REPLACEMENT RESERVE AGREEMENT
THIS REPLACEMENT RESERVE AGREEMENT ("Agreement") is made as of the 3rd
day of August, 1998, by and between EL CONQUISTADOR PARTNERSHIP L.P., a Delaware
limited partnership, having an address at 1000 El Conquistador Avenue, Las
Croabas, Xxxxxxx, Puerto Rico 00738 ("Borrower") and CITICORP REAL ESTATE, INC.,
a Delaware corporation, having an address at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 ("Lender").
RECITALS:
A. Lender is the owner and holder of certain reimbursement obligations
in the principal amount of $90,000,000 (collectively, the "Reimbursement
Obligations") which are outstanding pursuant to a Letter of Credit and
Reimbursement Agreement, dated as of February 7, 1991, by and between The Bank
of Tokyo-Mitsubishi, Ltd. (f/k/a The Mitsubishi Bank, Limited) ("Mitsubishi")
and the Borrower (as heretofore amended and as amended on the date hereof by the
Modification Agreement (as hereinafter defined), the "Reimbursement Agreement").
B. The Reimbursement Obligations are secured, in part, by certain
Collateral Pledge Agreements more particularly described in the Reimbursement
Agreement (collectively, the "Security Instruments") and by certain other notes,
deeds of mortgage, assignments, guaranties and other documents and instruments
executed in connection with the Reimbursement Agreement (including the
Modification Agreement) or otherwise with respect to the Reimbursement
Obligations (collectively, the "Other Security Documents").
C. At the request of Borrower and pursuant to the terms of that
certain Assignment and Modification Agreement, dated as of even date herewith,
by and among the Lender, the Borrower, Mitsubishi and certain other parties (the
"Modification Agreement"), the term for payment of the Reimbursement Obligations
is being extended and certain terms and provisions of the Reimbursement
Agreement, the Security Instruments and the Other Security Documents, among
other things, are being amended and modified at the request of the Borrower (the
Reimbursement Agreement, the Security Instruments, the Other Security Documents
and each of the other documents evidencing, securing or otherwise relating to
the Reimbursement Obligations or any of the foregoing documents are hereinafter
sometimes collectively referred to as the "Loan Documents").
D. Lender requires as a condition to its entering into the
Modification Agreement and modifying the Reimbursement Obligations that Borrower
enter into this Agreement and make certain deposits with Lender as provided in
this Agreement as additional security for all of Borrower's obligations under
the Reimbursement Agreement, the Security Instruments and the other Loan
Documents.
AGREEMENT:
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
Section 1. DEPOSITS TO THE REPLACEMENT RESERVE
(a) Initial Deposit. Concurrently with the execution of this
Agreement, Borrower shall deposit with Lender the sum of $702,476 (the
"Initial Deposit"; the Initial Deposit and the Additional Deposit (as
hereinafter defined) are hereinafter sometimes collectively referred to as
the "Replacement Reserve Fund").
(b) Replacement Reserve. Upon receipt of the Initial Deposit and the
Additional Deposit, Lender shall deposit the same, as received, in an
interest-bearing escrow account (the "Replacement Reserve"). Borrower
hereby acknowledges and confirms that (i) the Replacement Reserve Fund
shall not constitute a trust fund and may be commingled with other monies
held by Lender; (ii) Lender or its designee shall have the sole right to
make withdrawals from the Replacement Reserve; and (iii) Lender shall have
no responsibility or liability for the amount of interest earned on the
Replacement Reserve. All interest earned from investment of the funds
deposited in the Replacement Reserve shall be credited to the Replacement
Reserve. Borrower shall include and report such interest in its income for
Federal, state, commonwealth and local income and franchise tax purposes.
(c) Additional Deposit. In the event Borrower requests an extension of
the term for payment of the Reimbursement Obligations pursuant to the
provisions of the Reimbursement Agreement, as modified by the Modification
Agreement, then on or prior to the Initial Maturity Date, Borrower shall
cause to be deposited with Lender, for further deposit by Lender into the
Replacement Reserve, an amount to be held in the Replacement Reserve
pursuant to the terms of this Agreement (the "Additional Deposit") equal to
the difference between (1) $1,053,714 and (2) the amount then on deposit in
the Replacement Reserve, so that on the Initial Maturity Date, the balance
in the Replacement Reserve is not less than $1,053,714.
Section 2. PLEDGE OF REPLACEMENT RESERVE
As additional security for the payment of all sums due under the
Reimbursement Agreement and the other Loan Documents and the performance by
Borrower of its obligations thereunder, Borrower hereby pledges, assigns and
grants to Lender a continuing perfected security interest (to the extent Lender
maintains possession of same), in and to and a first lien upon, the Replacement
Reserve Fund and the Replacement Reserve; provided that, Lender shall make
disbursements from the Replacement Reserve in accordance with the terms of this
Agreement.
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Section 3. DISBURSEMENTS FROM REPLACEMENT RESERVE
(a) Disbursements for Replacements Only. Lender shall make
disbursements from the Replacement Reserve only to pay for the cost of capital
repairs, replacements and improvements at the Hotel which have been approved by
Lender in writing or by virtue of Lender's approval of the Annual Budget for the
Hotel and which are made after the date hereof in accordance with the terms and
provisions of the Reimbursement Agreement and the other Loan Documents
(collectively, the "Replacements") in the manner provided in this Section 3.
Lender shall, upon written request from Borrower and satisfaction of the
requirements set forth in this Section 3 and Section 4 of this Agreement,
disburse to Borrower amounts from the Replacement Reserve necessary to pay for
the actual approved costs of Replacements or to reimburse Borrower therefor,
upon completion of such Replacements (or, upon partial completion in the case of
Replacements made pursuant to Section 3(d) hereof) as reasonably determined by
Lender. In no event shall Lender be obligated to disburse funds from the
Replacement Reserve if a Default or an Event of Default exists.
(b) Request for Disbursement. Each request for disbursement from the
Replacement Reserve shall be in a form specified or approved by Lender and shall
specify (i) the specific Replacements for which the disbursement is requested,
(ii) the quantity and price of each item purchased, if the Replacement includes
the purchase or replacement of specific items, (iii) the price of all materials
(grouped by type or category) used in any Replacement other than the purchase or
replacement of specific items, and (iv) the cost of all contracted labor or
other services applicable to each Replacement for which such request for
disbursement is made. With each such request, Borrower shall certify that all
Replacements have been made in accordance with applicable laws. Each request for
disbursement shall include copies of invoices for all items or materials
purchased and all contracted labor or services provided and each request shall
include evidence satisfactory to Lender of payment of all such amounts. Except
as provided in Section 3(d) hereof, each request for disbursement from the
Replacement Reserve shall be made only after completion of the Replacement for
which disbursement is requested. Borrower shall provide Lender evidence of
completion satisfactory to Lender in its reasonable judgment.
(c) Disbursement Conditions. Borrower shall be entitled to request
disbursements from the Replacement Reserve to pay directly or to reimburse
Borrower for expenditures made in connection with the Replacements with respect
to which a disbursement is requested. Lender, at its option, may disburse the
amount for such invoices directly to the vendors; provided, however, that if
such invoices do not exceed $10,000, Lender shall disburse the amount for such
invoices directly to Borrower and Borrower covenants and agrees to promptly pay
such invoices. In addition, as a condition to any disbursement, Lender may
require Borrower to obtain lien waivers from each contractor,
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supplier, materialman, mechanic or subcontractor who receives payment in an
amount equal to or greater than $10,000 for completion of its work or delivery
of its materials. Any lien waiver delivered hereunder shall conform to the
requirements of applicable law and shall cover all work performed and materials
supplied (including equipment and fixtures) for the Hotel by that contractor,
supplier, subcontractor, mechanic or materialman through the date covered by the
current reimbursement request.
(d) Partial Completion. If (i) the time required to complete a
Replacement exceeds three months, (ii) the contractor performing such
Replacement requires periodic payments pursuant to the terms of a written
contract, (iii) Lender has approved in writing in advance such periodic
payments, and (iv) the cost of the portion of the work completed under such
contract exceeds $10,000, a request for reimbursement from the Replacement
Reserve may be made after completion of a portion of the work under such
contract, provided (A) such contract requires payment upon completion of such
portion of the work, (B) the materials for which the request is made are on site
at the Hotel and are properly secured or have been installed in the Hotel, (C)
all other conditions in this Agreement for disbursement have been satisfied, (D)
funds remaining in the Replacement Reserve are, in Lender's reasonable judgment,
sufficient to complete the portion of such Replacements to be completed during
the term of this Agreement, and (E) each contractor or subcontractor receiving
payments under such contract shall provide a waiver of lien with respect to
amounts which have been paid to that contractor or subcontractor.
(e) Number of Requests. Borrower shall not make a request for
disbursement from the Replacement Reserve more frequently than once in any
calendar month and, except in connection with the final disbursement, the total
cost of all Replacements in any request shall not be less than $10,000.
Section 4. PERFORMANCE OF REPLACEMENTS.
(a) Workmanlike Completion. Borrower shall make Replacements when
required in order to keep the Hotel in good order and repair and in good
marketable condition, and to keep the Hotel or any portion thereof from
deteriorating in any material respects. Borrower shall complete all Replacements
in a good and workmanlike manner as soon as practicable following the
commencement of making each such Replacement.
(b) Contracts. Lender reserves the right, at its option, to approve
all contracts or work orders with materialmen, mechanics, suppliers,
subcontractors, contractors or other parties providing labor or materials in
connection with the Replacements which requires a payment in the aggregate of
greater than $75,000. Lender's consent to any such item shall not be
unreasonably withheld. If Borrower shall submit a written request for approval
and such request shall state on the face thereof in capital letters the Legend
(defined below), then Lender's failure to respond to such request within ten
(10) days following
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Lender's actual receipt thereof shall be deemed an approval of the matter
requested therein. The "Legend" shall mean the following: LENDER'S FAILURE TO
RESPOND TO THIS REQUEST WITHIN TEN (10) DAYS FOLLOWING LENDER'S ACTUAL RECEIPT
HEREOF SHALL BE DEEMED TO BE AN APPROVAL OF THE MATTERS SET FORTH HEREIN. Upon
Lender's request, Borrower shall assign its rights under any contract or
subcontract to Lender.
(c) Lender's Right to Complete Replacements. In the event Lender
determines in its reasonable discretion that any Replacement is not being
performed in a workmanlike or timely manner or that any Replacement has not been
completed in a workmanlike or timely manner, and Borrower does not cure such
matter within the time periods provided in Section 5(a) below, Lender shall have
the option to withhold disbursement for such unsatisfactory Replacement and to
proceed under existing contracts or to contract with third parties to complete
such Replacement and to apply the Replacement Reserve Fund toward the labor and
materials necessary to complete such Replacement, and to exercise any and all
other remedies available to Lender upon an Event of Default.
(d) Entry onto Property. In order to facilitate Lender's completion or
making of the Replacements pursuant to Section 4(c) above, Borrower grants
Lender the right to enter onto the Hotel following an uncured default hereunder
and perform any and all work and labor necessary to complete or make the
Replacements and/or employ watchmen to protect the Hotel from damage. Borrower
shall have the right to have Borrower's representative accompany Lender and its
representatives in connection with any of the foregoing; provided, however, that
the failure of Borrower's representative to accompany Lender or Lender's
representatives shall not negate or diminish Lender's rights set forth in the
preceding sentence. All sums so expended by Lender (other than from the
Replacement Reserve) shall be deemed to have been advanced to Borrower under the
Reimbursement Agreement to Borrower and secured by the Loan Documents. For this
purpose, Borrower constitutes and appoints Lender its true and lawful
attorney-in-fact with full power of substitution to complete or undertake the
Replacements in the name of Borrower. Such power of attorney shall be deemed to
be a power coupled with an interest and cannot be revoked except upon the
termination of this Agreement. Borrower empowers said attorney-in-fact as
follows: (i) to use any funds in the Replacement Reserve for the purpose of
making or completing the Replacements; (ii) to make such additions, changes and
corrections to the Replacements as shall be necessary or desirable to complete
the Replacements; (iii) to employ such contractors, subcontractors, agents,
architects and inspectors as shall be required for such purposes; (iv) to pay,
settle or compromise all existing bills and claims which are or may become liens
against the Hotel, or as may be necessary or desirable for the completion of the
Replacements, or for clearance of title; (v) to execute all applications and
certificates in the name of Borrower which may be required by any of the
contract documents relating to the Replacements; (vi) in its reasonable
discretion, to prosecute and defend all actions or proceedings in connection
with the
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Replacements or any matters related thereto and (vii) to do any and every act
which Borrower might do in its own behalf to fulfill the terms of this
Agreement.
(e) No Obligation of Lender. Nothing in this Section 4 shall: (i) make
Lender responsible for making or completing the Replacements; (ii) require
Lender to expend funds in addition to the Replacement Reserve Fund to make or
complete any Replacement; (iii) obligate Lender to proceed with the
Replacements; or (iv) obligate Lender to demand from Borrower additional sums to
make or complete any Replacement.
(f) Inspections.
(i) Borrower shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect or
inspector) or third parties making Replacements pursuant to this Section 4 to
enter onto the Hotel during normal business hours upon reasonable notice to
Borrower and (subject to the rights of any guests or tenants of the Hotel, if
any, under their respective leases or concession agreements) to inspect the
progress of any Replacements and all materials being used in connection
therewith, to examine all plans and shop drawings relating to such Replacements
which are or may be kept at the Hotel, and to complete any Replacements made
pursuant to this Section 4. Borrower shall have the right to have Borrower's
representative accompany Lender or its representatives in connection with any of
the foregoing, provided, however, that the failure of Borrower's representative
to accompany Lender or Lender's representatives shall not negate or diminish
Lender's rights set forth in the preceding sentence. Borrower shall use its best
efforts to cause all contractors and subcontractors to cooperate with Lender or
Lender's representatives or such other persons described above in connection
with inspections described in this Section 4(f) or the completion of
Replacements pursuant to this Section 4.
(ii) Lender may require an inspection of the Hotel at Borrower's
expense prior to making a disbursement from the Replacement Reserve in order to
verify completion of the Replacements for which reimbursement is sought. Lender
may require that such inspection be conducted by an appropriate independent
qualified professional selected by Lender and/or may require a copy of a
certificate of completion by an independent qualified professional reasonably
acceptable to Lender prior to the disbursement of any amounts from the
Replacement Reserve. Borrower shall pay the expense of the inspection as
required hereunder, whether such inspection is conducted by Lender or by an
independent qualified professional.
(g) Lien-Free Completion.
(i) The Replacements and all materials, equipment, fixtures, or
any other item comprising a part of any Replacement shall be constructed,
installed or
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completed, as applicable, free and clear of all mechanic's, materialman's or
other Liens (except for Permitted Encumbrances).
(ii) Lender may require Borrower to provide Lender with a search
of title to the Hotel effective to the date of the disbursement, which search
shows that no mechanic's or materialmen's liens or other liens of any nature
have been placed against the Hotel or any portion thereof since the date of
recordation of the Mortgage and that title to the Hotel is free and clear of all
Liens (other than the lien of the Mortgage and any other Permitted
Encumbrances).
(h) Compliance with Laws. All Replacements shall comply with all Legal
Requirements and applicable insurance requirements, including, without
limitation, applicable building codes, special use permits, environmental
regulations and requirements of insurance underwriters.
(i) Insurance Requirements. In addition to any insurance required
under the Loan Documents, Borrower shall provide or cause to be provided
workmen's compensation insurance, builder's risk, and public liability insurance
and other insurance to the extent required under applicable law in connection
with a particular Replacement. All such policies shall be in form and amount
reasonably satisfactory to Lender. All such policies which can be endorsed with
standard mortgagee clauses making loss payable to Lender or its assigns shall be
so endorsed. Certified copies of such policies shall be delivered to Lender.
Section 5. DEFAULT.
(a) Default Under this Agreement. Borrower shall be in default under
this Agreement if (A) it fails to make any Additional Deposit or other payment
required hereunder when due, or (B) it fails to comply with any provision of
this Agreement and such failure is not cured within ten (10) calendar days after
notice from Lender. Borrower understands that a default under this Agreement
shall be deemed to be a default under the terms of the Reimbursement Agreement,
the Modification Agreement and the other Loan Documents, and that in addition to
the remedies specified in this Agreement, Lender shall be able to exercise all
of its rights and remedies under the Reimbursement Agreement, the Modification
Agreement, and the other Loan Documents upon a default. If a default occurs
under the Reimbursement Agreement, the Modification Agreement, or any of the
other Loan Documents, such event shall be deemed a default hereunder and Lender
may at its option hold and apply the funds in the Replacement Reserve as
provided in Section 5(b) hereof.
(b) Application of Replacement Reserve Upon Default. The funds held in
the Replacement Reserve are pledged as additional security for the Reimbursement
Obligations and all other indebtedness and other obligations of Borrower under
the
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Reimbursement Agreement and each of the other Loan Documents (the
"Obligations"). If Borrower defaults on any payment due under the Reimbursement
Agreement or any of the other Loan Documents, or if Borrower defaults under any
other provision in the Reimbursement Agreement, the Modification Agreement or
under any provision in the Security Instruments, any of the other Loan Documents
or this Agreement, then, upon any such default, Borrower shall not be entitled
to receive any funds from the Replacement Reserve and Lender may, in its sole
and absolute discretion, use the Replacement Reserve Fund (or any portion
thereof) for any purpose permitted under the Loan Documents, including, but not
limited to (i) completion of the Replacements as provided in Section 4 hereof,
(ii) for any other repair or replacement to the Hotel, (iii) toward payment of
the Obligations; provided, however, that such application of funds shall not
cure or be deemed to cure any default; (iv) reimbursement of Lender for all
losses and expenses (including, but not limited to, reasonable legal fees)
suffered or incurred by Lender as a result of such default; (v) payment of any
amount expended in exercising all rights and remedies available to Lender at law
or in equity or under this Agreement or under the Reimbursement Agreement, the
Security Instruments or any of the other Loan Documents, all in such order,
proportion and priority as Lender may determine in its sole discretion. Lender's
right to withdraw and apply the Replacement Reserve Fund shall be in addition to
all other rights and remedies provided to Lender under this Agreement, the
Reimbursement Agreement, the Modification Agreement, the other Loan Documents,
and at law or in equity.
(c) Insufficient Funds in the Replacement Reserve. The insufficiency
of any balance in the Replacement Reserve shall not relieve Borrower from its
obligations in the Reimbursement Agreement, the other Loan Documents and this
Agreement.
Section 6. WAIVERS
(a) Waiver of Counterclaim. Borrower hereby waives the right to assert
a counterclaim, other than a mandatory or compulsory counterclaim, in any action
or proceeding brought against it by Lender arising out of or in any way
connected with this Agreement, the Reimbursement Agreement, the Modification
Agreement, any of the other Loan Documents or the Obligations.
(b) Waiver of Notice. To the extent permitted by applicable law,
Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Agreement specifically and
expressly provides for the giving of notice by Lender to Borrower and except
with respect to matters for which Lender is required by applicable law to give
notice, and Borrower hereby expressly waives the right to receive any notice
from Lender with respect to any matter for which this Agreement does not
specifically and expressly provide for the giving of notice by Lender to
Borrower.
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(c) Waiver of Statute of Limitations. Borrower hereby expressly waives
and releases, to the fullest extent permitted by law, the pleading of any
statute of limitations as a defense to any and all of its obligations hereunder.
(d) Waiver of Trial By Jury. BORROWER AND LENDER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY 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 OR ANY OTHER LOAN DOCUMENT, OR IN RESPECT OF ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY
OR ARISING OUT OF ANY EXERCISE BY ANY PARTY OF ITS RESPECTIVE RIGHTS UNDER THE
LOAN DOCUMENTS OR IN ANY WAY RELATING TO THE OBLIGATIONS OR THE HOTEL
(INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO ANY ACTION TO RESCIND OR CANCEL
THIS AGREEMENT, AND WITH RESPECT TO ANY CLAIM OR DEFENSE ASSERTING THAT THIS
AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS
WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT FOR LENDER TO ACCEPT THIS
AGREEMENT.
Section 7. MISCELLANEOUS PROVISIONS
(a) Notices. All notices or other written communications hereunder
shall be given and become effective as provided in the Reimbursement Agreement.
(b) Choice of Law. This Agreement shall be governed, construed,
applied and enforced in accordance with the laws of the Commonwealth of Puerto
Rico and the applicable laws of the United States of America, without regard to
the principles of conflicts of laws.
(c) Provisions Subject to Applicable Law. All rights, powers and
remedies provided in this Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provisions of law and are
intended to be limited to the extent necessary so that they will not render this
Agreement invalid or unenforceable under the provisions of any applicable law.
(d) Inapplicable Provisions. If any term, covenant or condition of
this Agreement or any application thereof is held to be invalid, illegal or
unenforceable in any respect, this Agreement shall be construed without such
provision.
(e) Indemnification. Borrower agrees to indemnify Lender and to hold
Lender harmless from and against any and all actions, suits, claims, demands,
liabilities, losses, damages, obligations and costs and expenses (including
litigation costs and
9
reasonable attorneys' fees and expenses) arising from or in any way connected
with the performance of the Replacements or the holding, investing or disbursing
of the Replacement Reserve or the Replacement Reserve Fund except for any
actions, suits, claims, demands, liabilities, losses, damages, obligations and
costs and expenses caused by the gross negligence of Lender.
(f) Costs. Wherever it is provided for herein that Borrower pay any
costs and expenses, such costs and expenses shall include, but not be limited
to, all reasonable legal fees and disbursements of Lender (whether of retained
firms, the reimbursement for the expenses of in-house staff or otherwise).
Borrower hereby assigns to Lender all rights and claims in connection with the
Replacements that Borrower may have against all persons or entities supplying
labor or materials.
(g) Headings, Etc. The headings and captions of various Sections of
this Agreement are for convenience of reference only and are not to be construed
as defining or limiting in any way, the scope or intent of the provisions
hereof.
(h) No Oral Change. This Agreement, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated orally
or by any act or failure to act on the part of Borrower or Lender, but only by
an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
(i) Liability. If Borrower consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. This Agreement shall be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns forever.
(j) Duplicate Originals; Counterparts. This Agreement may be executed
in any number of duplicate originals and each duplicate original shall be deemed
to be an original. This Agreement may be executed in several counterparts, each
of which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Agreement. The failure of any party hereto to
execute this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.
(k) Number and Gender. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.
(l) Borrower's Records. Borrower shall furnish such financial
statements, invoices, records, papers and documents relating to the Hotel as
Lender may reasonably
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require from time to time to make the determinations permitted or required to be
made by Lender under this Agreement.
(m) No Third Party Beneficiary. This Agreement is intended solely for
the benefit of Borrower and Lender and their respective successors and assigns,
and no third party shall have any rights or interest in the Replacement Reserve,
the Replacement Reserve Fund, this Agreement, the Reimbursement Agreement or any
of the other Loan Documents. Nothing contained in this Agreement shall be deemed
or construed to create an obligation on the part of Lender to any third party,
nor shall any third party have a right to enforce against Lender any right that
Borrower may have under this Agreement.
(n) No Agency or Partnership. Nothing contained in this Agreement
shall constitute Lender as a joint venturer, partner, agent, tenant-in-common or
joint tenant of Borrower, or render Lender liable for any debts, obligations,
acts, omissions, representations, or contracts of Borrower.
(o) Termination of Replacement Reserve. After payment in full of the
Reimbursement Obligations and all other Obligations and the release by Lender of
the lien of the Security Instruments, Lender shall disburse to Borrower all
amounts remaining in the Replacement Reserve.
(p) Enforcement of Agreement. This Agreement is executed by Borrower
and Lender for the benefit of Lender and its successors and assigns.
(q) Sole Discretion of Lender. Wherever pursuant to this Agreement (i)
Lender exercises any right given to it to approve or disapprove, (ii) any
arrangement or term is to be satisfactory to Lender, or (iii) any other decision
or determination is to be made by Lender, the decision of Lender to approve or
disapprove all decisions that arrangements or terms are satisfactory or not
satisfactory, and all other decisions and determinations made by Lender, shall
be in the sole and absolute discretion of Lender and shall be final and
conclusive, except as may be otherwise expressly and specifically provided
herein.
(r) Completion of Replacements. Lender's approval of any plans for any
Replacement, release of funds from the Replacement Reserve, inspection of the
Hotel by Lender or Lender's agents, or other acknowledgment of completion of any
Replacement in a manner satisfactory to Lender shall not be deemed an
acknowledgment or warranty to any person that the Replacement has been completed
in accordance with applicable laws.
(s) Borrower's Other Obligations. Nothing contained in this Agreement
shall in any manner whatsoever alter, impair or affect the obligations of
Borrower, or relieve Borrower of any of its obligations to make payments and
perform all of its other obligations under the Reimbursement Agreement, the
Modification Agreement or any of the other Loan
11
Documents, except to the extent that payments required under the Loan Documents
are actually made pursuant to this Agreement.
(t) Remedies Cumulative. None of the rights and remedies herein
confirmed upon or reserved to Lender under this Agreement is intended to be
exclusive of any other rights or remedies conferred upon or reserved to Lender
under this Agreement or under the Reimbursement Agreement, the Modification
Agreement or any of the other Loan Documents or available to Lender at law or in
equity, and each and every right or remedy shall be cumulative and concurrent,
and may be enforced separately, successively or together, and may be exercised
from time to time as often as may be deemed necessary to Lender.
(u) Definitions. The word "Lender" as used herein includes Lender and
any and all of its agents. All capitalized words and phrases not otherwise
defined herein shall have the meanings ascribed to them in the Reimbursement
Agreement, as modified by the Modification Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF the undersigned have executed this Agreement as of
the date and year first written above.
BORROWER:
--------
EL CONQUISTADOR PARTNERSHIP L.P., a
Delaware limited partnership
By: Conquistador Holding, Inc., a Delaware
corporation, its general partner
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Vice President
LENDER:
------
CITICORP REAL ESTATE, INC.,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Xxxxxxx Xxxxxxx
Attorney-in-Fact
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