ASSIGNMENT AND MODIFICATION AGREEMENT
THIS ASSIGNMENT AND MODIFICATION AGREEMENT (this "Agreement") dated as
of the 3rd day of August, 1998, is made by and among EL CONQUISTADOR PARTNERSHIP
L.P., a Delaware limited partnership ("Owner"), CITICORP REAL ESTATE, INC., a
Delaware corporation ("CRE"), BANCO POPULAR DE PUERTO RICO, a banking
corporation organized and existing under the laws of the Commonwealth of Puerto
Rico, as trustee ("Trustee"), PUERTO RICO INDUSTRIAL, MEDICAL, EDUCATIONAL AND
ENVIRONMENTAL POLLUTION CONTROL FACILITIES FINANCING AUTHORITY, a public
corporation and government instrumentality created pursuant to the laws of the
Commonwealth of Puerto Rico ("Authority"), and THE BANK OF TOKYO-MITSUBISHI,
LTD. (formerly known as The Mitsubishi Bank, Limited), a Japanese banking
corporation acting through its New York Branch ("BTM").
R E C I T A L S:
WHEREAS, pursuant to the terms of that certain Trust Agreement dated as
of February 7, 1991 (as heretofore supplemented and amended, the "Indenture"),
by and between the Authority and the Trustee and that certain Loan Agreement
dated as of February 7, 1991 (as heretofore amended, the "Loan Agreement"), by
and between the Authority and the Owner, the Authority issued (i) its Industrial
Revenue Bonds, 1991 Series A (El Conquistador Resort Project), (the "Series A
Bonds"), (ii) its Convertible Industrial Revenue Bonds, 1991 Series B (El
Conquistador Resort Project), (the "Series B Bonds"), and (iii) its Industrial
Revenue Bonds, 1991 Series C (El Conquistador Resort Project), (the "Series C
Bonds"), in the aggregate principal amount of $120,000,000 (the Series A Bonds,
Series B Bonds and Series C Bonds being hereinafter referred to collectively as
the "Bonds"), and loaned the proceeds derived from the sale of the Bonds to the
Owner (the "Loan") to finance all or a portion of the cost of the Owner's
acquisition, construction and equipping of that certain first-class destination
resort hotel and related facilities located in the Las Croabas area of Fajardo,
Puerto Rico and known as the El Conquistador Resort and Country Club and more
particularly described on Exhibit A attached hereto and made a part hereof (the
"Project"); and
WHEREAS, as a condition precedent to the issuance of the Bonds and the
making of the Loan to the Owner, the Authority required that the Owner deliver
or cause to be delivered to the Trustee, for the benefit of the holders of the
Bonds, an irrevocable, transferable letter of credit to secure the payment of
the principal of, and interest on, the Bonds and to provide for the payment of
the purchase price thereof in accordance with the terms of the Indenture; and
WHEREAS, BTM issued its irrevocable letter of credit to the Trustee,
for the account of Owner (said letter of credit, as heretofore modified, amended
or substituted, the "Letter of Credit"), upon and subject to the terms,
provisions and conditions set forth in that certain Letter of Credit and
Reimbursement Agreement dated as of February 7, 1991 by and between BTM and the
Owner (as heretofore modified and amended, the "Reimbursement Agreement"); and
WHEREAS, the obligations of the Owner under the Reimbursement
Agreement, the Loan Agreement, the Mortgage Note, dated May 4, 1992, made by the
Owner and payable to bearer, in the principal amount of $100,000 and each of the
four Mortgage Notes, dated February 7, 1991 made by the Owner and payable to the
Authority, in the respective principal amounts of $120,000,000, $6,612,000,
$20,000,000 and $2,000,000 (as heretofore endorsed, modified, supplemented
and/or amended being hereinafter sometimes referred to collectively as the
"Notes"), are secured by, among other things, (a) that certain first mortgage
made by the Owner by Deed of Mortgage Number One executed in San Xxxx on
February 7, 1991 before Notary Public Xxxxxx X. Xxxxxxx-Xxxxxxxx (as heretofore
modified, supplemented and/or amended the "Fee Mortgage"), (b) that certain
first leasehold mortgage made by the Owner by Deed of Leasehold Mortgage, Number
Two executed in San Xxxx on February 7, 1991 before Notary Public Xxxxxx X.
Xxxxxxx-Xxxxxxxx (as heretofore modified, supplemented and/or amended, the
"Leasehold Mortgage"), (c) that certain Collateral Pledge Agreement, dated as of
February 7, 1991, made by the Owner in favor of the Authority and BTM (as
heretofore modified, supplemented and/or amended, the "Collateral Pledge
Agreement"), (d) that certain Assignment of Contracts Agreement dated as of
February 7, 1991, made by the Owner in favor of BTM (as heretofore modified,
supplemented and/or amended, the "Assignment of Contracts Agreement"), (e) that
certain Assignment of Management Agreement dated as of February 7, 1991, made by
the Owner in favor of BTM (as heretofore modified, supplemented and/or amended,
the "Assignment of Management Agreement"), (f) that certain Assignment of
Accounts Receivable Agreement dated as of February 7, 1991, made by the Owner in
favor of BTM (as heretofore modified, supplemented and/or amended, the
"Assignment of Accounts Receivable Agreement"), (g) that certain Pledge and
Security Agreement dated as of February 7, 1991, made by the Owner in favor of
BTM (as heretofore modified, supplemented and/or amended, the "Pledge and
Security Agreement"), (h) that certain Management Agreement Subordination and
Attornment Agreement dated as of February 7, 1991, between Xxxxxxxx Hospitality
Management Corporation and BTM (as heretofore modified, supplemented and/or
amended, the "Management Subordination Agreement"), (i) that certain Assignment
of Contracts Agreement dated as of May 5, 1992 made by the Owner in favor of BTM
(as heretofore modified, supplemented and/or amended, the "Second Assignment of
Contracts Agreement"), (j) that certain Collateral Pledge Agreement dated as of
May 4, 1992 made by the Owner in favor of BTM (as heretofore modified,
supplemented and/or amended, the "Second Collateral Pledge Agreement"), (k) that
certain first mortgage made by the Owner by Deed of Mortgage Number Thirty- Two
executed in San Xxxx on May 4, 1992 before Notary Public Xxxx Xxxxxxx Xxxxxx
Xxxxxxx (as heretofore modified, supplemented and/or amended the "Second Fee
Mortgage"), (the Reimbursement Agreement, Notes, Fee Mortgage, Leasehold
Mortgage, Collateral Pledge Agreement, Assignment of Contracts, Assignment of
Management Agreement, Assignment of Accounts Receivable Agreement, Pledge and
Security Agreement, Management Subordination Agreement, Second Assignment of
Contracts Agreement, Second Collateral Pledge Agreement, Second Fee Mortgage and
all other notes, mortgages, deeds of trust, assignments, guaranties,
indemnities, documents, instruments, agreements and certificates executed or
delivered in connection therewith and/or evidencing or securing, directly or
indirectly, the Owner's obligations thereunder, including, without limitation,
each of the documents set forth on Exhibit B attached hereto and made a part
hereof, each as heretofore modified,
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supplemented and/or amended, being hereinafter sometimes referred to
collectively as the "L/C Documents"); and
WHEREAS, on August 3, 1998, BTM honored a principal drawing on the
Letter of Credit made by the Trustee in the amount of $120,000,000, which amount
the Trustee has applied or are available for application to the payment of the
principal of the Bonds; and
WHEREAS, as of August 3, 1998, all of the outstanding Bonds have been
called for redemption in accordance with the terms of the Indenture from funds
drawn by the Trustee under the Letter of Credit; and
WHEREAS, on and as of August 3, 1998, all of the Bonds have been paid
in full (or provision has been made for such payment in accordance with the
terms of the Indenture), and, as a result, the Letter of Credit has expired in
accordance with its terms and has been surrendered by the Trustee to BTM for
cancellation; and
WHEREAS, pursuant to the terms of the Reimbursement Agreement, Owner is
obligated to immediately reimburse BTM for the full amount drawn under the
Letter of Credit on August 3, 1998; and
WHEREAS, as of the Effective Date (as hereinafter defined), the Owner
has paid to BTM $30,000,000 in partial reimbursement for the principal draw on
the Letter of Credit; and
WHEREAS, after the application of such payments made by the Owner to
BTM, the unreimbursed portion of the August 3, 1998 principal draw on the Letter
of Credit in the amount of $90,000,000, together with interest thereon as
provided in the Reimbursement Agreement (the "Reimbursement Amount") remains
outstanding under the Reimbursement Agreement and the Owner is currently
obligated under the terms of the Reimbursement Agreement to immediately pay the
Reimbursement Amount to BTM; and
WHEREAS, CRE desires to purchase from BTM all of BTM's right, title and
interest in, to and under the Reimbursement Agreement and each of the other L/C
Documents including, without limitation, the right to receive immediate payment
of the Reimbursement Amount from the Owner; and
WHEREAS, BTM desires to sell to CRE all of BTM's right, title and
interest in, to and under the Reimbursement Agreement and each of the other L/C
Documents including, without limitation, the right to receive immediate payment
of the Reimbursement Amount from the Owner; and
WHEREAS, after the assignment of all of BTM's right, title and interest
in, to and under the Reimbursement Agreement and each of the other L/C Documents
to CRE, the Owner and CRE desire to amend the Reimbursement Agreement and each
of the other L/C Documents as set forth herein;
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WHEREAS, the Owner has requested that CRE extend the term for payment
of the Reimbursement Amount and modify and amend certain terms and conditions of
the Reimbursement Agreement and the L/C Documents, and CRE is willing to extend
the term for payment of the Reimbursement Amount and to make such modifications
and amendments upon the terms, provisions and conditions hereinafter set forth;
WHEREAS, as a condition to extending the term for payment of the
Reimbursement Amount and making the other modifications to the Reimbursement
Agreement and the other L/C Documents, CRE has required, among other things,
that the Owner execute and deliver, or cause to be executed and delivered, each
of the documents, instruments and agreements set forth on Exhibit C attached
hereto and made a part hereof (collectively, the "Additional Security
Documents") to additionally evidence and/or secure the obligations of the Owner
under the Reimbursement Agreement and each of the other L/C Documents, as
assigned and amended hereby;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, covenants and agreements set forth herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:
1. Recitals. The recitals set forth herein are true and accurate and
are incorporated herein by reference.
2. Definitions. All initially capitalized terms used herein, unless
otherwise specifically defined herein, shall have the meanings assigned to such
terms in the Reimbursement Agreement, as assigned and modified hereby.
3. Assignment. (a) BTM hereby grants, bargains, sells, conveys,
assigns, transfers and sets over to CRE, its successors and assigns, all of
BTM's right, title and interest in, to and under the Reimbursement Agreement and
each of the other L/C Documents, without recourse and except as set forth
herein, without representation or warranty.
(b) The Authority hereby grants, bargains, sells, conveys, assigns,
transfers and sets over to CRE, its successors and assigns, all of the
Authority's rights, title, interests and benefits in, to and under the
Indenture, the Loan Agreement and each of the L/C Documents, without recourse,
representation or warranty except as set forth herein.
(c) The Trustee hereby grants, bargains, sells, conveys, assigns,
transfers and sets over to CRE, its successors and assigns, the Trust Estate (as
defined in the Indenture) pursuant to the provisions of Section 1301 of the
Indenture, together with all of the Trustee's rights, title, interests and
benefits in, to and under the Loan Agreement and each of the L/C Documents,
without recourse, representation or warranty except as set forth herein except
for its rights to indemnification, payment of its expenses and related rights
arising under Section 4.05 and 4.06 of the Loan Agreement.
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4. Acceptance of Assignment.
(a) The Owner hereby expressly and unconditionally acknowledges and
consents (to the extent that such acknowledgement or consent is required) to the
assignment from BTM to CRE of all of BTM's right, title and interest in, to and
under the Reimbursement Agreement and each of the other L/C Documents, as herein
provided.
(b) The Owner hereby expressly and unconditionally acknowledges and
consents to the assignment from the Authority to CRE of all of the Authority's
rights, title, interests and benefits in, to and under the Loan Agreement and
each of the L/C Documents, as herein provided.
(c) The Owner hereby expressly and unconditionally instructs the
Trustee to assign the Trust Estate to CRE and accordingly acknowledges and
consents to the assignment from the Trustee to CRE of the Trust Estate, together
with all of the Trustee's rights, title, interests and benefits in, to and under
the Indenture, the Loan Agreement and each of the L/C Documents, as herein
provided.
(d) CRE hereby accepts the assignments from the Trustee, the Authority
and BTM of all of their rights, title, interests and benefits in, to and under
the Trust Estate, the Reimbursement Agreement, the Loan Agreement and each of
the other L/C Documents, as herein provided.
(e) The Owner hereby agrees to pay to CRE all amounts required to be
paid by Owner under the terms of the Reimbursement Agreement and each of the
other L/C Documents, each as assigned and modified hereby, at the times, in the
manner and in the amounts provided in the Reimbursement Agreement and each of
the other L/C Documents, as assigned and modified hereby, including, without
limitation, the payment of the Reimbursement Amount. Further, the Owner agrees
to observe and perform each and every term, covenant, provision and condition
required to be observed or performed by Owner under the terms of the
Reimbursement Agreement and each of the other L/C Documents, as assigned and
modified hereby.
5. Representations by Authority and/or Trustee. The Trustee hereby
represents and warrants that all of the Bonds have been paid in full (or
provision has been made for such payment in accordance with the terms of the
Indenture), and, as a result, the Letter of Credit has expired in accordance
with its terms and has been surrendered by the Trustee to BTM for cancellation.
The Trustee represents and warrants that the BTM has never "wrongfully
dishonored" any drawing made by the Trustee in strict compliance with the terms
of the Letter of Credit as provided in the Collateral Pledge Agreement. The
Authority and the Trustee each hereby acknowledge and agree that all fees and
expenses of the Authority and the Trustee and all other amounts due or payable
to the Authority and/or the Trustee under, in connection with, or related in any
manner with the Bonds, the Indenture, the Loan Agreement or the Letter of Credit
have been paid in full. The Trustee hereby represents and warrants that, as of
the Effective Date, it has not received written notice, and is not otherwise
aware without having undertaken any independent investigation, of any default
under the Loan Agreement or any of the L/C Documents.
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6. Representations of BTM. BTM hereby represents and warrants to CRE
that:
(a) BTM has good title to the Reimbursement Agreement
and each of the other L/C Documents and is the sole owner and holder of
BTM's stated interest in the Reimbursement Agreement and each of the
other L/C Documents set forth on Exhibit B attached hereto, and BTM's
interest therein is not subject to any prior sale, conveyance or
assignment by BTM. BTM has full right and authority to sell and assign
BTM's rights under the Reimbursement Agreement and each of the other
L/C Documents set forth on Exhibit B to CRE and is selling and
transferring all of its right, title and interest in, to and under the
Reimbursement Agreement and each of the other L/C Documents set forth
on Exhibit B to CRE free and clear of any and all liens (including,
without limitation, participation interests of third parties).
(b) The Reimbursement Agreement and each of the other
L/C Documents set forth on Exhibit B, copies of which have been
provided by BTM to CRE contemporaneously with the execution of this
Agreement, are true, correct and complete copies of the documents such
copies purport to be. None of the terms of the Reimbursement Agreement
or any of the other L/C Documents have been altered or modified and
none of the terms, provisions or conditions thereof have been waived by
BTM, except in each case by written instruments which have been
delivered by BTM to CRE and which are reflected on Exhibit B hereto. No
L/C Document creating a security interest in, or lien upon, real and/or
personal property comprising the collateral securing the Reimbursement
Agreement or any of the Notes has been satisfied, released,
subordinated or rescinded, in whole or in part, and neither the related
mortgagor nor, if applicable, the related guarantor or indemnitor has
been released, in whole or in part, from its obligations under the
Reimbursement Agreement or any of the other L/C Documents or any
related guaranty or indemnity agreements, as the case may be, other
than pursuant to releases or other instruments set forth on Exhibit B
hereto, copies of which have been delivered by BTM to CRE.
(c) BTM has not knowingly expressly or impliedly
waived any default, breach, violation or event of acceleration under
the Reimbursement Agreement or any of the other L/C Documents set forth
on Exhibit B. BTM has not given or received written notice of any
material default under the terms of the Reimbursement Agreement or any
of the other L/C Documents.
(d) Neither BTM nor any of its agents or affiliates
nor CRE, as assignee of BTM, is or shall be obligated to advance funds
for the payment of any amount required by the Reimbursement Agreement
or any of the other L/C Documents.
(e) There are no escrows, sums or accounts being held
by BTM under the Reimbursement Agreement or any of the other L/C
Documents on and as of the Effective Date.
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(f) There is no pending litigation, court order,
injunction or decree with respect to which BTM has been served or, to
the best of BTM's knowledge after due inquiry, is any such litigation,
court order, injunction or decree threatened or existing, in each case
with respect to the interest of BTM in the Reimbursement Agreement or
any of the other L/C Documents. BTM has not received from any
governmental authority written notice of any threatened governmental
proceedings with respect to the Reimbursement Agreement or any of the
other L/C Documents or any interest of BTM therein.
(g) The Bond Swap Agreement has terminated in
accordance with its terms, and is of no further force or effect.
Neither the Owner nor BTM has any further obligations or liability
under the Bond Swap Agreement.
(h) BTM is duly organized and existing under the laws
of the jurisdiction of its organization, with full corporate power and
authority to execute and deliver this Agreement, to enter into the
transactions contemplated hereby and to perform all the duties and
obligations to be performed by it hereunder.
(i) BTM has duly authorized this Agreement and the
transactions contemplated hereby and the performance of all the duties
and obligations to be performed hereunder by all necessary governmental
and corporate action.
(j) BTM has duly executed and delivered this
Agreement and this Agreement constitutes its valid, legal and binding
obligation enforceable against it in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization or similar
laws or equitable principles relating to or limiting creditors' rights
generally.
(k) The execution and delivery of this Agreement and
the performance of the transactions contemplated hereby will not
violate any agreement by which BTM is bound or to which BTM or any of
BTM's assets are affected, or its organizational documents or any
statute, regulation, rule, order or judgment applicable to it.
(l) The proper officers or representatives of BTM are
hereby, or by proper proceedings therefor, authorized and empowered,
and BTM agrees, subject to the provisions of Section 18(c) hereof, to
execute such further instruments as, in the reasonable opinion of
counsel to BTM and/or CRE, are reasonably necessary in order to
effectuate the assignment set forth in Section 3(a) hereof.
7. Representations of the Owners. The Owner hereby represents and
warrants to the Authority, Trustee, CRE and BTM that:
(a) Owner is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of
Delaware and is in compliance with all legal requirements
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applicable to doing business in the Commonwealth of Puerto Rico and is
under no legal disability. Owner is not a "foreign person" within the
meaning of ' 1445(f)(3) of the Internal Revenue Code. The Owner has
complied with all material filing, registration and local laws
applicable to it insofar as such laws relate to the Owner carrying on
its business as now being conducted in the Commonwealth of Puerto Rico.
The Owner has no operations, assets or activities other than the
ownership and operation of the Hotel and has no Debts other than (i)
the obligations under the Reimbursement Agreement and the other L/C
Documents, as assigned and amended hereby, (ii) indebtedness to GDB
which is outstanding in the aggregate principal amount of $25,000,000,
(iii) indebtedness to partners of the Owner and their Affiliates as
shown on the June 30, 1998 financial statement of the Owner, a copy of
which has been delivered by the Owner to CRE (the "June Financial
Statement" and indebtedness to Xxxxxxx de Puerto Rico Associates,
Incorporated incurred on the date hereof in an aggregate principal
amount not to exceed $35,000,000, all of which indebtedness is
subordinate to the obligations of the Owner under the Reimbursement
Agreement and the other L/C Documents, as assigned and assumed hereby,
(iv) certain equipment leases and equipment financings as shown on the
June Financial Statement, (v) indebtedness to the Tourism Development
Company secured by certain slot machines, in an aggregate principal
amount of less than $1,000,000, and (vi) such debts as occur in the
ordinary course of business.
(b) The partners of the Owner and their respective
interests are as follows:
Name Type of Interest Percentage
---- ---------------- ----------
(1) WKA El Con Associates, General 15%
a New York general
partnership
(2) WKA El Con Associates, Limited 35%
a New York general
partnership
(3) Conquistador Holding, General 15%
Inc., a Delaware
corporation
(4) Conquistador Holding, Limited 35%
Inc., a Delaware
corporation
(c) WKA El Con Associates, a general partner and
limited partner of the Owner, is a general partnership duly organized
and validly existing under the laws of the State of New York and is
under no legal disability. Owner is not a "foreign person" within the
meaning of
8
'1445(f)(3) of the Internal Revenue Code. WKA El Con Associates is not
required to qualify to do business under the laws of the Commonwealth
of Puerto Rico in order to perform its obligations under the
Reimbursement Agreement and the other L/C Documents as assigned and
amended hereby and to carry on its business as presently being
conducted.
(d) WHG El Con Corp., a general partner of WKA El Con
Associates, is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and is in
compliance with all legal requirements applicable to doing business in
the State of Delaware and is under no legal disability. WHG El Con
Corp. is not a "foreign person" within the meaning of '1445(f)(3) of
the Internal Revenue Code. WHG El Con Associates is not required to
qualify to do business under the laws of the Commonwealth of Puerto
Rico in order to perform its obligations under the Reimbursement
Agreement and the other L/C Documents as assigned and amended hereby
and to carry on its business as presently being conducted.
(e) Conquistador Holding, Inc., a general partner and
limited partner of the Owner and a general partner of WKA El Con
Associates, is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and is in
compliance with all legal requirements applicable to doing business in
the State of Delaware and is under no legal disability. Conquistador
Holding, Inc. is not a "foreign person" within the meaning of
'1445(f)(3) of the Internal Revenue Code. Conquistador Holding, Inc. is
not required to qualify to do business under the laws of the
Commonwealth of Puerto Rico in order to perform its obligations under
the Reimbursement Agreement and the other L/C Documents as assigned and
amended hereby and to carry on its business as presently being
conducted.
(f) The Reimbursement Agreement and each of the other
L/C Documents and any and all documents modifying the terms of the
Reimbursement Agreement or any of the other L/C Documents, copies of
which have been provided or made available by Owner to CRE
contemporaneously with the execution of this Agreement, are true,
correct and complete copies of the documents such copies purport to be.
The Owner has provided CRE with copies of any and all documents
modifying the terms of the Reimbursement Agreement or any of the other
L/C Documents as set forth on Exhibit B hereto. None of the terms of
the Reimbursement Agreement or any of the other L/C Documents have been
altered or modified and none of the terms, provisions or conditions
thereof have been waived by BTM; except in each case by written
instruments which have been delivered by Owner to CRE on or prior to
the date hereof and which are reflected on Exhibit B hereto. No L/C
Document creating a security interest in, or lien upon, real and/or
personal property comprising the collateral securing the Reimbursement
Agreement or any of the Notes has been satisfied, released,
subordinated or rescinded, in whole or in part, and neither the related
mortgagor nor, if applicable, the related guarantor or indemnitor has
been released, in whole or in part, from its obligations under the
Reimbursement Agreement or any of the other L/C Documents or any
related guaranty or indemnity agreements, as the case may be, other
than pursuant to releases or other instruments set forth on Exhibit B
hereto, copies of which have been delivered by the Owner to CRE.
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(g) The Owner has lawful power and authority to enter
into this Agreement and each of the Additional Security Documents and
to carry out its obligations hereunder, thereunder, and under the
Reimbursement Agreement and the other L/C Documents, all as assigned
and amended hereby, and has duly authorized the execution and delivery
and performance hereof and thereof. The execution and delivery of this
Agreement and the Additional Security Documents and the performance or
compliance with the terms and conditions of this Agreement, the
Additional Security Documents, the Reimbursement Agreement and each of
the other L/C Documents (all as assigned and amended hereby) by the
Owner will not conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, any
mortgage, deed of trust, lease or other agreement or instrument to
which the Owner is a party or by which the Owner or any of its partners
or any of their property is bound, or the Owner's agreement of limited
partnership or any order, rule or regulation applicable to the Owner or
any of its partners or any of their property, of any court or
governmental body, or result in the creation or imposition of any
prohibited lien, charge or encumbrance of any nature whatsoever upon
any of the property or assets of the Owner under the terms of any
instrument or agreement to which the Owner is a party.
(h) All governmental or regulatory orders, consents,
permits, authorizations and approvals required for execution, delivery
and performance of this Agreement, the Additional Security Documents,
the Reimbursement Agreement and the L/C Documents, as assigned and
amended hereby, have been obtained. No additional governmental or
regulatory actions, filings or registration and no approvals,
authorizations or consents of any trustee or holder of any indebtedness
or obligation of the Owner or any partner of the Owner or any other
person are required for the due execution, delivery and performance by
the Owner of this Agreement, the Additional Security Documents, the
Reimbursement Agreement and the L/C Documents, as assigned and amended
hereby, other than the filing of the UCC Financing Statements set forth
on Exhibit C.
(i) This Agreement, the Additional Security
Documents, the Reimbursement Agreement and the L/C Documents to which
the Owner is a party, as assigned and amended hereby, constitute valid,
legal and binding obligations of the Owner enforceable against the
Owner in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization and other laws affecting the rights or remedies of
creditors generally.
(j) To Owner's knowledge, there are no actions,
suits, investigations, proceedings or arbitrations (whether or not
purportedly on behalf of the Owner or any of its partners) at law or in
equity or before or by any foreign or domestic court or other
governmental authority (a "Legal Action") pending or threatened against
the Owner or any partner of the Owner, or against BTM, the Trustee or
the Authority, involving the validity or enforceability of this
Agreement, the Additional Security Documents, the Bonds, the Indenture,
the Loan
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Agreement, the Reimbursement Agreement, or any of the L/C Documents or
that otherwise affect the Owner or any of its partners or any
properties or rights of the Owner or any of its partners, including,
without limitation, the Hotel, except actions, suits and proceedings
that are fully covered by insurance or that would not individually or
in the aggregate materially impair the ability of the Owner to perform
the Owner's obligations under this Agreement, the Additional Security
Documents, the Reimbursement Agreement and the other L/C Documents, as
assigned and amended hereby, or to pay any amounts that may become
payable under this Agreement, the Additional Security Documents, the
Reimbursement Agreement and the L/C Documents, as assigned and amended
hereby. The Owner and each of its partners is in compliance under any
order of any court or governmental authority, and in all material
respects, under any mortgage, deed of trust, lease, loan or credit
agreement or other instrument to which the Owner or any of its partners
is a party or by which any of them is bound or affected. Neither the
Owner nor any of its partners are (a) in violation of any applicable
law, which violation materially adversely affects or may materially
adversely affect the business, operations, assets or condition
(financial or otherwise) of either the Owner or any of its partners, or
(b) subject to, or in default with respect to, any legal requirement
that would have a materially adverse effect on the business,
operations, assets or condition (financial or otherwise) of either the
Owner or any of its partners. There is no Legal Action pending or to
the Owner's knowledge threatened against or affecting the Owner or any
of its partners questioning the validity or the enforceability of this
Agreement, the Additional Security Documents, the Bonds, the Indenture,
the Loan Agreement, the Reimbursement Agreement, or any of the L/C
Documents.
(k) Neither BTM nor any of its agents or affiliates
nor CRE, as assignee of BTM, is obligated to advance any further funds
for the payment of any amount required by the Reimbursement Agreement
or any of the other L/C Documents, as assigned and amended hereby.
(l) All amounts previously withdrawn by BTM or any of
its agents or affiliates from escrow or reserve deposits relating to
the Bonds, the Reimbursement Agreement or any of the other L/C
Documents have been applied in accordance with the terms of such
documents and these are no further escrows, sums or accounts being held
by BTM under the Reimbursement Agreement or any of the other L/C
Documents on and as of the Effective Date.
(m) No "Event of Default" or "Default" (as such terms
are defined in the Reimbursement Agreement, as assigned and amended
hereby) has occurred which has not been cured or waived or will result
from the execution and delivery of this Agreement, the Additional
Security Documents hereby or the consummation of the transactions
contemplated herein and therein. The Owner is not in default in any
material respect under the terms of the Reimbursement Agreement or any
of the other L/C Documents, as assigned and amended hereby.
11
(n) The execution and delivery of this Agreement and
the Additional Security Documents, the redemption and payment in full
of the Bonds and the assignments and modifications of the Reimbursement
Agreement and the other L/C Documents effected hereby and the
consummation of the transactions contemplated hereby will not impair
the security for repayment of the obligations of the Owner under the
Reimbursement Agreement and the L/C Documents, as assigned and amended
hereby, nor impair, in any way, the ability of CRE to enforce its
rights, remedies and recourse with respect to such security.
(o) Neither the Owner nor any of its partners is a
party to any other agreement, contract or other instrument containing
terms or provisions that are inconsistent or in conflict with any terms
or provisions of this Agreement, the Additional Security Documents, the
Reimbursement Agreement or any of the other L/C Documents, as assigned
and amended hereby.
(p) The Ground Lease or a memorandum thereof has been
duly and properly recorded in accordance with the laws of the
Commonwealth of Puerto Rico; the Ground Lease permits the interest of
the lessee thereunder to be encumbered by the Leasehold Mortgage;
neither the transfer of the Leasehold Mortgage to CRE nor any such
transfer to subsequent assignees requires the consent of the ground
lessor and, to the extent notice of the transfer of the Leasehold
Mortgage to CRE is required to be given to such ground lessor, such
notice has been delivered on or prior to the Effective Date in the form
and manner required by the Ground Lease and applicable law; and, there
has been no change in the terms of the Ground Lease.
(q) The Owner's interest in the Ground Lease is
assignable to CRE without the consent of the lessor thereunder (or, if
any such consent is required, it has been obtained prior to the
Effective Date and delivered to CRE) and, in the event that it is so
assigned, is further assignable by CRE and its successors and assigns
without a need to obtain the consent of such lessor.
(r) The Ground Lease is in full force and effect and
no default has occurred under the Ground Lease, nor is there any
existing condition which, but for the passage of time or the giving of
notice, or both, would result in a default in any material respect
under the terms of the Ground Lease.
(s) The Owner and each of its partners agree to
execute such other modification agreements, supplemental mortgage
documents, security agreements, assignments, financing statements, and
other instruments as CRE, the Authority or Trustee may reasonably
request to further evidence and/or secure the assignments and
modifications hereunder.
(t) The financial statements of the Owner and each of
its partners, if any, heretofore furnished to CRE in connection with
this Agreement and the transactions contemplated hereby are complete
and correct in all material respects and fairly present the financial
condition of the
12
Owner and each of its partners, if applicable, as of the dates
indicated and for the periods involved and show any material
liabilities, direct and contingent, of the Owner and each of its
partners. As of the date of the latest of those financial statements
there were no contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments which are substantial in amount in
relation to the financial condition of the Owner or any of its partners
obligated thereon, except as referred to or reflected or provided for
in the latest of said financial statements. Since the date of the
latest of said financial statements, if any, there has been no adverse
change in the business, condition or operations of the Owner or any of
its partners, which is material in relation to the financial condition
of the Owner.
(u) The Owner and each of its partners has good,
sufficient and legal title to all properties and assets reflected as
owned in their most recent balance sheets delivered to CRE, except for
assets disposed of in the ordinary course of business since the date of
such respective balance sheets.
(v) There has been no material adverse change in the
financial condition of the Owner or any of its partners from the date
of the latest financial statements of the Owner and each of its
partners, if any, which have been submitted to CRE.
(w) The Owner is the sole owner of, and has good and
marketable title to, the Hotel, the "Mortgaged Property" (as defined in
the Fee Mortgage), the "Mortgaged Property" (as defined in the
Leasehold Mortgage), the "Mortgaged Property" (as defined in the Second
Fee Mortgage), and all other real and personal property owned by the
Owner as described in the Additional Security Documents and the L/C
Documents, free from any lien, security interest or encumbrance of any
kind whatsoever, subject only to (A) liens securing, directly or
indirectly, the obligations of the Owner under the Reimbursement
Agreement and the other L/C Documents, as assigned and amended hereby,
(B) the lien of current real property taxes and assessments not yet due
and payable, (C) the lien for past due real property taxes and
assessments being contested in good faith in accordance with the
provisions of Section 7(uu) of the Reimbursement Agreement as assigned
and amended hereby, (D) liens, covenants, conditions and restrictions,
rights of way, easements and other matters of public record,
specifically set forth on Exhibit D attached hereto, none of which
interferes with the security intended to be provided by the Fee
Mortgage, the Leasehold Mortgage, the Second Fee Mortgage and/or the
Additional Security Documents or reduces the value or prohibits the
current use of the Hotel or any part thereof.
(x) All tax returns and reports of the Owner and each
of its partners required to be filed by any of them have been timely
filed (after taking into account all applicable extensions), and all
taxes, assessments, fees and other governmental charges upon the Owner
and each of its partners and upon their respective properties
(including, but not limited to, the Hotel), assets, income and
franchises which are due and payable have been paid when due and
payable, other
13
than past due real property taxes and assessments being contested in
good faith in accordance with the provisions of Section 7(uu) of the
Reimbursement Agreement as assigned and amended hereby. The Owner knows
of no proposed tax assessment against the Owner or any of its partners
that would be material to the condition (financial or otherwise) of the
Owner, and neither the Owner nor any of its partners has contracted
with any government entity in connection with taxes.
(y) The Owner is not subject to the Federal Power
Act, the Public Utility Holding Company Act of 1935, the Interstate
Commerce Act or any other statute or regulation restricting the
execution, performance or enforcement of this Agreement, the Additional
Security Documents, the Reimbursement Agreement or any of the other L/C
Documents, as assigned and amended hereby. Neither the Owner nor any of
its partners is an "investment company" or an "affiliated person" of,
or "promotor" or "principal underwriter" for, an "investment company,"
as such terms are defined in the Investment Company Act of 1940, as
amended. The entering into this Agreement and the Additional Security
Documents and the consummation of the transactions contemplated by this
Agreement, the Additional Security Documents, the Reimbursement
Agreement and the other L/C Documents, as assigned and amended hereby,
will not violate any provision of any of the foregoing acts or any
rule, regulation or order promulgated or issued thereunder by the
Securities and Exchange Commission.
(z) The Owner has not received from any insurance
company any notice of defect or inadequacy in connection with the Hotel
or any portion thereof.
(aa) There is no proceeding pending or, to Owner's
knowledge, threatened, for the total or partial condemnation of the
Hotel or any property related thereto nor has any casualty affecting
any material portion of the Hotel occurred which has not been fully
repaired.
(bb) None of the improvements which form a part of
the Hotel lie outside the boundaries and building restriction lines of
the Land, and no improvements on adjoining properties encroach upon the
Land; and none of the material improvements which form a part of the
Hotel lie outside the boundaries of the "Mortgaged Property" (as
defined in the Fee Mortgage), the "Mortgaged Property" (as defined in
the Leasehold Mortgage), the "Mortgaged Property" (as defined in the
Second Fee Mortgage) and no improvements on adjoining properties
encroach upon any such Mortgaged Property.
(cc) Telephone services, gas, electric power, storm
sewers, portable water facilities, and all other utilities and services
necessary for the operation and maintenance of the Hotel are available
therefor, are adequate to serve the Hotel and are not subject to any
conditions limiting the use of such utilities, other than normal
charges to the utility supplier. All streets and easements necessary
for the operation and maintenance of the Hotel are available to the
boundaries of the land on which the improvements comprising the Hotel
are located.
14
(dd) The Manager is in possession of all gaming
licenses required by applicable law to carry on gaming operations at
the Hotel as currently operated, which gaming licenses are valid and in
full force and effect. The Owner is in possession of all other material
certificates of occupancy, zoning and building approvals, licenses,
liquor licenses, business permits and approvals and other similar
licenses, permits and other authorizations necessary and required by
applicable law in connection with the acquisition, construction, use
and operation of the Hotel (collectively, the "Licenses",) and (B) all
such Licenses are valid and in full force and effect. The operation of
the Hotel in the manner presently operated and as presently
contemplated and described in the Additional Security Documents, the
Reimbursement Agreement and the other L/C Documents, as assigned and
amended hereby, does not conflict with any zoning, water or air
pollution or other ordinance, order, law or regulation applicable
thereto. The Hotel complies in all material respects with all federal,
state and local laws or ordinances (including rules and regulations)
relating to the Hotel and its operation, including without limitation
licensure, zoning, building, safety, and environmental quality. The
Owner has all Licenses necessary to permit the ownership and continued
use and operation of Hotel in accordance with its current operation and
all such Licenses are in full force and effect and no material default
exists thereunder. All such Licenses (other than the liquor licenses)
are assignable and have been collaterally assigned to CRE or are
readily obtainable, at nominal cost, by CRE. Upon request of CRE, from
time to time, the Owner shall provide copies of all Licenses to CRE.
(ee) All service contracts, equipment leases and
other agreements relating to the use and operation of the Hotel or any
portion thereof with any Affiliate of the Owner or any of its partners
were entered into in the ordinary course of business. No party is in
material default under any such service contract or equipment lease.
All such management agreements, service contracts, equipment leases and
other agreements relating to the use and operation of the Hotel or any
portion thereof are assignable (without consent or, if consent is
required such consents have been obtained) and have been collaterally
assigned to CRE. Upon request of CRE, from time to time, the Owner
shall provide copies of all such contracts, leases and other agreements
to CRE.
(ff) The Owner has not received from any governmental
authority notice of any special assessment affecting the Hotel or any
portion thereof that will result in any charge being levied or asserted
against the Hotel or any portion thereof or in the creation of any Lien
against the Hotel or any portion thereof.
(gg) There is no moratorium or like governmental
order in effect with respect to the Hotel or any portion thereof and,
to the knowledge of the Owner, no such moratorium or similar ordinance
is now contemplated.
15
(hh) All surveys, plot plans and other documents
heretofore and hereafter furnished by the Owner to CRE with respect to
the Hotel or any portion thereof are and will be, to the Owner's
knowledge accurate and complete with respect to the information
purported to be set forth therein as of their respective dates.
(ii) The Hotel is located on land zoned in accordance
with all applicable governmental rules, ordinances, regulations and
laws so as to permit the use and occupancy of the Hotel in the manner
presently employed by the Owner and as contemplated by this Agreement,
the Additional Security Documents, the Reimbursement Agreement and the
other L/C Documents, as assigned and amended hereby. The Hotel conforms
to all applicable governmental zoning and other governmental laws and
regulations, and to any covenants, agreements, conditions and
restrictions contained in any deed or deeds or agreements covering or
affecting all or any portion of the Hotel.
(jj) The Owner has obtained and examined all Legal
Requirements affecting the Owner and the Hotel. There exist no current
material violations of any Legal Requirements, with respect to the
Owner or the Hotel or any portion thereof. The Owner has not received
notice from any governmental authority of any current violation of any
Legal Requirements.
(kk) No chattel mortgage, xxxx of sale, security
agreement, financing statement or other title retention agreement
(except for those assigned to or executed in favor of CRE) which
remains enforceable has or will be executed by the Owner with respect
to any personal property, chattel or fixture owned by the Owner and
used in connection with the operation or maintenance of the Hotel,
except as set forth on the June Financial Statement, and except for
chattel mortgages, security agreements or financing statements securing
the GBD Loan Agreement which are subordinate to the obligations of the
Owner under the L/C Documents and the Additional Security Documents.
(ll) No brokerage or finders fees or commissions are
payable to any person engaged by the Owner, any partner of the Owner or
any Affiliate thereof in connection with the transactions contemplated
by this Agreement.
(mm) The Owner has the creditworthiness to operate
the Hotel in the manner contemplated by this Agreement, the Additional
Security Documents, the Reimbursement Agreement and the other L/C
Documents, all as executed and delivered contemporaneously herewith or
as assigned and amended hereby.
(nn) The Owner possesses or has the right to use all
necessary trademarks, trade names, copyrights, patents, patent rights
and licenses to conduct its businesses as now operated, without any
known conflict with the valid trademarks, trade names, copyrights,
patents and license rights of others.
16
(oo) The Bond Swap Agreement has terminated in
accordance with its terms, and is of no further force or effect.
Neither the Owner nor BTM has any further obligations or liability
under the Bond Swap Agreement.
(pp) Each of the representations and warranties of
the Owner contained in the Reimbursement Agreement were true and
correct as of February 7, 1991 and each of the representations and
warranties of the Owner set forth in subsections 8(f), (h), (i), (l),
(m), (o) other than the last sentence thereof, (t), and (v) of the
Reimbursement Agreement, are true and correct in all material respects
as of the Effective Date and are expressly restated by the Owner in
their entireties on, and as of the Effective Date.
(qq) Each and all of the recitals set forth at the
outset of this Agreement are true and correct and are incorporated
herein by reference and made a part hereof for all purposes.
All representations and warranties of the Owner set forth
herein shall be true in all material respects at all times until the
Reimbursement Amount and all of the other obligations of the Owner
hereunder and under the Additional Security Documents, the
Reimbursement Agreement and the other L/C Documents, as assigned and
amended hereby, have been performed and paid in full.
8. Representations of Parties other than BTM. Each of the parties
hereto, other than BTM, severally represents, each with respect only to itself,
as of the Effective Date, as follows:
(a) It is duly organized and existing under the laws
of the jurisdiction of its organization, with full power and authority
to execute and deliver this Agreement, to enter into the transactions
contemplated hereby and to perform all the duties and obligations to be
performed by it hereunder;
(b) It has duly authorized this Agreement and the
transactions contemplated hereby and the performance of all the duties
and obligations to be performed hereunder by all necessary
governmental, corporate and/or partnership action;
(c) It has duly executed and delivered this Agreement
and this Agreement constitutes its valid, legal and binding obligation
enforceable against it in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization or similar laws or
equitable principles relating to or limiting creditors' rights
generally;
(d) The execution and delivery of this Agreement and
the performance of the transactions contemplated hereby will not
violate any material agreement by which it is bound or to which it or
any of its assets are affected, or its organizational documents or any
statute, regulation, rule, order or judgment applicable to it; and
17
(e) The proper officers or representatives of each of
the parties hereto are hereby, or by proper proceedings therefor,
authorized and empowered, and each of the parties hereto agrees, to
execute such further instruments as, in the opinion of counsel to the
respective parties, are reasonably necessary in order to effectuate the
transfer herein authorized.
9. Modification of Reimbursement Agreement. The Reimbursement Agreement
is hereby amended as follows:
(a) Section 1 of the Reimbursement Agreement is hereby amended to add
the following defined terms:
AFFILIATE means any person, entity or group controlling,
controlled by or under common control with, the specified person or
entity and "control" of a person or entity (including, with correlative
meaning, the terms "controlled by" and "under common control with")
means (a) the beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of 10% or more of the voting
securities of such person or entity (b) the status of being a director,
officer, executor, trustee or other fiduciary of such person or entity,
or (c) the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of such person or
entity, whether through the ownership of voting securities, by contract
or otherwise.
AFICA APPROVAL shall mean the Issuer's official action, on or
prior to the date hereof, granting the Issuer's preliminary approval of
the Company's application for the issuance of Refunding Bonds.
BANK RATE shall mean (a) from August 3, 1998 until the first
day of September, 1998, a rate equal to 7.91% per annum; and (b) from
the first day of September, 1998 until the Maturity Date, 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%)). The Bank Rate shall be adjusted on each LIBOR
Determination Date to account for any changes in the LIBOR Rate, which
adjustment shall be effective on the commencement of the next
succeeding LIBOR Reference Period.
BANKRUPTCY CODE shall mean Title 11 of the United States Code,
Section 101 et seq., as now in effect or hereafter amended.
BONA FIDE COST shall mean any commissions, costs, expenses or
charges paid to any Affiliate of the Company or employee or agent of an
Affiliate of the Company which (i) are actually paid by the Company for
goods supplied or services rendered by the Affiliate of the Company,
(ii) are not more than the costs, expenses or charges that would be
paid to any unrelated, qualified independent third party, and (iii)
represent a fair and appropriate allocation of such
18
cost or expense if any such Affiliate of the Company performs work or
provides services for a number of properties.
CRE shall mean Citicorp Real Estate, Inc., a Delaware
corporation, and its successors and assigns.
COMPREHENSIVE STATEMENT shall mean a description of the scope
of work to be incorporated in any capital improvements or replacements
including, without limitation, plans and specifications for the work,
renderings, if applicable, and other material information respecting
the capital improvements or replacements as may be requested by the
Bank (including, without limitation, copies of construction contracts).
DEFAULT RATE shall mean a per annum rate equal to the lesser
of (a) 500 basis points in excess of the Bank Rate, and (b) the maximum
interest rate which the Company may by law pay or the Bank may charge
and collect.
DEFICIENCY LOAN GUARANTY shall mean 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 Mitsubishi,
as assumed in part by Patriot pursuant to that certain Assumption of
Guaranty, dated as of March 31, 1998, executed by Patriot, and that
certain guaranty by Patriot dated as of March 31, 1998 to assume the
obligations of KGC under paragraph 4 of the First Amendment to Letter
of Credit Reimbursement Agreement, as any of the foregoing may be
amended or modified from time to time.
EXTENDED MATURITY DATE shall mean March 15, 1999.
GENERAL DISBURSEMENT CONDITIONS shall mean all of the
following: (a) the Company shall have delivered to the Bank and the
Bank shall have approved a Comprehensive Statement for the applicable
capital improvements or replacements; (b) all work with respect to the
applicable capital improvements or replacements shall have been
performed in a manner reasonably satisfactory to the Bank and, if
required by the Bank, an engineer selected by the Bank; (c) the Company
shall have furnished the Bank with such draw request forms and other
collateral documentation (including, without limitation, title
endorsements, detailed cost breakdowns, payment schedules, copies of
bills or statements evidencing costs and copies of paid receipts),
respecting any requested disbursement as the Bank may reasonably
request from time to time; (d) no Event of Default or Default shall
have occurred; (e) no condemnation or adverse zoning or usage change
shall have been commenced with respect to the Hotel, or any portion
thereof, and the Company shall not have any knowledge of any authority
taking affirmative steps to condemn, adversely zone or change the usage
of the Hotel, or any portion thereof; (f) there has been no material
adverse change in the ability of the Company to pay the Reimbursement
Amount or any other amounts due hereunder or under any of the other L/C
Documents as such amounts become due or of the Company to perform its
obligations under any of the L/C
19
Documents as such obligations become due; and (g) no law, regulation,
ordinance, moratorium, injunction proceeding, restriction or similar
matter shall have been enacted or adopted by any federal, state or
local government or any board, authority, commission, agency or
department asserting jurisdiction over the Hotel if the result of such
law, regulation, ordinance, moratorium, injunction proceeding,
restriction or like matter would have the effect, in the Bank's
reasonable judgment, of materially and adversely affecting the use of
the Hotel as currently being operated.
HOLDING shall mean Conquistador Holding, Inc., a Delaware
corporation, its successors and assigns.
HOTEL shall mean the resort hotel commonly known as the El
Conquistador Resort and Country Club and consisting of the Fajardo
Property, the Palominos Island Property, all other real property owned
or leased by the Company (collectively, the "Land"), together with all
buildings and other improvements constructed on the Land which
improvements consist, in part, of a 751-room resort hotel facility,
golf course and clubhouse, food and beverage facilities, meeting rooms,
spa facilities, retail outlets, swimming pools, a 35-slip marina,
landscaping and parking, other on-site and off-site improvements
relating thereto, curbs and other infrastructure (including any
underground facilities), and other amenities and facilities
(collectively, the "Hotel Improvements"), and together with all
furnishings and fixtures, equipment and all other personal property now
or hereafter owned or leased by the Company and located on or otherwise
used in connection with the Land or the Hotel Improvements
(collectively, the "Hotel Personalty").
HOTEL IMPROVEMENTS shall have the meaning assigned to such
term within the definition of "Hotel".
HOTEL PERSONALTY shall have the meaning assigned to such term
within the definition of "Hotel".
INITIAL MATURITY DATE shall mean November 3, 1998.
LAND shall have the meaning assigned to such term within the
definition of "Hotel".
LATE CHARGE shall have the meaning assigned to such term in
Section 3A hereof.
LEASES shall mean all leases, concessions and other agreements
affecting the use, enjoyment or occupancy of all or any part of the
Hotel heretofore or hereafter entered into whether before or after the
filing by or against the Company of any petition for relief under the
Bankruptcy Code, as the same may be amended from time to time.
20
L/C DOCUMENTS shall mean, collectively, (i) the L/C Documents
(as such term is defined in the Modification Agreement), (ii) the
Modification Agreement, (iii) the Additional Security Documents (as
such term is defined in the Modification Agreement), (iv) the Operative
Documents, (v) any and all other agreements, instruments, certificates,
or documents at any time given by the Company or any other party to
Mitsubishi or the Bank pursuant thereto or in connection therewith, or
given to evidence, guaranty, or secure any of the Company's obligations
under the foregoing documents, and (vi) all modifications, amendments
and supplements to any of the foregoing.
LIBOR BUSINESS DAY shall mean any Business Day on which
commercial banks in the City of London, England are open for interbank
or foreign exchange transactions.
LIBOR DETERMINATION DATE shall mean, with respect to any LIBOR
Reference Period, the date that is two (2) LIBOR Business Days prior to
the first day of such LIBOR Reference Period.
21
LIBOR RATE shall mean, with respect to each LIBOR Reference
Period, the rate (expressed as a percentage per annum) for deposits in
U.S. dollars, for a one-month period, that appears on Telerate Page
3750 (or the successor thereto) as of 11:00 a.m., London, England time,
on the related LIBOR Determination Date. If such rate does not appear
on Telerate Page 3750 as of 11:00 a.m., London, England time, on such
LIBOR Determination Date, the LIBOR Rate shall be the arithmetic mean
of the offered rates (expressed as a percentage per annum) for deposits
in U.S. dollars for a one-month period that appear on the Reuters
Screen LIBOR Page as of 11:00 a.m., London, England time, on such LIBOR
Determination Date, if at least two such offered rates so appear. If
fewer than two such offered rates appear on the Reuters Screen LIBOR
Page as of 11:00 a.m., London, England time, on such LIBOR
Determination Date, Bank shall request the principal London, England
office of any four major reference banks in the London interbank market
selected by Bank to provide such bank's offered quotation (expressed as
a percentage per annum) to prime banks in the London interbank for
deposits in U.S. dollars for a one-month period as of 11:00 a.m.,
London, England time, on such LIBOR Determination Date for amounts
approximately equal to the outstanding principal balance of the
Reimbursement Amount. If at least two such offered quotations are so
provided, the LIBOR Rate shall be the arithmetic mean of such
quotations. If fewer than two such offered quotations are so provided,
Bank shall request any three major banks in New York City selected by
Bank to provide such bank's rate (expressed as a percentage per annum)
for loans in U.S. dollars to leading European banks for a one-month
period as of approximately 11:00 a.m., New York City time, on the
applicable LIBOR Determination Date for amounts approximately equal to
the outstanding principal balance of the Reimbursement Amount. If at
least two such rates are so provided, the LIBOR Rate shall be the
arithmetic mean of such rates. If fewer than two such rates are so
provided, then the LIBOR Rate for the applicable LIBOR Reference Period
shall be the LIBOR Rate as in effect for the next preceding LIBOR
Reference Period. The LIBOR Rate shall be determined in accordance with
this paragraph by Bank or its designee.
LIBOR REFERENCE PERIOD shall mean (i) initially, the period
commencing on the first day of September, 1998, and ending one month
thereafter, and (ii) thereafter, a period commencing on the last day of
the immediately preceding LIBOR Reference Period and ending one month
thereafter.
MATURITY DATE shall mean the earlier to occur of (a) the
Initial Maturity Date or, if extended pursuant to Section 3A hereof,
the 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.
MITSUBISHI shall mean The Bank of Tokyo-Mitsubishi, Ltd.
(formerly known as The Mitsubishi Bank, Limited), a Japanese banking
corporation acting through its New York Branch.
22
MODIFICATION AGREEMENT shall mean that certain Assignment and
Modification Agreement, dated as of August 3, 1998, by and among the
Company, CRE, the Trustee, the Issuer and Mitsubishi.
NEW ENVIRONMENTAL INDEMNITY shall mean that certain
Environmental Indemnity Agreement, dated as of August 3, 1998, made by
the Company and Patriot for the benefit of CRE, as amended or modified
from time to time.
PATRIOT shall mean Patriot American Hospitality, Inc., a
Delaware corporation, its successors and assigns.
PATRIOT GUARANTY shall mean that certain Guaranty, dated as of
August 3, 1998, made by Patriot for the benefit of CRE, as the same may
be amended or modified from time to time.
PATRIOT LOAN AGREEMENT shall mean that certain Amended and
Restated Credit Agreement dated as of July 18, 1997, amended and
restated as of December 16, 1997 and further amended and restated as of
June 2, 1998, among Patriot, Patriot American Hospitality Partnership,
L.P., a Virginia limited partnership, various lenders, Xxxxx Xxxxxx
Real Estate Securities Inc., Chase Securities Inc., Xxxxx Xxxxxx and
The Chase Manhattan Bank, as the same may be amended or modified from
time to time.
REFUNDING BONDS shall mean revenue bonds to be issued by the
Issuer in an aggregate principal amount of at least $90,000,000, the
proceeds of the sale of which are to be loaned by the Issuer to the
Company and applied by the Company to the repayment of the
Reimbursement Amount and its other obligations under the Reimbursement
Agreement.
REIMBURSEMENT AMOUNT shall have the meaning assigned to such
term in Section 3A hereof.
RENTS shall mean all right, title and interest of the Company,
its successors and assigns in and under any Leases, including, without
limitation, cash or securities deposited thereunder to secure the
performance by the lessees of their obligations thereunder and all
rents, additional rents, revenues, issues and profits (including all
oil and gas or other mineral royalties and bonuses), all receivables,
rentals, receipts and payments received from the rental of guest/hotel
rooms, suites, meeting rooms, beverage or food sales and facilities,
the provision or sale of other goods and services, vending machines,
telephone and television systems, guest laundry and all other payments
received from guests or visitors of the Hotel and other items of
revenue, receipts or income as identified in the Uniform System of
Accounts for Hotels 9th Edition, International Association of
Hospitality Accounts (1996).
SECOND FEE MORTGAGE shall mean that certain first mortgage
made by the Owner by Deed of Mortgage Number Thirty-Two executed in San
Xxxx on May 4, 1992 before Notary Public Xxxx Xxxxxxx Xxxxxx Xxxxxxx.
23
(b) Section 1 of the Reimbursement Agreement is hereby amended to
delete the defined terms "Agreement", "Bank", "GDB Standstill Agreement",
"General Partner", "Guarantor and Guarantors", "Guaranty and Guaranties",
"Management Subordination Agreement", "Mortgage", "Note", "Permitted
Encumbrances" and "Transfer" in their entireties and to substitute therefor,
each of the following defined terms:
AGREEMENT shall mean this Letter of Credit and Reimbursement
Agreement dated as of February 7, 1991, as amended or affected by (i)
that certain First Amendment to Letter of Credit and Reimbursement
Agreement dated as of May 5, 1992, (ii) that certain Second Supplement
to Letter of Credit and Reimbursement Agreement dated as of February 6,
1998, (iii) that certain Consent and Waiver Agreement dated as of April
21, 1997, (iv) that certain Supplement to Letter of Credit and
Reimbursement Agreement dated as of November 5, 1997, (v) that certain
Consent and Waiver Agreement dated as of March 31, 1998, (vi) that
certain Assumption of Obligations Under Letter of Credit and
Reimbursement Agreement dated as of March 31, 1998, and (vii) the
Modification Agreement, and as may be further modified or amended
subsequent to the effective date of the Modification Agreement.
BANK shall mean CRE, and its successors or assigns.
GDB STANDSTILL AGREEMENT shall mean the Subordination and
Standstill Agreement, dated as of February 7, 1991, between GDB and
Mitsubishi, as heretofore modified by amendment dated as of May 5,
1992, and as further modified and/or confirmed by that certain
Confirmation and Ratification of Subordination and Standstill
Agreement, dated as of August 3, 1998, executed by GDB.
GENERAL PARTNER shall mean either Holding or WKA, the sole
general partners of the Company (Holding and WKA together being
referred to as the GENERAL PARTNERS).
GUARANTOR and GUARANTORS shall mean Patriot and any other
guarantor of any of the obligations of the Company under this Agreement
or any of the other L/C Documents.
GUARANTY and GUARANTIES shall mean individually and
collectively, the Patriot Guaranty, the Deficiency Loan Guaranty and
any other guaranties executed in favor of Mitsubishi and assigned to
CRE, or made in favor of CRE securing or otherwise respecting any of
the Company's obligations under this Agreement or any of the other L/C
Documents.
MANAGEMENT SUBORDINATION AGREEMENT shall mean, collectively,
(i) that certain Management Agreement Subordination and Attornment
Agreement, dated as of February 7, 1991, between Mitsubishi and
Xxxxxxxx, as amended or modified from time to time, and (ii) that
certain Assignment of Management Agreement and Subordination of
Management Fees,
24
dated as of August 3, 1998, by and among the Company, CRE and Xxxxxxxx,
as amended or modified from time to time.
MORTGAGE shall mean, collectively, the Fee Mortgage, the
Leasehold Mortgage and the Second Fee Mortgage.
NOTE shall mean collectively the Mortgage Note, dated May 4,
1992, made by the Company and payable to bearer, in the principal
amount of $100,000 and each of the four Mortgage Notes, dated February
7, 1991, made by the Company and payable to the Issuer, in the
respective principal amounts of $120,000,000, $6,612,000, $20,000,000
and $2,000,000.
PERMITTED ENCUMBRANCES shall mean, collectively, the Mortgage,
the GDB Mortgage, and chattel mortgages on equipment in favor of
General Electric or its affiliates existing on the date hereof, real
estate taxes not yet due and payable, those items listed as exceptions
to title on the Title Policy issued on the Date of Issuance, and any
other Liens consented to in writing by the Bank.
TRANSFER shall mean any sale, conveyance, mortgage, grant,
bargain, encumbrance, pledge, hypothecation, assignment, or transfer of
the Hotel, or any portion thereof, or any legal or beneficial interest
in the Company or in any of its partners, which is subject to the
provisions of Section 7(h) hereof.
(c) The Reimbursement Agreement is hereby amended by adding the
following provision as new Section 3A:
"3A. Repayment of Reimbursement Amount.
(a) The Company acknowledges that, on August 3, 1998,
the Trustee made a Principal Drawing in the amount of $120,000,000 on
the Letter of Credit, which drawing was properly honored by Mitsubishi.
On August 3, 1998, the Company paid to Mitsubishi, $30,000,0000 in
partial reimbursement for such Principal Drawing. Following the
application of such monies paid by the Company to Mitsubishi on August
3, 1998 in reimbursement of a portion of such amounts drawn on the
Letter of Credit, the aggregate principal amount of $90,000,000 remains
outstanding, due and payable by the Company under the terms of this
Agreement on and as of Xxxxxx 0, 0000 (XXX XXXXXXXXXXXXX XXXXXX).
Notwithstanding anything to the contrary contained herein, the
Reimbursement Amount, together with interest thereon as provided
herein, shall be due and payable by the Company to the Bank as provided
in this Section 3A.
(b) The Reimbursement Amount, together with all
accrued and unpaid interest thereon and all other amounts due and
unpaid hereunder or under any of the other L/C Documents shall be due
and payable in full on the Maturity Date (as the same may be extended
in accordance with the provisions of Section 3A(g) hereof).
25
(c) Commencing on September 1, 1998 and on the first
day of each month thereafter, the Company shall pay to the Bank
interest in arrears on the Reimbursement Amount for the period from and
including August 3, 1998 until the Reimbursement Amount and all other
amounts due hereunder and under the other L/C Documents are paid in
full.
(d) The Reimbursement Amount, together with any other
amounts added to principal hereunder or under any of the other L/C
Documents, shall bear interest at the Bank Rate from and including
August 3, 1998 through and including the date on which the
Reimbursement Amount and all such other amounts have been paid in full.
Interest on the Reimbursement Amount shall be computed on the basis of
a fraction, the denominator of which is three hundred sixty (360) and
the numerator of which is the actual number of days elapsed from August
3, 1998 or the date on which the immediately preceding payment was due.
Subject to the last sentence of this Section 3A(d), if any monthly
installment of principal or interest or any other scheduled payment
hereunder or under any of the other L/C Documents is not paid within
five (5) days of the date on which it is due, the Company shall pay to
the Bank upon demand an amount (the LATE CHARGE) equal to the lesser of
five percent (5%) of such unpaid portion of the outstanding monthly
installment of principal or interest or other scheduled payment then
due or the maximum amount permitted by applicable law, to defray the
expense incurred by the Bank in handling and processing such delinquent
payment and to compensate the Bank for the loss of the use of any such
delinquent payment. Notwithstanding the foregoing or anything to the
contrary contained herein, while any Event of Default exists, the
entire Reimbursement Amount, regardless of whether or not the
Reimbursement Amount shall have been accelerated, shall bear interest
at the Default Rate.
(e) Provided that (i) interest payable on the
Reimbursement Amount shall be current and the indebtedness outstanding
hereunder shall be in full force and effect, (ii) 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, (iii)
the AFICA Approval has not been modified and remains in full force and
effect, (iv) the Company shall provide evidence satisfactory to the
Bank that the Company is proceeding with all due diligence to the
satisfaction of all conditions to the issuance of the Refunding Bonds,
including, without limitation, evidence that, on or prior to the
Initial Maturity Date, (A) the Company has provided to the Bank the
proposed organizational identity, structure and documentation for the
proposed obligors on the Refunding Bonds, (B) the Bank has approved all
current title and survey matters with respect to the Hotel, and (C) the
Borrower and the Bank have approved substantially all of the material
documentation relating to the issuance of the Refunding Bonds, (v) the
Bank has a reasonable expectation that the Refunding Bonds will be
issued on or prior to the Extended Maturity Date, and (vi) the Company
shall have provided to the Bank evidence reasonably satisfactory to the
Bank that there has been no material adverse change in the financial
condition of the Company or any of the Guarantors, then the Company
shall have the one time option of extending the
26
Initial Maturity Date until the Extended Maturity Date by, not less
than fifteen (15) days prior to the Initial Maturity Date, notifying
the Bank in writing of its desire to exercise its option to extend the
Initial Maturity Date until the Extended Maturity Date. The Company
shall pay all costs incurred by the Bank in connection with the
extension of the Initial Maturity Date to the Extended Maturity Date
including, without limitation, reasonable attorneys' fees and expenses
incurred by the Bank, and all costs and expenses incurred by the Bank
in verifying that the Company has satisfied each of the conditions to
the extension as described in this Section 3A(g)."
(f) Provided no Event of Default exists, the
Reimbursement Amount may be prepaid in whole or in part at any time
provided (i) written irrevocable notice of such prepayment specifying
the intended date of prepayment is received by the Bank not more than
sixty (60) days and not less than three (3) days prior to the date of
such prepayment, and (ii) such prepayment is accompanied by all
interest accrued hereunder and all other sums due hereunder or under
the L/C Documents. Notwithstanding anything to the contrary in this
Agreement or the L/C Documents, the outstanding balance of the
Reimbursement Amount shall be absolutely and unconditionally due and
payable on the date specified in any notice given pursuant to this
Subsection.
(g) Without limiting the foregoing, the Company shall
compensate the Bank for all losses, expenses and liabilities (including
any interest paid by such Bank to lenders of funds borrowed by it to
make or carry the indebtedness evidenced by this Agreement and any
loss, expense or liability sustained by Bank in connection with the
liquidation or re-employment of such funds) Bank may sustain: (i) if
any repayment of the unpaid balance of the Reimbursement Amount occurs
on a date that is not the last day of a LIBOR Reference Period, (ii) if
any repayment of the unpaid balance of the Reimbursement Amount is not
made on any date specified in a notice of repayment given by the
Company, or (iii) as a consequence of any default by the Company to
repay any indebtedness evidenced by this Agreement when required by the
terms hereof or any other event specified herein. Such compensation
shall be paid by the Company within fifteen (15) days after demand
therefor by Bank, provided that Bank shall have delivered to the
Company a certificate setting forth in reasonable detail the amount of
such compensation payable by the Company, and such certificate shall be
conclusive and binding on the Company as to the amount thereof except
in the case of manifest error or willful misconduct. Notwithstanding
any provision herein, the Bank shall be entitled to fund and maintain
its funding of all or any part of the indebtedness evidenced by this
Agreement in any manner it sees fit, it being understood, however, that
for the purposes hereof, all determinations shall be made as if Bank
had actually funded and maintained the indebtedness evidenced by this
Agreement during each LIBOR Reference Period through the purchase of
deposits in the relevant market having a maturity corresponding to such
LIBOR Reference Period and bearing an interest rate equal to the LIBOR
Rate for such LIBOR Reference Period No such compensation shall be
required with respect to repayment of the Reimbursement Amount made on
the Maturity Date.
27
(h) The Company shall, in addition to all other
amounts payable hereunder, also pay to the Bank, as additional
interest, the following sums, at the time and in the manner hereinafter
set forth:
(i) if, due to either: (A) the introduction
of or any change (including, without limitation, any change by
way of imposition or increase of reserve requirements) in or
in the interpretation of any law or regulation or (B) the
compliance by the Bank with any guideline or request from any
governmental authority (whether or not having the force of
law), there shall be any increase in the cost to the Bank of
agreeing to make or making the indebtedness evidenced by this
Agreement, then the Company shall from time to time, upon
demand by Bank, pay to Bank additional amounts to indemnify
Bank against any such increased costs. A certificate as to the
amount of such increased costs submitted to the Company by an
officer of the Bank shall be conclusive in the absence of
manifest error. Such increased costs shall be payable at the
time and in the manner that interest on the Reimbursement
Amount is payable hereunder for such costs incurred since the
last such interest payment due hereunder; and
(ii) Company shall also pay to the Bank at
the time and in the manner that interest is payable on the
Reimbursement Amount under this Agreement for each LIBOR
Reference Period, the cost since the last such interest
payment due hereunder, as determined in good faith by the
Bank, of complying, in connection with such LIBOR Reference
Period during such interest period with any reserve, special
deposit or similar requirement imposed or deemed applicable
against any assets held by or deposits or accounts in or with
or credit extended by the Bank, or the office of Bank, by any
United States governmental authority charged with the
administration of such requirements. Each notification as to
the amount of such cost delivered to the Company by an officer
of the Bank shall be conclusive as to the amount of such cost.
(d) The Reimbursement Agreement is hereby amended by deleting Section
7(e) in its entirety and substituting the following therefor:
"(e) Additional Indebtedness. The Company will not, directly
or indirectly, create, incur, permit or suffer to exist any Debt,
secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than (i) the Reimbursement Amount and the other
obligations of the Company under this Agreement and the other L/C
Documents, (ii) the GDB Loan, (iii) the posting of bonds, if any,
required in connection with the ownership and operation of the Hotel,
(iv) other Debt as expressly disclosed on the June 30 Financial
Statement, and (iv) indebtedness to Xxxxxxx de Puerto Rico Associates,
Incorporated incurred on the date hereof
28
in an aggregate principal amount not to exceed $35,000,000, provided
that all of the foregoing are paid when due."
(e) The Reimbursement Agreement is hereby amended by deleting Section
7(g) in its entirety and substituting the following therefor:
"(g) Financial Statements. (i) The Company shall keep adequate
books and records of account in accordance with the methods currently
employed by the Company, consistently applied and furnish to the Bank:
(1) upon request of the Bank from time to
time, certified rent rolls signed and dated by the
Company, detailing the names of all tenants of the
Hotel, the portion of Hotel occupied by each tenant,
the base rent and any other charges payable under
each Lease and the term of each Lease, including the
expiration date, and any other information as is
reasonably required by the Bank;
(2) a monthly operating statement of the
Hotel detailing the total revenues received, total
expenses incurred, total cost of all capital
improvements, total debt service and total cash flow,
to be prepared and certified by the Company in the
form required by the Bank, and if available, any
quarterly operating statement prepared by an
independent certified public accountant within thirty
(30) days after the close of each calendar quarter;
and
(3) an annual balance sheet and profit and
loss statement of the Company, in the form required
by the Bank, prepared and certified by the Company,
and an audited financial statement prepared by an
independent certified public accountant acceptable to
the Bank within ninety (90) days after the close of
each calendar year; provided that Ernst & Young LLP
shall be deemed an acceptable certified public
accountant for such purpose.
(ii) Upon reasonable request from the Bank,
the Company and Xxxxxxxx shall furnish to the Bank a property
management report for the Hotel, any lease proposals generated
by the Company or Xxxxxxxx, deposits received from tenants and
any other information reasonably requested by the Bank, in
reasonable detail and certified by the Company under penalty
of perjury to be true and complete; and an accounting of all
security deposits held in connection with any Lease of any
part of the Hotel, including the name and identification
number of the accounts in which such security deposits are
held, the name and address of the financial institutions in
which such security deposits are held and the name of the
person to contact at such financial institution, along with
any authority or release necessary for the Bank to obtain
information regarding such accounts directly from such
financial institutions.
29
(iii) The Company and Xxxxxxxx shall furnish
the Bank with such other additional financial or management
information as may, from time to time, be reasonably required
by the Bank in form and substance reasonably satisfactory to
the Bank.
(iv) The Company has submitted and the Bank
has approved the projections and operating budget for the
Hotel covering the remainder of calendar year 1998 attached
hereto as Exhibit E (this and any other budget hereafter
approved by the Bank for any subsequent calendar year and
which is in effect during the applicable period is referred to
as the "Current Budget"). The Company will operate the Hotel
only in accordance with the Current Budget then in effect, and
any deviation of more than ten (10%) percent in any major
category of the Current Budget, any deviation of more than ten
(10%) in any item for capital improvements or capital
replacements, and any adverse deviation of more than ten (10%)
percent in the overall Current Budget, will require the
written approval of the Bank which consent may be arbitrarily
withheld. The Company shall not expend any funds other than in
accordance with the Current Budget as provided herein, subject
to deviation as provided in the preceding sentence. In no
event shall the Current Budget be changed or modified without
the prior written consent of the Bank. The inclusion of the
reference to the Current Budget in this Agreement is not, and
shall not be deemed to be, for the benefit of any contractor
or materialman and no contractor or materialman shall rely
thereon or shall be deemed or considered to be a third party
beneficiary of any of the provisions of this Agreement.
(v) On each December 1 for so long as the
Reimbursement Amount shall remain outstanding, the Company
shall submit to the Bank for its prior written approval, which
approval may be withheld in the Bank's sole and absolute
discretion, the following items with respect to the use and
operation of the Hotel during the following calendar year
(collectively, the "Annual Business Plan"): (i) the Current
Budget which shall include among other things, an operating
budget on a monthly basis, and a budget for all capital
improvements and capital replacements; (ii) a description of
the marketing strategy for the Hotel; (iii) budgets,
strategies, plans, and other information, if any, delivered to
the Company by the Manager; and (iv) any other matters
reasonably requested by the Bank with respect to the Company
or the Hotel. The Company will furnish the Bank with the
Annual Business Plan for approval no later than December 1 of
each calendar year. The Bank's approval or disapproval (which
disapproval must be accompanied by a statement of the reasons
therefor) of the Annual Business Plan shall be given in the
Bank's sole discretion within thirty (30) days after receipt
thereof from the Company, and if the Bank neither approves or
disapproves a proposed Annual Business Plan nor requests
additional information in connection therewith within such
thirty (30) day period, then such Annual Business Plan will be
deemed approved. If the Bank rejects a proposed Annual
Business Plan or requests additional information from the
Company, then the Bank will provide the Company with written
notice thereof and the Company will submit a revised proposed
Annual Business Plan or such
30
information within twenty (20) days of receipt of such
rejection or request, and the Company shall thereafter have
twenty (20) days to approve or disapprove the revised proposed
Annual Business Plan. If the Company's proposed Annual
Business Plan for a given year has not been approved by
January 1 of such year, then the Annual Business Plan in
effect for the immediately preceding year will be the
effective Annual Business Plan for the current year or portion
thereof until a new Annual Business Plan is approved by the
Company, provided that during such period prior to the
approval of a new Annual Business Plan by the Bank, an interim
Current Budget shall be used which shall consist of (i) for
line items with respect to which there is no dispute between
the Company and the Bank, the interim Current Budget shall
contain the amounts of such undisputed line items, and (ii)
for all disputed line items, the amounts shall be (x) in the
case of revenues, the greater of the amounts for such line
items set forth in the approved Current Budget for the prior
year and the actual revenues received for the previous year,
and (y) in the case of expenses, the expenses set forth in the
approved Current Budget for the prior year if the revenues in
the interim Current Budget are based on revenues in the
approved Current Budget for the prior year, or the actual
expenses for the prior year if the revenues in the interim
Current Budget are based on the actual revenues for the
previous year, except that the actual expenses for any
increases in taxes and insurance premiums shall be reflected
in the interim Current Budget. In the event that no new Annual
Business Plan is approved by the Company on or before April 1
of any year, then an independent third-party property manager
shall be selected by the Bank which shall be reasonably
acceptable to the Company, and such manager shall propose and
approve an Annual Business Plan for such current year. The
Company will operate the Hotel only in accordance with the
Annual Business Plan then in effect, and any deviation of more
than ten (10%) percent in any major category of the Current
Budget then in effect, any deviation of more than ten (10%)
percent in any item for capital improvements or capital
replacements in the Current Budget then in effect, and any
adverse deviation of more than ten (10%) percent in the
overall Current Budget then in effect, will require the prior
written consent of the Bank which consent may be arbitrarily
withheld. The Company shall not expend any funds other than in
accordance with the Annual Business Plan and the Current
Budget as provided herein, subject to deviation as provided in
the preceding sentence. The inclusion of the reference to the
Current Budget and the Annual Business Plan in this Agreement
is not, and shall not be deemed to be, for the benefit of any
contractor or materialman and no contractor or materialman
shall rely thereon or shall be deemed or considered to be a
third party beneficiary of any of the provisions of this
Agreement."
(f) The Reimbursement Agreement is hereby amended by deleting Section
7(h) in its entirety and substituting the following therefor:
31
"(h) Transfers. The Company (i) will not sell, convey, assign,
transfer, mortgage or encumber (or contract to sell, convey, assign,
transfer, mortgage or encumber) the Hotel or any part thereof (other
than obsolete or worn out fixtures and equipment replaced by adequate
substitutes of equal or greater value than the replaced items when new,
and other than inventory and supplies in the ordinary course of
business), or any interest therein (legal or beneficial) nor will the
Company ever be divested of title or any interest therein (legal or
beneficial) in any manner or way, whether voluntary or involuntary, by
operation of law or otherwise, (ii) will not permit, and there shall
not occur, any (1) transfer of the partnership interest of any general
partner of Company, (2) transfer of any limited partnership interest of
Company, or (3) a new general or limited partner to be admitted to the
Company, (iii) if any general or limited partner of Company or the
general partner of any such general or limited partner, is a
corporation, (A) none of its respective voting or nonvoting securities
shall be sold, conveyed, assigned, or otherwise transferred (except
upon the death or incapacity of a natural person) or pledged,
hypothecated (in each instance, whether voluntarily or involuntarily)
or otherwise transferred as security for debt or otherwise, (B) there
shall be no increase in the number of issued and/or outstanding shares
of voting or nonvoting securities of any general or limited partner of
Company or the general partner of any such general or limited partner
of Company, and (C) there shall not be created any additional classes
of voting or nonvoting securities of any general or limited partner of
Company or the general partner of any such general or limited partner
of Company, however accomplished, whether in a single transaction or in
a series of related or unrelated transactions, with the result that no
voting or nonvoting securities of any general or limited partner of
Company or the general partner of any such general or limited partner
of Company shall be sold or otherwise pledged, hypothecated or
transferred as security for debt or shall be held by any person who or
which is not a holder of such securities as of the date hereof or held
by a person who is a holder of such voting securities as of the date
hereof in a percentage different from the percentage interest held by
such person as of the date hereof, and (iv) if Company or any general
or limited partner of Company is a partnership, joint venture,
syndicate or other group, neither all nor any portion of the interest
of any partner, joint venturer or member thereof shall be sold,
conveyed or otherwise transferred (except upon the death or incapacity
of a natural person) or pledged, hypothecated or otherwise transferred
as security for debt (in each instance whether voluntary or
involuntary). Further, without the prior written consent of the Bank,
(i) in no event shall the organizational documents of either the
Company or any general partner of the Company be amended or modified in
any manner whatsoever, (ii) in no event shall any amendment,
modification, transfer, assignment, conveyance or any other change
result in a change in the direct or indirect beneficial interest of
Wyndham International, Inc. or Patriot American Hospitality, Inc. in
the Company, and (iii) in no event shall the organizational documents
of Wyndham International, Inc. or Patriot American Hospitality, Inc. or
of any partner in the Company be amended or modified in any manner or
shall there be any other change in the ownership of direct or indirect
legal or beneficial interests in the Company that would require the
consent of the lenders under the terms of the Patriot Loan Agreement.
Any violation of the provisions of this paragraph, shall constitute an
Event of Default and the Bank shall have no obligation to allege or
show any
32
impairment of its security and may pursue any remedy hereunder and/or
any legal or equitable remedies for default without such allegation or
showing."
(g) The Reimbursement Agreement is hereby amended by deleting Section
7(x) in its entirety and substituting the following therefor:
"(x) Insurance. (i) The Company shall obtain and maintain, or
cause to be maintained, insurance for the Company and the Hotel
providing at least the following coverages:
(A) Property Insurance. Insurance with
respect to the Hotel Improvements and building equipment
insuring against any peril included within the classification
"All Risks of Physical Loss" in amounts at all times
sufficient to prevent the Bank from becoming a co-insurer
within the terms of the applicable policies and under
applicable law, but in any event such insurance shall be
maintained in an amount equal to the full insurable value of
the Hotel Improvements and building equipment, the term "full
insurable value" to mean the actual replacement cost of the
Hotel Improvements and building equipment (without taking into
account any depreciation, and exclusive of excavations,
footings and foundations, landscaping and paving) determined
annually by an insurer, a recognized independent insurance
broker or an independent appraiser selected and paid by the
Company and acceptable to the Bank and in no event less than
the coverage required pursuant to the terms of any Lease and
in no event in an amount less than an amount reasonably
acceptable to the Bank;
(B) Liability Insurance. Comprehensive
general liability insurance, including bodily injury, death
and property damage liability, insurance against any and all
claims, including all legal liability to the extent insurable
and imposed upon the Bank and all court costs and attorneys'
fees and expenses, arising out of or connected with the
possession, use, leasing, operation, maintenance or condition
of the Hotel in such amounts as are generally available at
commercially reasonable premiums and are generally required by
institutional lenders for properties comparable to the Hotel
but in no event for a combined single limit of less than an
amount acceptable to the Bank;
(C) Workers' Compensation Insurance.
Statutory workers' compensation insurance with respect to any
work on or about the Hotel;
(D) Business Interruption. Business
interruption and/or loss of "rental income" insurance in an
amount sufficient to avoid any co-insurance penalty and to
provide proceeds which will cover a period of not less than
one (1) year from the date of casualty or loss, the term
"rental income" to mean the sum of (A) the total then
ascertainable Rents from the Hotel and (B) the total
ascertainable amount of all other amounts to be received by
the Company from third parties, reduced to the extent such
amounts would not be received because of operating expenses
not incurred during a
33
period of non-occupancy of that portion of the Hotel then not
being occupied or utilized;
(E) Boiler and Machinery Insurance. Broad
form boiler and machinery insurance (without exclusion for
explosion) covering all boilers or other pressure vessels,
machinery, and equipment located in, on or about the Hotel and
insurance against loss of occupancy or use arising from any
breakdown in such amounts as are generally available at
commercially reasonable premiums and are generally required by
institutional lenders for properties comparable to the Hotel;
(F) Flood Insurance. Flood insurance in an
amount at least equal to the lesser of (A) the Reimbursement
Amount, or (B) the maximum limit of coverage available for the
Hotel under the National Flood Insurance Act of 1968, The
Flood Disaster Protection Act of 1973 or the National Flood
Insurance Reform Act of 1994, as each may be amended; and
(G) Other Insurance. Such other insurance
with respect to the Hotel against loss or damage of the kinds
from time to time customarily insured against and in such
amounts as are generally available at commercially reasonable
premiums and are generally required by institutional lenders
for properties comparable to the Hotel, including, without
limitation, earthquake and hurricane insurance, but in no
event in an amount less than an amount reasonably acceptable
to the Bank.
(ii) All insurance provided for in Section 7(x)(i)
above shall be obtained under valid and enforceable policies (the
INSURANCE POLICIES or in the singular, the INSURANCE POLICY), and shall
be issued by either the insurers who insure the Hotel Improvements on
the Effective Date of the Modification Agreement or one or more other
domestic primary insurer(s) having (A) a claims paying rating ability
of not less than "A" as assigned by one or more credit rating agencies
approved by the Bank and (B) a general policy rating of A or better and
a financial class of VI or better by A.M. Best Company, Inc. (each such
insurer shall be referred to below as a QUALIFIED INSURER). All
insurers providing insurance required by this Agreement shall be
authorized to issue insurance in the jurisdiction in which the Hotel is
located. The Insurance Policy referred to in Section 7(x)(i)(B) above
shall name the Bank as an additional named insured and the Insurance
Policy referred to in Sections 7(x)(i)(A), (D), (E), (F) and, if
applicable, (G) above shall provide that all proceeds be payable to the
Bank as set forth in Section 7(aaa) hereof. The Insurance Policies
referred to in Sections 7(x)(i)(A), (E), (F) and, if applicable, (G)
shall also contain: (1) a standard "non-contributory mortgagee"
endorsement or its equivalent relating, inter alia, to recovery by the
Bank notwithstanding the negligent or willful acts or omission of the
Bank; (2) to the extent available at commercially reasonable rates, a
waiver of subrogation endorsement as to the Bank; and (3) an
endorsement providing for a deductible per loss of an amount not more
than that which is customarily maintained by prudent owners of similar
properties in the general vicinity of the Hotel, but in no event in
34
excess of an amount acceptable to the Bank. All Insurance Policies
described in Section 7(x)(i) above shall contain (x) a provision that
such Insurance Policies shall not be cancelled or terminated, nor shall
they expire, without at least thirty (30) days' prior written notice to
the Bank in each instance; and (y) include effective waivers by the
insurer of all claims for Insurance Premiums (defined below) against
any loss payees, additional insureds and named insureds (other than the
Company). Certificates of insurance with respect to all renewal and
replacement Insurance Policies shall be delivered to the Bank not less
than ten (10) days prior to the expiration date of any of the Insurance
Policies required to be maintained hereunder which certificates shall
bear notations evidencing payment of applicable premiums (the INSURANCE
PREMIUMS). Originals or certificates of such replacement Insurance
Policies shall be delivered to the Bank promptly after the Company's
receipt thereof but in any case within thirty (30) days after the
effective date thereof. If the Company fails to maintain and deliver to
the Bank the original Insurance Policies or certificates of insurance
required by this Agreement, upon ten (10) days' prior notice to the
Company, the Bank may procure such insurance at the Company's sole cost
and expense.
(iii) The Company shall comply in all material
respects with all insurance requirements and shall not bring or keep or
permit to be brought or kept any article upon any portion of the Hotel
or cause or permit any condition to exist thereon which would be
prohibited by an insurance requirement, or would invalidate the
insurance coverage required hereunder to be maintained by the Company
on or with respect to any part of the Hotel pursuant to this Section
7(x).
(iv) If the Hotel shall be damaged or destroyed, in
whole or in part, by fire or other casualty, the Company shall give
prompt notice of such damage to the Bank and provided that the Bank
shall have received the insurance proceeds, the Company shall promptly
commence and diligently prosecute the completion of the repair and
restoration of the Hotel as nearly as possible to the condition the
Hotel was in immediately prior to such fire or other casualty, with
such alterations as may be approved by the Bank (the Restoration) and
otherwise in accordance with Section 7(aaa) of this Agreement.
(v) The insurance coverage required under Section
7(i)(B) may be satisfied by a layering of Comprehensive General
Liability, Umbrella and Excess Liability Policies, but in no event will
the Comprehensive General Liability policy be written for an amount
less than an amount acceptable to the Bank's combined single limit for
bodily injury and property damage liability."
(h) The Reimbursement Agreement is hereby amended by deleting Section
7(gg) in its entirety and substituting the following therefor:
"(gg) Leasing. Except as otherwise consented to by the Bank,
all Leases shall be written on the standard form of lease which has
been approved by the Bank. Upon request, the Company
35
shall furnish the Bank with executed copies of all Leases. No material
changes may be made to the Bank-approved standard lease without the
prior written consent of the Bank, which consent shall not be
unreasonably withheld or delayed. Proposed Leases and renewals of
existing Leases shall not be subject to the prior approval of the Bank
if the renewal is pursuant to the terms of an existing Lease or if the
proposed renewal or new Lease (i) is on the Bank- approved form,
subject only to commercially reasonable variations therefrom, (ii) is
negotiated in an arms'-length transaction with a third party not
affiliated with the Company, (iii) provides for rental rates and terms
comparable to existing local market rates and (iv) is consistent with
the current ordinary course of business at the Hotel. All other
proposed Leases and renewals of existing Leases shall be subject to the
prior approval of the Bank. All Leases shall be subordinate to this
Agreement, the Mortgage and the other L/C Documents. All new Leases
shall provide that they are subordinate to all mortgages on the Hotel,
and that the lessee agrees to attorn to the Bank and any other holder
of such mortgage. The Company (1) shall observe and perform all the
obligations imposed upon the lessor under the Leases if the failure to
perform or observe the same would materially and adversely affect the
value of the Hotel taken as a whole and shall not do or permit to be
done anything to materially impair the value of the Leases as security
for the indebtedness of the Company hereunder and under the other L/C
Documents; (2) shall promptly send copies to the Bank of all notices of
default which the Company shall send or receive thereunder; (3) shall
enforce in a commercially reasonable manner all of the material terms,
covenants and conditions contained in the Leases upon the part of the
lessee thereunder to be observed or performed; (4) shall not collect
any of the Rents more than one (1) month in advance, (except a security
deposit shall not be deemed rent collected in advance); (5) shall not
execute any other assignment of the lessor's interest in the Leases or
the Rents; (6) shall not (A) materially alter, modify or change the
terms of any of the Leases without the prior written consent of the
Bank, which consent shall not be unreasonably withheld or delayed if
the alteration, modification or change does not materially and
adversely affect the value of the Hotel taken as a whole and provided
further that such Lease, as altered, modified or changed, is otherwise
in compliance with the requirements of this Agreement and the other L/C
Documents; provided, however that no such consent shall be required for
Leases, if after giving effect to such alteration, modification or
change the Lease would not have required the Bank's consent in the
first instance or (B) cancel or terminate any Lease (except for
defaults thereunder), or accept a surrender thereof or convey or
transfer or suffer or permit a conveyance or transfer of any portion of
the Land or of any interest therein so as to effect a merger of the
estates and rights of, or a termination or diminution of the
obligations of, lessees thereunder; (7) shall not alter, modify or
change the terms of any guaranty, letter of credit or other credit
support with respect to the Leases (the Lease Guaranty) or cancel or
terminate such Lease Guaranty without the prior written consent of the
Bank; and (8) shall not consent to any assignment of or subletting
under the Leases not in accordance with their terms, without the prior
written consent of the Bank."
(i) The Reimbursement Agreement is hereby amended by adding the
following new Section 7(uu):
36
"(uu) Payment of Taxes, Etc. (a) The Company shall pay, or
cause to be paid, by their due date (except as otherwise set forth in
subsection (c) hereof) taking into account all applicable extensions,
all taxes, assessments, water rates, sewer rents, governmental
impositions, and other charges, including, without limitation, vault
charges and license fees for the use of vaults, chutes and similar
areas adjoining the Land, now or hereafter levied or assessed or
imposed against the Hotel or any part thereof (the TAXES), all ground
rents, maintenance charges and similar charges, now or hereafter levied
or assessed or imposed against the Hotel or any part thereof (the OTHER
CHARGES), and all charges for utility services provided to the Hotel as
same become due and payable. The Company will deliver to the Bank,
promptly upon the Bank's request, evidence satisfactory to the Bank
that the Taxes, Other Charges and utility service charges have been so
paid or are not then delinquent. The Company shall not suffer and shall
promptly cause to be paid and discharged any lien or charge whatsoever
which may be or become a lien or charge against the Hotel or any
portion thereof. Except to the extent sums sufficient to pay all Taxes
and Other Charges have been deposited with the Bank in accordance with
the terms of this Agreement or any of the other L/C Documents, Borrower
shall furnish to the Bank paid receipts for the payment of the Taxes
and Other Charges prior to the date the same shall become delinquent.
(b) After prior written notice to the Bank, the Company, at
its own expense, may contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any of the
Taxes or Other Charges, provided that (i) no Event of Default has
occurred and is continuing under this Agreement or any of the other L/C
Documents, (ii) the Company is permitted to do so under the provisions
of any other mortgage, deed of trust or deed to secure debt affecting
the Hotel, (iii) such proceeding shall suspend the collection of such
Taxes and Other Charges from the Company and from the Hotel or the
Company shall have paid all of the Taxes and Other Charges under
protest (if required to do so under applicable law), (iv) such
proceeding shall be permitted under and be conducted in accordance with
the provisions of any other instrument to which the Company is subject
and shall not constitute a default thereunder, (v) neither the Hotel
nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, cancelled or lost, (vi) the Company shall
have set aside adequate reserves for the payment of the Taxes and other
Charges, together with all interest and penalties thereon, unless the
Company has paid all of the Taxes and Other Charges under protest, and
(vii) if the Company has not paid the contested Taxes and Other Charges
under protest, the Company shall have furnished the security as may be
required in the proceeding, or as may be reasonably requested by the
Bank to insure the payment of any contested Taxes and Other Charges,
together with all interest and penalties thereon, taking into
consideration the amount in any escrow fund being held by the Bank and
available for the payment of Taxes and Other Charges.
(c) On August 3, 1998, the Company shall deposit with the Bank
the sum of $3,245,137 with respect to the Taxes accruing prior to such
date. In addition to the foregoing, in the event that any contested
Taxes with respect to the Hotel or any portion thereof have not been
paid in full
37
on or prior to September 30, 1998, the Company shall deposit with the
Bank, on October 1, 1998, an additional amount equal to the difference
between $3,245,137 and the full amount of all such contested Taxes as
estimated by the Bank. Further, upon request of the Bank, the Company
shall deposit with the Bank, monthly, on the first Business Day of each
month, one-twelfth (1/12th) of the annual Taxes relating to the Hotel
or any portion thereof. On the third Business Day following such
request from the Bank, the Company shall deposit with the Bank a sum of
money which together with the monthly installments will be sufficient
to make each of such payments thirty (30) days prior to the date any
delinquency or penalty becomes due with respect to such payments.
Deposits shall be made on the basis of the Bank's estimate from time to
time of the Taxes for the current year (after giving effect to any
reassessment or, at the Bank's election, on the basis of the Taxes for
the prior year, with adjustments when the Taxes are fixed for the then
current year). All funds so deposited shall be held by the Bank, in an
interest bearing account. The Company hereby grants to the Bank a
security interest in all funds so deposited with the Bank for the
purpose of securing the obligations of the Company hereunder and under
the other L/C Documents. While an Event of Default exists, the funds
deposited may be applied in payment of the charges for which such funds
have been deposited, or to the payment of the obligations of the
Company to the Bank or any other charges affecting the security of the
Bank, as the Bank may elect, but no such application shall be deemed to
have been made by operation of law or otherwise until actually made by
the Bank. The Company shall furnish the Bank with bills for the Taxes
for which such deposits are required at least thirty (30) days prior to
the date on which the Taxes first become payable, or if the Company has
not received the bills for the Taxes by such date, then the Company
shall furnish such Tax bills to the Bank within two Business Days of
the Company's receipt of such xxxx. If at any time the amount on
deposit with the Bank, together with amounts to be deposited by the
Company before such Taxes are payable, is insufficient to pay such
Taxes, the Company shall deposit any deficiency with Bank immediately
upon demand. The Bank shall apply the moneys so deposited to the
payment of such Taxes when the amount on deposit with the Bank is
sufficient to pay such Taxes and the Bank has received a xxxx for such
Taxes."
(j) The Reimbursement Agreement is hereby amended by adding the
following new Section 7(vv):
"(vv) Maintenance of Property. The Company shall cause the
Hotel to be maintained in a good and safe condition and repair. Neither
the Hotel Improvements nor the Hotel Personalty nor any portion thereof
shall be removed, demolished or materially altered (except for normal
replacement of the Hotel Personalty) without the prior written consent
of the Bank either on a case by case basis or in connection with the
Bank's approval of the Current Budget to the extent that such Current
Budget specifically and expressly describes the nature and extent of
the proposed removal, demolition or alteration of a specified item. The
Company shall promptly repair, replace or rebuild any part of the Hotel
which may be destroyed by any casualty, or become damaged, worn or
dilapidated or which may be affected by any condemnation or other
similar proceeding and shall complete and pay for any structure at any
38
time in the process of construction or repair on the Land. The Company
shall not initiate, join in, acquiesce in, or consent to any change in
any private restrictive covenant, zoning law or other public or private
restriction, limiting or defining the uses which may be made of the
Hotel or any part thereof. If under applicable zoning provisions the
use of all or any portion of the Hotel is or shall become a
nonconforming use, the Company will not cause or permit the
nonconforming use or Hotel Improvement to be discontinued or abandoned
without the express written consent of the Bank."
(k) The Reimbursement Agreement is hereby amended by adding the
following new Section 7(ww):
"(ww) Performance of Other Agreements. The Company shall
observe and perform each and every material term to be observed or
performed by the Company pursuant to the terms of any agreement or
recorded instrument affecting or pertaining to the Hotel."
(l) The Reimbursement Agreement is hereby amended by adding the
following new Section 7(xx):
"(xx) Partnership Distributions. The Company will make no
distributions of cash or property of any type or nature to any partner
in the Company."
(m) The Reimbursement Agreement is hereby amended by adding the
following new Section 7(yy):
"(yy) Management. There shall be no change in the day-to-day
control and management of the Hotel without the prior written consent
of the Bank. The Company shall not terminate or replace Xxxxxxxx or any
other manager hereafter approved by the Bank (collectively, the
MANAGER) or appoint a new Manager for all or any portion of the Hotel
or with respect to any operation within the Hotel or terminate or amend
the Management Agreement for the Hotel without the Bank's prior written
approval. Any change in ownership or control of Xxxxxxxx or any other
Manager shall be cause to require the re-approval of such Manager and
Management Agreement by the Bank. The Manager shall hold and maintain
all necessary licenses, certifications and permits required by law for
the use, occupancy, management and operation of the Hotel and each
component thereof. The Company shall fully perform all of its material
covenants, agreements and obligations under the Management Agreement.
Notwithstanding the foregoing, the Bank shall deem either Wyndham
International, Inc. or Wyndham International Operating Partnership,
Inc. acceptable as a replacement Manager provided that the terms of any
new management agreement are acceptable to Bank and such replacement
Manager executes such documents and agreements in favor of the Bank as
the Bank shall request in substantially the same substance as those
documents executed by the prior Manager in favor of the Bank."
39
(n) The Reimbursement Agreement is hereby amended by adding the
following new Section 7(zz):
"(zz) Affiliate Transactions. Without the prior written
consent of the Bank, the Company shall not engage in any transaction
affecting the Hotel with an Affiliate of the Company, except to the
extent of any payment made to any such Affiliate under the Management
Agreement as approved by the Bank or which constitutes a Bona Fide Cost
and is otherwise expressly permitted hereunder."
(o) The Reimbursement Agreement is hereby amended by adding the
following new Section 7(aaa):
"(aaa) Use and Application of Insurance Proceeds. The Bank
shall apply insurance proceeds to costs of restoring the Hotel or to
the Reimbursement Amount as follows:
(i) if the loss is less than or equal to
$25,000,000, the Bank shall apply the insurance proceeds to
the Company's Restoration of the Hotel provided (A) no Event
of Default or Default exists, and (B) the Company promptly
commences and is diligently pursuing Restoration of the Hotel;
(ii) if the loss exceeds $25,000,000 but is
not more than 25% of the replacement value of the Hotel
Improvements (for projects containing multiple phases or stand
alone structures, such calculation to be based on the damaged
phase or structure, not the project as a whole), the Bank
shall apply the insurance proceeds to the Company's
Restoration of the Hotel provided that at all times during
such Restoration (A) no Event of Default or Default exists;
(B) the Bank determines that there are sufficient funds
available to restore and repair the Hotel to a condition
approved by the Bank; (C) the Bank determines that the net
operating income of the Hotel during Restoration will be
sufficient to pay debt service under this Agreement; (D) the
Bank determines that Restoration and repair of the Hotel to a
condition approved by the Bank will be completed within three
(3) months after the date of loss or casualty and in any event
at least thirty (30) days prior to the Maturity Date; and (E)
the Company promptly commences and is diligently pursuing
Restoration of the Hotel;
(iii) if the conditions set forth above are
not satisfied or the loss exceeds the amount and percentage
specified in Subsection (ii) above, in the Bank's sole
discretion, the Bank may apply any insurance proceeds it
receives to the repayment of the Reimbursement Amount or any
other amount outstanding hereunder or under any of the other
L/C Documents or allow all or a portion of such proceeds to be
used for the Restoration of the Hotel; and
40
(iv) if the loss exceeds $500,000 and
insurance proceeds are to be applied to Restoration of the
Hotel as provided herein, such insurance proceeds will be
disbursed on receipt by the Bank of satisfactory plans and
specifications, contracts and subcontracts, schedules,
budgets, title endorsements, and architects' certificates, and
otherwise in accordance with prudent commercial construction
lending practices for construction loan advances, including,
without limitation, the General Disbursement Conditions."
(p) The Reimbursement Agreement is hereby amended by adding the
following new Section 7(bbb):
"(bbb) Condemnation. The Company shall promptly give the Bank
notice of the actual or, threatened commencement of any condemnation or
eminent domain proceeding and shall deliver to the Bank copies of any
and all papers served in connection with such proceedings. The Bank may
participate in any such proceedings to the extent permitted by law.
Upon an Event of Default, the Company shall deliver to the Bank all
instruments requested by it to permit such participation. The Company
shall, at its expense, diligently prosecute any such proceedings, and
shall consult with the Bank, its attorneys and experts, and cooperate
with them in the carrying on or defense of any such proceedings.
Notwithstanding any taking by any public or quasi-public authority
through eminent domain or otherwise (including, but not limited to any
transfer made in lieu of or in anticipation of the exercise of such
taking), the Company shall continue to pay the Reimbursement Amount and
all other indebtedness outstanding hereunder at the time and in the
manner provided for its payment hereunder and such indebtedness shall
not be reduced until any award or payment therefor shall have been
actually received and applied by the Bank, after the deduction of
expenses of collection, to the reduction or discharge of the
indebtedness outstanding hereunder. The Bank shall not be limited to
the interest paid on the award by the condemning authority but shall be
entitled to receive out of the award interest at the rate or rates
provided herein. If the Hotel or any portion thereof is taken by the
power of eminent domain, the Company shall promptly commence and
diligently prosecute the Restoration of the Hotel in accordance with
the provisions respecting Restoration of the Hotel following a casualty
and receipt by the Company of insurance proceeds as provided in Section
7(aaa) of hereof and the Bank shall make the proceeds available for
Restoration as provided in said Section 7(aaa). If the Hotel is sold,
through foreclosure or otherwise, prior to the receipt by the Bank of
the award or payment, the Bank shall have the right, whether or not a
deficiency judgment shall have been sought, recovered or denied, to
receive the award or payment, or a portion thereof sufficient to pay
the indebtedness outstanding hereunder and under the other L/C
Documents."
(q) The Reimbursement Agreement is hereby amended by deleting Section
8(p) in its entirety and substituting the following therefor:
41
"(p) Location of Company. The place of business or chief executive
office of the Company is located at 0000 Xx Xxxxxxxxxxxx Xxxxxx,
Xxx Xxxxxxx, Xxxxxxx, X.X. 00738, Attention: General Manager. The
Company will give the Bank prior written notice of any relocation of
such office."
(r) The Reimbursement Agreement is hereby amended to provide that, in
addition to all of the other Events of Default as defined in the Reimbursement
Agreement, the occurrence of any of the following events shall constitute an
Event of Default under the Reimbursement Agreement:
(i) Any representation or warranty of any of the
Company (A) contained in this Agreement, (B) contained in any
certificate delivered in connection therewith, or (C) made to CRE
concerning the financial condition or creditworthiness of the Company,
shall prove to have been false or misleading in any material respect.
(ii) The failure by the Company to perform or observe
any of the agreements or covenants contained in this Agreement and the
continuance of such failure for thirty (30) days after notice by CRE to
the Company.
(iii) Any default beyond any applicable period of
notice or grace by the Guarantor, the Company or any affiliate of the
Guarantor or the Company under that certain Patriot Loan Agreement.
Notwithstanding anything contained herein to the contrary, (i) neither
the notice nor applicable grace or cure periods described in
subsections (i), (ii) or (iii) hereof shall have any applicability to
any of the other Events of Default as defined in the Reimbursement
Agreement, (ii) in no event shall any of the notice and/or grace
periods provided for herein or in any of the other L/C Documents or
Additional Security Documents be considered to be in addition to any
other notice or grace period provided therein, and (iii) any applicable
notice or grace period shall run concurrently with and not in addition
to any other notice or grace period to which the Owner shall be
entitled either hereunder or under any of the other L/C Documents or
Additional Security Documents.
(s) The Reimbursement Agreement is hereby amended by deleting Section
14(t) in its entirety and substituting the following therefor:
"(t) Limitation of Liability. The Company shall be
personally liable for all amounts due under this Agreement and/or any
of the other L/C Documents; provided, however, that, except as provided
below, none of the general partners of the Company shall be personally
liable for such amounts. The general partners of the Company shall be
personally liable for any deficiency, loss or damage suffered by the
Bank with respect to or in connection with this Agreement, the L/C
Documents or any of the indebtedness evidenced or secured hereby or
thereby, because of: (a) the commission of a criminal act by the
Company or any Affiliate of
42
the Company, (b) the failure to comply with provisions of the L/C
Documents prohibiting the sale, transfer, encumbrance or other Transfer
of the Hotel or any portion thereof, any other collateral, or any
direct or indirect ownership interest in the Company or its partners;
(c) the misapplication or conversion by the Company or any of its
Affiliates of any revenues or other funds derived from the Hotel,
including management fees, security deposits, insurance proceeds and
condemnation awards; (d) any fraud or misrepresentation of a material
fact by the Company or any of its Affiliates made in or in connection
with the L/C Documents; (e) the Company's or its Affiliate's collection
of rents more than one month in advance but only if such collection of
rents is in violation of this Agreement or any of the other L/C
Documents, or entering into or modifying any Leases with respect to the
Hotel, or receipt of monies by the Company or any of its Affiliates in
connection with the modification of any such Leases, in violation of
this Agreement or any of the other L/C Documents; (f) the Company's
failure to apply revenues or proceeds of rents or any other payments
received by the Company or its Affiliates with respect to the Hotel and
other income of the Hotel or any other collateral to the costs of
maintenance and operation of the Hotel and to the payment of taxes,
lien claims, insurance premiums, debt service and other amounts due
under the L/C Documents; (g) the Company's failure to maintain
insurance as required by this Agreement or any of the other L/C
Documents or to pay any taxes or assessments affecting the Hotel, or
any portion thereof; (h) the intentional interference by the Company or
its Affiliates with the Bank's exercise of rights under any Assignment
of Rents or under the Assignment of Accounts Receivable; (i) any damage
or destruction to the Hotel caused by the acts or omissions of the
Company or any of its Affiliates, or any of their respective agents,
employees, or contractors to the extent not covered by insurance
proceeds; (j) the Company's obligations with respect to environmental
matters pursuant to the New Environmental Indemnity; (k) the Company's
failure to pay for any loss, liability or expense (including reasonable
attorneys' fees and expenses) incurred by the Bank arising out of any
claim or allegation made by the Company, its successors or assigns, or
any creditor of the Company, that this Agreement or the transactions
contemplated hereby or by any of the other L/C Documents establish a
joint venture, partnership or other similar arrangement between the
Company and the Bank; (l) any brokerage commission or finder's fees
claimed by anyone other than by virtue of a written agreement with the
Bank in connection with the transactions contemplated by the L/C
Documents; (m) the Company's obligations with respect to the payment of
any and all real estate property taxes and personal property taxes and
any other governmental lienable charges against the Hotel or any
portion thereof including, without limitation, real property taxes for
the all prior years which, as of August 3, 1998, remain outstanding and
unpaid; (n) the avoidance, or any action seeking the avoidance, of any
transfer of an interest in property of the Company to or for the
benefit of Bank pursuant to Section 544, 547, 548 or 550 of the
Bankruptcy Code or any similar statute under applicable law; or (o) any
(i) voluntary bankruptcy or insolvency proceeding, or (ii) involuntary
bankruptcy or insolvency proceeding with respect to the Company
commenced by an affiliate of the Company which is not dismissed within
ninety (90) days of filing. None of the foregoing limitations on
liability for amounts due under the L/C Documents shall in any way
impair the validity of the indebtedness evidenced thereby or the
validity of the indebtedness
43
secured by the L/C Documents or the lien on or security interest in the
collateral or the right of the secured party to enforce the lien or
security interest or other interest in the collateral or any part
thereof after default by the Company. Further, none of the foregoing
limitations on the personal liability of the general partners of the
Company shall modify, diminish or discharge the personal liability of
any guarantor or indemnitor of the Company's obligations hereunder.
Nothing herein shall be deemed to be a waiver of any right which the
Bank may have under Sections 506(a), 506(b), 1111(b) or any other
provision of the Bankruptcy Code, as such sections may be amended, or
corresponding or superseding sections of the Bankruptcy Amendments and
Federal Judgeship Act of 1984, to file a claim against the estate of
the Company for the full amount due to the Bank under the L/C Documents
or to require that all collateral shall continue to secure the amounts
due under the L/C Documents."
(t) Exhibit "D" attached to and made a part of the Reimbursement
Agreement is hereby deleted and Exhibit F attached to and made a part hereof is
substituted in lieu thereof.
(u) The Consent and Waiver Agreement, dated as of March 31, 1998, by
and between the Company and BTM ("Consent and Waiver"), is hereby amended to
delete Sections 1(c), (d), (e) and (f) (collectively, the "Deleted Sections") in
their entireties. As a result of such modification to the Consent and Waiver, it
is hereby agreed that the Company shall not consummate any of the transactions
contemplated in any of the Deleted Sections without the prior written consent of
CRE, which consent, as to the transactions contemplated in Sections 1(d) and (f)
only, shall not be unreasonably withheld.
10. Modification of Reimbursement Agreement and L/C Documents. (a) All
references to the Reimbursement Agreement set forth in the L/C Documents shall
refer to and mean the Reimbursement Agreement as assigned and modified hereby
and any subsequent modifications and/or amendments thereto, such that from and
after the Effective Date, the L/C Documents shall evidence and/or secure, among
other things, the obligations of Owner to CRE under the Reimbursement Agreement,
as assigned and modified hereby and as subsequently modified and/or amended.
Notwithstanding anything to the contrary contained in any of the L/C Documents,
the limitation of liability provisions of Section 14(t) of the Reimbursement
Agreement, as modified hereby, shall supersede and control any and all other
limitation of liability provisions contained in any of the other L/C Documents.
11. Notices. (a) All notice provisions in the Reimbursement Agreement
and each of the other L/C Documents shall be modified to provide that notices to
BTM, the issuer of the Letter of Credit or the "Bank" shall hereafter be
addressed to CRE as follows:
44
Citicorp Real Estate, Inc.
000 Xxxxxxxxx Xxxxxx
20th Floor, Zone 1
New York, New York 10043
Attention: General Counsel
Reference: El Conquistador, Puerto Rico
Telecopier: (000) 000-0000
With copies to:
Citicorp Real Estate, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Reference: El Conquistador, Puerto Rico
Telecopier: (000) 000-0000
and
Weil, Gotshal & Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
(b) All notice provisions in the Reimbursement Agreement and each of
the other L/C Documents shall be modified to provide that notices to the Owner
shall hereafter be addressed to the Owner as follows:
El Conquistador Partnership L.P.
0000 Xx Xxxxxxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxx, XX 00000
Attention: General Manager
Telecopier: (000) 000-0000
45
with copies to:
Patriot American Hospitality, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, III
Telecopier: (000) 000-0000
and
Shack & Xxxxxx, PC
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
12. Confirmation of Mortgages and Liens Upon Property.
(a) The Owner acknowledges and agrees that the Fee Mortgage
constitutes, and continues to be, a valid first mortgage lien and security
interest upon the Mortgaged Property (as defined therein) in favor of CRE, as
the assignee of BTM under the Collateral Pledge Agreement and the Second
Collateral Pledge Agreement, (collectively, 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 Owner under the Reimbursement Agreement, as
modified hereby, are secured by, among other things, the Collateral Pledge
Agreements, the Notes and the Fee Mortgage, as amended hereby, and that the Fee
Mortgage and each of the other L/C Documents, as amended hereby, constitute
valid and subsisting agreements and obligations of the Owner. 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 Mortgage. The Mortgaged
Property (as defined in the Fee Mortgage) is and shall remain subject to and
encumbered by the lien, charge and encumbrance of the Fee Mortgage, and nothing
herein contained shall affect or be construed to affect the lien or encumbrance
of the Fee Mortgage or the priority thereof over other liens or encumbrances.
(b) The Owner 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 CRE, 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 Owner under the Reimbursement Agreement, as modified hereby, are secured
by, among other things, the Collateral Pledge Agreements, the Notes and
Leasehold Mortgage, as amended hereby, and that the Leasehold
46
Mortgage and each of the other L/C Documents, as amended hereby, constitute
valid and subsisting agreements and obligations of the Owner. 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.
13. Ratification. Except as expressly modified and amended herein, the
Owner covenants and agrees that all of the terms, covenants, promises,
warranties, representations and conditions of the Reimbursement Agreement and
the other L/C Documents shall remain unmodified and in full force and effect.
The Owner hereby ratifies and confirms each of its obligations under the
Reimbursement Agreement and the other L/C Documents, as hereby modified.
14. Effective Date. This Agreement shall be effective as of August 3,
1998 (the "Effective Date").
15. Indemnifications. The Owner hereby agrees to indemnify and hold CRE
and BTM and their respective officers, directors, shareholders, counsel,
employees, agents and servants and their respective heirs, successors and
assigns (collectively, the "Indemnified Parties") harmless from and against any
and all claims, damages, actions, costs, expenses, liabilities or losses of any
kind whatsoever (including, without limitation, court costs, reasonable
attorneys' and paralegals' fees and disbursements through and including any
appellate proceedings at all levels and any special proceedings) whether 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, incurred by
any Indemnified Party by reason of, under, arising out of, related to or in
connection in any manner with the Bonds, this Agreement, the Additional Security
Documents, the Reimbursement Agreement (as assigned and amended hereby), any of
the other L/C Documents (as assigned and amended hereby) or any of the
transactions contemplated hereunder or thereunder, including, without
limitation, those arising from the joint, concurrent, or comparative negligence
of the Indemnified Parties, except to the extent any of the foregoing is caused
solely by such Indemnified Parties' gross negligence or willful misconduct.
16. No Defenses. The Owner hereby acknowledges, confirms and warrants
to the Authority, Trustee, BTM and CRE that, as of the Effective Date, the Owner
has absolutely no defenses, claims, rights of set-off or counterclaims against
the Authority, Trustee, BTM and/or CRE under, arising out of, or in connection
with, the Bonds, the Additional Security Documents, the Reimbursement Agreement
or any of the other L/C Documents, as assigned and amended hereby, this
Agreement or any of the transactions contemplated hereby or by any of the
foregoing documents, or against any of the indebtedness evidenced or secured by
any of the foregoing, any and all of which the Owner hereby expressly waives.
47
17. Release. The Owner acknowledges that it is executing this Agreement
as its own voluntary act and free from duress and undue influence and upon and
with the advice of counsel. The Owner hereby unconditionally and irrevocably
releases, acquits and discharges the Authority, Trustee, BTM and CRE and their
respective predecessors, subsidiaries, affiliates, and their respective
employees, officers, directors, shareholders, agents, representatives, servants
and counsel (collectively, the "Released 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 the Owner ever had, now has or hereafter can, shall or may have
against any of the Released Parties or any of them 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 Bonds, the Hotel, the Reimbursement Agreement, the L/C Documents,
the Additional Security Documents, this Agreement or any of the transactions
contemplated hereby or thereby, except that each of the parties hereto shall
continue to be responsible for executing such additional documents as may be
necessary to carry out the intent of this Agreement as provided in Section 19
hereof.
18. Conflicts with L/C Documents. In the event of any conflict between
the terms of the L/C Documents and this Agreement, the terms of the document
which shall enlarge the rights or remedies of CRE, grant to CRE greater
financial security, or better insure the payment and performance in full of all
obligations of the Owner to CRE hereunder or under any of the L/C Documents,
shall control. Whenever possible, the provisions of this Agreement shall be
deemed supplemental to and not in derogation of the L/C Documents.
19. Further Assurances . The parties hereto will, whenever and as often
as shall be reasonably requested to do so by any other party hereto, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all conveyances, assignments and all other instruments and documents as
may be reasonably necessary to complete the transactions herein contemplated and
to carry out the intent and purposes of this Agreement. The Owner shall, upon
request, pay for all reasonable costs and expenses incurred by any party in
connection therewith.
20. Limitation of BTM Liability. The parties hereto acknowledge and
agree that BTM shall have absolutely no express or implied obligation or
liability hereunder to any party hereto other than the Owner, CRE, and their
successors and assigns, and that BTM's obligations and liabilities hereunder
shall be limited to those obligations or liabilities of BTM arising in favor of
the Owner, CRE, and their successors and assigns, under the provisions of
Sections 1, 2, 3(a), 6, 14, 19 and 21 hereof (the parties hereto acknowledging
that BTM has no obligations or liabilities to Owner pursuant to Sections 3(a)
and 6 hereof). Without limiting the foregoing, BTM shall have no obligation,
express or implied, with respect to the truth and accuracy of any
representations or warranties of any other party set forth in this Agreement.
48
21. Miscellaneous.
(a) Modifications and Amendments. This Agreement may
only be modified, altered or amended by an agreement in writing executed by all
of the parties hereto.
(b) Headings. The headings of the articles, sections
and subsections of this Agreement are for convenience and 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.
(c) Reimbursement of Expenses. The Owner hereby
agrees to pay all expenses incurred by the Authority, the Trustee, BTM and CRE
in connection with this Agreement and each of the Additional Security Documents
and the transactions contemplated hereby and thereby, including, without
limitation, the fees and expenses of the Authority's, the Trustee's, BTM's or
CRE's reasonable attorneys, environmental, engineering and other consultants,
and fees, charges or taxes for the recording or filing of this Agreement, any of
the L/C Documents, any of the Additional Security Documents, and any other
documents, instruments or agreements in connection with the transactions
contemplated hereby.
(d) Time; Construction; Exhibits. Time is of the
essence of each provision of this Agreement. 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 Agreement unless otherwise specifically noted. The use of
the words "hereof", "hereunder", "herein" and words of similar import shall
refer to this entire Agreement and not to any particular section, paragraph or
portion of this Agreement unless otherwise specifically noted. All exhibits
attached hereto are by this reference made a part of this Agreement for all
purposes.
(e) Judicial Interpretation. Should any provision of
this Agreement, the Reimbursement Agreement, the L/C Documents or any of the
Additional Security 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
Agreement.
(f) Validity of Provisions. Any provision of this
Agreement which may prove unenforceable under law shall not affect the validity
of the other provisions hereof.
(g) Counterparts . To facilitate execution, this
Agreement may be executed in as many counterparts as may be convenient or
required. It shall not be necessary that the signature and acknowledgment of, or
on behalf of, each party, or that the signature and acknowledgment of all
persons required to bind any party, appear on each counterpart. All counterparts
shall collectively constitute a single instrument. It shall not be necessary in
making proof of this Agreement to produce
49
or account for more than a single counterpart containing the respective
signatures and acknowledgments of each of the parties hereto.
(h) Construction. This Agreement shall be construed
in accordance with the laws of the State of New York without regard to the
principles of conflicts of laws. Notwithstanding the prior sentence of this
subsection (h) or anything else contained in this Agreement to the contrary, to
the extent that this Agreement contains any provisions (collectively, the
"Amending Provisions") which modify any L/C Document, which by its terms is
governed by the laws of the Commonwealth of Puerto Rico, the Amending Provisions
shall, to the extent that such provisions modify any such L/C Documents, be
governed by and construed in accordance with the laws of the Commonwealth of
Puerto Rico without regard to the principles of conflicts of law.
(i) Binding Effect. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
(j) Merger. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter thereof and
merges with and supersedes all prior and contemporaneous agreements and
understandings among the parties hereto.
(k) Usury Laws. This Agreement, the Additional
Security Documents, the Reimbursement Agreement and the L/C Documents as
assigned and amended hereby are subject to the express condition that at no time
shall Owner be obligated or required to pay interest on the Reimbursement Amount
or any portion thereof or any other charges or amounts at a rate which could
subject CRE or any other the holder of the Additional Security Documents, the
Reimbursement Agreement or any of the other L/C Documents as assigned and
amended hereby to either civil or criminal liability as a result of being in
excess of the maximum interest rate which Owner is permitted by applicable law
to contract or agree to pay. If by the terms of the Additional Security
Documents, this Agreement, the Reimbursement Agreement or any of the other L/C
Documents as assigned and amended hereby, Owner is at any time required or
obligated to pay interest on the indebtedness evidenced thereby, or any portion
thereof or any other charges or amounts at a rate in excess of such maximum
rate, the rate of interest and other charges or amounts under the terms of the
Additional Security Documents, this Agreement, the Reimbursement Agreement or
any of the other L/C Documents as assigned and amended hereby shall be deemed to
be immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of such
maximum rate shall be applied and shall be deemed to have been payments in
reduction of the principal balance of the Reimbursement Amount. All sums paid or
agreed to be paid to CRE for the use, forbearance, or detention of the
indebtedness evidenced by this Agreement, the Additional Security Documents, the
Reimbursement Agreement and the other L/C Documents as assigned and amended
hereby shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term until payment in full so
that the rate or amount of interest on account of such indebtedness does not
exceed the maximum lawful rate of interest from time to time in effect and
applicable to such debt for so long as such debt is outstanding.
50
(l) Waiver of Jury Trial. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY,
UNCONDITIONALLY, IRREVOCABLY AND INTENTIONALLY FOREVER WAIVE THE RIGHT TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT, THE REIMBURSEMENT AGREEMENT, THE L/C
DOCUMENTS, THE ADDITIONAL SECURITY DOCUMENTS, OR ANY OTHER DOCUMENTS REFERENCED
HEREIN OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PERSON OR ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THIS
AGREEMENT, THE REIMBURSEMENT AGREEMENT, THE L/C DOCUMENTS OR THE ADDITIONAL
SECURITY DOCUMENTS OR IN ANY WAY RELATING TO THE HOTEL (INCLUDING, WITHOUT
LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT OR ANY SUCH
DOCUMENTS, AND ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT OR ANY OF SUCH
DOCUMENTS WERE FRAUDULENTLY INDUCED OR ARE OTHERWISE VOID OR VOIDABLE); THIS
WAIVER BEING A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS
AGREEMENT.
[THE REMAINDER OF THIS PAGE IS LEFT BLANK]
51
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized representatives all as of the date
and year first above written.
EL CONQUISTADOR PARTNERSHIP L.P., a Delaware
limited partnership
By: Conquistador Holding, Inc., a Delaware corporation, its
general partner
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
[Corporate Seal]
STATE OF FLORIDA )
) SS.:
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this 2nd day of
August, 1998 by Xxxxx Xxxxxx, as Vice President of Conquistador Holding, Inc., a
Delaware corporation, as a general partner of EL CONQUISTADOR PARTNERSHIP L.P.,
a Delaware limited partnership, on behalf of said corporation, on behalf of said
limited partnership. He/she is personally known to me or has produced a driver's
license as identification.
/s/ Xxxx Xxxxx
----------------------------
My Commission Expires: Name:
Notary Public
State of Florida
[Notary Stamp/Seal]
CITICORP REAL ESTATE, INC., a Delaware corporation
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Attorney-in-Fact
STATE OF FLORIDA )
) SS.:
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this 2nd day of
August, 1998 by Xxxxxxx Xxxxxxx, as Attorney-in-Fact of CITICORP REAL ESTATE,
INC., a Delaware corporation, on behalf of said corporation. He/she is
personally known to me or has produced a driver's license as identification.
/s/ Xxxx Xxxxx
---------------------------
My Commission Expires: Name:
Notary Public
State of Florida
[Notary Stamp/Seal]
BANCO POPULAR DE PUERTO RICO, a banking
corporation organized and existing under the laws of the
Commonwealth of Puerto Rico, as trustee
By: /s/ Xxxx X. Xxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
Affidavit No. 139 (Copy)
Sworn to and subscribed before me by Xxxx X. Xxxxxxx, of legal age,
married, executive and resident of Guaynabo, Puerto Rico, in his capacity as
Senior Vice President of BANCO POPULAR DE PUERTO RICO, a banking corporation
organized and existing under the laws of the Commonwealth of Puerto Rico, as
trustee, who is personally known to me, in San Xxxx, Puerto Rico, this 3rd day
of August, 1998.
/s/ Xxxx Xxxxx Xxxxxx
------------------------------------
Notary Public
PUERTO RICO INDUSTRIAL, MEDICAL,
EDUCATIONAL AND ENVIRONMENTAL
POLLUTION CONTROL FACILITIES
FINANCING AUTHORITY, a public
corporation and government
instrumentality created pursuant to
the laws of the Commonwealth of
Puerto Rico
By: /s/ Xxxxxxx Xxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx Xxxxx
Title: Executive Director
Affidavit No. 59
Sworn to and subscribed before me by Xxxxxxx Xxxxxx Xxxxx, of legal
age, married, executive and resident of San Xxxx, Puerto Rico, in her capacity
as Executive Director of PUERTO RICO INDUSTRIAL, MEDICAL, EDUCATIONAL AND
ENVIRONMENTAL POLLUTION CONTROL FACILITIES FINANCING AUTHORITY, a public
corporation and government instrumentality created pursuant to the laws of the
Commonwealth of Puerto Rico, who is personally known to me, in San Xxxx, Puerto
Rico, this 3rd day of August, 1998.
/s/ Xxxxx X. Xxxxx
------------------------------------
Notary Public
THE BANK OF TOKYO-MITSUBISHI, LTD. (formerly
known as The Mitsubishi Bank, Limited), a
Japanese banking corporation acting through its
New York Branch
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 31st day of
July, 1998 by Xxxxx X. Xxxxxx, a Vice President of THE BANK OF TOKYO-MITSUBISHI,
LTD. (formerly known as The Mitsubishi Bank, Limited), a Japanese banking
corporation acting through its New York Branch, on behalf of said corporation.
He/she is personally known to me or has produced a driver's license as
identification.
/s/ Xxxx Xxxxxxx
---------------------------
My Commission Expires: Name:
Notary Public
State of New York
[Notary Stamp/Seal]
