FIRST AMENDMENT TO
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
This FIRST AMENDMENT TO LETTER OF CREDIT AND REIMBURSEMENT
AGREEMENT (this AMENDMENT) dated as of May 5, 1992 between EL CONQUISTADOR
PARTNERSHIP, L.P., a Delaware limited partnership (the COMPANY), WKA EL CON
ASSOCIATES, a New York general partnership (WKA), KUMAGAI CARIBBEAN, INC., a
Texas corporation (KGC), and THE MITSUBISHI BANK, LIMITED, a Japanese banking
corporation acting through its New York Branch (the BANK).
W I T N E S S E T H :
WHEREAS, the Company and the Bank entered into that certain
Letter of Credit and Reimbursement Agreement dated as of February 7, 1991 (the
LC AGREEMENT; all capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the LC Agreement); and
WHEREAS, the LC Agreement required the Initial Disbursement to
occur on or prior to February 7, 1992; and
WHEREAS, the conditions to the Initial Disbursement enumerated
in the LC Agreement were not fulfilled in all respects by February 7, 1992; and
WHEREAS, the Bank has determined, with the concurrence of the
Company, that the aggregate amount of undisbursed Bond Proceeds is insufficient
to pay the aggregate of the cost of completing the Construction of the
Improvements and the other costs contemplated in the Budget, and that the amount
required to eliminate such insufficiency is $24,000,000; and
WHEREAS, pursuant to Paragraph 9(k) of the LC Agreement, the
Bank has
required, as a condition to the Initial Disbursement, that the Company and/or
its partners deposit with the Bank the amount of $24,000,000 (the Loan Balance
Amount); and
WHEREAS, a portion of the Loan Balance Amount represents
amounts previously expended by the Borrower and with respect to which the
Borrower is entitled to reimbursement; and
WHEREAS, WKA and KGC have determined to each provide one-half
of the Loan Balance Amount as equity and/or a loan to the Company; and
WHEREAS, in order to finance a portion of such contributions,
WKA and KGC shall together borrow the amount of $8,000,000 from GDB on the date
hereof, pursuant to a Credit Facility Agreement dated the date hereof among GDB,
WKA and KGC (the GDB Additional Loan Agreement); and
WHEREAS, in consideration of the Bank's agreement to allow the
Initial Disbursement to occur after February 7, 1992, the Company has agreed to
certain changes in the terms and conditions to the LC Agreement.
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The following terms defined in the LC Agreement shall be
changed to mean the following:
COMPANY PARTNERSHIP AGREEMENT shall mean that certain Venture
Agreement dated January 12, 1990 between KGC and WKA, as amended by that certain
Amendment Agreement dated April 30, 1992 (the Amendment to Venture Agreement).
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COMPLETION DATE shall mean October 12, 1993.
GUARANTIES shall mean the (i) Environmental Indemnity, the
Completion Guaranty, the Secondary Completion Guaranty, and (ii) the Completion
Guaranty of even date herewith by WKA to the Company.
GUARANTORS shall mean KIUSA, KGCC, KGC, Williams and WKA.
INITIAL DISBURSEMENT shall mean the initial disbursement by
the Bank of the funds held by the Bank pursuant to Section 9(k) of the LC
Agreement.
SUBSTANTIAL COMPLETION shall mean the occurrence of all of the
following events: (i) the completion of the Construction of the Improvements
(excluding punchlist items) in accordance with all Legal Requirements and
substantially in accordance with the Plans as to any aspect of Construction and
the issuance of applicable use or occupancy permits therefor satisfactory to the
Bank; (ii) the delivery to the Bank of certificates, in form and content
satisfactory to the Bank, from the Company, the Architects and the Bank's
Consultant to the effect that all of the work required to be performed
substantially to complete the Improvements in accordance with all Legal
Requirements and in accordance with the Plans has been performed; and (iii) the
Commencement Date under the Management Agreement.
2. The Annual Letter of Credit Fee shall be increased by .20%
per annum through the Date of Substantial Completion and by .30% per annum
thereafter, so that the percentages 1.25%, 1.05% and .90% which appear in
Section 2(b) of the LC Agreement shall be changed to 1.45%, 1.35% and 1.20%,
respectively.
3. The Bank consents to the execution and delivery of the
Amendment to Venture Agreement. Accordingly, the first three sentences of
Section 7(ii) of the LC Agreement
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are amended in their entirety as follows:
(ii) Deficiency Loans. Any funds advanced to the
Company as Deficiency Loans (as defined in the Company Partnership
Agreement), whether or not at the direction of the Bank, shall be
applied only to the operating costs or other fees and expenses related
to the operation of the Project; provided, however, that the foregoing
restriction shall be of no effect from and after the Coverage Date.
After the Date of Substantial Completion and until the Coverage Date,
the Bank will have the right to cause the Company, acting through WKA,
(A) at such times as the Bank shall determine in the reasonable
exercise of its judgment that an Operating Deficit exists with respect
to any month, to require the General Partners to make Deficiency Loans
in amounts of up to $14,000,000 in the aggregate (less any such
Deficiency Loans for such purpose which may have previously been
voluntarily advanced), and (B) to apply such funds on account of such
Operating Deficits. The Bank shall have no right to cause Deficiency
Loans to be made to pay principal under the Bonds, the Loan Agreement
or hereunder. Notwithstanding anything in the Company Partnership
Agreement to the contrary, neither the Deficiency Loans nor the
operating reserve line item of the Budget may be used for the purpose
of paying principal or interest under the GDB Additional Loan.
4. From and after the date on which Deficiency Loans in the
aggregate amount of $14,000,000 have been made and applied to the payment of
Operating Deficits and until the Coverage Date, if the Bank shall determine in
the reasonable exercise of its judgment that further Operating Deficits (which,
for the purposes of this Paragraph 4, shall not include debt service on the GDB
Loan or any Special Loans (as defined in the Company Partnership
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Agreement)) exist with respect to any month, the Bank may require (i) each of
WKA and KGC to make additional loans to the Company in the amount of one-half of
such Operating Deficits, and (ii) the Company to apply such funds on account of
such Operating Deficits; provided, however, that the obligation of each of WKA
and KGC to make such additional loans shall be limited to $3,000,000 in the
aggregate (so that the total amount of such additional loans required to be made
by the Bank shall not exceed $6,000,000 in the aggregate). If the Bank requires
any such loans to be made, the Company hereby irrevocably directs WKA and KGC to
pay the proceeds of such loans at the direction of the Bank for application to
such Operating Deficits. The failure by WKA and/or KGC to make any such
additional loans shall constitute a default under the LC Agreement. The
obligations of WKA under this Paragraph 4 shall be severally guarantied by WMS
Industries, Hugh Andrews and Burton I. Koffman and Richard E. Koffman (the
ADDITIONAL LOAN GUARANTORS) pursuant to guaranties to be executed
contemporaneously herewith. It shall be deemed an Event of Default if (i) any of
the events described in clauses (v), (vi), (vii) and (viii) of Section 12(a) of
the LC Agreement shall occur with respect to any of the Additional Loan
Guarantors, and (ii) the Company fails to provide the Bank, within 60 days after
the event in question, with reasonably acceptable collateral or guaranties to
replace the guaranties of the Additional Loan Guarantors with respect to whom
such event occurred.
5. Simultaneously herewith, GDB shall fully advance the GDB
Additional Loan, and WKA and KGC shall deposit the Loan Balance Amount with the
Bank in the following manner: $3,538,705.36, representing amounts previously
expended by the Borrower on account of Total Project Costs, shall be paid to or
at the Borrower's direction; $3,560,966.34, representing the remaining portion
of the Initial Disbursement, shall be disbursed
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in accordance with the Request for Disbursement approved by the Bank; and the
balance of the Loan Balance Amount $16,900,298.30) shall be paid to the Bank by
wire transfer. The Bank shall hold the Loan Balance Amount in an account at the
Bank, which account shall bear interest at a fluctuating rate per annum equal to
the Eurodollar Time Deposit Rate. The Line Item for Contingency shall be
increased by the amount of any interest earned on the Loan Balance Amount. All
such interest shall be added to and become part of the Loan Balance Amount, and,
to the extent not disbursed to pay Project Costs, shall be released to WKA and
KGC upon Substantial Completion of the Project. The Loan Balance Amount may be
commingled with the Bank's general funds. Notwithstanding anything in Section
9(k) of the LC Agreement to the contrary, the Bank is hereby irrevocably
authorized and directed by the Company, WKA and KGC to apply the Loan Balance
Amount to the costs of the first Disbursements for Hard Costs and Soft Costs
approved by the Bank, without regard to the particular Line Item(s) to which
such costs relate, before the Bank shall direct and authorize the Trustee to
disburse proceeds of the Loan to pay such costs. Upon each such application of a
portion of the Loan Balance Amount, a corresponding amount shall be deemed to
have been loaned by WKA and KGC to the Company. Unless and until the Loan
Balance Amount is so applied, the Loan Balance Amount shall constitute
additional security for WKA's and KGC's obligations under their respective
Completion Guaranties and for the Company's performance of its obligations
pursuant to this Agreement (a security interest therein being hereby created).
The parties agree that the first $8,000,000 of the Loan Balance Amount disbursed
by the Bank shall be deemed to be the proceeds of the loan from WKA and KGC to
the Company.
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6. The Bank confirms that the Initial Disbursement is taking
place on the date hereof, notwithstanding that the Initial Disbursement is being
funded with a portion of the Loan Balance Amount rather than with Bond Proceeds.
7. The Company shall agree to promptly recommence construction
of the Project, so that the following construction activities will commence on
or before the dates listed below:
- Begin wall footings for the Cliftop remodeling -- May
30, 1992.
- Begin Elect/Mech. underground for Cliftop new
building -- May 30, 1992.
- Begin mobilization for Convention Center -- May 15,
1992.
- Begin footing excavation for Convention Center -- May
30, 1992.
- Begin mobilization for Hotel core/casino -- May 15,
1992.
- Begin footing for Panoramic Elevator at the Hotel
core/casino -- May 30, 1992.
- Begin footing excavation for Harborside -- June 30,
1992.
Failure to comply with the foregoing requirements shall constitute an Event
of Default under the LC Agreement.
8. The Bank confirms that it has approved the execution by the
Company of the Trade Contracts described on Schedule A annexed hereto in the
form presented by the Company to the Bank's Consultant.
9. The following is added to Paragraph 12(a) of the LC
Agreement:
(xxiii) if any Event of Default relating to the Project
shall occur under the
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GDB Loan Agreement or the Additional GDB Loan
Agreement.
10. WKA and KGC agree to use their respective best efforts to
assist the Bank in obtaining participants for the Bank's interest in the LC
Agreement and the Letter of Credit.
Except as amended hereby, the LC Agreement remains in full
force and effect.
This Agreement may be executed in one or more counterparts.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective duly authorized
officers as of the day and year first above written.
EL CONQUISTADOR PARTNERSHIP L.P.
By: KUMAGAI CARIBBEAN, INC.
By: /s/
____________________________
Shunsuke Nakane, President
By: WKA EL CON ASSOCIATES
By: /s/
____________________________
Hugh A. Andrews,
Authorized Signatory
WKA EL CON ASSOCIATES
By: /s/
____________________________
Hugh A. Andrews,
Authorized Signatory
KUMAGAI CARIBBEAN, INC.
By: /s/
____________________________
Shunsuke Nakane, President
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THE MITSUBISHI BANK, LIMITED,
acting through its New York Branch
By: _____________________________
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SCHEDULE A
EL CONQUISTADOR PARTNERSHIP L.P. TRADE CONTRACTS
1. Purchase Order #1103 dated February 3, 1992 to Stelko Electrical
Products, Co. for purchase of Switchgear Units and 38KV Substation for
$161,000.
2. Purchase Order #1109 dated February 4, 1992 to Westinghouse Electric
Supply, Co. for purchase of Units Substations for $468,000.
3. Purchase Order #1108 dated February 2, 1992 to Zenruss International
for purchase of Cooling Towers for $148,000.
4. Purchase Order #1111 dated February 3, 1992 to Trane Export Inc. for
purchase of AHU,VAV Boxes for $1,543,000.
5. Purchase Order #1106 dated February 3, 1992 to Techinical Distributors,
Inc. for purchase of Pumps for $68,435.
6. Purchase Order #1125 dated February 3, 1992 to United Equipment Corp.
for purchase of Pressure Reducing Valves for $12,200.
7. Purchase Order #1122 dated February 3, 1992 to SyncroFlow c/o United
Equipment Corp. for purchase of Water Booster Systems and Well Water
Pumps for $87,300.
8. Purchase Order #1123 dated February 3, 1992 to Aurora Pump c/o United
Equipment Corp. for purchase of Fire Pump for $40,500.
9. Trade Contract of Desarrollos Metropolitanos, S.E. for Convention
Center, Hotel Core and Casino, and Seaview Building, dated February 9,
1992, for $37,944,600.
10. Trade Contract of Bird Construction Co. Inc. for Clifftop Buildings and
Main Pool, dated February 9, 1992, for $18,050,000.
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11. Trade Contract of Redondo Construction Corp. for WWTF, dated February
10, 1992, for $1,925,000.
12. Trade Contract of Von Roll Transport Systems Inc. for Funicular, dated
February 1, 1992, for $1,708,500.
13. Trade contract of Central Florida Turf Inc. for Golf Course, dated
_________________, 199__, for $2,310,660.
14. Trade Contract of Dover Elevator Company for Elevator/Escalator, dated
February 7, 1992 for $2,109,213.
15. Trade Contract of Redondo Construction Corp. for General Sitework and
Infrastructure, dated August 22, 1991, for $2,163,800, and the
following change orders:
a) Pump House 1 & 3, for $35,000.
b) Water lines to Core Hotel and Casino, for $13,000.
c) CO-01/05/08 Lagoon Surcharge, for $93,052.
d) CO-02 Golf Course - grading, for $15,860.
e) CO-03 Core Hotel and Casino - access to Panoramic, for $1,000.
f) C04 Core Hotel and Casino - Demolition, for $3,500.
g) CO-06 Sitework, for $11,245.
h) CO-10 Earthwork - Adj., for $4,842.
16. Trade Contract of Bermudez & Longo, S.E. for Infra (Elec), dated
September 3, 1991, for $885,000.
17. Trade Contract of Hoover Pumping Systems for Fire Pumps, dated February
4, 1992, for $228,000.
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