EXHIBIT 10.14
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SECOND MODIFICATION TO LOAN AGREEMENT
among
ITT CORPORATION,
SLT REALTY LIMITED PARTNERSHIP,
STARWOOD HOTELS & RESORTS
and
STARWOOD HOTELS & RESORTS HOLDINGS, INC.
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Dated as of December 30, 1999
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(Original Principal Amount of up to $3,282,000,000)
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SECOND MODIFICATION TO LOAN AGREEMENT, dated as of December 30, 1999
("Second Modification"), among ITT CORPORATION, a Nevada Corporation (the
'"Borrower" or "ITT"), successor-in-interest to Starwood Hotels & Resorts
Worldwide, Inc., a Maryland corporation (the "Corporation"). SLT REALTY LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Lender" or "SLT Realty"),
STARWOOD HOTELS & RESORTS, a Maryland real estate investment trust (the
"Trust"), and STARWOOD HOTELS & RESORTS HOLDINGS, INC., an Arizona corporation
("Starwood Holdings"). Unless otherwise defined herein, all capitalized terms
used herein shall have the respective meanings provided such terms in the Loan
Agreement, as amended, referred to below.
WITNESSETH:
WHEREAS, the Trust previously made a loan to the Corporation in the
maximum principal amount of up to $3,282,000,000 (the "Loan") pursuant to that
certain Loan Agreement, dated as of February 23, 1998 (as amended, supplemented
or otherwise modified from time to time, the "Original Loan Agreement"); as
assigned by the Trust to the Lender pursuant to that certain General Assignment
dated as of February 23, 1998 and as evidenced by that certain Promissory Note,
dated as of February 23, 1998 (the "Original Note");
WHEREAS, the Corporation assigned its existing rights and
obligations under the Original Loan Agreement to the Borrower pursuant to that
certain Assignment and Assumption Agreement dated as of December 17, 1998;
WHEREAS, in connection with the transactions contemplated under a
certain Loan Agreement dated as of January 27, 1999 (as amended from time to
time, the "CMBS Loan Agreement"), Borrower, the Sheraton Phoenician Corporation
and Lender entered into a certain Agreement of Severance of Note and
Modification of Deed of Trust, dated as of January 27, 1999 (the "Severance
Agreement"), pursuant to which the parties thereto agreed (i) to separate the
Original Note into two notes, one of which evidenced a portion of the
outstanding principal balance of the Original Note, with interest thereon, equal
to $2,489,467,038.25 (the "Mortgage Note") and the other of which evidenced the
remaining portion of the outstanding principal balance of the Original Note,
with interest thereon, equal to $210,000,000 (the "Substitute Note
(Phoenician)") and (ii) to amend a certain Deed of Trust, Security Agreement and
Financing Statement dated as of February 23, 1998 (the "Phoenician Deed of
Trust") to secure only the indebtedness evidenced by the Substitute Note
(Phoenician) (all of the foregoing being herein referred to as the "Phoenician
Note Transaction");
WHEREAS, in connection with the transactions contemplated under the
CMBS Loan Agreement and the Phoenician Note Transaction, the parties thereto
agreed to modify the Original Loan Agreement by First Modification to Loan
Agreement dated as of January 27, 1999 (as modified, the "Loan Agreement") to
provide for, among other things, (i) the severance of the Original Note and the
modification of the Phoenician Deed of Trust, (ii) the extension of the Final
Maturity Date of the Loan to February 23, 2014 and, additionally, the further
extension of the Final Maturity Date of the Loan upon any extension of the
maturity date of the loan advanced
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under the CMBS Loan Agreement, and (iii) the amendment of certain definitions
under the Loan Agreement;
WHEREAS, on or about April 27, 1999, the Corporation, ITT Sheraton
Corporation, Starwood Canada Corp. ("Starwood Canada"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Sheraton Desert Inn Corporation, Sheraton Tunica Corporation
("Tunica") and Park Place Entertainment Corporation ("Park Place") entered into
that certain Stock Purchase Agreement (as amended or modified from time to time,
the "Caesars Stock Purchase Agreement"), pursuant to which, inter alia; Park
Place agreed to purchase, and the Corporation and certain Subsidiaries of the
Corporation agreed to sell, (i) all of the outstanding shares of common stock of
each of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Tunica and (ii) all of Starwood Canada's partnership
interests in and notes receivable from Metropolitan Entertainment Group, a
Canadian partnership, which partnership interests represent ninety-five percent
(95%) of the economic ownership interest therein, and (iii) the Halifax Sheraton
Hotel owned by Clocktower Hotel Limited Partnership, in each case, subject to
and in addition to all of the other matters described in the Caesars Stock
Purchase Agreement (all of the foregoing, together with the matters described in
the following paragraphs, being collectively referred to herein as the "▇▇▇▇▇▇▇
▇▇▇▇▇ Transaction");
WHEREAS, certain real property assets relating to the ▇▇▇▇▇▇▇ ▇▇▇▇▇
Transaction (collectively, the "▇▇▇▇▇▇▇ ▇▇▇▇▇ Assets") presently secure the
Mortgage Note, and it is a condition to the consummation of the ▇▇▇▇▇▇▇ ▇▇▇▇▇
Transaction that the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Assets be released from the collateral
security for the Mortgage Note;
WHEREAS, in connection with the release of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Assets,
the Corporation and ITT desire to (i) reduce the outstanding principal balance
of the Mortgage Note by $1,200,000,000.00 (the "Undercollateralized Amount") in
order to prevent the Mortgage Note from being Undercollateralized after the
release of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Assets (the amount of such reduction being referred
to herein as the "Mortgage Reduction Amount"), and (ii) consummate certain other
transactions in connection therewith (all of the foregoing, together with the
next recital, being referred to herein, collectively, as the "Caesars Mortgage
Note Transaction");
WHEREAS, in order to effectuate all of the foregoing, the
Corporation, the Trust, SLT Realty and ITT have agreed pursuant to a certain
Agreement of Severance of Note and Release of Security Instruments dated of even
date herewith, to separate the Mortgage Note into two notes (which after giving
effect to such separation the two notes shall sometimes be referred to herein as
the "New Mortgage Note" and the "Unsecured Note") so that, immediately after
giving effect to such separation, (i) the principal amount of the New Mortgage
Note shall be in an amount equal to the balance of the Mortgage Note prior to
the separation into two new notes, less the Mortgage Reduction Amount, (ii) the
outstanding principal amount of the new Unsecured Note shall be equal to the
Mortgage Reduction Amount, and (iii) the aggregate outstanding principal amount
of both the New Mortgage Note and the new Unsecured Note immediately subsequent
to the consummation of the Caesars Mortgage Note Transaction shall be equal to
the outstanding principal amount of the Mortgage Note immediately prior to the
consummation of the Caesars Mortgage Note Transaction;
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WHEREAS, prior to the consummation of the transactions contemplated
under the Caesars Mortgage Note Transaction, the Mortgage Note was secured by,
inter alia, certain Mortgages (as defined in the Loan Agreement) (other than the
Phoenician Deed of Trust);
WHEREAS, upon completion of the separation of the Mortgage Note into
the New Mortgage Note and the Unsecured Note, (i) the Trust desires to cause
Lender to distribute to the Trust the Unsecured Note and (ii) immediately
thereafter, the Trust desires to distribute the Unsecured Note to Starwood
Holdings; and
WHEREAS, in connection with the transactions contemplated under the
Caesars Mortgage Note Transaction, the parties hereto desire to modify the Loan
Agreement to provide for, among other things, (i) (a) the separation of the
Mortgage Note and (b) the modification of the Mortgages (other than the
Phoenician Deed of Trust) and the discharge and release of the liens of the
Mortgages set forth on Exhibit A hereto from such Mortgages so that the
remaining Mortgages shall secure only the New Mortgage Note and all of the
indebtedness evidenced thereunder, (ii) (a) the assignment of all of Lender's
right, title and interest in the Unsecured Note and all documents and agreements
in connection therewith to the Trust and (b) the subsequent assignment of all of
the Trust's right, title and interest in the Unsecured Note and all documents
and agreements in connection therewith to Starwood Holdings, and the assumption
by Starwood Holdings of all of such right, title and interest and (iii) the
amendment of certain definitions under the Loan Agreement;
NOW, THEREFORE, the parties hereto have agreed as follows:
1. All references to "Note" under the Loan Agreement shall hereby be
modified to include (i) the Substitute Note (Phoenician), (ii) the New Mortgage
Note and (iii) the Unsecured Note.
2. The parties hereto acknowledge and agree that (i) the liens of
the Mortgages set forth on Exhibit A hereto shall be released and discharged
from such Mortgages and (ii) the remaining Mortgages (other than the Phoenician
Deed of Trust) shall secure the outstanding principal balance under the New
Mortgage Note, with interest thereon, equal to $1,289,467,038.25.
3. The parties hereto acknowledge, confirm and agree to (a) the
assignment to the Trust of all of Lender's right, title and interest in the
Unsecured Note and all documents and agreements in connection therewith and (b)
the subsequent assignment by the Trust to Starwood Holdings of all of the
Trust's right, title and interest in the Unsecured Note and all documents and
agreements in connection therewith, and Starwood Holdings hereby assumes all of
the "Lender's" obligations under the Loan Agreement (but only with respect to
any obligations specific to the Unsecured Note).
4. The terms and provisions of this Second Modification shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns.
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5. This Second Modification shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
principles of conflicts of laws.
6. This Second Modification is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Loan Agreement.
7. This Second Modification may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
8. The parties hereto acknowledge and agree that the name "Starwood
Hotels & Resorts" is a designation of the Trust and its trustees (as trustees
but not personally) under a Declaration of Trust dated August 25, 1969, as
amended and restated as of June 6, 1988 and as further amended and restated as
of January 6, 1999, and as the same has been or may be amended from time to time
thereafter, and that the parties hereto shall look solely to the Trust's assets
for the enforcement of any claims against the Trust, as the trustees, officers,
agents and security holders of the Trust assume no personal liability for
obligations entered into on behalf of the Trust, and their respective individual
assets shall not be subject to the claims of any person relating to such
obligations. The foregoing shall govern all direct and indirect obligations of
the Trust under this Second Modification.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Second Modification to be duly executed and delivered as of
the date first above written.
BORROWER:
ITT CORPORATION,
a Nevada corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
LENDER:
SLT REALTY LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Starwood Hotels & Resorts, a Maryland real
estate investment trust, its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
STARWOOD HOTELS & RESORTS HOLDINGS, INC.,
an Arizona corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
STARWOOD HOTELS & RESORTS,
a Maryland real estate investment trust
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Exhibit A
(Released Mortgages)
1. Mortgage between Starwood Hotels & Resorts and Boardwalk Regency Corp.,
Leisure Themes, Maritial Development Corp. and Atlantic HMO, Inc., dated
as of February 23, 1998 and secured by property located at Caesars
Atlantic City, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
2. Deed of Trust between Starwood Hotels & Resorts and Caesars Palace Realty
Corp., dated as of February 23, 1998 and secured by property located at
Caesars Palace, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
3. Deed of Trust between Starwood Hotels & Resorts and Desert Palace, Inc.,
dated as of February 23, 1998 and secured by property located at ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
