;
(ii) Lender or its designee shall have the sole right to make withdrawals from
the Cash Flow Reserve Fund; and (iii) Lender shall have no responsibility or
liability for the amount of interest earned on the Cash Flow Reserve. All
interest earned from investment of the funds deposited in the Cash Flow Reserve
Fund shall be credited to the Cash Flow Reserve Fund. Borrower shall include and
report such interest in its income for Federal, state, commonwealth and local
income and franchise tax purposes.
c. Security Interest. As additional security for the payment of all
sums due under the L/C Documents and the performance by Borrower of its
obligations thereunder, Borrower hereby pledges, assigns and grants to Lender a
continuing perfected security interest (to the extent Lender maintains
possession of same) in and to and a first lien upon, the Cash Flow Reserve Fund
and the Cash Flow Reserve.
d. Default. Borrower shall be in default under the Reimbursement
Agreement if it fails to make when due any Cash Flow Deposit as provided herein.
Upon the occurrence of such a default and during the continuance thereof, in
addition to the remedies specified in the Reimbursement Agreement, Lender shall
be able to exercise all of its rights and remedies under any or all of the L/C
Documents. If Borrower defaults on any payment due under the Reimbursement
Agreement or any of the other L/C Documents, or if Borrower defaults under any
other provision in the L/C Documents, then, upon any such default and during the
continuance thereof, Lender may, in its sole and absolute discretion, use the
Cash Flow Reserve (or any portion thereof) for any purpose permitted under the
L/C Documents, including, but not limited to (i) payment of all or any portion
of the Reimbursement Obligations and other amounts due under the L/C Documents;
provided, however, that such application of funds shall not cure or be deemed to
cure any default; (ii) reimbursement of Lender for all losses and expenses
(including, without limitation, reasonable legal fees) suffered or incurred by
Lender as a result of
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such default; and/or (iii) payment of any amount expended in exercising any of
the rights and remedies available to Lender at law or in equity or under the L/C
Documents, all in such order, proportion and priority as Lender may determine in
its sole discretion. Lender's right to withdraw and apply the Cash Flow Reserve
Fund as provided herein shall be in addition to all other rights and remedies
provided to Lender under the L/C Documents and at law or in equity.
e. Insufficient Funds in the Cash Flow Reserve Fund. The insufficiency
of any balance in the Cash Flow Reserve Fund shall not relieve Borrower from its
obligations under the Reimbursement Agreement or any of the other L/C Documents.
f. Definitions. As used in this Paragraph 5, the following terms shall
have the meanings indicated:
(i) "Gross Receipts" for any period, means, without duplication,
the sum of all income, proceeds, receipts and revenues generated by or from the
operation or use of the Hotel or otherwise arising in respect of the Hotel from
and after January 1, 1999 which are properly allocable to the Hotel, including
Rents, insurance proceeds or condemnation awards paid to reimburse Borrower for
loss of business or rental income (but specifically excluding any insurance
proceeds actually deposited by Borrower into the Net Proceeds Reserve Fund (as
such term is defined in the Amendment Agreement) or otherwise paid to Lender),
proceeds from any loans obtained by Borrower and withdrawals from cash reserves
(except to the extent that any operating expenses paid therewith are excluded
from Operating Expenses), but excluding security deposits until forfeited by the
depositor. Gross Receipts shall be determined in accordance with the cash basis
method of accounting and applicable Hotel Accounting Standards, consistently
applied.
(ii) "Hotel Accounting Standards" means the accounting standards
set forth in the Uniform System of Accounts for the Lodging Industry (9th
Revised Edition, 1996) of the Hotel Association of New York City, Inc., as
adopted by the American Hotel and Motel Association.
(iii) " Cash Flow" for any period, means the amount, if any, by
which Gross Receipts received in such period exceeds the amount of Operating
Expenses paid in such period.
(iv) "Operating Expenses" means, without duplication, all normal,
reasonable and customary costs and expenses incurred by Borrower relating to the
operation and maintenance of the Hotel, including ad valorem real estate taxes
and assessments, income taxes, payroll and other taxes, insurance premiums,
escrow and reserve payments to Lender but excluding any amounts deposited into
the Net Proceeds Reserve Fund or the Insurance Reserve Fund (as defined in the
Amendment Agreement), maintenance costs, management fees and expenses to the
extent permitted to be paid under the terms of the Reimbursement Agreement and
the other L/C Documents (the "Permitted Management Fees"), accounting, legal and
other professional fees related to operation of the Hotel and wages, salaries
and personnel expenses, all as determined in accordance with the cash basis
method of accounting and applicable Hotel Accounting Standards, consistently
applied; provided that (A) Operating Expenses shall not include interest,
principal or other payments made with respect to the Reimbursement Obligations
or any other indebtedness of the Borrower to the extent paid
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from funds held by Lender in escrow, non-cash charges such as depreciation and
amortization, the costs of any capital improvements or repairs made to the
Hotel, the costs of Restoration, the costs of any furniture, fixtures or
equipment, any refunds of security deposits made to any tenants or
concessionaires at the Hotel, or any general or administrative expenditures of
the Borrower not, in the reasonable discretion of the Lender, attributable to
the Hotel, and (B) for the purpose of computing Operating Expenses, no fees,
commissions, charges, expenses or other amounts paid to any Affiliate of the
Borrower, including, without limitation, Manager, or any employee, agent, or
independent contractor of any such Affiliate of Borrower shall constitute an
Operating Expense except for Permitted Management Fees. Notwithstanding anything
to the contrary contained herein, the term "Operating Expenses" shall not
include any of the foregoing items to the extent paid directly or reimbursed by
any tenant or concessionaire of the Borrower or any other third party unless the
amount paid by such tenant or concessionaire is also included in Gross Receipts
for the same period.
g. Borrower hereby directs Manager to pay directly to Lender from
Gross Receipts held by Manager any Cash Flow required to be paid to Lender
hereunder.
6. Reserves.
a. Notwithstanding any provision of the Reimbursement Agreement
or in the Replacement Reserve Agreement, Debt Service Reserve Agreements or
Required Repair Reserve Agreement, each dated as of August 3, 1998, between
Borrower and Lender, on or before the date hereof and as a condition to the
extension of the First Extended Maturity Date to the Second Extended Maturity
Date, Borrower has caused the cash balances in each of the following escrows and
reserves to equal, at a minimum, the amounts set forth below:
Tax escrow established pursuant to Section 7(uu) $3,298,100.97
of the Reimbursement Agreement
Replacement Reserve Fund created pursuant to the $0.00
Replacement Reserve Agreement
Debt Service Reserve Fund pursuant to the Debt $1,689,834.38
Service Reserve Agreement
Debt Service Reserve Fund pursuant to the Debt $525,000
Service Reserve Agreement (re GDB Loan)
Insurance Reserve pursuant to Section 6 of the $7,500,000
Amendment Agreement
b. In the event that Borrower requests an extension of the Second
Extended Maturity Date until the Third Extended Maturity Date pursuant to the
terms of the Reimbursement Agreement, as amended hereby, then on or prior to
March 30, 1999, Borrower shall cause to be deposited with Lender, for further
deposit by Lender into the respective debt
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service reserve funds created under the Debt Service Reserve Agreements between
Borrower and Lender, each dated as of August 3, 1998, the following amounts: (i)
$1,689,834.38 (the "Reimbursement DSRF Amount"), to be deposited into the debt
service reserve fund created under the Debt Service Reserve Agreement respecting
the Reimbursement Obligations (the "Reimbursement DSRF Fund"), and (ii) $525,000
(the "GDB DSRF Amount"), to be deposited into the debt service reserve fund
under the Debt Service Reserve Agreement respecting the GDB Loan (the "GDB DSRF
Fund"). Notwithstanding the foregoing and provided that no Event of Default or
Default shall exist and no "event of default" or event which, with the passage
of time, the giving of notice, or both, would constitute an "event of default"
under any of the L/C Documents, shall exist, upon the written request of the
Borrower, Lender shall transfer (through a bookkeeping entry and a reallocation
of escrow funds on the books of the Lender) moneys from the Cash Flow Reserve
Fund, to the extent of any available moneys therein, into the Reimbursement DSRF
Fund and GDB DSRF Fund in amounts equal to the Reimbursement DSRF Amount and the
GDB DSRF Amount, respectively; provided, that, to the extent that the cash
balance in the Cash Flow Reserve Fund is insufficient to fully fund the
Reimbursement DSRF Amount and/or the GDB DSRF Amount, then the balance of the
Reimbursement DSRF Amount and/or the GDB DSRF Amount shall be funded by the
Borrower from its own funds and not from any other escrow or reserve fund being
held by Lender under the Reimbursement Agreement or any of the other L/C
Documents. In the event that for any reason the Second Extended Maturity Date is
not extended until the Third Extended Maturity Date, any moneys transferred by
Lender from the Cash Flow Reserve Fund to the Reimbursement DSRF Fund and/or GDB
DSRF Fund as provided herein may be transferred and reallocated back to the Cash
Flow Reserve Fund in Lender's sole and absolute discretion.
7. Patriot Subordinated Loan. As of the date hereof, the outstanding
principal balance of the Patriot Subordinated Loan (as such term is defined in
the Amendment Agreement) is $3,308,917. Borrower and Guarantor hereby confirm
that the Patriot Subordinated Loan may be repaid only from and to the extent of
any Available Insurance Funds (as such term is defined in the Amendment
Agreement) and, subject to repayment as provided in the Reimbursement Agreement,
is and shall remain fully subordinated to the Reimbursement Obligations in all
respects.
8. Confirmation of Re-Opening. Borrower hereby represents and warrants to
Lender that all guest rooms, the casino, pool and other amenities of the Hotel
have been fully re-opened so as to permit the Borrower to conduct its business
in the manner in which such business was conducted prior to the Hurricane Damage
(as such term is defined in the Amendment Agreement).
9. Project Items. Borrower's failure to deliver to Lender, on or before
February 15, 1999, (i) a detailed project schedule for completion of the
Restoration, (ii) a project budget reconciliation of the Approved Construction
Budget (as defined in the Amendment Agreement) with actual expenditures for the
Restoration, and (iii) a revised project budget for the remaining Restoration
for approval by Lender, shall constitute an Event of Default under the
Reimbursement Agreement without notice or demand and without the benefit of any
grace period provided for in any L/C Document.
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10. References. All references in the Reimbursement Agreement and each of
the other L/C Documents to the Reimbursement Agreement shall mean and refer to
the Reimbursement Agreement, as amended hereby.
11. Outstanding Indebtedness. Borrower and Guarantor represent and warrant
to Lender that, as of the date hereof, the outstanding principal balance of the
Reimbursement Obligations is $90,000,000 and that interest has been paid through
December 31, 1998.
12. Confirmation of Representations and Warranties. Except as set forth in
Schedule 2 hereto, each of Borrower and Guarantor hereby represents and warrants
to Lender that each of the representations and warranties of Borrower or
Guarantor, as the case may be, contained in the Modification Agreement, the
Amendment Agreement and each of the Additional Security Documents (as such term
is defined in the Modification Agreement) to which it is a party are true,
correct and complete as of the date hereof and apply to the execution and
delivery of this Amendment and any other documents executed in connection
herewith.
13. No Defenses. Each of Borrower and Guarantor hereby acknowledges,
confirms and warrants to Lender that as of the date hereof it has no defenses,
claims, rights of set-off or counterclaims against Lender under, arising out of,
or in connection with, this Amendment, the Reimbursement Agreement, the
Reimbursement Obligations, the Guaranties or any of the other L/C Documents, or
against any of the indebtedness evidenced, advanced or secured thereby or under
any other documents executed in connection therewith or relating thereto, any
and all of which Borrower and Guarantor hereby expressly waive.
14. Release. Each of Borrower and Guarantor acknowledges that it is
executing this Amendment as its own voluntary act and free from duress and undue
influence and upon and with the advice of counsel. Each of Borrower and
Guarantor hereby unconditionally and irrevocably forever releases, acquits and
discharges Lender, its predecessors, subsidiaries and affiliates and their
respective employees, officers, directors, shareholders, agents, servants and
counsel (collectively, the "Related Parties") from any and all claims, demands,
actions, causes of actions, suits, debts, costs, dues, sums of money, accounts,
bonds, bills, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments expenses and liabilities whatsoever,
known or unknown, at law or in equity, irrespective of whether such claims arise
out of contract, tort, violation of laws or regulations or otherwise, which
Borrower or Guarantor ever had, now has or hereafter can, shall or may have
against Lender or any of the Related Parties for, upon, or by reason of any
matter, cause or thing whatsoever from the beginning of the world to and
including the date hereof arising out of, in connection with, or related in any
manner to the Hotel, the Reimbursement Obligations, the Mortgaged Property (as
hereinafter defined), the Reimbursement Agreement, this Amendment, the
Guaranties or any of the other L/C Documents.
15. Confirmation of Mortgages and Liens.
a. Borrower acknowledges and agrees that the Fee Mortgage and the
Second Fee Mortgage (collectively, the "Fee Mortgages") constitute and continue
to be valid first mortgage liens and security interests upon the Mortgaged
Property (as defined therein) in favor of Lender, as the assignee of BTM under
the Collateral Pledge Agreement and the Second Collateral Pledge Agreement,
(collectively, the "Collateral Pledge Agreements"), and as the
8
holder of the Notes and the holder of the rights of BTM under the Reimbursement
Agreement, subject only to permitted encumbrances as provided therein, that the
obligations of the Borrower under the Reimbursement Agreement, as modified
hereby, are secured by, among other things, the Collateral Pledge Agreements,
the Notes, the Fee Mortgages and that the Fee Mortgages and each of the other
L/C Documents constitute valid and subsisting agreements and obligations of the
Borrower. Nothing herein is intended to, nor shall it, constitute a novation of
the indebtedness secured by the Collateral Pledge Agreements, the Notes or the
Fee Mortgages. The Mortgaged Property (as defined in each of the Fee Mortgages,
respectively) is and shall remain subject to and encumbered by the lien, charge
and encumbrance of the applicable Fee Mortgage, and nothing herein contained
shall affect or be construed to affect the lien or encumbrance of either of the
Fee Mortgages or the priority thereof over other liens or encumbrances.
b. The Borrower acknowledges and agrees that the Leasehold
Mortgage constitutes, and continues to be, a valid first mortgage lien and
security interest upon the Mortgaged Property (as defined therein) in favor of
Lender, as assignee of BTM under the Collateral Pledge Agreements and as the
holder of the Notes and the holder of the rights of BTM under the Reimbursement
Agreement, subject only to permitted encumbrances as provided therein, that the
obligations of the Borrower under the Reimbursement Agreement, as modified
hereby, are secured by, among other things, the Collateral Pledge Agreements,
the Notes and Leasehold Mortgage, and that the Leasehold Mortgage and each of
the other L/C Documents, constitute valid and subsisting agreements and
obligations of the Borrower. Nothing herein is intended to, nor shall it,
constitute a novation of the indebtedness secured by the Collateral Pledge
Agreements, the Notes or the Leasehold Mortgage. The Mortgaged Property (as
defined in the Leasehold Mortgage) is and shall remain subject to and encumbered
by the lien, charge and encumbrance of the Leasehold Mortgage, and nothing
herein contained shall affect or be construed to affect the lien or encumbrance
of the Leasehold Mortgage or the priority thereof over other liens or
encumbrances.
16. Consent and Reaffirmation. Guarantor hereby confirms its
obligations under each of the Guaranties and any other L/C Document to which it
is a party and consents to the terms of this Amendment and the transactions
contemplated herein. Nothing contained in this Amendment or any of the other L/C
Documents or any of the transactions contemplated herein or thereby shall be
deemed to waive, release, or limit any obligation of the Guarantor relating to
or otherwise connected with the Guaranties or any of the other L/C Documents, as
modified hereby. Nothing herein is intended to, nor shall it, constitute a
novation of the indebtedness secured by the Guaranties. Except as expressly set
forth in this Amendment, nothing herein is intended to nor shall it expand the
liability of Guarantor under the Guaranties.
17. Expenses of Transaction. Simultaneously upon the execution of
this Amendment, Borrower and Guarantor shall pay all fees, costs, expenses and
disbursements of Lender and Lender's counsel in connection with the preparation,
execution and delivery of this Amendment and each of the other documents
executed in connection herewith and in connection with the transactions
contemplated hereby.
18. No Oral Modification. This Amendment may not be amended
except upon the written agreement of all of the parties hereto.
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19. Ratification. Except as expressly modified and amended
herein, each of Borrower and Guarantor covenants and agrees that all of the
terms, covenants, promises, warranties, representations and conditions of the
Reimbursement Agreement, the Guaranties, and each of the other L/C Documents
shall remain in full force and effect with respect to the Borrower and
Guarantor. Borrower hereby ratifies and confirms each of its obligations under
the Reimbursement Agreement, as modified hereby, and each of the other L/C
Documents. Guarantor hereby ratifies and confirms each of its obligations under
the Guaranties and each of the other L/C Documents to which it is a party.
20. Binding Upon Successors and Assigns. This Amendment shall
inure to the benefit of, and shall be binding upon, the parties hereto and their
respective successors and permitted assigns under the Reimbursement Agreement.
21. Headings. The headings of the sections and subsections of
this Amendment are for convenience of reference only and shall not be considered
a part hereof nor shall they be deemed to limit or otherwise affect any of the
terms or provisions hereof.
22. Validity of Provisions. Any provision of this Amendment which
may prove unenforceable under law shall not affect the validity of the other
provisions hereof.
23. Judicial Interpretation. Should any provision of this
Amendment, the Reimbursement Agreement or any of the L/C Documents require
judicial interpretation, it is agreed that a court interpreting or construing
the same shall not apply a presumption that the terms hereof shall be more
strictly construed against any party by reason of the rule of construction that
a document is to be construed more strictly against the party who itself or
through its agent prepared the same, it being agreed that all parties hereto
have participated in the preparation of this Amendment.
24. Time; Construction; Exhibits and Schedules. Time is of the
essence of each provision of this Amendment. All references to the singular or
plural number or masculine, feminine or neuter gender shall, as the context
requires, include all others. All references to sections, paragraphs, and
exhibits are to this Amendment unless otherwise specifically noted. The use of
the words "hereof", "hereunder", "herein" and words of similar import shall
refer to this entire Amendment and not to any particular section, paragraph or
portion of this Amendment unless otherwise specifically noted. All exhibits and
schedules attached hereto are by this reference made a part of this Amendment
for all purposes.
25. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one agreement. It shall not be necessary for the same counterpart to
be signed by all of the parties in order for this instrument to be fully binding
upon any party signing at least one counterpart.
26. Governing Law. THIS AMENDMENT SHALL BE GOVERNED, CONSTRUED,
APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND
THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
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27. Conflicting Provisions. In the event of any conflict between
this Amendment and the terms of the Reimbursement Agreement or any of the other
L/C Documents, the terms of this Amendment shall govern and control. Whenever
possible, the provisions of this Amendment shall be deemed supplemental to and
not in derogation of the terms of the Reimbursement Agreement and the other
L/C Documents.
28. Entire Agreement. This Amendment and the documents executed
and delivered in connection herewith constitute the entire agreement among the
parties with respect to the subject matter hereof, and all understandings (oral
or written) and agreements heretofore had among the parties are merged in or
contained in this Amendment and such documents.
29. Facsimile Execution. Delivery of an executed counterpart of a
signature page to this Amendment by facsimile transmission shall be effective as
delivery of a manually executed counterpart of this Amendment.
30. Waiver of Jury Trial. LENDER, BORROWER AND GUARANTOR HEREBY
KNOWINGLY, VOLUNTARILY, UNCONDITIONALLY, IRREVOCABLY AND INTENTIONALLY FOREVER
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
AMENDMENT OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT, THE
REIMBURSEMENT AGREEMENT, OR ANY OTHER DOCUMENTS EXECUTED IN CONJUNCTION HEREWITH
OR THEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY OR THE EXERCISE BY ANY PARTY OF ITS
RIGHTS UNDER THIS AMENDMENT OR ANY OF THE OTHER L/C DOCUMENTS OR IN ANY WAY
ARISING OUT OF OR RELATED IN ANY MANNER WITH THE HOTEL OR THE SUBJECT MATTER
HEREOF OR THEREOF (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR
CANCEL THIS AMENDMENT OR ANY OF THE L/C DOCUMENTS AND ANY CLAIM OR DEFENSE
ASSERTING THAT THIS AMENDMENT OR ANY OTHER L/C DOCUMENT WAS FRAUDULENTLY INDUCED
OR IS OTHERWISE VOID OR VOIDABLE); BORROWER AND GUARANTOR ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO AND ACCEPT THIS
AMENDMENT.
[THE REMAINDER OF THIS PAGE IS LEFT BLANK]
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IN WITNESS WHEREOF, THIS AMENDMENT has been executed by
Borrower, Guarantor and Lender as of the day and year first above written.
BORROWER:
EL CONQUISTADOR PARTNERSHIP, L.P., a Delaware
limited partnership
By: Conquistador Holding, Inc., a Delaware
corporation, its general partner
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx
Vice President
LENDER:
CITICORP REAL ESTATE, INC., a Delaware
corporation
By: /s/ Xxxxx Xxxxx
--------------------------------------
Xxxxx Xxxxx, Authorized Signatory
GUARANTOR:
PATRIOT AMERICAN HOSPITALITY, INC., a Delaware
corporation
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxxx
Vice President
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