EL CONQUISTADOR PARTNERSHIP LP SE, S-11/A, 1999-04-16

EL CONQUISTADOR PARTNERSHIP LP SE
S-11/A, 1999-04-16
REAL ESTATE

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 16, 1999

REGISTRATION NO. 333-65889
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 2
TO
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------

EL CONQUISTADOR PARTNERSHIP L.P., S.E.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS GOVERNING INSTRUMENTS)

------------------------
EL CONQUISTADOR RESORT & COUNTRY CLUB
1000 EL CONQUISTADOR AVENUE
FAJARDO, PUERTO RICO 00738
(787) 863-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
NOEL VERA-RAMIREZ
WYNDHAM RESORTS
6063 EAST ISLA VERDE AVENUE
CAROLINA, PUERTO RICO 00979
(787) 791-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C> <C>
JAIME E. SANTOS, ESQ. JULIO L. AGUIRRE, ESQ. PAMELA E. FLAHERTY, ESQ. SAMUEL T. CESPEDES, JR., ESQ.
PIETRANTONI MENDEZ & ALVAREZ FIDDLER GONZALEZ & RODRIGUEZ, LLP SHACK & SIEGEL, P.C. MCCONNELL VALDES
BANCO POPULAR CENTER, SUITE 1901 254 MUNOZ RIVERA AVENUE 530 FIFTH AVENUE 270 MUNOZ RIVERA AVENUE
SAN JUAN, PUERTO RICO 00918 SAN JUAN, PUERTO RICO 00918 NEW YORK, NEW YORK 10036 SAN JUAN, PUERTO RICO 00918

</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after this Registration Statement becomes
effective.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] _________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _________
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
==================================================================================================================================
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
AMOUNT BEING OFFERING PRICE OFFERING REGISTRATION
TITLE OF SECURITIES BEING REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE(2)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Undivided interests in the Loan Agreement between Puerto
Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority
('AFICA') and Registrant relating to certain AFICA
tourism revenue bonds.................................. $105,200,000 $5,000 $105,200,000 $ 30,946
==================================================================================================================================
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee.

(2) $29,500 of the registration fee was paid with the initial filing on October
20, 1998 at the rates then in effect. $1,112 of the registration fee was
paid with the filing of Amendment No. 1 to the Registration Statement on
December 31, 1998 at the rates presently in effect. $334 of the registration
fee has been paid together with this filing of Amendment No. 2 to the
Registration Statement at the rates presently in effect.

------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================

<PAGE>

<PAGE>
CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
CAPTION IN OFFICIAL STATEMENT AND
ITEM AND CAPTION IN FORM S-11 PROSPECTUS
--------------------------------------------------------------- ------------------------------------------
<C> <S> <C>
1. Forepart of the Registration Statement and Outside Front Cover
Page of Prospectus........................................... Front Cover Page of Registration Statement
and Outside Front Cover Page of Official
Statement and Prospectus
2. Inside Front and Outside Back Cover Pages of Prospectus........ Inside Front Cover Page of Official
Statement and Prospectus and Outside
Back Cover Page of Official Statement
and Prospectus
3. Summary Information, Risk Factors and Ratio of Earnings to
Fixed Charges................................................ Summary, Risk Factors and Selected
Financial Data
4. Determination of Offering Price................................ Not applicable
5. Dilution....................................................... Not applicable
6. Selling Security Holders....................................... Not applicable
7. Plan of Distribution........................................... Underwriting
8. Use of Proceeds................................................ Use of Proceeds
9. Selected Financial Data........................................ Selected Financial Data
10. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................ Management's Discussion and Analysis of
Financial Condition and Results of
Operations
11. General Information as to Registrant........................... El Conquistador Resort & Country Club and
El Conquistador Partnership
12. Policy with Respect to Certain Activities...................... El Conquistador Resort & Country Club, El
Conquistador Partnership and Policy with
Respect to Certain Activities
13. Investment Policies of Registrant.............................. Investment Objectives and Policies
14. Description of Real Estate..................................... El Conquistador Resort & Country Club
15. Operating Data................................................. El Conquistador Resort & Country Club
16. Tax Treatment of Registrant and its Security Holders........... The Bonds and Tax Consequences
17. Market Price of and Dividends on the Registrant's Common Equity
and Related Stockholder Matters.............................. Not applicable
18. Description of Registrant's Securities......................... The Bonds
19. Legal Proceedings.............................................. Legal Proceedings
20. Security Ownership of Certain Beneficial Owners and
Management................................................... Security Ownership of Certain Beneficial
Owners and Management
21. Directors and Executive Officers............................... Management of El Conquistador Partnership
22. Executive Compensation......................................... Management of El Conquistador Partnership
23. Certain Relationships and Related Transactions................. Certain Relationships and Related
Transactions and El Conquistador
Partnership
24. Selection, Management and Custody of Registrant's
Investments.................................................. El Conquistador Resort & Country Club and
El Conquistador Partnership
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
CAPTION IN OFFICIAL STATEMENT AND
ITEM AND CAPTION IN FORM S-11 PROSPECTUS
--------------------------------------------------------------- ------------------------------------------
<C> <S> <C>
25. Policies with Respect to Certain Transactions.................. El Conquistador Partnership and Policies
with Respect to Certain Transactions
26. Limitations of Liability....................................... El Conquistador Partnership
27. Financial Statements and Information........................... Financial Statements
28. Interests of Named Experts and Counsel......................... Not applicable
29. Disclosure of Commission Position on Indemnification for
Securities Act Liabilities................................... Management of El Conquistador Partnership
and Underwriting
30. Quantitative and Qualitative Disclosures about Market Risk..... Not applicable
</TABLE>

<PAGE>

<PAGE>
THE INFORMATION IN THIS OFFICIAL STATEMENT AND PROSPECTUS IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
OFFICIAL STATEMENT AND PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND
IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE OR
JURISDICTION WHERE THE OFFER IS NOT PERMITTED.

PRELIMINARY OFFICIAL STATEMENT AND PROSPECTUS DATED APRIL 16, 1999
SUBJECT TO COMPLETION AND AMENDMENT

$105,200,000
PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL, MEDICAL AND ENVIRONMENTAL
CONTROL FACILITIES FINANCING AUTHORITY TOURISM REVENUE BONDS,
1999 SERIES A (EL CONQUISTADOR RESORT PROJECT)

- --------------------------------------------------------------------------------

TERMS OF SALE

The final pricing of the bonds is shown on the inside cover page of this
official statement and prospectus. AFICA will issue the bonds and lend the
proceeds to El Conquistador Partnership L.P., S.E. Payments of principal and
interest will be made by El Conquistador. While AFICA is the issuer of the
bonds, the bonds do not constitute debt of the government of Puerto Rico. The
offering has been structured this way so that, under most circumstances,
interest on the bonds will be tax free to residents of Puerto Rico. The proceeds
to El Conquistador from this offering will be $ , after paying the
underwriting fees and commissions of $ . The bonds:

Earn interest at fixed rates ranging from % to %, depending on
their maturity date

Are rated 'Baa2' by Moody's Investors Service, Inc.

Earn interest payable monthly on the first day of each month, commencing
, 1999

Are subject to mandatory and optional redemption

Will be secured by a lien on substantially all of El Conquistador's assets

Will be issued in denominations which are multiples of $5,000

TAX RAMIFICATIONS OF THE BONDS AND THE INTEREST ON THE BONDS

The bonds may be exempt from Puerto Rico tax and United States tax if the
purchaser meets the requirements set forth on page 72.

CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 12, INCLUDING:

Possible inability of El Conquistador to pay principal and interest on the
bonds

Lack of asset diversification
of El Conquistador

Current financial difficulties of Patriot/Wyndham, the owners of El
Conquistador

Dependence on operator of the resort

Risks related to the operations of the resort

A glossary of certain defined terms is set forth on page 77.

- --------------------------------------------------------------------------------

EL CONQUISTADOR AND AFICA DO NOT INTEND TO APPLY FOR LISTING OF THE BONDS
ON A SECURITIES EXCHANGE. THERE WILL LIKELY BE NO SECONDARY MARKET FOR THE
BONDS.

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION, INCLUDING THE
COMMISSIONER OF FINANCIAL INSTITUTIONS OF PUERTO RICO, HAS APPROVED THE BONDS OR
PASSED UPON THE ADEQUACY OR ACCURACY OF THIS OFFICIAL STATEMENT AND PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

- --------------------------------------------------------------------------------

CITICORP FINANCIAL SERVICES CORPORATION

, 1999

<PAGE>

$105,200,000
PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL, MEDICAL AND
ENVIRONMENTAL CONTROL FACILITIES FINANCING AUTHORITY
TOURISM REVENUE BONDS, 1999 SERIES A
(EL CONQUISTADOR RESORT PROJECT)

$ Serial Bonds Issued as Follows:

<TABLE>
<CAPTION>
PRINCIPAL INTEREST
AMOUNT RATE MATURITY DATE PRICE
- ---------- -------- --------------------------------- -----

$ Term Bonds, Issued as Follows:

<TABLE>
<CAPTION>
PRINCIPAL INTEREST
AMOUNT RATE MATURITY DATE PRICE
- ---------- -------- --------------------------------- -----
<S> <C> <C> <C>
$ % Term Bonds Due , 2014 100.0%
$ % Term Bonds Due , 2019 100.0%
$ % Term Bonds Due , 2024 100.0%
$ % Term Bonds Due , 2029 100.0%
</TABLE>

<PAGE>

<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY........................................ 3
The Bonds................................. 3
Risk Factors.............................. 4
Tax Consequences.......................... 5
Rating.................................... 5
Underwriter............................... 5
El Conquistador Partnership............... 5
El Conquistador Resort & Country Club..... 6
Management and Marketing of the Resort.... 6
Ownership Structure....................... 7
Continuing Disclosure..................... 8
Effect of Hurricane Georges............... 8
Summary Financial Information............. 9
Disclosure Regarding Forward-Looking
Statements.............................. 11
RISK FACTORS................................... 12
Possible Inability to Make Payments on the
Bonds................................... 12
Hotel Industry Risks...................... 13
Events Not Within the Control of El
Conquistador............................ 14
Real Estate Investment Risks Related to
the Resort.............................. 14
Financial Difficulties of Patriot and
Wyndham International................... 16
Dependence on the Hotel Operator.......... 17
Potential Conflicts of Interest Between El
Conquistador and the Hotel Operator..... 17
Risks of Operating a Hotel under a Brand
Affiliation............................. 18
Potential Loss of Tourism Tax
Exemptions.............................. 18
Gaming Regulations Associated with the
Resort's Casino......................... 18
Dependence on Highly-Skilled Personnel.... 19
Competition Within the Hotel and Casino
Business................................ 19
Reliance on Single Market................. 19
Relationship Between Citicorp Financial
Services and Citicorp Real Estate....... 20
Absence of Secondary Market for the Bonds;
Rating Maintenance for the Bonds........ 20
USE OF PROCEEDS................................ 21
EL CONQUISTADOR RESORT & COUNTRY CLUB.......... 22
General................................... 22
Access.................................... 23
Casino Credit Policy...................... 24
Government Regulation and Licensing....... 24
Seasonality............................... 24
Competition............................... 25
Employees................................. 25
Property.................................. 25
Management and Marketing of the Resort and
Las Casitas Village..................... 26
Golden Door'r' Spa........................ 29
Las Casitas Village Arrangements.......... 29
Further Development of Las Casitas
Village................................. 30
Available Information..................... 30
EL CONQUISTADOR PARTNERSHIP.................... 30
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN
BENEFICIAL OWNERS............................ 32
MANAGEMENT OF EL CONQUISTADOR PARTNERSHIP...... 35
Executive Officers of El Conquistador..... 35
Officers and Directors of the Managing
General Partner......................... 37
Compensation of Executive Officers of El
Conquistador............................ 37
Limitations on the Liability of Affiliated
Persons................................. 37
SELECTED FINANCIAL DATA........................ 39
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS................................... 41
General................................... 41
Results of Operations..................... 41
Financial Condition....................... 43
Taxes..................................... 46
Inflation................................. 46
Seasonality............................... 46
Effect of Hurricane Georges............... 46
Year 2000 Compliance...................... 47
LEGAL PROCEEDINGS.............................. 50
POLICY WITH RESPECT TO CERTAIN ACTIVITIES...... 50
INVESTMENT OBJECTIVES AND POLICIES............. 51
POLICIES WITH RESPECT TO CERTAIN
TRANSACTIONS................................. 51
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS................................. 52
THE BONDS...................................... 53
General................................... 53
Trustee................................... 53
Book-Entry Only System.................... 53
Redemption................................ 56
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Sources of Payment and Security for the
Bonds................................... 58
SUMMARY OF THE LOAN AGREEMENT.................. 60
Bond Proceeds............................. 60
Maintenance and Operation of the Resort... 60
Disposition of Project; Assignment of Loan
Agreement; Merger or Consolidation of El
Conquistador............................ 60
Maintenance of Source of Income;
Additional Interest Upon Event of
Taxability.............................. 61
Covenants................................. 62
Events of Default and Remedies............ 63
Limitation on Partner's Liability......... 64
Amendments and Supplements to the Loan
Agreement and the Related Documents..... 64
SUMMARY OF THE TRUST AGREEMENT................. 65
Project Fund.............................. 65
Bond Fund................................. 65
Reserve Fund.............................. 65
Renewal and Replacement Fund.............. 66
Investment of Funds....................... 66
Events of Default......................... 67
Acceleration of Maturities................ 68
Enforcement of Remedies................... 68
Amendments and Supplements to the Trust
Agreement............................... 69
Defeasance................................ 69
AFICA.......................................... 70
General................................... 70
Governing Board........................... 70
Outstanding Revenue Bonds and Notes of
AFICA................................... 71
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO.... 71
TAX CONSEQUENCES............................... 72
RATING......................................... 73
LEGAL INVESTMENT............................... 73
UNDERWRITING................................... 73
LEGAL MATTERS.................................. 74
CONTINUING DISCLOSURE COVENANT................. 74
REPORTS OF EL CONQUISTADOR PARTNERSHIP......... 76
EXPERTS........................................ 76
GLOSSARY....................................... 77
MISCELLANEOUS.................................. 77
INDEX TO FINANCIAL STATEMENTS.................. F-1
FORM OF OPINION OF BOND COUNSEL................ A-1
</TABLE>

<PAGE>

<PAGE>
SUMMARY

This Summary highlights selected information from this official statement
and prospectus. It may not contain all of the information that is important to
you. To understand the terms of the bonds, you should carefully read this
official statement and prospectus, including the financial statements and the
notes to the financial statements of El Conquistador Partnership L.P. S.E.,
formerly known as El Conquistador Partnership L.P. No person is authorized to
detach this Summary from this official statement and prospectus or otherwise to
use it without the entire official statement and prospectus.

El Conquistador changed its fiscal year-end to December 31 from March 31
effective for the fiscal year (nine months) ended December 31, 1997. El
Conquistador has provided information for the 12-month period ended December 31,
1997 throughout this official statement and prospectus. El Conquistador believes
that information for the 12-month period ended December 31 is a more accurate
reflection of its results of operations and makes the information for the fiscal
year ended December 31, 1998 comparable to a 12-month period. This belief is
based on the fact that the El Conquistador's business is seasonal with the high
season occurring primarily in the fiscal quarter ended March 31.

Financial and other information contained in this official statement and
prospectus with respect to El Conquistador Resort & Country Club does not
include information with respect to Las Casitas Village. Las Casitas Village is
a condominium complex with 90 privately owned units. Substantially all of the
units are made available to the resort as guest rooms through individual
year-to-year rental agreements. For a complete discussion of Las Casitas
Village, see 'EL CONQUISTADOR RESORT & COUNTRY CLUB.'

THE BONDS

TITLE OF SECURITY. $105,200,000 Puerto Rico Industrial, Tourist,
Educational, Medical and Environmental Control Facilities Financing Authority
Tourism Revenue Bonds, 1999 Series A (El Conquistador Resort Project).

THE ISSUER AND SOURCES OF PAYMENT. AFICA will issue the bonds and lend the
proceeds to El Conquistador under a loan agreement. The loan agreement obligates
El Conquistador to pay the principal and interest on the bonds. El Conquistador
will pay the bonds from cash it generates from the resort.

USE OF PROCEEDS. El Conquistador will use the loan proceeds to repay
Citicorp Real Estate, Inc. a $90,000,000 interim loan and related interest, to
fund certain reserves and to pay certain costs and expenses of issuing the
bonds. The proceeds of the interim loan were used to repay The Bank of
Tokyo-Mitsubishi, Ltd. for advances made by it to redeem outstanding bonds
issued by AFICA in 1991. The 1991 bonds were issued to finance the development
and construction of the El Conquistador Resort & Country Club.

INTEREST ON THE BONDS. Interest on the bonds will be paid to you monthly on
the first day of each month, commencing on , 1999. Additionally,
interest will be paid to you at maturity or redemption. Interest will be
computed using a 360-day year of twelve 30-day months.

DETAILS OF THE BONDS. The bonds will be issued in the total principal
amount of $105,200,000. $ of the bonds will be serial bonds maturing at
six-month intervals commencing 2002 as set forth on the inside front
cover page of this official statement and prospectus. $ of the bonds will be
term bonds maturing at five-year intervals commencing 2009 as set
forth on the inside front cover page of this official statement and prospectus.

The bonds will be issued under a trust agreement between AFICA and Banco
Santander Puerto Rico, as trustee. The bonds will be issued in registered form,
without coupons, in denominations which are multiples of $5,000. The bonds will
be registered under The Depository Trust Company book-entry only system. This
means that you will not receive a certificate for any

<PAGE>

bonds you purchase. Your ownership interest in the bonds will be recorded in the
Depository's book-entry only system.

SECURITY FOR THE BONDS. The bonds will be secured by a lien on
substantially all the assets of El Conquistador.

MANDATORY REDEMPTION OF BONDS. Some or all of the bonds may be required to
be redeemed if all or a portion of the resort is condemned or damaged. Some or
all of the bonds are required to be redeemed if the resort stops operating or if
there is a second occurrence of an Event of Taxability.

In addition, the term bonds are periodically subject to mandatory
redemption in part. For a schedule of term bond redemptions, see 'THE
BONDS -- Redemption -- Mandatory Redemption Other Than Upon Event of
Taxability.'

OPTIONAL REDEMPTION OF BONDS. El Conquistador has the right to redeem all
or part of the bonds, on and after , 2009. The redemption prices
are set forth below. The redemption prices are expressed as a percentage of the
outstanding principal amount of such bonds, and do not include interest.

<TABLE>
<CAPTION>
REDEMPTION
REDEMPTION PERIOD PRICE
- ----------------- -----

<S> <C>
, 2009 - , 2010.................................... 102.0%
, 2010 - , 2011.................................... 101.0%
, 2011 and thereafter............................................. 100.0%
</TABLE>

BONDS ARE NOT OBLIGATIONS OF AFICA. The bonds do not constitute an
indebtedness of the government of Puerto Rico or any of its political
subdivisions. Neither the government of Puerto Rico nor any of its subdivisions
will be liable for payment of the bonds, except that AFICA is required to pay
the bonds solely out of payments made by El Conquistador under the loan
agreement. AFICA is the issuer of the bonds and acts as a pass-through entity so
that under most circumstances, interest on the bonds will be tax free to Puerto
Rico residents.

RISK FACTORS

The bonds are subject to certain risks that could affect the ability of El
Conquistador to pay the principal of and interest on the bonds. You should
review the section entitled 'RISK FACTORS' for a discussion of certain risks
associated with an investment in the bonds. Some of these risks are:

All of El Conquistador's income is generated from a single asset -- the
resort. El Conquistador's ability to make payments on the bonds is
dependent solely on the performance of the resort.

The operations and revenues of the resort are affected by a number of
factors that are outside of the control of El Conquistador, including
competition, seasonality of the hotel industry, potential overbuilding in
the industry, general economic conditions, weather conditions, droughts
and water shortages, hurricanes and other natural disasters, and the cost
and availability of labor, insurance and utilities.

Properties like the resort are relatively difficult to sell, which may
affect the ability of bondholders to foreclose on and sell El
Conquistador's property in the event such actions were necessary to pay
the bonds.

There will likely be no secondary market for the bonds.

Each of Williams Hospitality Group Inc., Wyndham Management Corporation
and Grand Bay Management Company is an affiliate of El Conquistador.
Williams Hospitality and Wyndham Management also operate other hotel and
resort properties in Puerto Rico and the Caribbean and, therefore, there
is a potential for conflicts of interest to arise.

<PAGE>

<PAGE>
TAX CONSEQUENCES

Provided El Conquistador complies with the source of income covenants in
the loan agreement, it is the opinion of Fiddler Gonzalez & Rodriguez, LLP, bond
counsel, that the bonds and the interest on the bonds are exempt from or not
subject to:

(1) Puerto Rico income taxes and municipal property and license taxes,

(2) under certain circumstances, Puerto Rico gift and estate taxes,
and

(3) United States income tax when received by:

(a) individuals who are bona fide residents of Puerto Rico during
the entire taxable year in which such interest is received, or

(b) foreign corporations, including Puerto Rico corporations, and
such interest is not effectively connected with the conduct of
trade or business in the United States.

If you are a person or entity described in (3)(a) or (b) above and you have
to pay United States income tax on the interest paid on the bonds because El
Conquistador fails to comply with source of income provisions of the loan
agreement, El Conquistador will be required to pay you additional interest. The
actual interest paid to you on the bonds plus any additional interest will not
exceed 12% of the outstanding principal amount of the bonds which you own during
any taxable year of El Conquistador. The additional interest that El
Conquistador may be required to pay to you if the interest on the bonds becomes
taxable in the United States may not be enough for you to have as much income
after payment of taxes as you would have had if interest on the bonds remained
tax free.

RATING

The bonds will be rated 'Baa2' by Moody's Investors Service, Inc. There is
no assurance that such rating will remain in effect for any given period of time
or that it will not be revised downward or withdrawn entirely by Moody's if, in
its sole judgment, circumstances so warrant.

UNDERWRITER

The underwriters of the bonds are Citicorp Financial Services Corporation.
The underwriters have agreed to purchase the bonds at an aggregate discount of
$ from the initial offering price of the bonds shown or derived from
information shown on the inside front cover page of this official statement and
prospectus.

EL CONQUISTADOR PARTNERSHIP

The resort is owned by El Conquistador. El Conquistador owns no assets
other than the resort. El Conquistador's sole business is the ownership of the
resort and entering into a management agreement for the operation of the resort.

El Conquistador is a Delaware limited partnership organized on January 16,
1990 under the Delaware Revised Uniform Limited Partnership Act. El
Conquistador's mailing address in Puerto Rico is 1000 El Conquistador Avenue,
Fajardo, Puerto Rico 00738. El Conquistador's telephone number at this location
is (787) 863-1000. The managing general partner of El Conquistador is
Conquistador Holding, Inc.

El Conquistador is beneficially owned approximately 77% by Patriot American
Hospitality, Inc. and approximately 23% by Wyndham International, Inc. Patriot
is a real estate investment trust specializing in the ownership of hotels.
Wyndham International owns and operates hotels under several brand names
including Wyndham Resorts'r' and Grand Bay'r'. On March 1, 1999, Patriot/Wyndham
announced that Patriot will be merged into and become a subsidiary of Wyndham
International. As a result of the merger, Wyndham International will
beneficially own substantially all of El Conquistador. The merger is expected to
be completed by June 30, 1999.

<PAGE>

EL CONQUISTADOR RESORT & COUNTRY CLUB

El Conquistador Resort & Country Club is a world class destination resort
complex. The resort consists of 751 guest rooms, an 18-hole championship golf
course, a marina, seven tennis courts, 90,000 square feet of convention and
meeting facilities, six lounges and nightclubs, 12 restaurants, a 10,000 square
foot casino, 25 retail shops, a fitness center and five pool areas, situated on
a bluff overlooking the convergence of the Atlantic Ocean and the Caribbean Sea
in Fajardo, Puerto Rico. The resort also features a secluded beach located on a
private island three miles offshore known as Palominos Island.

The resort also generally has available 90 condominium units known as Las
Casitas Village, which provides up to another 167 rooms to the inventory of
luxury rooms available to the resort. Las Casitas Village condominium units are
owned by third parties substantially all of who make the units available to the
resort through individual year-to-year rental agreements.

The resort's average occupancy and average room rate for certain periods
were as follows:

<TABLE>
<CAPTION>
AVERAGE
AVERAGE ROOM
PERIOD OCCUPANCY RATE
------ --------- ----

<S> <C> <C>
12-months ended 12/31/98............................................... 72.3% $213.39
12-months ended 12/31/97............................................... 73.3% $202.77
</TABLE>

MANAGEMENT AND MARKETING OF THE RESORT

The resort has historically been managed by Williams Hospitality, an
affiliate of El Conquistador. As of January 16, 1998, Wyndham International, the
owner of the Wyndham Resorts'r' and Grand Bay'r' brands, acquired the majority
interest in Williams Hospitality and in March 1998 acquired the remaining
interests. El Conquistador has entered into an amended and restated management
agreement with Williams Hospitality. At the same time, Williams Hospitality
entered into an agreement with Wyndham Management with respect to the management
of the resort and Las Casitas Village. Under this agreement, the resort will be
marketed as a Wyndham Resort'r'. Additionally, Williams Hospitality entered into
a marketing agreement with Grand Bay Management Company providing for the
marketing of Las Casitas Village as a Grand Bay'r' hotel and the use of the
Grand Bay reservation system for Las Casitas Village. All of the management and
marketing agreements became effective as of January 1, 1999.

<PAGE>

<PAGE>
OWNERSHIP STRUCTURE

As a condition to this offering, immediately prior to this offering the
ownership structure of El Conquistador will change. The new ownership structure
of El Conquistador, and its relationship to Williams Hospitality and Wyndham
Management will be as follows:

[GRAPH]

<PAGE>

El Conquistador has no current relationship with AFICA. In 1991, El
Conquistador raised $120,000,000 through an AFICA financing the proceeds of
which were used for the purchase and development of the resort. The 1991 AFICA
financing was repaid in August 1998.

CONTINUING DISCLOSURE

El Conquistador will enter into an undertaking for the benefit of the
bondholders and the beneficial owners of the bonds to file financial information
and operating data, including audited financial statements, on an annual basis.
El Conquistador will also provide notice of certain events, including defaults,
draws on reserves, bond calls and rating changes. Such filings and notices will
be provided to nationally recognized municipal securities information
repositories and any Puerto Rico state information depository. Such filings will
be made pursuant to Rule 15c2-12 promulgated by the SEC under the Securities
Exchange Act of 1934.

EFFECT OF HURRICANE GEORGES

Hurricane Georges passed through Puerto Rico on September 21 and 22, 1998.
The Hurricane caused approximately $32,000,000 of property related damage to the
resort. As a result of the damage, the resort was closed during the period
September 22, 1998 through October 2, 1998. All of the physical damage and
business interruption suffered by El Conquistador, except $180,000, is covered
by insurance.

<PAGE>

<PAGE>
SUMMARY FINANCIAL INFORMATION

The following table sets forth selected income data and balance sheet data
of El Conquistador. The selected income data and balance sheet data are derived
from the financial statements of El Conquistador for the period from March 1,
1998 to December 31, 1998 (successor partnership) and for the period from
January 1, 1998 to February 28, 1998, and the fiscal years ended December 31,
1997 (9 months) and March 31, 1997 (predecessor partnership), which have been
audited. The financial statements and notes thereto as of December 31, 1998 and
December 31, 1997 and for the period from March 1, 1998 to December 31, 1998
(successor partnership) and the period from January 1, 1998 to February 28,
1998, and the fiscal years ended December 31, 1997 (9 months) and March 31, 1997
(predecessor partnership) are included in this official statement and
prospectus, and include an explanatory paragraph which describes an uncertainty
about El Conquistador's ability to continue as a going-concern. The financial
data for the period from March 1, 1998 to December 31, 1998 is under a new basis
as a result of the acquisition of El Conquistador by Patriot/Wyndham.

The pro forma operating information for the fiscal year ended December 31,
1998 is intended to give you an idea of what El Conquistador's business might
have looked like if the following transactions had occurred on January 1, 1998:

this offering of $105,200,000 of bonds with an assumed interest rate of
6.08%;

repayment of the $90,000,000 interim loan made by Citicorp Real Estate;

the effective date of the amended and restated management agreement;

a $15,000,000 capital contribution to El Conquistador by Conquistador
Holding, Inc.; and

repayment of the long-term debt of $25,000,000 owed to the Government
Development Bank for Puerto Rico by El Conquistador.

The pro forma balance sheet assumes such transactions had occurred as of
the pro forma balance sheet date.

The pro forma data is unaudited.

The data below should be read in conjunction with the financial statements,
related notes and other financial information included in this official
statement and prospectus.

EBITDA represents earnings (loss) before interest expense, income taxes,
depreciation and amortization. El Conquistador believes that EBITDA is a useful
measure of operating performance because (A) it is industry practice to evaluate
hotel companies based on operating income (loss) before interest, depreciation
and amortization and minority interests, which is generally equivalent to
EBITDA, and (B) EBITDA is unaffected by the debt and equity structure of the
entity. EBITDA:

does not represent cash flow from operations as defined by generally
accepted accounting principles;

is not necessarily indicative of cash available to fund all cash flow
needs;

should not be considered as an alternative to net income under generally
accepted accounting principles for purposes of evaluating El
Conquistador's results of operations; and

may not be comparable to other similarly titled measures used by other
companies.

<PAGE>

<TABLE>
<CAPTION>
FISCAL YEAR
(NINE FISCAL YEAR
MONTHS) TWELVE MONTHS FISCAL YEAR ENDED
FISCAL YEAR ENDED MARCH 31, ENDED ENDED ENDED DECEMBER 31,
--------------------------------- DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998
1995 1996 1997 1997 1997 1998 PRO FORMA
-------- -------- --------- ------------ -------------- -------------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT ROOM AND OCCUPANCY DATA)

<S> <C> <C> <C> <C> <C> <C> <C>
Selected Statement
of Income Data:
Revenues:
Rooms......... $ 37,943 $ 38,817 $ 40,025 $ 25,130 $ 40,734 $ 42,291 $ 42,291
Food and
beverage.... 27,298 26,189 26,235 17,429 26,030 28,845 28,845
Casino........ 6,055 6,179 6,005 3,554 5,548 5,058 5,058
Other
income...... 14,652 19,166 21,959 14,472 23,478 26,240 26,240
-------- -------- --------- ------------ -------------- -------------- -------------
85,948 90,351 94,224 60,585 95,790 102,434 102,434
Less casino
promotional
allowance... (1,205) (1,137) (1,266) (458) (875) (778) (778)
-------- -------- --------- ------------ -------------- -------------- -------------
Total
revenues... $ 84,743 $ 89,214 $ 92,958 $ 60,127 $ 94,915 $101,656 $ 101,656
-------- -------- --------- ------------ -------------- -------------- -------------
-------- -------- --------- ------------ -------------- -------------- -------------
Depreciation and
amortization... $ 11,124 $ 10,499 $ 9,147 $ 6,887 $ 9,224 $ 9,146 $ 8,304(1)
-------- -------- --------- ------------ -------------- -------------- -------------
Income (loss)
from
operations
(EBIT)........ (11,808) 4,552 7,560 (2,013) 7,805 15,136 19,604
Interest
income........ 468 229 199 128 188 245 245
Interest
expense....... (16,137) (17,022) (17,162) (13,157) (17,627) (15,642) (11,057)
-------- -------- --------- ------------ -------------- -------------- -------------
Extraordinary
loss from
early
extinguishment
of debt....... -- -- -- -- -- (1,677) --
Net income
(loss).... $(27,477) $(12,241) $ (9,403) $(15,042) $ (9,634) $ (1,938) $ 8,791
-------- -------- --------- ------------ -------------- -------------- -------------
-------- -------- --------- ------------ -------------- -------------- -------------
(Deficiency in)
partners'
capital
beginning of
period........ $ 36,191 $ 8,716 $ (3,525) $(12,928) $(18,337) $(27,971) $ (27,971)
Partner capital
contributions... 2 -- -- -- -- 81,672 85,680
(Deficiency in)
partners'
capital end of
period........ 8,716 (3,525) (12,928) (27,971) (27,971) 51,763 66,500
Ratio of
earnings to
fixed
charges....... (27,241) (12,004) (9,166) (14,864) (9,397) (1,700) 1.8x
Ratio of EBITDA
to fixed
charges....... (17,799) (2,948) (1,434) (9,017) (1,576) 1.5x 2.5x
Other Financial
Data:
Available
rooms(#)...... 751 751 751 751 751 751 751
Occupancy....... 73.3% 71.0% 72.0% 69.3% 73.3% 72.3% 72.3%
Average rate.... $ 188.87 $ 198.99 $ 202.86 $ 175.59 $ 202.77 $ 213.39 $ 213.39
RevPAR(2)....... 138.42 141.22 146.01 121.68 148.60 154.28 154.28
Revenue per
available
room.......... 112,840 118,794 123,779 80,062 126,385 135,360 135,360
Cash flow from
operating
activities.... (4,712) 1,906 5,855 (1,415) 5,373 9,398
Cash flow from
investing
activities.... (3,002) (864) (1,428) (1,890) 2,298 (7,385)
Cash flow from
financing
activities.... 7,294 (1,063) (2,903) 2,053 2,995 (1,584)
EBITDA.......... (684) 15,051 16,707 4,874 17,029 24,282 27,908
Selected Balance
Sheet Data:
Current
assets........ $ 15,316 $ 11,823 $ 13,618 $ 13,953 $ 13,953 $ 27,052 26,651
Land, building
and equipment,
net........... 194,557 188,994 183,960 181,127 181,127 229,858 229,858
Total assets.... 225,191 211,691 205,430 200,422 200,422 262,368 266,704
Long-term debt,
including
current
maturities.... 193,034 197,154 199,709 204,624 204,624 152,035 142,235
Total
liabilities
and
(deficiency
in) partners'
capital....... 225,191 211,691 205,430 200,422 200,422 262,368 266,704
</TABLE>

- ------------

(1) Reflects an adjustment for amortization of offering costs, estimated at $5.0
million, amortized on the straight-line method over the 30-year term of the
bonds at a rate of $166,667 per year, and the effect of the acquisition of
El Conquistador by Patriot/Wyndham related to depreciation and deferred cost
amortization.

(2) RevPAR is equal to the average rate multiplied by occupancy percentage.

<PAGE>

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This official statement and prospectus includes certain 'forward-looking
statements' that are subject to risks and uncertainties. Forward-looking
statements include information regarding El Conquistador's future financial
position, business strategy, budgets, projected costs and plans and objectives
for future operations. Forward-looking statements generally are preceded by,
followed by or include the words 'may,' 'will,' 'expect,' 'intend,' 'estimate,'
'anticipate,' 'believe,' or 'continue' or similar expressions. You are cautioned
that any such forward-looking statements reflect El Conquistador's good faith
beliefs. They are not guarantees of future performance. They involve known and
unknown risks, and actual results may differ materially from those in the
forward-looking statements as a result of various factors. Certain factors that
might cause such a difference include:

competition for guests from other hotels;

dependence upon group and leisure travelers and tourism;

adverse weather conditions and occurrences;

the seasonality of the hotel industry; and

general economic conditions, including prevailing interest rates and the
availability of debt and equity financing.

Important factors that could cause actual results to differ materially from El
Conquistador's expectations are disclosed under 'Risk Factors' and elsewhere in
this official statement and prospectus, including in conjunction with the
forward-looking statements included in this official statement and prospectus.
All subsequent written and oral forward-looking statements attributable to El
Conquistador, or persons acting on its behalf, are expressly qualified in their
entirety by the various factors set forth in this official statement and
prospectus.

<PAGE>

<PAGE>
RISK FACTORS

IN CONSIDERING WHETHER TO PURCHASE THE BONDS, YOU SHOULD CONSIDER CAREFULLY
THE MATTERS DISCUSSED IN THIS SECTION IN ADDITION TO THE OTHER INFORMATION IN
THIS OFFICIAL STATEMENT AND PROSPECTUS.

POSSIBLE INABILITY TO MAKE PAYMENTS ON THE BONDS

ABILITY OF EL CONQUISTADOR TO SERVICE ITS DEBT. At December 31, 1998, after
making pro forma adjustments to the actual balance sheet of El Conquistador to
give effect to this offering, the repayment of the interim loan to Citicorp Real
Estate and certain related transactions, total short-term and long-term
indebtedness of El Conquistador was $167,007,820 consisting of the following:

$105,200,000 of the bonds, which are secured by substantially all of the
assets of El Conquistador;

$33,065,730 owed to Posadas de Puerto Rico Associates, Incorporated, an
affiliate of El Conquistador and the Hotel Operator;

$15,592,563 of loans and accrued interest owed to the partners of El
Conquistador;

$9,388,207 of incentive management fees owed to Williams Hospitality;

$1,274,200 of interest on the incentive management fees owed to Williams
Hospitality; and

$2,487,120 of loans and accrued interest owed to Williams Hospitality.

The aggregate annual interest costs and expenses in respect of such
indebtedness is approximately $10,893,000, of which approximately $6,396,000 is
paid on a current basis and the balance of $4,497,000 is deferred. All of the
amounts set forth above other than with respect to the bonds are subordinate to
the bonds. That means that current interest and principal on the bonds must be
paid first and if El Conquistador defaults on its obligations to pay the bonds,
interest and principal on the bonds must be paid first. The principal of and
interest on the bonds are payable at the times set forth on the inside front
cover page of this official statement and prospectus. We cannot promise that at
the time such payments become due El Conquistador will have the funds necessary
to make such payments. If El Conquistador is unable to generate sufficient cash
flow from operations, El Conquistador may be required to obtain additional
equity contributions or refinance its outstanding debt or obtain additional
financing. We cannot promise that any such equity contributions or refinancing
would be possible or that any additional financing, if available, could be
obtained on terms that would be favorable or acceptable to El Conquistador.

RESTRICTIVE PROVISIONS IN THE LOAN AGREEMENT AND RELATED COLLATERAL
DOCUMENTS. The loan agreement and the related collateral documents restrict in
certain circumstances incurrence of additional indebtedness, creation of
additional liens, disposition of certain assets, engagements in mergers and the
entry into additional transactions with affiliates. These restrictions could
limit the ability of El Conquistador to respond to changing market and economic
conditions and provide for capital expenditures or additional financing. As a
result, operations of the resort may be adversely affected. Therefore, cash flow
from operations may be insufficient to pay principal and interest on the bonds.

LIMITATION ON PAYMENT OF ADDITIONAL INTEREST UPON AN EVENT OF TAXABILITY.
The additional amount that El Conquistador may be required to pay to you if the
interest on the bonds becomes subject to U.S. income taxes may not be enough for
you to have as much income after payment of such taxes as you would have had if
the interest remained tax free. We cannot promise that El Conquistador, if
required, will have the necessary cash to make any such additional payments.

ABILITY TO ENFORCE REMEDIES AGAINST EL CONQUISTADOR. In the case of an
event of default under the trust agreement, the trustee may proceed to enforce
any remedies under the trust agreement, the loan agreement, or the related
collateral documents. However, any foreclosure or other proceeding is dependent,
in many respects, upon judicial action which is subject to discretion

<PAGE>

or delay. Under existing laws and judicial decisions, including the United
States Bankruptcy Code, the remedies for your benefit specified under the trust
agreement, the loan agreement and the related collateral documents may not be
readily available or may be limited. In addition, we cannot promise that the
proceeds of any sale of El Conquistador's assets upon a foreclosure will be
sufficient to pay principal of and interest on the bonds.

ABILITY TO MAKE PREPAYMENT OF THE BONDS. The bonds may be required to be
prepaid following an acceleration upon the occurrence of certain events of
default under the loan agreement and the trust agreement. In the event the bonds
must be prepaid, we cannot promise that El Conquistador will have the funds
necessary to make such prepayments.

HOTEL INDUSTRY RISKS

MATTERS AFFECTING THE OPERATION OF A HOTEL. The sole business of El
Conquistador is the ownership and operation, through a manager, of the resort.
El Conquistador's ability to generate sufficient revenues from operations to pay
expenses of operation and El Conquistador's debt service obligations, including
the bonds, has certain risks. These risks include, among other things:

competition for guests from other hotels, a number of which may have
greater marketing and financial resources and experience than El
Conquistador or the Hotel Operator;

increases in operating costs due to inflation and other factors which may
not be offset in the future by increased room rates;

dependence on business and leisure travelers and tourism, which may
fluctuate and is seasonal;

increases in costs of travel, which may deter travelers from coming to the
resort;

adverse effects of general and local economic conditions; and

dependence on the Hotel Operator for the marketing and management of the
resort.

These factors could adversely affect the ability of the resort to generate
revenues and, therefore, El Conquistador's ability to make payments with respect
to the bonds.

OPERATING COSTS AND CAPITAL EXPENDITURES FOR A HOTEL; HOTEL RENOVATIONS.
The resort requires substantial ongoing expenditures to replace furniture and
equipment and redecorate or upgrade the resort in order to continue to provide
first-class facilities to its guests. Capital expenditures at the resort in the
past have been as follows:

<TABLE>
<S> <C>
Fiscal year ended March 31, 1997................................................ $1,428,000
Fiscal year ended March 31, 1996................................................ $ 864,000

Fiscal year (9 months) ended December 31, 1997.................................. $1,890,000
Nine months ended December 31, 1996............................................. $1,623,000

Fiscal year ended December 31, 1998............................................. $7,385,000
Twelve months ended December 31, 1997........................................... $2,298,000
</TABLE>

Capital expenditures at the resort in 1996 were low due to the newness of
the facility. Capital expenditures at the resort are budgeted at $4,000,000 for
the fiscal year ending December 31, 1999.

For fiscal 1998, El Conquistador spent $7,385,000 for capital expenditures.
Capital expenditures for fiscal 1998 included $4,900,000 for the construction of
the new spa at the resort. As of March 31, 1999, $1,693,000 of this year's
capital expenditure budget had been spent. We cannot promise that cash provided
from operations will be sufficient to meet the resort's future capital
expenditure requirements.

Additionally, as a result of Hurricane Georges, approximately $32,000,000
was required to make repairs and replacements at the resort. All but
approximately $180,000 of such amount is covered by insurance. For a complete
description of the damage caused by Hurricane Georges at the resort, see
' -- Events Not Within the Control of El Conquistador.'

<PAGE>

Under the terms of the loan agreement, El Conquistador is obligated to
establish a reserve to pay the cost of capital expenditures at the resort and
pay for periodic repair, replacement or refurbishment of furniture, fixtures and
equipment. If capital expenditures exceed El Conquistador's expectations,
additional costs could have an adverse effect on El Conquistador's cash
available for payment of the bonds. If El Conquistador is unable to generate
sufficient cash flow to fund the cost of capital expenditures in the future, the
loan agreement permits El Conquistador to borrow for such purposes. However, we
cannot promise that El Conquistador will be able to obtain such financing if
required for future capital expenditures.

SEASONALITY OF HOTEL BUSINESS. Tourism in Puerto Rico is at its peak during
the months of December through April. Occupancy levels and room rates are lower
during the balance of the year. Successful operation of the resort is dependent
in large part to a successful high season, the ability of the resort to attract
guests during the off-season months and careful management of costs throughout
the year. Efforts are made by the Hotel Operator to actively market during off-
season months so as to minimize the effects of seasonality. We cannot promise
that such efforts will be successful. If such efforts are not successful, El
Conquistador may be unable to generate sufficient cash for payment of the bonds.

EVENTS NOT WITHIN THE CONTROL OF EL CONQUISTADOR

Hurricanes and other natural disasters, airline strikes, droughts and water
shortages, civil unrest, acts of war, and other uncontrollable events may
adversely affect occupancy levels at the resort. Such events could adversely
affect cash flows of El Conquistador and its ability to make payments on the
bonds. The resort is particularly vulnerable to these types of events because of
its high debt service requirements. El Conquistador cannot predict the effect an
uncontrollable event may have on the resort or El Conquistador's financial
condition.

Hurricane Georges passed through Puerto Rico on September 21 and 22, 1998.
Hurricane Georges caused approximately $32,000,000 of property related damage at
the resort, all but $180,000 of which is covered by insurance. The resort lost
at least 2,500 room nights during the 10-day period September 20-30, 1998 as a
result of Hurricane Georges. El Conquistador believes such room night losses
will be covered by its business interruption insurance. As a result of Hurricane
Georges, the resort was closed during the period September 22, 1998 through
October 2, 1998. Additionally, the majority of condominium units of Las Casitas
Village were damaged and were not available to the resort until December 10,
1998. Puerto Rico itself and other hotel properties on the island also suffered
extensive damage from Hurricane Georges. As a result, travelers' perception of
Puerto Rico as a leisure destination may be adversely affected for the 1998/1999
tourist season. The resort could lose additional room nights as a result of this
perception, which may or may not be covered by its business interruption
insurance. As of the date of this offical statement and prospectus, the resort
is fully operational. However, El Conquistador cannot predict the effect that
Hurricane Georges will have on its future bookings. To the extent that
additional group and leisure travelers with reservations cancel their plans to
come to the resort or additional travelers do not make reservations as a result
of Hurricane Georges, such lost bookings could have a material adverse effect on
El Conquistador's financial condition and results of operations.

REAL ESTATE INVESTMENT RISKS RELATED TO THE RESORT

GENERAL RISKS INCIDENT TO OWNERSHIP OF THE RESORT. El Conquistador's
investment in the resort is subject to varying degrees of risk generally
incident to the ownership of real property. The underlying value of El
Conquistador's investment in the resort and its income and ability to make
payments on the bonds will depend on the ability of the Hotel Operator to
operate the resort in a manner sufficient to maintain or increase revenues and
to generate sufficient income in excess of operating expenses for payment of the
bonds. Income from the resort may be adversely affected by events beyond the
control of El Conquistador, including:

changes in national economic conditions

<PAGE>

<PAGE>
changes in local market conditions due to changes in general or local
economic conditions

the ongoing need for capital improvements, changes in real estate tax
rates and other operating expenses for the resort

adverse changes in governmental rules and fiscal policies

adverse changes in zoning laws

other events which may result in uninsured losses.

PROPERTY TAXES MAY INCREASE. The resort is subject to real property taxes.
The real property taxes on the resort may increase or decrease as property tax
rates change and/or if the value of the property is reassessed by taxing
authorities. If property taxes increase as a result of such reassessments, El
Conquistador's ability to make payments on the bonds could be adversely
affected. El Conquistador recently completed negotiations with the Municipal
Revenue Collection Center in Fajardo, Puerto Rico concerning the valuation
method used by the Municipal Revenue Collection Center to assess real property
taxes for the resort. In February and March 1999, El Conquistador paid an
aggregate of approximately $1.3 million with respect to real property taxes for
the fiscal years ended March 31, 1995, 1996 and 1997, December 31, 1997 (9
months) and December 31, 1998, and the period ending June 30, 1999. El
Conquistador cannot promise that real property taxes will not increase in the
future.

COST OF COMPLIANCE WITH ENVIRONMENTAL LAWS. The operating costs of El
Conquistador may be affected by the obligation to pay for the cost of complying
with existing environmental laws, ordinances and regulations, as well as the
cost of complying with future legislation. Under various federal and Puerto Rico
environmental laws, ordinances and regulations, a current or previous owner or
operator of the resort may be liable for the costs of removal or remediation of
hazardous or toxic substances on, under, or in the property. Such laws may
impose liability whether or not the El Conquistador or the Hotel Operator knew
of, or was responsible for, the presence of such hazardous or toxic substances.

The resort maintains certain facilities at which hazardous or toxic
substances are utilized. Petroleum residues from the operation of golf carts at
the resort are present at the service area for such carts. Periodically, El
Conquistador arranges for the removal of these petroleum residues. Additionally,
there are several diesel fuel storage tanks at the resort's marina. This diesel
fuel is used by the ferryboats shuttling guests to and from Palominos Island. As
persons who arrange for the transportation, disposal or treatment of hazardous
or toxic substances El Conquistador or the Hotel Operator may also be liable for
the costs of removal or remediation of such substances. Certain environmental
laws and common law principles could be used to impose liability for releases of
hazardous materials into the environment, and third parties may seek recovery
from El Conquistador or the Hotel Operator for personal injury associated with
exposure to released hazardous materials. The cost of defending against claims
of liability or remediating contaminated property and the cost of complying with
environmental laws could materially adversely affect El Conquistador's results
of operations and financial condition. Such costs could have an adverse effect
on El Conquistador's ability to make payments on the bonds. El Conquistador is
not aware of any potential environmental liability or compliance concerns that
it believes would have a material adverse effect on its business, assets,
results of operations or liquidity.

COST OF COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT. Under the
Americans with Disabilities Act, all public accommodations are required to meet
certain federal requirements related to access and use by disabled persons. A
determination that the resort is not in compliance with the Act could result in
the imposition of fines or an award of damages to private litigants. If El
Conquistador were required to make material modifications to the resort to
comply with the Act, the ability of El Conquistador to make payments on the
bonds could be adversely affected. El Conquistador has not been notified, and it
has no other knowledge of, any material non-compliance, liability or claim under
the Act with respect to the resort.

POTENTIAL LOSSES DUE TO UNINSURED AND UNDERINSURED LOSSES. The loan
agreement will specify comprehensive insurance to be maintained on the resort,
including liability, fire and extended coverage. If such insurance is not
maintained, the bonds may be accelerated. El Conquistador believes that its
insurance is adequate for its business. However, there are certain types of
losses,

<PAGE>

generally of a catastrophic nature, such as earthquakes, hurricanes and floods,
that may be uninsurable or not economically insurable. El Conquistador currently
has hurricane insurance and is in the process of making claims for property
damages of approximately $32,000,000 as a result of Hurricane Georges.
Additionally, El Conquistador has made an initial claim under its business
interruption insurance policy as a result of the loss of business caused by
Hurricane Georges. El Conquistador believes that after all claims related to
Hurricane Georges are made it will continue to be covered for damages and
business interruptions as a result of future hurricanes. However, we cannot
promise that such insurance will continue to be available or affordable. This
may result in insurance coverage that, in the event of a substantial loss, would
not be sufficient to pay the full current market value or current replacement
cost of the loss. Inflation, changes in building codes and ordinances,
environmental considerations, and other factors also might make it infeasible to
use insurance proceeds to replace the property after such property has been
damaged or destroyed. Under such circumstances, the insurance proceeds received
by El Conquistador might not be adequate to restore its economic position with
respect to the resort.

Additionally, in the event the resort is damaged or destroyed to the extent
that a mandatory prepayment of the bonds is required pursuant to the loan
agreement, the insurance proceeds received by El Conquistador together with
other funds available to it might not be sufficient to repay the principal of
and interest on the bonds to the extent so required.

LIMITED USE OF RESORT. The resort may not be suitable for purposes other
than a vacation and convention resort. As a result, in the event of a default,
acceleration of the bonds and any resulting foreclosure sale of the resort, the
trustee's remedies and the number of entities which could purchase the resort
would be limited, and the sales price generated thereby might be
adversely affected. The sale of the resort under such circumstances might not
provide proceeds sufficient to repay the bonds.

DEVELOPMENT OF LAND ADJACENT TO THE RESORT. There are approximately 192
acres of land located adjacent to the resort which is owned by affiliates of El
Conquistador. Approximately 42 acres of such property is used by the resort for
various purposes including employee parking facilities. The additional 150 acres
adjacent to the resort owned by an affiliate is vacant land. This 150 acre
property may be developed into a time share and/or hotel. It may also be
developed into a golf course or have another use which would be an additional
amenity to the resort. El Conquistador believes that any such development would
be beneficial to the resort. However, El Conquistador cannot promise that such
development would not have an adverse effect on its financial condition or
results of operations, including its ability to make payments on the bonds.

FINANCIAL DIFFICULTIES OF PATRIOT AND WYNDHAM INTERNATIONAL

Patriot/Wyndham has substantial debt and debt service requirements and may
not have enough available funds to meet its near-term debt service requirements.
Patriot/Wyndham is evaluating ways to improve its liquidity and its ability to
meet is debt service obligations. On March 1, 1999, Patriot/Wyndham announced it
had entered into a definitive agreement with a group of investors to make a $1
billion preferred equity investment in Patriot/Wyndham. Patriot/Wyndham also
announced that the two companies will be combined into a single entity and
convert from a paired-share real estate investment trust structure to a C
corporation. The equity infusion and C corporation conversion are subject to
Patriot/Wyndham stockholder approval and both are expected to be completed by
June 30, 1999. The equity infusion is also subject to antitrust clearance and
certain other conditions and consents.

Patriot/Wyndham will use the $1 billion in proceeds to reduce its bank debt
and settle its forward equity obligations. In addition, Patriot/Wyndham
announced it has definitive financing commitments for $2.45 billion, consisting
of $1.8 billion of senior bank facilities and $650 million of five-year senior
secured loans. The proceeds from the commitments will be used to refinance the
balance of Patriot/Wyndham's bank debt and provide additional revolver capacity.

To the extent Patriot/Wyndham is unable to successfully complete the
refinancing of its indebtedness, it may not be able to pay its debts as they
come due without selling some or all of

<PAGE>

<PAGE>
its assets, restructuring its debt or substantially revising its operations.
Additionally, Patriot/Wyndham's inability to close the $1 billion proposed
investment, or in the alternative secure additional capital in the future, could
have a material adverse effect on its financial condition and results of
operations.

Although Patriot and Wyndham International together own substantially all
of the interests in El Conquistador, neither Patriot nor Wyndham International
will be liable with respect to the bonds. Additionally, neither will be
obligated to make additional loans or capital contributions to El Conquistador.
However, Patriot/Wyndham's financial condition could have a material adverse
effect on the resort. The resort relies on Patriot/Wyndham for many aspects of
its operations, including management and marketing of the facilities,
centralized purchasing and centralized reservations. Additionally, effective
January 1, 1999, the resort was branded a Wyndham Resort'r' and Las Casitas
Village was branded a Grand Bay'r' hotel.

If Patriot/Wyndham is unable to improve its financial condition and avoid
defaulting on its obligations, such defaults could have a negative effect on the
financial condition and results of operations of El Conquistador. As a result,
El Conquistador's ability to make payments on the bonds could be adversely
affected. We cannot promise that Patriot/Wyndham will be able to improve its
financial condition in the future.

DEPENDENCE ON THE HOTEL OPERATOR

El Conquistador depends solely on the Hotel Operator to manage and operate
the resort. The management agreement expires in January 2014, prior to the
maturity date for a majority of the bonds. If the management agreement is
terminated as a result of a default or other reason, or if the Hotel Operator
decides not to renew the management agreement, the Hotel Operator would have to
be replaced. There is a possibility that a new hotel manager would be obtained
on terms not as favorable to El Conquistador as those set forth in the
management agreement. Conquistador Holding (SPE), Inc., which will be the sole
general partner of El Conquistador at the time of this offering, will have the
responsibility for obtaining the services of a manager. However, the general
partner is not itself obligated to manage the resort. Additionally, no affiliate
of the general partner, other than the Hotel Operator, is legally responsible
for the performance of the obligations of Williams Hospitality under the
management agreement or Wyndham Management and Grand Bay under their
arrangements with Williams Hospitality. Termination or non-renewal of the
management agreement could have an adverse effect on El Conquistador's financial
condition and results of operations. As a result, El Conquistador's cash flow
from operations in the future may be insufficient to make payments on the bonds.

POTENTIAL CONFLICTS OF INTEREST BETWEEN EL CONQUISTADOR AND THE HOTEL OPERATOR

El Conquistador is subject to various conflicts of interest arising out of
its relationship with the managing general partner and the Hotel Operator, and
their respective affiliates. Each of Williams Hospitality and Wyndham Management
manage other hotel and resort properties in Puerto Rico and the Caribbean.
Wyndham Management and Grand Bay also manage operate other resort destinations.
The management of multiple hotel and resort properties could result in conflicts
with respect to:

the direction of guests to properties other than the resort;

the desire to maximize overall results of the Hotel Operator and its
affiliates rather than the results of the resort; and

the availability to the resort of personnel employed by the Hotel Operator
best suited to manage the resort.

Additionally, the terms and provisions of the management agreement were not
negotiated on an arm's-length basis. Such terms and conditions were set by
Conquistador Holding, Inc., and the Hotel Operator, both of which are controlled
by Wyndham International. Accordingly, the terms, provisions and compensation
contained in the management agreement may not reflect the fair

<PAGE>

market value of the services rendered by the Hotel Operator. Such conflicts and
arrangements could result in certain actions or decisions that could have an
adverse effect on El Conquistador's cash flow and its ability to make payments
on the bonds.

RISKS OF OPERATING A HOTEL UNDER A BRAND AFFILIATION

On January 1, 1999, the resort began operating under the Wyndham Resorts'r'
brand name and Las Casitas Village began operating under the Grand Bay'r' brand
name. The continued use of a brand is generally contingent upon the continuation
of the management arrangements related to the property with the branded manager.
If a brand affiliation is terminated, El Conquistador may seek to obtain a
suitable replacement brand affiliation, or to operate the resort and/or Las
Casitas Village independent of a brand affiliation. The loss of a brand
affiliation could have a material adverse effect upon the operations or the
underlying value of the property covered by the brand affiliation because of the
loss of associated name recognition, marketing support and centralized
reservation systems provided by the brand owner. Currently, El Conquistador and
the Hotel Operator are controlled by Wyndham International and it is unlikely
that the brand affiliation will be terminated. Such common control will continue
under Patriot/Wyndham's C corporation structure scheduled to be implemented in
June 1999. However, if El Conquistador and the Hotel Operator are not commonly
controlled in the future, the brand affiliation could be terminated. Such a
termination could have an adverse effect on El Conquistador's financial
condition and its ability to make payments on the bonds.

Operating under a brand name is different from operating more or less
independently as the resort has done in the past. The reputation and customer
perception of the resort will be influenced by customers' experiences at other
hotels having the same brand. We cannot promise that the branding of the resort
and Las Casitas Village will have a positive affect on the resort's operations
or that the results of operations in the past are necessarily indicative of
future results of operations. In fact, such branding could have a negative
effect on El Conquistador and its results of operations. If this were so, El
Conquistador's cash flow may be insufficient to make payments on the bonds.

POTENTIAL LOSS OF TOURISM TAX EXEMPTIONS

The resort enjoys certain tax exemptions under the Puerto Rico Tourism
Incentive Acts. The grants provided under such acts accord tax exemptions to the
grantees for 10 years, which may be extended for an additional 10 years. El
Conquistador was granted a tax exemption under the provisions of the Puerto Rico
Tourism Incentives Act of 1993. The exemptions do not apply to casino revenues.
The grants are conditioned upon continued compliance with various terms and
conditions set forth in the grants. Failure of El Conquistador to comply with
these requirements could result in the revocation of the grant resulting in the
elimination of the exemptions. We cannot promise that these exemptions will
continue to be available, and if changed, what effect a change would have on El
Conquistador's financial condition or results of operations. In the event the
exemptions are eliminated, El Conquistador could be required to pay increased
taxes. As a result, El Conquistador's cash flow may be insufficient to pay the
bonds.

GAMING REGULATIONS ASSOCIATED WITH THE RESORT'S CASINO

The ownership and operation of casinos in Puerto Rico is heavily regulated.
Williams Hospitality was granted a casino franchise as an operator of the casino
at the resort. Williams Hospitality operates the casino on behalf of El
Conquistador as part of its management function at the resort. Additionally,
certain of the individuals employed at the resort are licensed to work in the
casino. The casino is required to renew its casino franchise quarterly. Unless a
change of ownership of a franchisee has occurred or regulators have reason to
believe that reinvestigation of a franchisee is necessary, renewal is generally
automatic. Although El Conquistador and Williams Hospitality have no reason to
believe that the current casino franchise will not be renewed, there can be no
assurance of such renewal. Non-renewal of the casino franchise may have an
adverse

<PAGE>

effect on the financial condition of El Conquistador. As a result, El
Conquistador may not have sufficient cash to make payments on the bonds.

DEPENDENCE ON HIGHLY-SKILLED PERSONNEL

The success of the resort depends to a significant extent upon the
performance of the Hotel Operator and its ability to continue to attract,
motivate and retain highly-qualified employees. The resort's highly-skilled
employees include senior management and engineers. The loss of services of the
Hotel Operator or a significant number of employees could have a material
adverse effect on El Conquistador. Competition for highly-skilled employees with
management, marketing and other specialized training in the hotel and casino
business is intense, especially in Puerto Rico and other parts of the Caribbean.
We cannot promise that the Hotel Operator will be successful in attracting and
retaining such personnel. Specifically, El Conquistador may experience increased
costs in order to attract and retain skilled employees.

COMPETITION WITHIN THE HOTEL AND CASINO BUSINESS

The hotel and casino business in the Caribbean region is highly
competitive. The resort competes with numerous hotels and resorts on the island
of Puerto Rico, including 18 with casinos, and on other Caribbean and Bahamian
islands as well as those in the southeastern United States, Hawaii and Mexico.
The resort competes with such chains as Hyatt, Marriott, Hilton and Westin as
well as numerous other hotel and resort chains and independent hotel and motel
operators. Las Casitas Village competes with such chains as The Four Seasons
Resorts and the Ritz Carlton. During the past three years, five new hotels and
casinos have opened in Puerto Rico alone and an additional hotel and casino is
expected to open in Puerto Rico during 1999.

The resort is a large destination resort and competes for much of its group
business with other destination resorts located in Puerto Rico, the Caribbean,
the continental United States and Hawaii. The ability of the resort to
effectively compete in this market depends on a number of factors including:

high quality service

aggressive marketing

competitive rates

varied facilities and accommodations

Continuous capital improvement programs are essential to stay current with
industry trends and maintain the resort's market share. Many hotels with which
the resort competes are owned or managed by hotel chains possessing
substantially greater financial and marketing resources than those of El
Conquistador and the Hotel Operator. We cannot promise that the resort will
effectively compete in the future or maintain cash flows sufficient to make
payments on the bonds.

RELIANCE ON SINGLE MARKET

The resort is located in Fajardo, Puerto Rico. Any adverse events such as
hurricanes and other natural disasters, droughts and water shortages, labor
strikes and the like which may affect Puerto Rico generally will adversely
affect the resort's entire business. Additionally, Puerto Rico is served by a
small number of major airlines and the market is dominated by American Airlines.
Any adverse events in the airline industry as a whole, and especially to
American Airlines, including airline strikes, increased fuel prices or accidents
could have a material adverse effect on El Conquistador's business, financial
condition and its ability to make payments on the bonds.

El Conquistador lacks asset diversification since the resort is, and will
remain, its only property. The ability of El Conquistador to comply with its
obligations under the loan agreement and the trust agreement, including its
obligation to pay principal and interest on the bonds, depends primarily upon
the future operating revenues and expenses of the resort. El Conquistador's
financial condition may be affected by factors such as:

<PAGE>

<PAGE>
competition from other resort hotels

seasonality of the hotel industry

potential over-building in the hotel industry

inflation and other economic conditions

the existence of favorable and economical air travel services

the cost and availability of labor

the cost and availability of utilities

the cost and availability of adequate insurance for risks such as property
damage and general liability

other events beyond El Conquistador's control

RELATIONSHIP BETWEEN CITICORP FINANCIAL SERVICES AND CITICORP REAL ESTATE

Citicorp Financial Services Corporation is the lead underwriter for the
bonds. Citicorp Real Estate, Inc. made a $90,000,000 interim loan to El
Conquistador on August 3, 1998. The proceeds from the sale of the bonds will be
used to repay $90,000,000 to Citicorp Real Estate. Citicorp Financial Services
and Citicorp Real Estate are affiliated entities. Before entering into the
interim loan, El Conquistador recognized that Citicorp Financial Services could
act as its financial advisor for the sale of the bonds. El Conquistador decided,
after considering the possible engagement of a variety of other financial
advisors for this and other financing alternatives, that Citicorp Financial
Services would be its exclusive financial advisor for the sale of the bonds. El
Conquistador agreed to pay Citicorp Financial Services an underwriting fee and
structuring/management fee with respect to the issuance of the bonds. Although
it is possible that El Conquistador could have negotiated better terms with an
underwriter that was not affiliated with Citicorp Real Estate, El Conquistador
selected Citicorp Financial Services as the exclusive financial advisor for the
sale of the bonds after reviewing indications of interest from a variety of
other firms for this and other financing alternatives. El Conquistador's
selection of Citicorp Financial Services as its exclusive financial advisor for
the sale of the bonds was independent from its decision to enter into the
interim loan with Citicorp Real Estate and El Conquistador has represented and
confirmed that neither agreement was conditioned upon the other. In the event of
any default by El Conquistador with respect to the interim loan, Citicorp Real
Estate would be free to exercise any and all of its remedies at law, in equity
or otherwise without any restriction, notwithstanding the engagement of Citicorp
Financial Services as the lead underwriter for the bonds.

ABSENCE OF SECONDARY MARKET FOR THE BONDS; RATING MAINTENANCE FOR THE BONDS

El Conquistador and AFICA do not intend to apply for listing of the bonds
on a securities exchange. There is currently no secondary market for the bonds.
There will likely be no secondary market for the bonds. If such a market were to
exist, the bonds could trade at prices that may be lower than the initial market
values thereof depending on many factors, including prevailing interest rates
and the markets for similar securities.

The liquidity of the bonds also may be adversely affected by general
declines in the market for similar securities. Such a decline may adversely
affect such liquidity independent of the financial performance of, and prospects
for, El Conquistador.

The investment rating initially assigned to the bonds may be downgraded or
withdrawn. Such a rating change could adversely affect the value of and market
for the bonds.

<PAGE>

<PAGE>
USE OF PROCEEDS

The bonds will be issued to provide for the repayment of the interim loan,
including interest thereon, provided by Citicorp Real Estate to El Conquistador
on August 3, 1998, funding certain reserves and paying certain costs and
expenses of issuing the bonds. The proceeds of the interim loan were used to
repay The Bank of Tokyo-Mitsubishi, Ltd. for advances it made to El Conquistador
to redeem a portion of AFICA's Tourism Revenue Bonds, 1991 Series A and 1991
Series C (El Conquistador Resort Project), in the aggregate outstanding
principal amount of $120,000,000 and to pay fees and expenses in connection with
the interim loan. The 1991 AFICA bonds would have matured on March 9, 1999 and
bore interest at floating rates. The 1991 AFICA bonds were secured by, among
other things, a letter of credit issued by The Bank of Tokyo-Mitsubishi, Ltd.
The 1991 AFICA bonds were subject to mandatory redemption on the interest
payment date preceding the expiration date of the letter of credit. The letter
of credit was scheduled to expire September 9, 1998 and the 1991 AFICA bonds
were therefore redeemed on August 3, 1998.

The interim loan bears interest at a floating rate which is currently
7.69%. The interim loan had an original maturity date of November 3, 1998. Due
to the damage to the resort from Hurricane Georges, the offering of the bonds
was delayed. El Conquistador and Citicorp Real Estate have agreed on an
extension of the maturity date of the interim loan until June 30, 1999.

El Conquistador is indebted to the Government Development Bank for Puerto
Rico in the aggregate principal amount of $25,000,000 pursuant to a term loan.
It is a condition to this offering that such indebtedness be repaid in full. El
Conquistador intends to repay such indebtedness concurrently with the issuance
of the bonds. El Conquistador will use $10,000,000 in cash generated from
operating activities and a $15,000,000 capital contribution to the partnership
by Conquistador Holding to make such repayment. Conquistador Holding will make
the aforementioned capital contribution with the proceeds of a $15,000,000 loan
made to it by the Government Development Bank. The loan by the Government
Development Bank to Conquistador Holding and the capital contribution by
Conquistador Holding to El Conquistador are subject to and conditions to
completion of this offering. Conquistador Holding's obligation to the Government
Development Bank will be secured by, among other things, the ownership interests
in El Conquistador and the capital stock of Conquistador Holding (SPE), Inc.,
which will be the sole general partner of El Conquistador upon completion of
this offering.

Set forth below are the estimated sources and uses of proceeds with respect
to the sale of the bonds:

<TABLE>
<S> <C> <C>
Source
Gross bond proceeds.............................................................. $105,200,000
------------
Total sources............................................................... $105,200,000
------------
------------
Uses
Repayment of the interim loan.................................................... $ 90,000,000
Reimbursement for interest previously paid on interim loan.......................
Reserve fund..................................................................... 9,100,000
Cost of issuance of the bonds:
SEC registration fee......................................... $ 30,946
Printing expenses............................................
Accounting fees and expenses.................................
Legal fees and expenses......................................
Trustee fees................................................. 30,000
Mortgage recording fees...................................... 631,000
Miscellaneous expenses.......................................
Subtotal..........................................................
AFICA fee........................................................................ 526,000
Underwriters' discount...........................................................
Underwriters' structuring/management fee.........................................
------------
Total uses.................................................................. $105,200,000
------------
------------
</TABLE>

<PAGE>

EL CONQUISTADOR RESORT & COUNTRY CLUB

GENERAL

El Conquistador Resort & Country Club, a world class destination resort
complex, is one of the leading hotel and casino properties in Puerto Rico. The
resort has 751 guest rooms, an 18-hole championship golf course, a marina, seven
tennis courts, 90,000 square feet of convention and meeting facilities, six
lounges and nightclubs, 12 restaurants, a 10,000 square foot casino, 25 retail
shops, a fitness center and five pool areas, situated on a bluff overlooking the
convergence of the Atlantic Ocean and the Caribbean Sea in Fajardo, Puerto Rico.
The resort also features a secluded beach located on a private island three
miles offshore commonly known as Palominos Island.

In addition, the resort generally has available 90 condominium units known
as Las Casitas Village. Almost all of the owners of these condominiums have
entered into rental arrangements with El Conquistador pursuant to which the
units are made available as additional guest rooms of the resort. Each unit
consists of one, two or three bedroom(s) and bathroom(s). Each multiple room
unit can be divided into two or more separate one bedroom guest rooms or can be
sold as a multi-room unit depending on guests' preferences. The units can be
divided into a maximum of 167 separate guest rooms which are made available to
the inventory of luxury rooms at the resort. Guests at Las Casitas Village are
able to enjoy all the facilities of the resort.

The resort offers group and conference facilities for groups of up to 2,000
participants and also attracts the individual upscale leisure traveler. The
upscale leisure traveler is attracted to the resort by the Caribbean climate and
resort amenities including the casino, swimming pools, whirlpools, tennis, golf
and water sports facilities, a health club and entertainment lounges. 'Blue
Chip' corporate and incentive groups comprise a significant portion of the
resort's clientele due to its convention and meeting facilities as well as the
other resort amenities.

The resort has received the Gold Key Award by Meetings & Conventions
Magazine and the Paragon Award by Corporate Meetings & Incentives Magazine for
excellence in meetings and conventions. It has been awarded the American
Automobile Association 'Four Diamond' rating for each of its five years of
operation. Las Casitas Village was awarded a 'Five Diamond' rating (the highest
rating) by the American Automobile Association commencing in the fourth quarter
of 1997.

Commencing with the 1998-99 winter season, the resort was marketed as a
Wyndham Resort'r'. As a Wyndham Resort, the property is included in Wyndham
International's national and worldwide marketing campaigns as well as the
Wyndham International reservation system. Also commencing with the 1998-99
winter season, Las Casitas Village was marketed as a Grand Bay'r' hotel and is
likewise included in Grand Bay's national and worldwide marketing campaigns.
Wyndham Management and Grand Bay have substantially greater marketing resources
than were available to the resort in the past.

The PricewaterhouseCoopers Lodging Research Network has independently
ranked more than 40 U.S. hotel brands owned by publicly traded companies by
growth in revenue per available room for the second quarter of 1998 vs. the
year-earlier period. The Wyndham Resorts'r' brand was the top-performing upper
upscale hotel brand with revenues per available room growth of 37.5% in the
second quarter of 1998 versus the second quarter of 1997. The Grand Bay'r' brand
was the second-best performing upper upscale brand, with revenues per available
room growth of 12.3% during the period.

During the fiscal year ended December 31, 1998, the resort had an average
occupancy of 72.3% and gross revenues of $102,434,000 compared to an average
occupancy of 73.3% and gross revenues of $95,790,000 during the corresponding
12-month period ended December 31, 1997. During the fiscal year (9 months) ended
December 31, 1997, the resort had an average occupancy of 69.3% and gross
revenues of $60,585,000 compared to an average occupancy of 67.6% and gross
revenues of $59,019,000 during the corresponding 9-month period ended December
31, 1996. The resort finished its third full fiscal year ended March 31, 1997
with an average occupancy of 72.0% and gross revenues of $94,224,000. This
compares to an average occupancy of 71.0% and gross

<PAGE>

revenues of $90,351,000 for the fiscal year ended March 31, 1996 and an average
occupancy of 73.3% and gross revenues of $85,948,000 for the fiscal year ended
March 31, 1995.

During the fiscal year ended December 31, 1998 and the 12-month period
ended December 31, 1997, daily room rates at the resort were $213.39 and
$202.77, respectively. The average daily room rates at the resort during the
fiscal year (9 months) ended December 31, 1997 and the 9-month period ended
December 31, 1996 were $175.59 and $175.01, respectively. During the fiscal
years ended March 31, 1997, 1996 and 1995, daily room rates at the resort were
$202.86, $198.99 and $188.87, respectively.

During the fiscal year ended December 31, 1998 and the 12-month period
ended December 31, 1997, capital expenditures for the purchase of property and
equipment were $7,385,000 and $2,298,000, respectively. During the fiscal year
(9 months) ended December 31, 1997 and the 9-month period ended December 31,
1996, the resort's capital expenditures for the purchase of property and
equipment were $1,890,000 and $1,623,000, respectively. During the fiscal years
ended March 31, 1997, 1996 and 1995, the resort's capital expenditures for the
purchase of property and equipment were $1,428,000, $864,000 and $3,002,000,
respectively.

The resort has historically been managed by Williams Hospitality, an
affiliate of El Conquistador. Williams Hospitality's sole business was the
operation of the resort and two other Puerto Rico hotel properties owned by
affiliates of El Conquistador. As of January 16, 1998, Wyndham International
acquired the majority interest in Williams Hospitality's and in March 1998
acquired the remaining interests. El Conquistador entered into an amended and
restated management agreement with Williams Hospitality which became effective
January 1, 1999. Williams Hospitality simultaneously entered into an agreement
with Wyndham Management with respect to the management of the resort and Las
Casitas Village and the marketing of the resort as a Wyndham Resort'r'. Williams
Hospitality also entered into a marketing agreement with Grand Bay with respect
to the marketing of Las Casitas Village as a Grand Bay'r' hotel.

Set forth below is a chart which contains certain historical and financial
information concerning the resort:

<TABLE>
<CAPTION>
ROOM REVENUE
AVERAGE AVERAGE PER RENOVATION
PERIOD OCCUPANCY DAILY RATE AVAILABLE ROOM EXPENDITURES
------ --------- ---------- -------------- ------------
<S> <C> <C> <C> <C>
January 1, 1998 - December 31, 1998(1)......... 72.3% $ 213.39 $ 56,312 $7,385,000
January 1, 1997 - December 31, 1997(1)......... 73.3% $ 202.77 $ 54,239 $2,298,000

April 1, 1997 - December 31, 1997.............. 69.3% $ 175.59 $ 33,461 $1,890,000
April 1, 1996 - December 31, 1996(1)........... 67.6% $ 175.01 $ 32,516 $1,623,000

April 1, 1996 - March 31, 1997................. 72.0% $ 202.86 $ 53,294 $1,428,000
April 1, 1995 - March 31, 1996................. 71.0% $ 198.99 $ 51,687 $ 864,000
April 1, 1994 - March 31, 1995................. 73.3% $ 188.87 $ 50,523 $3,002,000
</TABLE>

- ------------

(1) Financial information for this period is unaudited. El Conquistador changed
its fiscal year-end to December 31 from March 31 effective for the fiscal
year ended December 31, 1997.

ACCESS

The resort is located on the northeast coast of Puerto Rico, approximately
35 miles east of the Luis Munoz Marin International Airport. Access from San
Juan and the Luis Munoz Marin International Airport to the resort is provided by
Puerto Rico Highway 3, a four lane thoroughfare. The Luis Munoz Marin
International Airport is currently served by approximately 30 United States and
international airlines, including American Airlines, which uses San Juan as a
hub for its intra-Caribbean service. Frequent, scheduled passenger air service
connects Puerto Rico to the mainland United States, Europe and South America.
Flying time is 3 1/4 hours to New York, 2 1/4 hours to Miami, 1 1/2 hours to
Caracas and 8 hours to Europe. At present, according to the Official Airline
Guide, a recognized travel industry source, there is daily non-stop service
between San Juan and 17 United States cities, including, New York, Chicago,
Dallas, Miami, Atlanta, Boston and numerous others. There is also regularly
scheduled service between Puerto Rico and

<PAGE>

<PAGE>
other Caribbean islands and major Latin American and European cities. El
Conquistador believes that the abundance of non-stop flights to San Juan
provides a major competitive advantage for resorts in Puerto Rico over those
elsewhere in the Caribbean. However, airline service for Puerto Rico is wholly
outside the control of El Conquistador and such service may change at any time.

CASINO CREDIT POLICY

The resort's casino extends credit to qualified players who satisfy its
credit review procedures. The procedures include external credit verification
and internal management level approvals. Credit play at the resort has not been
significant since its opening in November 1993 and credit losses have been
immaterial. Gaming debts are enforceable in Puerto Rico and the majority of
states in the United States. Those states that do not enforce gaming debts will
nonetheless generally allow enforcement of a judgment obtained in a jurisdiction
such as Puerto Rico. Due to the unenforceability generally of gaming debts in
Latin America, procedures have been established to obtain promissory notes from
most Latin American credit casino clients.

GOVERNMENT REGULATION AND LICENSING

Puerto Rico legalized gambling by the adoption of Law No. 221 on May 15,
1948. The Office of the Commissioner of Financial Institutions of Puerto Rico is
responsible for investigating and licensing casino owners and the Gaming
Division of the Tourism Company of Puerto Rico regulates and supervises casino
operations. A government inspector must be on-site whenever a casino is open.
Among its responsibilities, the Gaming Division licenses all casino employees
and enforces regulations relating to method of play and operation of the casino.
The casino at the resort is subject to strict internal controls imposed by El
Conquistador and the Hotel Operator over all facets of its operations, including
the handling of cash and security measures. Each casino pays the government of
Puerto Rico a casino franchise fee depending on total play or drop in the
casino, which fee ranges from $50,000 to $200,000. Williams Hospitality was
granted a casino franchise as an operator of the casino at the resort. Williams
Hospitality operates the casino on behalf of El Conquistador as part of its
management function at the resort. The resort pays an annual casino franchise
fee of $150,000 in equal quarterly installments. Williams Hospitality is
required to renew its casino franchise quarterly; and, unless a change of
ownership of the franchisee has occurred or the gaming authorities have reason
to believe that reinvestigation of the franchisee is necessary, renewal is
generally automatic.

The resort is also subject to various local laws and regulations affecting
its business, including provisions relating to fire safety, sanitation, health
and the sale of alcoholic beverages.

SEASONALITY

Tourism in Puerto Rico is at its peak during the months of December through
April. Most hotels, despite reducing their room rates during the off-season
months, experience decreased occupancy and lower revenues. The resort expects
that group business developed during the off-season and the shoulder-season will
reduce the effect of seasonality on its operations.

During the fiscal year ended December 31, 1998 and the 12-month period
ended December 31, 1997, the resort's occupancy ranged from 46.5% to 86.9% and
54.7% to 88.2%, respectively, with an average occupancy of 72.3% and 73.3%,
respectively. During the fiscal year (9 months) ended December 31, 1997, the
resort's monthly occupancy ranged from 54.7% to 85.0% with an average occupancy
of 69.3% compared to monthly occupancy ranging from 47.1% to 84.2% and an
average occupancy of 67.6% for the 9-month period ended December 31, 1996.
During the fiscal years ended March 31, 1997 and 1996, the resort's monthly
occupancy ranged from 47.1% to 85.5% and 50.1% to 88.8%, respectively, with an
average occupancy of 72.0% and 71.0%, respectively. The in-season average
occupancy for December 1997 to April 1998 was 78.5% compared to 79.8% and 77.1%
for the corresponding periods ending in April 1997 and April 1996, respectively.

<PAGE>

<PAGE>
COMPETITION

The hotel and casino business in the Caribbean region is highly
competitive. The resort competes with other hotels and resorts on the island of
Puerto Rico and on other Caribbean and Bahamian islands and in the southeastern
United States, Hawaii and Mexico. The resort competes with such chains as Hyatt,
Marriott, Hilton and Westin as well as numerous other hotel and resort chains
and independent hotel and motel operators. Las Casitas Village competes with
such chains as The Four Seasons Resorts and the Ritz Carlton. Some of these
competing properties are owned or managed by hotel companies possessing
substantially greater financial and marketing resources than those of El
Conquistador and the Hotel Operator.

El Conquistador believes that Puerto Rico offers many advantages over
geographical areas in which competing properties are located. Unlike most other
Caribbean islands, Puerto Rico is served by many direct air flights from the
continental United States and has a highly developed economy and a well-educated
population. Moreover, Puerto Rico is a Commonwealth of the United States,
freeing mainland visitors from concerns about foreign currencies or customs and
immigration laws. Unlike resort areas in the southeastern United States, Puerto
Rico enjoys a mild subtropical climate throughout the year and offers legalized
gambling.

The resort hotels in Puerto Rico that most directly compete with the resort
are the Hyatt Regency Cerromar Beach Resort & Casino with, according to the
Official Hotel Guide, 506 rooms, the Hyatt Dorado Beach Resort & Casino with,
according to the Official Hotel Guide, 298 rooms, and the Westin Rio Mar Beach
Resort & Country Club, which is also located in the northeastern section of
Puerto Rico with, according to the Official Hotel Guide, 600 rooms. All of these
other resort hotels offer services, meeting space and recreational facilities
comparable to those offered by the resort. The Caribe Hilton Hotel located in
San Juan, Puerto Rico has recently announced significant renovation and
expansion plans to position it to compete with the resort for group business.
All of these hotels are beach and, with the exception of the Caribe Hilton
Hotel, golf resorts and have an experienced hotel operator that has available to
it major hotel chain resources. The resort competes with the foregoing resort
hotels, as well as those in other destination resort locations, on the basis of
price, service, the extent and quality of facilities, ease of access, and its
ability to promote the resort to travel agents, meeting planners and directly to
the public. In this regard, El Conquistador expects to benefit from the
marketing programs and reservation services of Wyndham Management and Grand Bay.

EMPLOYEES

Approximately 1,490 persons are employed at the resort, of whom 120 are
casino employees. None of the employees at the resort is represented by a labor
union. The number of persons employed at the Resort varies from season to season
and is at its highest during the high season of December through April when
occupancy is at its highest. Under the management agreement, all of the persons
employed at the resort will become employees of the Hotel Operator, not El
Conquistador. El Conquistador will continue to bear all costs with respect to
employees at the resort. Such costs are considered reimbursable expenses and are
in addition to the management fees paid to the Hotel Operator. El Conquistador
considers the current relationships between the resort and its employees to be
satisfactory.

PROPERTY

The resort is situated on approximately 220 acres of land in Fajardo,
Puerto Rico. Additionally, an affiliate of El Conquistador owns approximately 42
additional acres of land in the vicinity of the resort which has various uses
including employee parking facilities for the resort. The following table sets
forth the material properties which constitute the resort as of the date hereof.
El Conquistador believes that the properties listed in the following table are
in good repair and are adequate for their respective purposes. El Conquistador
owns substantially all of the machinery, equipment, furnishings, goods and
fixtures used in its business, all of which are well maintained and satisfactory
for the purposes intended. Some of El Conquistador's personal property utilized
at the resort is subject to security interests held by third parties who
financed the

<PAGE>

<PAGE>
acquisition of such property. El Conquistador believes that its properties are
adequately covered by insurance.

<TABLE>
<CAPTION>
APPROXIMATE
LOCATION PRINCIPAL USE SIZE INTEREST ENCUMBRANCES
- -------- ------------- ---- -------- ------------

<S> <C> <C> <C> <C>
Fajardo, PR................... Hotel and casino 854,000 sq. ft.(1) Fee simple $105,200,000(2)
Palominos Island
Fajardo, PR................. Beach and watersports 90 acres Leasehold(3) $ 2,000,000(4)
</TABLE>

- ------------

(1) The approximate size represents the square footage size of the structures,
which constitute the resort.

(2) Assuming completion of this offering, will be subject to a first mortgage
lien securing a mortgage note in the principal amount of $105,200,000
securing the bonds.

(3) Leased by El Conquistador pursuant to a Deed of Lease dated December 15,
1990. The term of the Deed of Lease is for 32 years, expiring November 30,
2022, with two options to extend the term for additional five-year periods.
Annual rent for Palominos Island was $210,000 for the 12-month period ended
November 30, 1998, which annual rent increases $30,000 every five years
thereafter commencing December 1, 2002, including during extensions of the
original term.

(4) Assuming completion of this offering, the Deed of Lease will be subject to a
first leasehold mortgage lien securing a mortgage note in the principal
amount of $2,000,000 securing the bonds.

MANAGEMENT AND MARKETING OF THE RESORT AND LAS CASITAS VILLAGE

El Conquistador was a party to a management agreement with Williams
Hospitality which was terminated effective December 31, 1998. The previous
management agreement required El Conquistador to pay to Williams Hospitality a
base management fee equal to 3.5% of the resort's and Las Casitas Village's
gross revenues and an incentive management fee equal to 10% of the resort's and
Las Casitas Village's gross operating profit. Gross operating profit means
income after deduction of the base management fee and before insurance, interest
and rent expenses, depreciation and amortization, and payment of property taxes.
Payment of the incentive management fees are subordinate to all obligations of
El Conquistador to third parties as well as certain obligations to its partners.
To date, payment of all incentive management fees has been deferred. Prior to
the acquisition of Williams Hospitality by Wyndham International, Williams
Hospitality's sole business was primarily to manage three hotels in Puerto Rico:
the resort, the El San Juan Hotel & Casino and the Condado Plaza Hotel & Casino.
Following Wyndham International's acquisition of Williams Hospitality during
1998, the employees of Williams Hospitality became employees of Wyndham
International and in many cases their responsibilities have increased to include
other properties operated by Wyndham International.

The following table sets forth the basic management fees paid and the
incentive management fees earned by Williams Hospitality during the periods set
forth. Such fees do not include amounts Williams Hospitality was reimbursed for
certain administrative expenses incurred in connection with its management of
the resort and Las Casitas Village which are set forth separately in the
following table.

<PAGE>

<TABLE>
<CAPTION>
REIMBURSED
TOTAL ADMINISTRATIVE
BASIC INCENTIVE FEES EXPENSES OF
MANAGEMENT MANAGEMENT PAID AND WILLIAMS
FEES PAID FEES EARNED EARNED HOSPITALITY
---------- ----------- ---------- --------------

<S> <C> <C> <C> <C>
Fiscal year ended December 31, 1998.......................... $3,596,000 $2,986,000 $6,582,000 $1,800,000
12-month period ended December 31, 1997...................... 3,360,000 2,336,000 5,696,000 3,286,000

Fiscal year ended March 31, 1997............................. $3,305,000 $2,376,000 $5,681,000 $3,258,000
Fiscal year ended March 31, 1996............................. 3,170,000 2,224,000 5,395,000 2,728,000

Fiscal year (9 months) ended December 31, 1997............... $2,125,000 $ 860,000 $2,985,000 $2,497,000
9-month period ended December 31, 1996....................... 2,071,000 899,000 2,970,000 2,082,000
</TABLE>

El Conquistador has entered into an amended and restated management
agreement with Williams Hospitality for the management and marketing of the
resort and Las Casitas Village. The management agreement became effective
January 1, 1999 and expires in January 2014. Simultaneously, Williams
Hospitality entered into an agreement with Wyndham Management with respect to
the management of the resort and Las Casitas Village and the marketing of the
resort as a Wyndham Resort'r'. The term of the agreement between Williams
Hospitality and Wyndham Management coincides with the term of the management
agreement between El Conquistador and Williams Hospitality. El Conquistador
structured the new management arrangements to keep Williams Hospitality involved
to ensure employees were able to preserve their 401(k) plans. Williams
Hospitality will continue to provide administrative services with respect to
employees of the resort. It is intended that all employees of the resort become
employees of Williams Hospitality in the future. Williams Hospitality also
entered into a marketing agreement with Grand Bay with respect to the marketing
of Las Casitas Village as a Grand Bay'r' hotel. The agreement between Williams
Hospitality and Grand Bay is for a term of one year and is renewable on a yearly
basis if both Williams Hospitality and Grand Bay consent to such renewal.

Under the management agreement, El Conquistador is required to pay to
Williams Hospitality a base management fee of 2.5% of the gross revenues of the
resort and 3.0% of the gross room revenues of Las Casitas Village. El
Conquistador is also required to pay a trade name fee of 0.5% of gross room
revenues of the resort, and marketing fees of 1.5% of gross room revenues of the
resort and 1.0% of the gross room revenues of Las Casitas Village. In addition,
El Conquistador is solely responsible for all of the expenses incurred by the
Hotel Operator in connection with managing and operating the resort and Las
Casitas Village and is solely responsible for its allocable share of the cost of
the Hotel Operator's national sales office efforts.

The fees payable under the management agreement differ from those under the
old management agreement as follows:

the base management fee was reduced from 3.5% to 2.5% of gross revenues of
the resort

the base management fee was reduced from 3.5% to 3.0% of gross room
revenues of Las Casitas Village

the 10.0% incentive fee under the old agreement was eliminated

there is a new trade name fee of 0.5% of gross room revenues of the resort

there are new marketing fees of 1.5% of gross room revenues of the resort
and 1.0% of gross room revenues of Las Casitas Village

The following table sets forth the fees that would have been payable to
Williams Hospitality for the periods shown if the management agreement had been
in effect during such periods.

<PAGE>

<TABLE>
<CAPTION>
1.0%
3.0% BASE 0.5% MARKETING
2.5% BASE MANAGEMENT TRADE 1.5% FEE FOR
MANAGEMENT FEE FOR NAME MARKETING LAS TOTAL
FEE LAS CASITAS FEE FEE CASITAS FEES
---------- ----------- -------- --------- --------- ----------

<S> <C> <C> <C> <C> <C> <C>
Fiscal year ended December 31,
1998............................ $2,509,230 $ 235,116 $211,453 $ 634,359 $78,372 $3,658,531

Fiscal year (9 months) ended
December 31, 1997............... 1,487,553 140,463 125,648 376,944 46,821 2,177,430
</TABLE>

The management agreement provides that Williams Hospitality has exclusive
supervision, control and discretion in the management, maintenance and operation
of the resort and limited management responsibilities with respect to Las
Casitas Village. The Hotel Operator has sole responsibility and total discretion
on all matters with respect to the employees of the resort and in the future all
such employees will become employees of the Hotel Operator or its affiliates,
and will not be employed by El Conquistador. All leases and concession
agreements relating to the resort require the approval of each of the Hotel
Operator and El Conquistador. The Hotel Operator is responsible for providing
repairs to and maintenance of the resort at certain quality levels, the payment
for which is reimbursed by El Conquistador. The Hotel Operator will notify El
Conquistador of the need for all capital improvements of the resort. However,
completion of such capital improvements is the responsibility of El
Conquistador. The Hotel Operator may use its affiliates to furnish goods or
services to the resort, but the terms of such arrangements must be no less
favorable than those reasonably obtainable from an unrelated party.

The Hotel Operator's business strategy is to maximize the economic
potential of the resort and Las Casitas Village. The Hotel Operator is
constantly seeking new ways to reduce operating costs as well as upgrade or add
amenities to the resort and Las Casitas Village to enhance the overall
experience of its guests. One new restaurant and five new retail shops were
recently opened at the resort. Additionally, the resort has been enhanced by a
Golden Door'r' spa which opened in December 1998.

El Conquistador believes that the resort will benefit significantly from
the use of the Wyndham Resorts'r' and Grand Bay'r' trade names in the marketing
of the resort and Las Casitas Village. The Hotel Operator promotes the multiple
products of Wyndham International under a series of unified marketing programs
and a proprietary reservation system. As a result, Wyndham International hotels
enjoy a large market presence significant enough to yield cost savings by
centralizing functions such as sales, marketing, reservations and advertising.
According to industry studies, the Wyndham Resorts'r' brand was the top
performing upper upscale hotel brand with respect to revenue per available room
growth of 37.5% in the second quarter of 1998 versus the second quarter of 1997.
With respect to the luxury Grand Bay'r' hotels, the Hotel Operator's aim is to
consistently deliver excellent and personalized service and 'seek opportunities
to create memories.' To better position the Grand Bay'r' brand and to develop a
unified luxury concept and brand, the Hotel Operator developed and is currently
implementing a unified marketing program designed to position this brand as a
collection of distinctive, luxury hotels and resorts competing with other
high-end products.

The Hotel Operator initiated a multi-million dollar advertising campaign
during January 1999. The advertising campaign predominately features the resort
as the flagship of the Wyndham Resorts'r'. The resort's portion of the cost of
the advertising campaign will be funded by the marketing fees paid by El
Conquistador to the Hotel Operator. The Hotel Operator expects that the
advertising campaign will increase the exposure and awareness of the resort and
its amenities and, as a result, will increase the occupancy rate and revenues of
the resort. We cannot promise, however, that the advertising campaign will be a
success with respect to either Wyndham Resorts'r' as a whole or the resort
specifically.

The advertising campaign features other Wyndham Resorts'r' that compete
directly or indirectly with the resort such as the Wyndham Aruba Beach Resort &
Casino in Palm Beach, Aruba, the Wyndham Rose Hall Golf & Beach Resort in
Montego Bay, Jamaica, the El San Juan Hotel & Casino in San Juan, Puerto Rico
and the Buena Vista Palace in Orlando, Florida. We cannot

<PAGE>

promise that the advertising campaign will not result in a loss of resort guests
to other Wyndham Resorts'r' hotels.

Effective January 1, 1999, Las Casitas Village was branded as a Grand
Bay'r' hotel and, like other Grand Bay'r' hotels, is marketed to the upper
upscale traveler. All Grand Bay'r' hotels intend to install Golden Door'r' spas
on the hotel premises. An aggressive marketing campaign for Grand Bay'r' hotels
was launched in early 1999 promoting Las Casitas Village as well as other Grand
Bay'r' hotels such as the Grand Bay Hotel in Miami, Florida, the Peaks in
Telluride, Colorado, the Boulders in Boulder, Colorado, the Grand Bay Hotel in
Scottsdale, Arizona and La Paloma in Tucson, Arizona. This campaign will be part
of Wyndham International's strategy to consolidate the marketing of the
properties acquired by Patriot/Wyndham during the past two years and enhance the
Grand Bay'r' brand. The Las Casitas Village portion of the campaign will be
funded by the marketing fees paid to the Hotel Operator with respect to Las
Casitas Village.

The resort and Las Casitas Village will now have available the resources of
the extensive sales and marketing networks of Wyndham Resorts'r' and Grand
Bay'r'. Prior to 1998, the resort and Las Casitas Village had an in-house
marketing staff of approximately 8 employees, a U.S. mainland exclusive
marketing service with 40 employees located primarily in Miami, Florida and New
York, New York and sales agents in South America and Europe.

El Conquistador has agreed to indemnify and hold harmless the Hotel
Operator and its shareholders and affiliates and their respective partners,
shareholders, directors, officers, employees and agents from and against any and
all liabilities relating to the operation of the resort and Las Casitas Village
except for the gross negligence or willful misconduct of the Hotel Operator's
executive employees.

GOLDEN DOOR'r' SPA

The Hotel Operator has determined that each Grand Bay'r' hotel will contain
a Golden Door'r' spa. A Golden Door'r' spa was opened at the resort in December
1998. The spa is marketed as an amenity to Las Casitas Village but is also
available to all guests of the resort. El Conquistador owns the spa and the
Hotel Operator manages and markets the spa. The cost of construction of the spa
was approximately $4.9 million, which cost was borne by El Conquistador. El
Conquistador will pay Grand Bay a management fee of 6% of the gross revenues of
the spa and an incentive fee of 25% of the operating income of the spa.

LAS CASITAS VILLAGE ARRANGEMENTS

El Conquistador has entered into separate, year-to-year agreements with the
owners of almost all of the condominium units of Las Casitas Village with
respect to the management and marketing of the condominium units. El
Conquistador has full discretion in fixing room rates for each unit in Las
Casitas Village. Each unit must be made available to El Conquistador for at
least 11 months per calendar year and 23 of 25 weeks during the resort's high
season. Additionally, the owner of each condominium must maintain the unit,
including its furnishings and equipment, in first class condition. El
Conquistador receives 50% of the net rental income of each condominium unit,
which is equal to the gross rental income of each condominium unit less certain
administrative, marketing, maintenance, operational and other costs associated
with the condominium units individually and Las Casitas Village as a whole.
During the fiscal year ended December 31, 1998 and the fiscal year (9 months)
ended December 31, 1997, El Conquistador's net revenue from the operation of Las
Casitas Village was approximately $2,065,000 and $1,083,000, respectively. None
of the unit owners is an affiliate of El Conquistador. We cannot promise that
the arrangements with each individual unit owner will be renewed in the future.
However, El Conquistador believes that the condominium units will continue to
generally be made available to it based on the tax incentives available to the
owners of such units from such arrangements.

The condominium units were developed and sold by Las Casitas Development
Company I, S en C (S.E.), which is owned 50% by WKA El Con Associates and 50% by
an unaffiliated third party. At the time of such development and sale, WKA El
Con owned 50% of El Conquistador.

<PAGE>

<PAGE>
FURTHER DEVELOPMENT OF LAS CASITAS VILLAGE

Immediately prior to the issuance of the bonds, El Conquistador will make a
distribution of approximately 15 acres of vacant land located within its main
parcel and adjacent to Las Casitas Village to a newly formed affiliated entity.
As part of the corporate restructuring for this offering, the common stock of
the new entity will be issued to WHG El Con Corp. and Conquistador Holding, Inc.
It is contemplated that this land will be developed for an expansion of Las
Casitas Village. El Conquistador anticipates entering into management and
marketing arrangements with the owners of the new development similar to the
arrangements with the owners of Las Casitas Village.

AVAILABLE INFORMATION

El Conquistador has filed a registration statement on Form S-11 under the
Securities Act of 1933 with the SEC with respect to this offering of the
undivided interests in the loan agreement between AFICA and El Conquistador
relating to the bonds. This official statement and prospectus does not contain
all of the information set forth in the registration statement and the exhibits
and schedules thereto, certain parts of which have been omitted in accordance
with the rules and regulations of the SEC. Reference is hereby made to the
registration statement, including the exhibits and schedules thereto, for
further information with respect to the bonds. Summaries and other statements
contained herein concerning the provisions of any document are not necessarily
complete, and in each instance reference is hereby made to the copy of the
document included in this official statement and prospectus or filed as an
exhibit to the registration statement.

The registration statement and the exhibits and schedules thereto can be
inspected and copied at the public reference facilities maintained by the SEC in
Washington, DC, Chicago, IL and New York, NY. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Such
material may also be accessed electronically by means of the SEC's home page on
the Internet at http://www.sec.gov.

Following consummation of this offering, El Conquistador will be subject to
the informational reporting requirements of the Securities Exchange Act of 1934
during the current fiscal year by reason of the public offering and the issuance
of the bonds. In accordance with the Exchange Act, El Conquistador will file
with the SEC the reports and other information required to be filed under the
Exchange Act. El Conquistador anticipates, however, that it will not be subject
to the reporting requirements of the Exchange Act in future fiscal years
pursuant to Section 15(d) of the Exchange Act; however, El Conquistador will
continue to file copies of its annual reports and certain other information,
documents and reports specified in Rule 15c2-12 promulgated under the Exchange
Act so long as the bonds are outstanding.

EL CONQUISTADOR PARTNERSHIP

El Conquistador is a Delaware limited partnership organized on January 16,
1990 under the Delaware Revised Uniform Limited Partnership Act. El Conquistador
has elected special partnership treatment under the laws of Puerto Rico. El
Conquistador's mailing address in Puerto Rico is 1000 El Conquistador Avenue,
Fajardo, Puerto Rico 00738. El Conquistador's registered office in the State of
Delaware is c/o Corporation Trust Company, 1209 Orange Street, Wilmington,
Delaware 19801.

The general partners and limited partners of El Conquistador are WKA El Con
Associates, a New York general partnership, and Conquistador Holding, Inc., a
Delaware corporation. Each of WKA El Con and Conquistador Holding owns a 35%
limited partnership interest and a 15% general partnership interest in El
Conquistador. Conquistador Holding is the managing general partner of El
Conquistador with the authority to make all decisions on behalf of El
Conquistador without the consent of WKA El Con. As of the date of issuance of
the bonds, El Conquistador will be governed by an amended and restated agreement
of limited partnership.

Immediately prior to the issuance of the bonds:

<PAGE>

<PAGE>
(1) WKA El Con will be dissolved;

(2) WKA El Con's general partnership interest in El Conquistador will be
distributed to Conquistador Holding and converted to a limited
partnership interest;

(3) a portion of WKA El Con's limited partnership interest in El
Conquistador representing an 11.73% ownership interest in El
Conquistador will be distributed to Conquistador Holding;

(4) a portion of WKA El Con's limited partnership interest in El
Conquistador representing a 23.27% ownership interest in El
Conquistador will be distributed to WHG El Con Corp.;

(5) Conquistador Holding will transfer its general and limited partnership
interests in El Conquistador to Conquistador Holding (SPE), Inc., its
newly-formed, wholly-owned, single-purpose subsidiary; and

(6) Conquistador Holding (SPE) will become the sole general partner of El
Conquistador at the time of the transfer referred to in (5) above.

After the restructuring discussed above:

WHG El Con Corp. will own a 23.27% limited partnership interest in El
Conquistador

Conquistador Holding (SPE) will own a 61.73% limited partnership interest
in El Conquistador

Conquistador Holding (SPE) will own a 15% general partnership interest in
El Conquistador

Conquistador Holding (SPE) will be the sole general partner of El
Conquistador

In connection with this offering, the term of El Conquistador will be
extended and continue until March 31, 2035, provided that El Conquistador may be
dissolved prior to such date upon (1) mutual agreement of all the partners of El
Conquistador; (2) the sale or abandonment of all or substantially all of the
resort; or (3) the bankruptcy of the general partner unless the remaining
partners agree in writing to continue the business of El Conquistador and to
replace the bankrupt general partner.

No regular meetings of the partners of El Conquistador are required under
the El Conquistador partnership agreement. However, the partners meet once per
year to review and approve the forthcoming year's budget for the resort as
prepared and presented by the Hotel Operator. The partners also meet from
time-to-time as required to discuss various matters pertaining to El
Conquistador.

In 1990, WHG Resorts & Casinos Inc., together with certain other
individuals, caused the formation of WKA El Con. El Conquistador was formed by
WKA El Con and Kumagai Caribbean, Inc., a subsidiary of Kumagai Gumi Co., Ltd.,
a large Japanese construction company, for the purpose of acquiring and
renovating the hotel and casino property now known as the resort. El
Conquistador was originally owned 50% by WKA El Con and 50% by Kumagai
Caribbean. The resort was originally built as a 388 room hotel in 1962. In
January 1990, Williams Hospitality entered into an agreement with El
Conquistador for the management of the resort. The resort was substantially
renovated and expanded during 1991 and 1992 with Kumagai Caribbean acting as
construction manager and rendering technical development services during the
construction phase and Williams Hospitality rendering management services in
preparation of opening of the resort. The resort opened for business in November
1993.

In April 1993, WKA El Con became a limited partner in Las Casitas
Development Company I, S en C (S.E.) which acquired certain land from El
Conquistador for the purpose of developing and selling approximately 90
condominiums known as Las Casitas Village. The project was substantially
completed in or about January 1995. Las Casitas Development is an affiliate of
El Conquistador. However, Las Casitas Development currently conducts no business
and it will not conduct any further business in the future.

On January 16, 1998, WHG Resorts & Casinos Inc. was acquired by a
wholly-owned subsidiary of Wyndham International. Williams Hospitality was owned
by WHG Resorts and

<PAGE>

certain other individuals. Wyndham International acquired WHG Resort's interest
in Williams Hospitality concurrently with its acquisition of WHG Resorts.

On March 31, 1998, Patriot acquired the interests of certain of the other
individual owners in WKA El Con and Kumagai Caribbean in El Conquistador.
Simultaneously, Wyndham International acquired the remaining interests in
Williams Hospitality. On July 13, 1998, Patriot acquired the balance of the
other individual owner's interests in WKA El Con. Subsequently, Patriot
transferred its ownership interest in WKA El Con and El Conquistador to
Conquistador Holding. WKA El Con is currently beneficially owned 46.54% by
Wyndham International and 53.46% by Conquistador Holding. Patriot beneficially
owns approximately 77% of El Conquistador by reason of its 99% equity ownership
interest in Conquistador Holding. Wyndham International beneficially owns
approximately 23% of El Conquistador by reason of its equity ownership in WKA El
Con. Williams Hospitality is wholly owned by Wyndham International.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

El Conquistador's partnership interests are currently comprised of 30%
general partnership interests and 70% limited partnership interests. The
beneficial ownership of El Conquistador as of April 15, 1999 is set forth below:

<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------- -------------------- ----------------
<S> <C> <C>
WKA El Con Associates 50.00% General Partnership Interest (1) 50.00%
1000 El Conquistador Avenue
Fajardo, PR 00738
Conquistador Holding, Inc. 76.73% General Partnership Interest (2) 76.73%
1000 El Conquistador Avenue
Fajardo, PR 00738
WKA El Con Associates 50.00% Limited Partnership Interest (3) 50.00%
1000 El Conquistador Avenue
Fajardo, PR 00738
Conquistador Holding, Inc. 76.73% Limited Partnership Interest (4) 76.73%
1000 El Conquistador Avenue
Fajardo, PR 00738
</TABLE>

- ------------

(1) WKA El Con directly owns 50% of the general partnership interests of El
Conquistador which is equal to 15% of the total partnership interests of El
Conquistador. WKA El Con is 46.54% indirectly owned by Wyndham International
and 53.46% owned by Conquistador Holding.

(2) Conquistador Holding directly owns 50% of the general partnership interests
of El Conquistador and indirectly owns 26.73% of the general partnership
interests of El Conquistador by reason of its 53.46% ownership of WKA El
Con, resulting in direct and indirect ownership of 76.73% of the general
partnership interests in El Conquistador which is equal to 23.02% of the
total partnership interests of El Conquistador. Wyndham International
Operating Partnership, L.P. owns 100% of the Class A voting stock of
Conquistador Holding, which represents 1% of the equity of Conquistador
Holding, and Patriot owns 100% of the Class B non-voting stock of
Conquistador Holding, which represents 99% of the equity of Conquistador
Holding.

(3) WKA El Con directly owns 50% of the limited partnership interests of El
Conquistador which is equal to 35% of the total partnership interests of El
Conquistador.

(4) Conquistador Holding directly owns 50% of the limited partnership interests
of El Conquistador and indirectly owns 26.73% of the limited partnership
interests of El Conquistador by reason of its 53.46% ownership of WKA El
Con, resulting in direct and indirect ownership of 76.73% of the limited
partnership interests in El Conquistador which is equal to 53.71% of the
total partnership interests of El Conquistador.
------------------------

Patriot/Wyndham owns substantially all of El Conquistador by reason of its
beneficial ownership of WKA El Con and Conquistador Holding. Patriot
beneficially owns approximately 77% of El Conquistador. Wyndham International
owns approximately 23% of El Conquistador.

<PAGE>

<PAGE>
As of the date of this official statement and prospectus, the ownership
structure of El Conquistador is as follows:

[GRAPH]

Prior to consummation of this offering, the partners of El Conquistador
will enter into an amended and restated partnership agreement which will:

(1) restrict El Conquistador's activities to the ownership and operation of
the resort;

(2) prohibit El Conquistador from acquiring any other property which will
not become part of the resort;

(3) prohibit the incurrence of obligations not related to the resort; and

(4) limit El Conquistador's ability to file bankruptcy.

Conquistador Holding (SPE), Inc., the newly-formed, single-purpose entity
which will become the sole general partner of El Conquistador immediately prior
to consummation of this offering, will be similarly restricted. Additionally,
Conquistador Holding (SPE), Inc. will be required to have two independent
directors whose approval will be required for it or El Conquistador to file
bankruptcy.

Contemporaneously with the offering of the bonds, Patriot will assume
certain indebtedness of El Conquistador owed to the Government Development Bank
for Puerto Rico which will be collateralized by, among other things, the
indirect ownership interests of Patriot/Wyndham in El Conquistador. See
'MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS -- Financial Condition' for a description of this transaction.
Currently, the outstanding shares of common stock of Patriot are 'paired' with
the outstanding shares of common stock of Wyndham International so that they are
transferable and tradable only in combination as units, each unit consisting of
one share of Patriot common stock and one share of Wyndham International common
stock.

<PAGE>

Patriot, through its wholly-owned subsidiaries PAH GP, Inc. and PAH LP,
Inc., is the sole general partner of Patriot American Hospitality Partnership,
L.P. In addition, Patriot is the holder of a 88.0% economic interest in the
Patriot Partnership as of March 29, 1999. The Patriot Partnership was formed in
connection with the initial public offering on October 2, 1995 of Patriot's
predecessor. Patriot's predecessor contributed its assets to the Patriot
Partnership in exchange for units of limited partnership interests of the
Patriot Partnership.

Wyndham International was the holder of an 86.8% economic interest in
Wyndham Hospitality Operating Partnership, L.P. (formerly known as Patriot
American Hospitality Operating Partnership, L.P.) as of March 29, 1999.

As of March 22, 1999, there were outstanding: 234,131,492 paired shares of
Patriot/Wyndham common stock; 4,860,876 shares of series A preferred stock of
Patriot and 558,656 shares of series B preferred stock of Patriot; 1,781,173
shares of series A preferred stock of Wyndham International; 1,781,181 shares of
series B preferred stock of Wyndham International; 7,717,601 options to purchase
a like number of paired shares of Patriot/Wyndham; 655,892 preferred A
partnership units of Wyndham International; 1,324,804 preferred B paired
partnership units; and 586,814 preferred C partnership units of Wyndham
International.

The beneficial ownership of the executive officers of El Conquistador in
paired shares of Patriot/Wyndham as of March 22, 1999 is set forth below:

<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS(1)
---------------- ---------------------- -----------
<S> <C> <C>
Karim Alibhai.............................................................. 5,347,240(2) 2.28%
Karim Alibhai.............................................................. 171,200(3)** 4.81%**
James D. Carreker.......................................................... 2,028,661(4) *
Stanley M. Koonce, Jr...................................................... 613,438(5) *
William W. Evans, III...................................................... 773,637(6) *
Thomas W. Lattin........................................................... 406,880(7) *
Lawrence S. Jones.......................................................... 15,711(8) *
Carla S. Moreland.......................................................... 70,879(9) *
Brian R. Gamache........................................................... 9,810(10) *
Executive officers and directors as a group (8 persons).................... 9,437,456(11) 3.99%
</TABLE>

- ------------
* Less than 1%.

** Wyndham International series A preferred stock and Wyndham International
series B preferred stock.

(1) Assumes that all partnership units and shares of preferred stock of Patriot
held by each person are redeemed for a paired share of Patriot/Wyndham. The
total number of shares outstanding in calculating the percentage assumes
that none of the partnership units or shares of preferred stock of Patriot
held by other persons are redeemed for paired shares of Patriot/Wyndham.
Also assumes that all vested options to purchase paired shares of
Patriot/Wyndham are exercised. The total number of shares outstanding used
in calculating the percentage assumes that no other vested or unvested
options held by other persons are exercised.

(2) Includes options to purchase 300,531 paired shares of Patriot/Wyndham
issued to Mr. Alibhai, all of which are currently exercisable. The number
of shares beneficially held by Mr. Alibhai includes an aggregate of 441,059
partnership units beneficially owned by Gencom Interest, Inc., a family
corporation for which he serves as Vice President and of which he owns 30%
of the outstanding capital stock. Mr. Alibhai disclaims beneficial
ownership of the partnership units referred to above, except to the extent
of his 30% ownership interest in such corporation.

(3) Shares of Wyndham International series A preferred stock and shares of
Wyndham International series B preferred stock.

(4) Includes options to purchase 78,088 paired shares of Patriot/Wyndham issued
to Mr. Carreker, all of which are currently exercisable.

(5) Includes options to purchase 33,303 paired shares of Patriot/Wyndham issued
to Mr. Koonce, all of which are currently exercisable.

(footnotes continued on next page)

<PAGE>

<PAGE>
(footnotes continued from previous page)

(6) Includes options to purchase 601,074 paired shares of Patriot/Wyndham
issued to Mr. Evans, all of which are currently exercisable.

(7) Includes options to purchase 223,609 paired shares of Patriot/Wyndham
issued to Mr. Lattin, all of which are currently exercisable.

(8) Includes options to purchase 6,011 paired shares of Patriot/Wyndham issued
to Mr. Jones, all of which are currently exercisable.

(9) Includes options to purchase 56,788 paired shares of Patriot/Wyndham issued
to Ms. Moreland, all of which are currently exercisable.

(10) Includes options to purchase 620 paired shares of Patriot/Wyndham issued to
Mr. Gamache, all of which are currently exercisable.

(11) Includes an aggregate of 7,525,173 paired shares of Patriot/Wyndham,
options to purchase 1,300,024 paired shares of Patriot/Wyndham, an
aggregate of 441,059 partnership units and an aggregate of 171,200 shares
of Wyndham International series A preferred stock and Wyndham International
series B preferred stock.

MANAGEMENT OF EL CONQUISTADOR PARTNERSHIP

EXECUTIVE OFFICERS OF EL CONQUISTADOR

The following table sets forth the names, ages and principal occupations of
each of El Conquistador's executive officers and the year in which each was
elected an officer.

<TABLE>
<CAPTION>
NAME AGE TITLE OFFICER SINCE
---- --- ----- -------------

<S> <C> <C> <C>
James D. Carreker........................ 51 Chief Executive Officer 1998
Brian R. Gamache......................... 42 President 1995
Lawrence S. Jones........................ 53 Executive Vice President and Treasurer 1998
Karim Alibhai............................ 34 Executive Vice President 1998
William W. Evans, III.................... 46 Executive Vice President 1998
Stanley M. Koonce, Jr.................... 50 Executive Vice President 1998
Thomas W. Lattin......................... 54 Executive Vice President and Director 1998
Carla S. Moreland........................ 39 Secretary 1998
</TABLE>

JAMES D. CARREKER has served as the Chief Executive Officer of El
Conquistador since 1998. In February 1999, Mr. Carreker was named Chief
Executive Officer of Patriot. Mr. Carreker also has served as the Chairman of
the Board of Directors and Chief Executive Officer of Wyndham International as
well as a director of Patriot since January 1998. He has also served as the
Chief Executive Officer and as a director of Conquistador Holding since 1998.
Prior to January 1998, he had served as President and Chief Executive Officer
and as a director of Wyndham Hotel Corporation, the predecessor corporation to
Wyndham International. He also served as Chief Executive Officer of Trammell
Crow Company, a national real estate company, from August 1994 to December 1995.
Earlier in his career, Mr. Carreker was President of Burdines, the Miami based
division of Federated Department Stores, and Senior Vice President and Chief
Financial Officer of Sanger Harris. Mr. Carreker currently serves as a director
of Trammel Crow Company and of Carreker-Antinori, Inc., a computer service
company that completed its initial public offering in May 1998. Mr. Carreker
is 51 years old. Mr. Carreker holds a B.S. and a Master of Business
Administration from Oklahoma State University.

BRIAN R. GAMACHE became the President of El Conquistador and Conquistador
Holding in 1998. Mr. Gamache was President of the resort from May 1995 until
November 1997. He was also President and Chief Operating Officer of WHG Resorts
& Casino Inc. from April 1997 until January 1998. Mr. Gamache has been President
of Williams Hospitality since March 1996 and he was Chief Operating Officer of
Williams Hospitality from March 1996 until January 1998. Prior to such time, Mr.
Gamache served as the Vice President -- Sales and Marketing of Williams
Hospitality from September 1990 until May 1995. Prior to joining Williams
Hospitality, Mr.

<PAGE>

Gamache held various positions for Hyatt Hotels Corp. from 1983 until 1990,
including Corporate Director of Sales and Marketing -- Resorts from 1987 until
1990 and he held various positions at Marriott Hotels Corporation from 1980
until 1983, including Director of Sales at the Marriott Camelback Resort and
Country Club in Scottsdale, Arizona. Mr. Gamache is 42 years old.

LAWRENCE S. JONES became the Executive Vice President and Treasurer of El
Conquistador and Conquistador Holding in 1998. Mr. Jones also became the
Executive Vice President and Treasurer of each of Patriot and Wyndham
International in March 1998. Prior to such time, Mr. Jones joined Coopers &
Lybrand in 1972 and continued there as a partner until March 1998 where he
served as Chairman of the firm's REIT industry practice. Mr. Jones is 53 years
old. Mr. Jones holds a B.S. from the University of California, Berkeley and an
M.S. from UCLA. Mr. Jones is a certified public accountant.

KARIM ALIBHAI became an Executive Vice President of El Conquistador and
Conquistador Holding in 1998. Mr. Alibhai has been the President and the Chief
Operating Officer and a director of Wyndham International since October 1997.
For the prior 11 years, Mr. Alibhai was a principal of the Gencom Group, an
affiliated group of companies that acquired, developed, renovated, leased and
managed hotel properties in the United States and Canada through Gencom American
Hospitality. Prior to October 1997, Mr. Alibhai was the President and Chief
Executive Officer of the Gencom Group. Mr. Alibhai is 34 years old. He holds a
B.A. from Rice University.

WILLIAM W. EVANS, III became an Executive Vice President of El Conquistador
and Conquistador Holding in 1998. Mr. Evans also serves as Executive Vice
President of Wyndham International and President and Chief Operating Officer of
Patriot since 1998. Mr. Evans has been an executive officer of each of Patriot
and Wyndham International since March 1997, and a director since July 1997.
Previously, Mr. Evans was a Managing Director in PaineWebber's Real Estate Group
with responsibility principally for the organization and structuring of
principal transactions. He joined PaineWebber as a result of the firm's
acquisition of Kidder, Peabody & Co. Incorporated in December 1994. Prior to
joining Kidder, Peabody in 1992, Mr. Evans was a First Vice President and head
of the Real Estate Financing Division of Swiss Bank Corporation. Mr. Evans is 46
years old. Mr. Evans is a graduate of the University of Virginia.

STANLEY M. KOONCE, JR. became an Executive Vice President of El
Conquistador and Conquistador Holding in 1998. Mr. Koonce also has been the
Executive Vice President -- Marketing and Strategic Planning of Wyndham
International since January 1998. Prior to such time, he served as Executive
Vice President -- Marketing, Planning and Technical Services of Wyndham Hotel
Corporation, the predecessor to Wyndham International, since October 1994, was
elected a director of Wyndham Hotel Corporation in January 1997 and served as
Senior Vice President of Sales and Marketing of Wyndham Hotel Corporation from
October 1989 until October 1994. Mr. Koonce served as President of CUC Travel
Services, a division of CUC International, in Stamford, Connecticut from 1986 to
1989, as Vice President of the Marketing Department with American Express from
1979 to 1986 and as a Director of Finance and Planning for American Airlines
from 1976 to 1979. Mr. Koonce is 50 years old. Mr. Koonce holds a B.S. in
Mathematics and an M.B.A. from the University of North Carolina.

THOMAS W. LATTIN became an Executive Vice President of El Conquistador and
Executive Vice President and a director of Conquistador Holding in 1998. Mr.
Lattin also has been an Executive Vice President of Wyndham Hotel Corporation,
the predecessor corporation to Wyndham International, since October 1997. Prior
to such time, he became President and Chief Operating Officer of the predecessor
of Patriot in April 1995 and continues in such capacity for Patriot American
Hospitality Operating Company. From 1987 through 1994, he served as the National
Partner of the hospitality industry consulting practice of Laventhol & Horwarth
and subsequently as a partner in the national hospitality consulting group of
Coopers & Lybrand L.L.P. In 1994, he joined the Hospitality Group of Kidder,
Peabody & Co. Incorporated as a Senior Vice President and later served as a
Senior Vice President with PaineWebber Incorporated. Mr. Lattin is 54 years old.
Mr. Lattin holds a B.S. and an M.S. in Hotel Management from the Cornell School
of Hotel Administration. He is a certified public accountant.

<PAGE>

CARLA S. MORELAND became Secretary of El Conquistador and Senior Vice
President and Secretary of Conquistador Holding in 1998. Ms. Moreland also has
been Senior Vice President, General Counsel and Secretary of Wyndham
International since 1998. Ms. Moreland was Vice President, General Counsel and
Secretary of Wyndham Hotel Corporation from 1994 until 1998. From 1988 until
1994, Ms. Moreland was an attorney at Weil Gotshal & Manges. Ms. Moreland is 39
years old.

OFFICERS AND DIRECTORS OF THE MANAGING GENERAL PARTNER

Certain information is set forth below concerning the directors and
principal executive officers of Conquistador Holding, each of whom has been
elected or appointed to serve until his or her successor is duly elected and
qualified.

<TABLE>
<CAPTION>
POSITION(S)
NAME AGE POSITION(S) HELD SINCE
---- --- ----------- ----------
<S> <C> <C> <C>
James D. Carreker............................. 51 Chief Executive Officer and Director 1998
Brian R. Gamache.............................. 42 President 1998
Lawrence S. Jones............................. 53 Executive Vice President and Treasurer 1998
Karim Alibhai................................. 34 Executive Vice President 1998
William W. Evans, III......................... 46 Executive Vice President 1998
Stanley M. Koonce, Jr......................... 50 Executive Vice President 1998
Thomas W. Lattin.............................. 54 Executive Vice President and Director 1998
Carla S. Moreland............................. 39 Senior Vice President and Secretary 1998
</TABLE>

For biographical information with respect to the individuals listed above,
see ' -- Executive Officers of El Conquistador' above. The individuals set forth
above will also serve as the directors and principal executive officers of
Conquistador Holding (SPE), Inc. at the time of this offering.

Conquistador Holding (SPE), Inc. intends to designate two additional
directors after completion of this offering. The individuals who will serve as
the two additional directors will not become executive officers of El
Conquistador or Conquistador Holding (SPE), Inc. As of the date of this official
statement and prospectus, it has not been determined who will serve as the
additional directors.

COMPENSATION OF EXECUTIVE OFFICERS OF EL CONQUISTADOR

The executive officers of El Conquistador received no compensation from the
partnership during the fiscal years ended December 31, 1998, December 31, 1997
(9 months) or March 31, 1997.

LIMITATIONS ON THE LIABILITY OF AFFILIATED PERSONS

Section 17-403 of the Delaware Revised Uniform Limited Partnership Act
provides that unless modified by the partnership agreement, a general partner of
a limited partnership owes a fiduciary duty and will be liable for a breach of
such duty to the partnership and to other partners of the partnership. However,
the new partnership agreement of El Conquistador will provide that no general
partner and none of its officers, directors, partners, employees or agents,
whether acting as a general partner or otherwise, will have any liability to El
Conquistador or any other partner for any acts performed by such general
partner, officer, director, partner, employee or agent, by or on behalf of El
Conquistador in its capacity as such except for gross negligence or willful
misconduct.

The new partnership agreement will also provide that the liability of each
limited partner is limited to its capital contribution and that no limited
partner as such has any other liability to contribute money to, or in respect of
the liabilities or obligations of, El Conquistador, nor is any limited partner
as such personally liable for any obligations of El Conquistador except as
otherwise provided by law. The partnership agreement also provides that El
Conquistador will indemnify the general partner and its stockholders, officers,
directors, employees and affiliates from all liabilities arising from any act
taken on behalf of or reasonably believed to be taken on behalf of the
partnership other than willful misconduct or gross negligence. The general
partner is required to

<PAGE>

indemnify the partnership from any liabilities arising from the gross negligence
or willful misconduct of the general partner or its agents, employees or other
representatives. The partnership agreement also provides that the obligation
to indemnify the general partner is subordinate to El Conquistador's obligations
to pay the bonds and that no claim against El Conquistador can be made for
indemnification if El Conquistador's cash flow is insufficient to pay its
obligations on the bonds.

There may be instances where indemnification for violations of certain
federal statutes is deemed to be against public policy and, therefore,
unenforceable. For example, in the opinion of the SEC, indemnification for
liabilities arising under the Securities Act of 1993 is against public policy
and therefore unenforceable. A successful indemnification of the general partner
or an affiliate could deplete the assets of El Conquistador, unless El
Conquistador's indemnification obligation is covered by insurance. El
Conquistador does not anticipate obtaining such insurance.

The management agreement provides that El Conquistador will indemnify and
hold harmless Williams Hospitality and its shareholders and affiliates and their
respective partners, shareholders, directors, officers, employees and agents
from and against any and all liabilities (including those caused by the simple
negligence of the indemnitee and those as to which the indemnitee may be
strictly liable) (1) arising out of or incurred in connection with the
construction, renovation, management or operation of the resort or Las Casitas
Village or (2) arising out of or resulting from the environmental condition of
the resort or Las Casitas Village or the applicability of any legal requirements
relating to hazardous materials, except, in the case of both (1) and (2) above,
those liabilities caused by the gross negligence or willful misconduct of
executive personnel.

<PAGE>

<PAGE>
SELECTED FINANCIAL DATA

The following table sets forth selected income data and balance sheet data
of El Conquistador. The selected income data and balance sheet data are derived
from the financial statements of El Conquistador for the period from March 1,
1998 to December 31, 1998 (successor partnership) and for the period from
January 1, 1998 to February 28, 1998, and the fiscal years ended December 31,
1997 (9 months) and March 31, 1997 (predecessor partnership), which have been
audited. The financial statements and notes thereto as of December 31, 1998 and
December 31, 1997 and for the period from March 1, 1998 to December 31, 1998
(successor partnership) and the period from January 1, 1998 to February 28,
1998, and the fiscal year ended December 31, 1997 (9 months) and March 31, 1997
(predecessor partnership) are included in this official statement and
prospectus, and include an explanatory paragraph which describes an uncertainty
about El Conquistador's ability to continue as a going-concern. The financial
data for the period from March 1, 1998 to December 31 1998 is under a new basis
as a result of the acquisition of El Conquistador by Patriot/Wyndham.

this offering of $105,200,000 of bonds with an assumed interest rate of
6.08%;

repayment of the $90,000,000 interim loan made by Citicorp Real Estate;

the effective date of the amended and restated management agreement;

a $15,000,000 capital contribution to El Conquistador by Conquistador
Holding, Inc.; and

repayment of the long-term debt of $25,000,000 owed to the Government
Development Bank for Puerto Rico by El Conquistador.

The pro forma balance sheet assumes such transactions had occurred as of
the pro forma balance sheet date.

The pro forma data is unaudited.

The data below should be read in conjunction with the financial statements,
related notes and other financial information included in this official
statement and prospectus.

does not represent cash flow from operations as defined by generally
accepted accounting principles;

is not necessarily indicative of cash available to fund all cash flow
needs;

should not be considered as an alternative to net income under generally
accepted accounting principles for purposes of evaluating El
Conquistador's results of operations; and

may not be comparable to other similarly titled measures used by other
companies.

<PAGE>

<TABLE>
<CAPTION>
FISCAL YEAR
(NINE FISCAL YEAR
MONTHS TWELVE MONTHS FISCAL YEAR ENDED
FISCAL YEAR ENDED MARCH 31, ENDED ENDED ENDED DECEMBER 31,
--------------------------------- DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998
1995 1996 1997 1997 1997 1998 PRO FORMA
-------- -------- --------- ------------ -------------- -------------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT ROOM AND OCCUPANCY DATA)

<S> <C> <C> <C> <C> <C> <C> <C>
Selected Statement
of Income Data:
Revenues:
Rooms......... $ 37,943 $ 38,817 $ 40,025 $ 25,130 $ 40,734 $ 42,291 $ 42,291
Food and
beverage.... 27,298 26,189 26,235 17,429 26,030 28,845 28,845
Casino........ 6,055 6,179 6,005 3,554 5,548 5,058 5,058
Other
income...... 14,652 19,166 21,959 14,472 23,478 26,240 26,240
-------- -------- --------- ------------ -------------- -------------- -------------
85,948 90,351 94,224 60,585 95,790 102,434 102,434
Less casino
promotional
allowance... (1,205) (1,137) (1,266) (458) (875) (778) (778)
-------- -------- --------- ------------ -------------- -------------- -------------
Total
revenues... $ 84,743 $ 89,214 $ 92,958 $ 60,127 $ 94,915 $101,656 $ 101,656
-------- -------- --------- ------------ -------------- -------------- -------------
-------- -------- --------- ------------ -------------- -------------- -------------
Depreciation and
amortization... $ 11,124 $ 10,499 $ 9,147 $ 6,887 $ 9,224 $ 9,146 $ 8,304(1)
-------- -------- --------- ------------ -------------- -------------- -------------
Income (loss)
from
operations
(EBIT)........ (11,808) 4,552 7,560 (2,013) 7,805 15,136 19,604
Interest
income........ 468 229 199 128 188 245 245
Interest
expense....... (16,137) (17,022) (17,162) (13,157) (17,627) (15,642) (11,057)
-------- -------- --------- ------------ -------------- -------------- -------------
Extraordinary
loss from
early
extinguishment
of debt....... -- -- -- -- -- (1,677) --
Net income
(loss).... $(27,477) $(12,241) $ (9,403) $(15,042) $ (9,634) $ (1,938) $ 8,791
-------- -------- --------- ------------ -------------- -------------- -------------
-------- -------- --------- ------------ -------------- -------------- -------------
(Deficiency in)
partners'
capital
beginning of
period........ $ 36,191 $ 8,716 $ (3,525) $(12,928) $(18,337) $(27,971) $ (27,971)
Partner capital
contributions... 2 -- -- -- -- 81,672 85,680
(Deficiency in)
partners'
capital end of
period........ 8,716 (3,525) (12,928) (27,971) (27,971) 51,763 66,500
Ratio of
earnings to
fixed
charges....... (27,241) (12,004) (9,166) (14,864) (9,397) (1,700) 1.8x
Ratio of EBITDA
to fixed
charges....... (17,799) (2,948) (1,434) (9,017) (1,576) 1.5x 2.5x
Other Financial
Data:
Available
rooms(#)...... 751 751 751 751 751 751 751
Occupancy....... 73.3% 71.0% 72.0% 69.3% 73.3% 72.3% 72.3%
Average rate.... $ 188.87 $ 198.99 $ 202.86 $ 175.59 $ 202.77 $ 213.39 $ 213.39
RevPAR(2)....... 138.42 141.22 146.01 121.68 148.60 154.28 154.28
Revenue per
available
room.......... 112,840 118,794 123,779 80,062 126,385 135,360 135,360
Cash flow from
operating
activities.... (4,712) 1,906 5,855 (1,415) 5,373 9,398
Cash flow from
investing
activities.... (3,002) (864) (1,428) (1,890) 2,298 (7,385)
Cash flow from
financing
activities.... 7,294 (1,063) (2,903) 2,053 2,995 (1,584)
EBITDA.......... (684) 15,051 16,707 4,874 17,029 24,282 27,908
Selected Balance
Sheet Data:
Current
assets........ $ 15,316 $ 11,823 $ 13,618 $ 13,953 $ 13,953 $ 27,052 $ 26,651
Land, building
and equipment,
net........... 194,557 188,994 183,960 181,127 181,127 229,858 229,858
Total assets.... 225,191 211,691 205,430 200,422 200,422 262,368 266,704
Long-term debt,
including
current
maturities.... 193,034 197,154 199,709 204,624 204,624 152,035 142,235
Total
liabilities
and
(deficiency
in) partners'
capital....... 225,191 211,691 205,430 200,422 200,422 262,368 266,704
</TABLE>

- ------------

(2) RevPAR is equal to the average rate multiplied by occupancy percentage.

<PAGE>

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

El Conquistador's results of operations are highly seasonal with the
highest revenues occurring from December through April. During the months of May
through November, efforts are made to actively market the resort in order to
minimize the adverse effects of seasonality. Accordingly, results for any single
quarter are not necessarily indicative of the results for any other quarter or
for the full fiscal year. Results can also be negatively affected by
circumstances beyond El Conquistador's control such as hurricanes, airline
strikes, droughts and water shortages, and the like. The impact of such events,
if any, will depend, in part, upon the time of year when such events occur.

El Conquistador and the Hotel Operator have taken steps to improve the
operating performance of the resort. El Conquistador has strengthened management
at the resort by increased supervision of hiring practices, providing increased
benefits to employees and providing comprehensive training to new and existing
employees. El Conquistador has also reduced operating costs at the resort
primarily through the implementation of cost controls and more efficient
staffing. Generally, such cost savings are attributable to reduced staffing
levels, food and beverage operating hours and transportation services during the
low-season months. Additionally, commencing in January 1999, the resort began
utilizing the procurement program, Parker FIRST'TM', pursuant to arrangements
between Patriot/Wyndham and Hospitality Worldwide Services, Inc. The program
enables the resort to order operating supplies and equipment online or by
telephone in conjunction with Patriot/Wyndham's purchasing groups. It is
anticipated that use of the program will result in savings of approximately
three to five percent. In addition to savings, El Conquistador believes the
program will enable it to better monitor its purchasing patterns.

RESULTS OF OPERATIONS

FISCAL YEAR ENDED DECEMBER 31, 1998 COMPARED WITH TWELVE MONTHS ENDED
DECEMBER 31, 1997 (UNAUDITED)

<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
DECEMBER 31,
-------------------------
1998 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Revenues:
Hotel and casino revenues, net............................. $101,656 $ 94,915
Operating expenses......................................... 86,519 87,110
-------- --------
Operating income...................................... 15,136 7,805
Interest income....................................... 245 188
Interest expense...................................... (15,642) (17,627)
-------- --------
Loss before extraordinary item........................ (261) (9,634)
Loss from early extinguishment of debt................ (1,677) --
-------- --------
Net loss......................................... $ (1,938) $ (9,634)
-------- --------
-------- --------
</TABLE>

Hotel and casino revenues increased $6,741,000 or 7.1% in the fiscal year
ended December 31, 1998 to $101,656,000 from $94,915,000 in the 12 months ended
December 31, 1997, notwithstanding the fact that the resort was closed for the
last 10 days of September 1998 as a result of Hurricane Georges. El Conquistador
has estimated its loss of revenues due to the hurricane at approximately
$2,500,000. El Conquistador believes its business interruption insurance will
cover lost net income resulting from the aforementioned loss of revenues.
Revenues primarily increased due to a higher percentage of occupancy in the
group sector which generated higher average rates and additional room revenue as
well as additional banquet, food and beverage revenues. During the fiscal year
ended December 31, 1998, room prices increased an aggregate of $2,104,746
accounting for 135.2% of the change in room revenue while the value of rooms
sold decreased an aggregate of $550,901 accounting for (35.2%) of the change in
room revenue compared to the corresponding period in

<PAGE>

<PAGE>
1997. Additional revenues were also generated from transportation and golf
greens fee price increases implemented on January 1, 1998.

Operating income increased by $7,331,000 or 93.9% to $15,136,000 for the
fiscal year ended December 31, 1998 compared to $7,805,000 in the 12 months
ended December 31, 1997. These results were achieved by the combination of
operating departments producing higher margins on improved sales and expenses of
overhead departments remaining constant or being reduced for the fiscal year
ended December 31, 1998 compared to the corresponding period in 1997.

During the fiscal year ended December 31, 1998, El Conquistador had a loss
of $261,000 before extraordinary items compared to a loss before extraordinary
items of $9,634,000 during the 12 months ended December 31, 1997. This
improvement was generated from higher revenues in fiscal 1998 while maintaining
operating expense levels at the same rate during the corresponding period of the
prior year. In the third quarter of 1998, El Conquistador expensed as an
extraordinary item the remaining $1,677,000 of deferred financing fees relating
to its 1991 $120,000,000 AFICA bond transaction. The extraordinary item expense
was due to the replacement of the 1991 AFICA bonds with an interim loan in
August 1998, and represents full amortization of the property's original
financing costs. Amortization expenses decreased as the unamortized portion of
the five-year pre-opening marketing expenses amounting to approximately
$1,087,000 were eliminated in March 1998 as a result of the acquisition of
control of El Conquistador by Conquistador Holding and the resulting new basis
of accounting.

Net loss for the fiscal year ended December 31, 1998 decreased by
$7,696,000 to $1,938,000 versus $9,634,000 for the 12 month period ended
December 31, 1997. This improvement is directly related to increased group
revenues, improved operating efficiencies and a $1,000,000 reduction in interest
expense associated with the buyout of certain loans made by Kumagai Caribbean to
El Conquistador together with lower capital lease interest expenses during the
current nine month period compared to the corresponding period in 1997.

FISCAL YEAR (NINE MONTHS) ENDED DECEMBER 31, 1997 COMPARED WITH NINE MONTHS
ENDED
DECEMBER 31, 1996 (UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31,
-------------------------
1997 1996
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Revenues:
Hotel and casino revenues, net............................. $ 60,127 $ 58,169
Operating expenses......................................... 62,140 60,428
-------- --------
Operating loss........................................ (2,013) (2,259)
Interest income....................................... 128 139
Interest expense...................................... (13,157) (12,691)
-------- --------
Net loss......................................... $(15,042) $(14,811)
-------- --------
-------- --------
</TABLE>

Hotel and casino revenues increased by $1,958,000 or 3.4% in the nine
months ended December 31, 1997 to $60,127,000 from $58,169,000 in the nine
months ended December 31, 1996. Despite this increase, the additional travel
agent commissions paid and greater sales and marketing expenses to attract
summer business negated this revenue gain. The resort extended additional
discounts and marketing promotional monies to stimulate demand in other markets.
During the period ended December 31, 1997, room prices increased an aggregate of
$627,417 accounting for 11.6% of the change in room revenue and the value of
rooms sold increased an aggregate of $709,872 accounting for 88.4% of the change
in room revenue compared to the corresponding period in 1996.

For the nine primarily off-season months of April 1, 1997 to December 31,
1997, operating loss was $2,013,000 as compared to a loss of $2,259,000 for
April 1, 1996 to December 31, 1996. Operating loss decreased $246,000
notwithstanding the slow summer convention season and higher marketing expenses
for the nine months ended December 31, 1997 as compared to the same nine months
ended December 31, 1996.

<PAGE>

<PAGE>
The net loss in the nine months ended December 31, 1997 was $15,042,000
compared to a net loss of $14,811,000 in the nine months ended December 31,
1996. The net loss increased due to increased travel agent commissions and
higher marketing expenses along with increased interest charges for the deferred
Williams Hospitality management fees and the $120,000,000 1991 AFICA bonds.

FISCAL YEAR ENDED MARCH 31, 1997 COMPARED WITH FISCAL YEAR ENDED
MARCH 31, 1996

<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
MARCH 31,
-------------------------
1997 1996
-------- --------
(IN THOUSANDS)

<S> <C> <C>
Revenues:
Hotel and casino revenues, net............................. $ 92,958 $ 89,214
Operating expenses......................................... 85,398 84,662
-------- --------
Operating income...................................... 7,560 4,552
Interest income....................................... 199 229
Interest expense...................................... (17,162) (17,022)
-------- --------
Net loss......................................... $ (9,403) $(12,241)
-------- --------
-------- --------
</TABLE>

Hotel and casino revenues were $92,958,000 in the fiscal year ended March
31, 1997 compared to $89,214,000 for the fiscal year ended March 31, 1996, an
increase of $3,744,000 or 4.2%.

Combined 1997 fiscal year revenues increased by $3,744,000 or 4.2% over
fiscal 1996 as the resort was able to pass on higher room rates as well as
increasing occupancy by 1% in fiscal 1997. In addition, transportation price
increases as well as increased concession rents contributed to the revenue
increase for fiscal 1997 over fiscal 1996. During the period ended March 31,
1997, room prices increased an aggregate of $762,195 accounting for 63.2% of the
change in room revenue and the value of rooms sold increased an aggregate of
$444,548 accounting for 36.8% of the change in room revenue compared to the
corresponding period in the prior year.

Operating income increased by $3,008,000 or 66.0% for the fiscal year ended
March 31, 1997 as management continued to improve the operating efficiency and
profit margins in the rooms, food and beverage departments. Undistributed
expenses increased in sales and marketing due to increased advertising and
promotions necessary to stimulate summer demand. Depreciation and amortization
expenses declined for the fiscal year ended March 31, 1997 versus March 31, 1996
by $1,352,000 as the 24-month pre-opening expenses became fully amortized at the
end of fiscal 1996.

Net loss for the fiscal year ended March 31, 1997 was $9,403,000 compared
to a net loss of $12,241,000 for the fiscal year ended March 31, 1996. This
$2,838,000 or 23.2% reduction can be attributed to increased volume and pricing
as well as the decrease in amortization in fiscal 1997 of certain pre-opening
marketing expenses.

FINANCIAL CONDITION

The resort's cash needs during the high-season months of December through
April are provided from cash generated at the resort. The resort's cash needs
during the off-season months of May through November have historically been
provided from cash generated at the resort and by the Hotel Operator, and from a
revolving credit facility. The revolving credit facility was terminated in May
1998. Additionally, during the fiscal year ended December 31, 1998, a portion of
the resort's cash needs were funded from short-term borrowings from Patriot.
Such borrowings are payable on demand and interest accrues at a rate of 8.00%
per annum. Such borrowings were necessary to fund a portion of the interest and
real property tax reserves and certain costs and expenses related to the
extension of the $90,000,000 interim loan provided by Citicorp Real Estate. El
Conquistador believes that after completion of this offering its cash needs
throughout the year will be provided by cash generated at the resort.

<PAGE>

At December 31, 1998, total short-term and long-term indebtedness of El
Conquistador was approximately $176,807,820 consisting of the following:

$90,000,000 interim loan provided by Citicorp Real Estate;

$33,065,730 owed to Posadas de Puerto Rico Associates, Incorporated, an
affiliate of El Conquistador and the Hotel Operator;

$25,000,000 owed to the Government Development Bank for Puerto Rico;

$15,592,563 of loans and accrued interest owed to the partners of El
Conquistador;

$9,388,207 of incentive management fees owed to Williams Hospitality;

$1,274,200 of interest on the incentive management fees owed to Williams
Hospitality; and

$2,487,120 of loans and accrued interest owed to Williams Hospitality.

The first mortgage lien in the amount of $90,000,000 in favor of Citicorp
Real Estate requires monthly payments of interest and matures June 30, 1999,
unless extended or refinanced. The obligation is non-recourse to the partners of
El Conquistador payable solely from assets of the partnership. Patriot has
guaranteed up to $22,500,000 of the amount owed to Citicorp Real Estate. The
$90,000,000 indebtedness will be repaid in full with the proceeds from this
offering. El Conquistador has been advised by its auditors that if this offering
is not completed it raises substantial doubt as to El Conquistador's ability to
continue as a going-concern.

The second mortgage lien on the El Conquistador is in the principal amount
of $25,000,000 in favor of the Government Development Bank for Puerto Rico. The
loan is non-recourse to the partners of El Conquistador and is the subject of a
subordination and standstill agreement with Citicorp Real Estate, the holder of
the first mortgage lien. The $25,000,000 loan becomes due in February 2006. It
is a condition to this offering that such indebtedness be repaid in full. El
Conquistador intends to repay such indebtedness concurrently with the issuance
of the bonds. El Conquistador will use $10,000,000 in cash generated from
operating activities and a $15,000,000 capital contribution to the partnership
by Conquistador Holding to make such repayment. Conquistador Holding will make
the aforementioned capital contribution with the proceeds of a $15,000,000 loan
made to it by the Government Development Bank. The loan by the Government
Development Bank to Conquistador Holding and the capital contribution by
Conquistador Holding to El Conquistador are subject to and conditions to
completion of this offering. Conquistador Holding's obligation to the Government
Development Bank will be secured by, among other things, the ownership interests
in El Conquistador and the capital stock of Conquistador Holding (SPE), Inc.,
which will be the sole general partner of El Conquistador upon completion of
this offering.

On August 3, 1998, El Conquistador borrowed $32,021,172 from Posadas de
Puerto Rico Associates, Incorporated, the proceeds of which were used, together
with the $90,000,000 advance from Citicorp Real Estate, to repay the
$120,000,000 1991 AFICA bonds. As of December 31, 1998, the amount of such
indebtedness together with accrued interest totaled $33,065,730. The loan is
payable on demand but is subordinate in all respects to El Conquistador's
obligations to Citicorp Real Estate with respect to the $90,000,000 advance.
This loan will be subordinate to the bonds.

All the amounts owed to the partners of El Conquistador and to Williams
Hospitality will be subordinate to the bonds.

Upon completion of this offering, El Conquistador believes that cash flow
from operations of the resort will be adequate to pay its long-term obligations
with respect to the bonds as they become due.

Annual capital expenditures are provided for each year as part of the
resort's annual budgeting process. Capital expenditures are incurred taking into
account available cash and available financing, if necessary. The loan agreement
will permit El Conquistador to borrow funds for capital expenditures subject to
satisfaction of certain conditions. For a complete description of the covenants
in the loan agreement with respect to additional indebtedness, see 'SUMMARY OF
THE LOAN AGREEMENT -- Covenants.'

<PAGE>

The management agreement provides for reduced fees on an overall basis as
compared to the old management agreement which was in effect through December
31, 1998. The base fee was reduced by 1.0%, from 3.5% to 2.5%, of gross revenue
of the resort. There is a new trade name fee of 0.5% of gross revenue of the
resort. The incentive fee of 10.0% of the resort's and Las Casitas Village's
gross operating profit was eliminated. Although there is a new marketing fee of
1.5% of gross room revenues of the resort as well as 1.0% of gross room revenues
of Las Casitas Village, El Conquistador believes that such fees will not
increase the overall marketing expense of the resort and Las Casitas Village.
Prior to the effective date of the current marketing arrangements, El
Conquistador incurred marketing expenses internally at approximately the same
rate as provided for under the management agreement. As the marketing function
has been outsourced to Wyndham Management and Grand Bay, through their
arrangements with Williams Hospitality, El Conquistador believes that the
resort's and Las Casitas Village's future marketing costs will be substantially
the same as its historical marketing expenses.

Fiscal Year Ended December 31, 1998 Compared With 12 Months Ended December
31, 1997 (unaudited). Cash flows from the operating, investing and financing
activities of the property for the fiscal year ended December 31, 1998 resulted
in net cash provided of $430,000 compared with net cash provided of $80,000 for
the twelve months ended December 31, 1997.

Cash provided by operating activities was $9,398,000 for the fiscal year
ended December 31, 1998 compared to $5,373,000 in the twelve months ended
December 31, 1997. The increase was primarily due to the improvement in net loss
of $7,696,000 in the fiscal year ended December 31, 1998.

Cash used by investing activities was $7,385,000 for the fiscal year ended
December 31, 1998 versus $2,298,000 for the twelve months ended December 31,
1997. Cash used for the purchase of property and equipment, including for major
renovations related to the Golden Door'r' Spa, was $7,335,000 in fiscal year
1998 versus $2,277,000 in the twelve months ended December 31, 1997. Cash used
for the purchase of operating equipment was $50,000 in fiscal 1998 compared to
$21,000 during the twelve months ended December 31, 1997.

Cash used by financing activities during the fiscal year ended December 31,
1998 was $1,584,000 versus $2,995,000 during the twelve months ended December
31, 1997. During the fiscal year ended December 31, 1998, El Conquistador (1)
borrowed $32,021,172 from Posadas de Puerto Rico, (2) borrowed $90,000,000 from
Citicorp Real Estate on an interim basis and (3) received $4,988,000 of
partners' capital contributions. The proceeds from (1), (2) and (3) above were
used to repay the $120,000,000 originally borrowed in 1991 through an AFICA bond
financing, to repay a $6,000,000 revolving credit line with the Government
Development Bank and to fund certain reserves with respect to the Citicorp Real
Estate borrowing. $700,324 of debt issuance expenses were recorded in August
1998 which were associated with the interim loan provided by Citicorp Real
Estate.

Fiscal Year (Nine Months) Ended December 31, 1997 Compared With Nine Months
Ended December 31, 1996 (unaudited). Cash flows from the operating, investing
and financing activities of the property for the nine months ended December 31,
1997 resulted in net cash used of $1,252,000 compared with net cash provided of
$191,000 for the nine months ended December 31, 1996.

Cash used by operating activities was $1,415,000 for the nine months ended
December 31, 1997 as compared to $13,000 provided by operations during the nine
months ended December 31, 1996. The increase of cash used was due to accounts
receivable and prepaid expense increases along with the reduction of balances
due to affiliates.

Cash used by investing activities was $1,890,000 for the nine months ended
December 31, 1997 versus $1,623,000 for the period ended December 31, 1996. Cash
used for the purchase of property and equipment was $1,994,000 in the nine
months ended December 31, 1997 versus $1,625,000 for the nine months ended
December 31, 1996. Cash provided in the reduction of operating equipment was
$104,000 in the nine month ended December 31, 1997 versus $2,000 in the nine
month period ended December 31, 1996.

<PAGE>

<PAGE>
Cash provided by financing activities during the nine months ended December
31, 1997 was $2,053,000 versus $1,802,000 for the period ended December 31,
1996. Cash used for the payment of long term chattel mortgages and capital lease
obligations totaled $2,447,000 and $1,698,000 in the periods ended December 31,
1997 and December 31, 1996, respectively. Net cash proceeds provided from bank
notes totaled $4,500,000 in the nine month period ended December 31, 1997
compared to $3,500,000 for the nine month period ended December 31, 1996.

TAXES

As El Conquistador is not a taxable entity for Puerto Rico income tax
purposes. Instead, each partner reports its distributive share of profits and
losses in its respective income tax return and, therefore, no provision for
income taxes has been made in El Conquistador's financial statements.

INFLATION

During the past three fiscal years, the level of inflation affecting the
resort has been relatively low. The ability of the resort to pass on future cost
increases in the form of higher room rates and other price increases will
continue to be dependent on the prevailing competitive environment and the
acceptance of the resort's services in the market place.

SEASONALITY

The hotel and casino business in Puerto Rico is highly seasonal. From
December through April the occupancies of the resort and Las Casitas Village are
greater than other months and the average room rates are higher than other
months resulting in higher revenues and net income primarily in the first
calendar quarter. During the calendar quarter of July 1 through September 30 El
Conquistador normally has a net loss.

EFFECT OF HURRICANE GEORGES

Hurricane Georges passed through Puerto Rico on September 21 and 22, 1998.
Hurricane Georges caused approximately $32,000,000 of property related damage at
the resort, all of which is covered by insurance, subject to an approximately
$180,000 deductible. Since the hurricane, El Conquistador has had numerous
meetings and contacts with its insurance providers. To date, all of El
Conquistador's insurance claims for physical damage caused by Hurricane Georges
have been paid by the insurers. The aggregate amount paid to date to El
Conquistador for insurance claims for physical damage is $27,588,000. These
payments include funds for: construction repairs completed to date; materials;
equipment rentals; furniture, fixture and equipment replacements; and related
associated expenses. Additional claims will be made by El Conquistador on an
on-going basis until all repairs are completed. It is contemplated that
permanent repair of certain roof areas and the heating/air conditioning system
will not be made until after the current high season ends in April 1999. The
aggregate cost of repairs to be delayed until after the high season will be
approximately $2,000,000, all of which should be covered by insurance. The roof
and heating/air conditioning system have been repaired temporarily and are fully
operational at this time.

The resort lost at least 2,500 room nights during the 10-day period
September 20-30, 1998 as a direct result of Hurricane Georges. El Conquistador
believes such room night losses will be covered by its business interruption
insurance. To date, El Conquistador has received $2,130,000 under its business
interruption insurance. As a result of Hurricane Georges, the resort was closed
during the period September 22, 1998 through October 2, 1998. Additionally, the
majority of condominium units of Las Casitas Village were damaged and were not
available to the resort until December 10, 1998. Puerto Rico itself and other
hotel properties on the island also suffered extensive damage from Hurricane
Georges. As a result, travelers' perception of Puerto Rico as a leisure
destination may be adversely affected for the 1998/1999 tourist season. The
resort could lose additional room nights as a result of this perception, which
may or may not be covered by its business interruption insurance. As of the date
of this official statement and prospectus, the resort is fully operational.
However, El Conquistador cannot predict the effect that Hurricane Georges

<PAGE>

<PAGE>
will have on its future bookings. To the extent that additional group and
leisure travelers with reservations cancel their plans to come to the resort or
additional travelers do not make reservations as a result of Hurricane Georges,
such lost bookings could have a material adverse effect on El Conquistador's
financial condition and results of operations.

The Puerto Rico Tourism Company launched a $1.7 million advertising
campaign to negate the negative perception created by media images of Hurricane
Georges. The campaign was entitled 'Puerto Rico Now' and included three new 30
second commercials and a 20 minute video. The campaign commenced on October 14,
1998 with the airing of television commercials in key media markets in the
Northeastern United States during early prime time programming periods. The
video was shown at tourism industry trade shows and was distributed to
approximately 2,000 travel agents around the United States. El Conquistador
believes that the Wyndham International advertising campaign together with the
'Puerto Rico Now' campaign will limit the adverse effects of the perception of
damage caused by Hurricane Georges.

YEAR 2000 COMPLIANCE

Many computer systems were not designed to interpret any dates beyond 1999,
which could lead to business disruptions in the United States and
internationally. This technological problem is commonly referred to as the Year
2000 issue. El Conquistador recognizes the importance of minimizing the number
and seriousness of any disruptions that may occur as a result of Year 2000 and
has adopted an extensive compliance program. El Conquistador's compliance
program involves three major program areas:

corporate information technology infrastructure and reservation systems

other electronic assets (such as, but not limited to, automated time
clocks, point-of-sale systems, non-information technology systems,
including embedded technologies that operate fire-life safety systems,
phone systems, energy management systems and other similar systems)

third parties with whom El Conquistador conducts business

El Conquistador is applying a three phase approach to each program area:

Inventory Phase (identify systems and third parties that may be affected
by Year 2000 issues)

Assessment Phase (prioritize the inventoried systems and third parties,
assess their Year 2000 readiness, plan corrective actions)

Remediation Phase (implement corrective actions, verify implementation,
formulate contingency plans)

El Conquistador engaged a consulting firm to conduct the inventory and
assessment phases of the compliance program. The inventory and assessment phases
have been completed with respect to the resort's corporate information
technology infrastructure and reservation system. The inventory and assessment
phases have also been completed with respect to the resort's information
technology and other electronic assets. Based on the assessment, El Conquistador
has determined, together with its consultants, which systems are not Year 2000
compliant and the scope of the non-compliance.

El Conquistador will modify or replace a portion of its software so that
its information technology will function properly with respect to dates in the
year 2000 and thereafter. El Conquistador now estimates that its Year 2000
project cost will be approximately $750,000, which includes approximately
$700,000 for the purchase of new hardware and software that will be capitalized
and approximately $50,000 that will be expensed as incurred. To date, El
Conquistador has incurred approximately $20,000 for assessment of the Year 2000
issue. El Conquistador's non-information technology assets require a limited
amount of modifications with respect to the Year 2000 issue. El Conquistador is
currently completing such modifications and it does not believe that such
modifications will be significant.

<PAGE>

El Conquistador is surveying its significant vendors and service providers
to determine the extent to which the resort's interface systems are vulnerable
to those third parties' failure to remediate their own Year 2000 issues. El
Conquistador now expects to complete its vendor and service provider surveys in
the second quarter of 1999, but cannot guarantee that all vendors or service
providers will comply with El Conquistador's surveys. To date, no significant
vendors or service providers have responded to the surveys. More importantly, El
Conquistador must rely on the information provided by third parties and will not
be able to test the third parties' compliance. As a result, El Conquistador will
not be able to ensure Year 2000 compliance of these vendors or service
providers. During the second quarter of 1999, El Conquistador intends to
determine the extent to which it will be able to replace vendors and service
providers that are expected to be non-compliant. Due to the lack of an
alternative source, there may be instances in which El Conquistador will have no
alternative but to remain with non-compliant vendors and service providers. As
El Conquistador identifies the non-compliant vendors and service providers, it
will then determine appropriate contingency plans.

The costs of the project and the date on which El Conquistador believes it
will complete the Year 2000 modifications are based on management's best
estimates, which were derived utilizing numerous assumptions of future events,
including the continued availability of certain resources and other factors.
However, there can be no guarantee that these estimates will be achieved and
actual results could differ materially from those anticipated. Specific factors
that might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes, and similar uncertainties.

The project is estimated to be completed not later than November 1999. El
Conquistador believes that with the modifications to existing software and
conversions to new software, the Year 2000 issue will not pose significant
operational problems for its computer system. However, if such modifications and
conversions are not made, or are not completed in a timely manner, the Year 2000
issue could have a material impact on the operations of the resort. Because of
the importance of addressing the Year 2000 issue, El Conquistador expects to
develop contingency plans if it determines that the remediation phase of its
compliance plan will not be fully implemented by June 30, 1999. El Conquistador
believes that the time frames set forth above will provide adequate time to test
and correct, if necessary, any remaining Year 2000 problems or to implement a
contingency plan, if necessary.

The resort also utilizes certain computer systems and programs of
Patriot/Wyndham and its subsidiaries. Patriot/Wyndham has reported that its Year
2000 compliance involves the three major program areas discussed above.
Patriot/Wyndham is also applying the three phase approach set forth above.
Patriot/Wyndham has further reported in its annual report filed with the SEC the
following on the Year 2000 issue:

Patriot/Wyndham engaged a consulting firm to conduct the inventory and
assessment phases of its compliance program. Patriot/Wyndham has completed
inventory and assessment phases with respect to its corporate information
technology infrastructure and reservation systems. Patriot/Wyndham has also
completed the inventory and assessment phases with respect to the
information technology and other electronic assets that are located in
Patriot/Wyndham hotels, other than certain hotels not owned and managed by
Patriot/Wyndham. Based on those assessments, Patriot/Wyndham, working with
its consultants, determined which systems were not Year 2000 compliant and
developed appropriate remediation plans.

Patriot/Wyndham has begun the necessary work to remediate those
systems at its owned and leased hotels, and has completed ten percent of
that work. Patriot/Wyndham previously engaged a consulting firm to provide
the support and additional skills to effect the necessary remediation in
sufficient time for testing and any necessary modifications.

Of the Patriot/Wyndham hotels not owned and managed by it, 93 were not
acquired in the merger with Interstate Hotels. 66 of these hotels have been
assessed as part of Patriot/Wyndham's compliance program and
Patriot/Wyndham has begun to implement remediation plans at 21 of these
hotels. The owners of the other 45 hotels that were assessed

<PAGE>

have, to date, neither taken any action to effect the necessary remediation
identified in the assessment nor authorized Patriot/Wyndham to effect the
remediation on behalf of the owners. While none of the remaining 27 hotels
have been assessed by Patriot/Wyndham, four of the owners have informed
Patriot/Wyndham that the owners completed their own assessments.
Patriot/Wyndham is continuing to monitor the status of these hotels and has
reminded the owners of the importance of making these hotels Year 2000
compliant in sufficient time to permit adequate testing. Patriot/Wyndham
has begun surveying the Year 2000 compliance of the owners of the hotels
that are franchised under the Wyndham brand but not managed by Wyndham
International, and have informed these owners of the appropriate standards
to make the equipment operating Wyndham International's systems Year 2000
compliant. However, as the systems at the hotels which are not owned and
managed by Patriot/Wyndham are not under Patriot/Wyndham's control,
Patriot/Wyndham will be required to rely on the information provided by
those owners or manager/operators and will not be able to test the
assessment or remediation effected by third parties at these hotels or the
franchised hotels.

Patriot/Wyndham presently expects to expend approximately $34 million
in connection with Year 2000 issues. To date, Patriot/Wyndham has expended
$1.75 million in connection with the inventory and assessment phases of its
compliance program and $4.6 million to remediate its systems. However,
Patriot/Wyndham anticipates expenditures may increase as it completes the
inventory and assessment phases in respect to the hotels acquired in 1998
referred to above and the remediation plans are effected.

As part of the settlement of litigation arising out of the
Patriot/Wyndham merger with Interstate Hotels, Patriot/Wyndham agreed to
contribute to a new company management of the hotels acquired in the merger
and not owned and managed by Patriot/Wyndham, and then dispose of
substantially all of that new company's stock by means of a spin-off to the
shareholders of Patriot/Wyndham. As the hotels in the Interstate merger
whose management will be contributed to the new company are owned by third
parties, Patriot/Wyndham expects those owners to bear all costs related to
the inventory, assessment and remediation of those hotels.

Patriot/Wyndham had identified the vendors and service providers that
are critical to its businesses and has requested those parties to provide
information concerning Year 2000 compliance and remediation efforts.
Patriot/Wyndham is now seeking additional information from those parties
that did not respond or did not provide sufficient information, but cannot
guarantee that all vendors or service providers will comply with
Patriot/Wyndham's request. More importantly, Patriot/Wyndham must rely on
the information provided by third parties and will not be able to test the
third parties' compliance. As a result, Patriot/Wyndham will not be able to
accurately determine the Year 2000 compliance of those vendors or service
providers. Based on preliminary responses, Patriot/Wyndham believes that
its most critical vendors and service providers will not cause
Patriot/Wyndham's operations to be materially disrupted as a result of Year
2000 issues. During 1999, Patriot/Wyndham intends to determine the extent
to which it will be able to replace vendors and service providers that are
expected to be non-compliant. Due to the lack of an alternative source,
there may be instances in which Patriot/Wyndham will have no alternative
but to remain with non-compliant vendors or service providers. As
Patriot/Wyndham identifies the non-compliant vendors and service providers,
it will then determine appropriate contingency plans.

Patriot/Wyndham believes that its current compliance program will
allow it sufficient time to identify which of its systems and other
electronic assets are not Year 2000 compliant and to effect the necessary
remedies to avoid substantial problems arising from Year 2000 induced
failures. Patriot/Wyndham believes that its reprogramming, upgrading and
systems replacements will be implemented and tested by the end of the third
quarter of 1999. Patriot/Wyndham believes that this should provide adequate
time to further correct any problems that did not surface during the
implementation and testing for those systems. Notwithstanding that,
Patriot/Wyndham does recognize that some vendors and the owners and
managers/operators of certain of its hotels not owned and managed by
Patriot/Wyndham may not comply with its

<PAGE>

present schedules and could affect Patriot/Wyndham's timing and remediation
effects generally. If Patriot/Wyndham is not successful in implementing its
Year 2000 compliance plan, Patriot/Wyndham may suffer a material adverse
impact on its consolidated results of operations and financial condition.

In addition to those systems within Patriot/Wyndham's control and the
control of its vendors and suppliers, there are other systems that could
have an impact on Patriot/Wyndham's businesses and which may not be Year
2000 compliant by January 1, 2000. These systems could affect the
operations of the air traffic control system and airlines or other segments
of the lodging and travel industries, or the economy and travel generally.
In addition, these systems could affect the hotels not owned and managed by
Patriot/Wyndham or the hotels franchised under Patriot/Wyndham's brands
whose owners and manager/operators are implementing their own compliance
programs. These systems are outside of Patriot/Wyndham's control or
influence and their compliance may not be verified by Patriot/Wyndham.
However, these systems could adversely affect Patriot/Wyndham's financial
condition or results of operation.

During the second quarter of 1999, Patriot/Wyndham intends to develop
plans to address potential Year 2000 induced failures. Because
Patriot/Wyndham has no control over third party assessment and remediation
efforts, Patriot/Wyndham expects to focus most of its contingency planning
on externally caused disruptions. In addition, Patriot/Wyndham will develop
its plans on its belief that the consequences of Year 2000 induced failures
will be local in nature. These plans will be based on existing contingency
plans for operations during storms and other natural disasters. While each
hotel will develop a contingency plan, any disruption in utilities or other
key local services could have the effect of disrupting operations of
several hotels located in the affected geographic areas. As part of
Patriot/Wyndham's contingency planning, it also expects to evaluate its
continued management of hotels it does not own and manage that do not
become Year 2000 compliant.

LEGAL PROCEEDINGS

On or about November 23, 1998, Ava, Inc. d/b/a Avante Salon & Spa, which
operates a beauty salon at the resort, filed a preliminary and permanent
injunction and a torts claim against El Conquistador and Golden Door Corp. The
case is pending in the Puerto Rico Court of First Instance, Superior Court of
Humacao. The action seeks preliminary and permanent injunctions ordering
defendants not to intervene with Avante's contractual and property rights
provided in the concession agreement pursuant to which the beauty salon is
operated. Avante also seeks damages in the sum of $5,000,000, plus costs and
attorney's fees. On December 4, 1998, defendants filed a motion to dismiss the
complaint together with their opposition to the complaint. On the same day, the
court held a hearing with respect to the preliminary injunction without granting
such injunction. At the hearing, the parties agreed to submit a joint
stipulation with respect to certain facts in order to assist the court in
rendering its decision. On December 14, 1998, the parties filed the joint
stipulation of facts. As of January 1999, both parties filed all memorandum of
law and motions required to be filed by the court. The parties are currently
awaiting the court's decision whether to grant injunctive relief and continue
the tort action or dismiss the suit.

Other than set forth above, El Conquistador currently and from time to time
is involved in litigation incidental to the conduct of its business. In the
opinion of El Conquistador, none of the existing litigations is likely to have a
material adverse effect on El Conquistador or its business including the one set
forth above.

POLICY WITH RESPECT TO CERTAIN ACTIVITIES

The loan agreement will prohibit El Conquistador from issuing any
securities which are senior to the bonds. During the past three years, El
Conquistador has not issued any senior securities. From time to time during the
past three years, El Conquistador has borrowed monies from third-parties, its
affiliates and its partners in order to fund day-to-day operations at the resort
as well as

<PAGE>

for capital improvements and furniture, fixtures and equipment. Additionally, El
Conquistador maintained a revolving credit facility with the Government
Development Bank of up to $6,000,000 during the period of July 1995 through May
1998. As a condition to entering into the revolving credit facility, the
Government Development Bank required the partners of El Conquistador to lend El
Conquistador $800,000. To date, $465,000 of these loans has been repaid and
$335,000 remains outstanding and will be subordinate to the bonds. Additionally,
as of December 31, 1998, El Conquistador was indebted to Posadas de Puerto Rico
Associates, Incorporated in the aggregate principal amount of $33,065,730. Such
loan will be subordinate to the bonds. Posadas de Puerto Rico is an indirect
wholly-owned subsidiary of Wyndham International and is the owner of the Condado
Plaza Hotel & Casino in San Juan, Puerto Rico. El Conquistador's ability to
borrow funds in the future will be governed by the loan agreement. To the extent
that El Conquistador is able to borrow in the future, such borrowing decisions
will be made solely by its general partner, which will be Conquistador Holding
(SPE), Inc. upon completion of this offering.

The loan agreement will prohibit El Conquistador from making loans to other
persons, offering securities in exchange for property and repurchasing or
otherwise acquiring its partnership interests or other securities, including the
bonds. Additionally, El Conquistador does not engage in the purchase and sale,
or turnover, of investments, investing in securities of other persons or
underwriting securities of other issuers. El Conquistador has not engaged in any
of the aforementioned activities during the past three years.

INVESTMENT OBJECTIVES AND POLICIES

The purpose of El Conquistador is limited to the ownership of the resort
and entering into a management agreement for the operation of the resort. El
Conquistador was formed in order to develop, own and operate the resort, and to
generate income therefrom. El Conquistador and the managing general partner, on
behalf of El Conquistador, are authorized to enter into any agreements necessary
or desirable for the operation of the resort and Las Casitas Village and
ownership of the resort.

The resort and Las Casitas Village will be operated by the Hotel Operator.
For a complete discussion concerning these management arrangements, see 'EL
CONQUISTADOR RESORT & COUNTRY CLUB -- Management and Marketing and the Resort
and Las Casitas Village.' El Conquistador does not anticipate any additional
long-term financing other than the bonds. El Conquistador believes that its cash
flows from future operations will be sufficient to meet short-term working
capital needs. Additional financing may be required for specific projects at the
resort, including the purchase of replacement furniture, fixtures and equipment.
The loan agreement will limit El Conquistador's ability to obtain additional
financing, including secured financing, in certain circumstances. For a
description of such limitations, see 'SUMMARY OF THE LOAN
AGREEMENT -- Covenants.' El Conquistador will not invest in real estate
mortgages or securities of or interests in persons primarily engaged in real
estate activities.

POLICIES WITH RESPECT TO CERTAIN TRANSACTIONS

El Conquistador was formed solely to own the resort and operate the resort
through a manager. El Conquistador will be prohibited from making other
investments or disposing of its

<PAGE>

<PAGE>
assets pursuant to the loan agreement, and, therefore, a policy with respect to
such matters for executive officers and partners of El Conquistador is not
necessary.

The new partnership agreement will prohibit the general partner of El
Conquistador from engaging in any other business activities other than those as
a partner of El Conquistador. Conquistador Holding (SPE), Inc. will be the sole
general partner of El Conquistador upon consummation of this offering.
Conquistador Holding (SPE), Inc. will be a single purpose entity which will only
be permitted to engage in the business of acting as a partner of El
Conquistador. Conquistador Holding (SPE), Inc. will be prohibited from any other
business activities. However, Patriot/Wyndham, the beneficial owner of
substantially all of the partnership interests in El Conquistador will not be so
restricted.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

El Conquistador is subject to various conflicts of interest arising out of
its relationship with the partners of the partnership and their affiliates. See
'RISK FACTORS -- Potential Conflicts of Interest between El Conquistador and the
Hotel Operator' for a description of these various conflicts of interest.
Because El Conquistador will be operated by Conquistador Holding (SPE), Inc., as
general partner, these conflicts will not be resolved through arm's-length
negotiations, but through the exercise of the general partner's judgment
consistent with its fiduciary responsibility to WHG El Con Corp., which will be
the only other partner other than Conquistador Holding (SPE), Inc. El
Conquistador has agreed to indemnify the general partner and its officers,
directors, employees or agents, whether acting as general partner or otherwise,
except for gross negligence or willful misconduct.

Williams Hospitality, an affiliate of El Conquistador, has historically and
will continue to manage the resort and Las Casitas Village. The arrangements
between El Conquistador and Williams Hospitality, including those contained in
the management agreement, were not negotiated at arm's-length. There can be no
assurances that the terms of the management agreement, including the Hotel
Operator's fees, are as favorable to El Conquistador as those that could
reasonably be obtained in an arm's-length negotiation with an unrelated third
party. See 'EL CONQUISTADOR RESORT & COUNTRY CLUB -- Management and Marketing of
the Resort and Las Casitas Village' for a detailed description of these
arrangements and the fees paid with respect thereto.

El Conquistador is also an affiliate of Wyndham Management, which will
manage the resort and Las Casitas Village and market the resort. El Conquistador
is also an affiliate of Grand Bay, which will market Las Casitas Village. Each
of Wyndham Management and Grand Bay market other resorts, some of which compete
directly with the resort and Las Casitas Village. There can be no assurance that
either Wyndham Management or Grand Bay will not take actions which favor other
properties that they market to the detriment of the resort and Las Casitas
Village.

Wyndham International has a responsibility to its shareholders to maximize
the economic return of all of the Wyndham Resorts'r' that it manages, not only
the resort. There can be no assurance that Wyndham International will not take
actions or cause Wyndham Management or Grand Bay to take such actions to benefit
another Wyndham Resort'r' or Grand Bay'r' hotel to the detriment of the resort.
Such actions may include, without limitation, shifting key employees from the
resort to another Wyndham Resort'r', marketing other Wyndham Resorts'r' or Grand
Bay'r' hotels more prominently than the resort and not providing the financial
support to the resort that it provides to other Wyndham Resorts'r'.

In order to repay a portion of the $120,000,000 1991 AFICA bonds, El
Conquistador borrowed $32,021,172 from Posadas de Puerto Rico Associates,
Incorporated. Posadas de Puerto Rico is an indirect wholly-owned subsidiary of
Wyndham International, which beneficially owns approximately 23% of El
Conquistador. The loan is evidenced by a demand promissory note bearing interest
at the prime rate. This loan will be subordinate to the bonds.

Historically from time to time, El Conquistador borrowed funds from the
partners of El Conquistador. Such loans are classified as deficiency loans and
additional loans and are subordinate to the bonds. Deficiency loans were
required to be made during the five-year period from November 1993 until
November 1998. The proceeds of deficiency loans were used to pay operating costs
or any other fees or expenses related to the operation of the resort or the
partnership's

<PAGE>

business, including payment of liabilities or reserves for liabilities.
Deficiency loan proceeds were not used for renovation, improvement, construction
or development of the resort. The maximum aggregate principal amount of
deficiency loans that could be called was $7,000,000 for each general partner
and $14,000,000 in total. The actual amount of deficiency loans that were called
was $7,600,000. Additional loans are required to be made any time after all
capital contributions are made and either (1) there are outstanding $14,000,000
of deficiency loans or (2) the obligations to make deficiency loans has
terminated. The general partners have the right, but not the obligation, to make
additional loans. The proceeds of additional loans are used to meet any of the
partnership's obligations for which it has insufficient funds. To date
$9,597,120 of additional loans have been made by the partners to El
Conquistador. As of December 31, 1998, such partner loans and related interest
totalled $15,592,563. Interest on partner loans currently ranges from 7.50% to
8.00% per annum. The most recent of such loans was in the aggregate principal
amount of $800,000 and is described under 'POLICY WITH RESPECT TO CERTAIN
ACTIVITIES' above.

THE BONDS

GENERAL

The bonds will be issued pursuant to the trust agreement in the aggregate
principal amount of $105,200,000. The bonds will be dated the date of the
initial delivery and payment for the bonds and will bear interest at such rates
and will mature, subject to the rights of redemption described below, in such
amounts on and of such years, as set forth on the inside front cover
page of this official statement and prospectus. Interest on the bonds will be
payable monthly on the first day of each month commencing on , 1999 until
maturity or prior redemption.

The bonds are issuable as fully registered bonds without coupons in
denominations of $5,000 or any integral multiple thereof. The bonds will be
registered under The Depository Trust Company Book-Entry Only System described
below. The principal or redemption price of and interest on the bonds will be
payable as described below under ' -- Book-Entry Only System.'

TRUSTEE

The trustee will be Banco Santander Puerto Rico. The trustee's corporate
trust office is located at 221 Ponce de Leon Avenue, Lobby Level, Hato Rey,
Puerto Rico 00918.

BOOK-ENTRY ONLY SYSTEM

The following information concerning The Depository Trust Company and its
book-entry system has been obtained from The Depository Trust Company.

The Depository will act as securities depository for the bonds. The bonds
will be issued as fully registered bonds in the name of Cede & Co., the
Depository's partnership nominee. One fully registered bond will be issued for
each maturity of the bonds in the aggregate principal amount of such maturity,
and will be deposited with the Depository.

The Depository has advised El Conquistador and the underwriters as follows:
the Depository is a limited-purpose trust company organized under the New York
Banking Law, a 'banking organization' within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a 'clearing corporation' within the
meaning of the New York Uniform Commercial Code, and a 'clearing agency'
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. The Depository holds securities that its direct participants
deposit with the Depository. The Depository also facilitates the settlement of
securities transactions among direct participants, such as transfers and
pledges, in deposited securities through electronic book-entry changes in
accounts of the direct participants, thereby eliminating the need for physical
movement of securities. Direct participants include securities brokers and
dealers, including the underwriters, banks, trust companies, clearing
corporations, and certain other organizations. The Depository is owned by a
number of the direct participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc.

<PAGE>

<PAGE>
Access to the the Depository system is also available to others such as banks,
brokers, dealers and trust companies that clear transactions through or maintain
a custodial relationship with a direct participant, either directly or
indirectly. The rules applicable to the Depository and its participants are on
file with the SEC.

Purchases of bonds under the the Depository system must be made by or
through direct participants which will receive a credit for the bonds on the
Depository's records. The ownership interest of each actual beneficial owner of
each bond is in turn to be recorded on the direct and indirect participants'
records. Beneficial owners will not receive written confirmation from the
Depository of their purchase, but beneficial owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the direct or indirect participant through
which the beneficial owner entered into the transaction. Transfers of ownership
interests in the bonds are to be accomplished by entries made on the books of
participants acting on behalf of beneficial owners. Beneficial owners will not
receive certificates representing their ownership interests in the bonds, except
in the event that use of the Depository system for the bonds is discontinued.

To facilitate subsequent transfers, all bonds deposited by participants
with the Depository are registered in the name of the Depository's partnership
nominee, Cede & Co. The deposit of bonds with the Depository and their
registration in the name of Cede & Co. effect no change in beneficial ownership.
The Depository has no knowledge of the actual beneficial owners of the bonds.
The Depository's records reflect only the identity of the direct participants to
whose accounts such bonds are credited, which may or may not be the beneficial
owners. The participants will remain responsible for keeping account of their
holdings on behalf of their customers.

Conveyance of notices and other communications by the Depository to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.

Redemption notices shall be sent to Cede & Co. If less than all of the
bonds of any maturity are being redeemed, the Depository's practice is to
determine by lot the amount of the interest of each direct participant in such
maturity to be redeemed.

Neither the Depository nor Cede & Co. will consent or vote with respect to
the bonds. Under its usual procedures, the Depository mails an 'Omnibus Proxy'
to AFICA as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those direct participants to whose
accounts the bonds are credited on the record date and identified in a listing
attached to the Omnibus Proxy.

Principal of and redemption premium, if any, and interest payments on the
bonds will be made to the Depository. The Depository's practice is to credit
direct participants' accounts on each interest payment date in accordance with
their respective holdings shown on the Depository's records unless the
Depository has reason to believe that it will not receive payment on such date.
Payments by participants to beneficial owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in 'street name,' and
will be the responsibility of such participant and not of the Depository, the
trustee, El Conquistador or AFICA, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal and
interest to the Depository is the responsibility of the trustee, disbursement of
such payments to direct participants is the responsibility of the Depository,
and disbursement of such payments to the beneficial owners is the responsibility
of direct and indirect participants.

Each person for which a participant acquires an interest in the bonds, as
nominee, may desire to make arrangements with such participant to receive a
credit balance in the records of such participant, and may desire to make
arrangements with such participant to have all notices of redemption or other
communications to the Depository, which may affect such persons, forwarded in
writing by such participant and to have notification made of all interest
payments.

<PAGE>

<PAGE>
The Depository may discontinue providing its services as securities
depository with respect to the bonds at any time by giving reasonable notice to
AFICA or the trustee. In such event, AFICA will try to find a substitute
securities depository and, if unsuccessful, definitive bonds will be printed and
delivered. In addition, AFICA, in its sole discretion and without the consent of
any other person, may terminate the services of the Depository as securities
depository with respect to the bonds if AFICA determines that beneficial owners
of such bonds shall be able to obtain definitive bonds. In such event,
definitive bonds will be printed and delivered as provided in the trust
agreement and registered in accordance with the instructions of the beneficial
owners.

So long as Cede & Co., as nominee of the Depository, or any other nominee
of the Depository, is the registered owner of the bonds, all references herein
to the bondholders or registered owners of the bonds, other than under the
section 'TAX CONSEQUENCES,' shall mean Cede & Co., or such other nominee, in the
capacity of nominee for the Depository, and shall not mean the beneficial owners
of the bonds.

When reference is made to any action which is required or permitted to be
taken by the beneficial owners, such reference shall only relate to those
permitted to act, whether by statute, regulation or otherwise, on behalf of such
beneficial owners for such purposes. When notices are given, they shall be sent
by AFICA or the trustee to the Depository only.

For every registration of transfer or exchange of the book-entry bonds, the
beneficial owner may be charged a sum sufficient to cover any tax, fee or other
governmental charge that may be imposed in relation thereto.

NONE OF AFICA, THE TRUSTEE OR EL CONQUISTADOR SHALL HAVE ANY RESPONSIBILITY
OR OBLIGATION TO ANY PARTICIPANT OR ANY BENEFICIAL OWNER WITH RESPECT TO: (1)
THE ACCURACY OF ANY RECORDS MAINTAINED BY THE DEPOSITORY OR ANY PARTICIPANT, AS
DESCRIBED ABOVE; (2) THE PAYMENT OR TIMELINESS OF PAYMENT BY THE DEPOSITORY OR
ANY PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE
PRINCIPAL AMOUNT OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (3) THE
DELIVERY OR TIMELINESS OF DELIVERY BY THE DEPOSITORY OR ANY PARTICIPANT OF ANY
NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF
THE TRUST AGREEMENT TO BE GIVEN TO BONDHOLDERS; (4) THE SELECTION OF THE
BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF
THE BONDS; OR (5) THE DEPOSITORY'S DUTIES WITH RESPECT TO ANY CONSENT GIVEN OR
OTHER ACTION TAKEN BY BONDHOLDERS.

In the event that the book-entry only system is discontinued and the
beneficial owners become registered owners of the bonds, the following
provisions will apply: the principal of the bonds and premium, if any, thereon
when due will be payable upon presentation of the bonds at the corporate trust
office of the trustee in San Juan, Puerto Rico, and interest on the bonds will
be paid by check mailed to the persons who were the registered owners, or in the
case of beneficial owners holding at least $1,000,000 aggregate principal amount
of bonds who so request by wire transfer, as of the 15th day of the month
immediately preceding the related interest payment date, as provided in the
trust agreement. Bonds may be exchanged for an equal aggregate principal amount
of bonds in other authorized denominations and of the same maturity and interest
rate, upon surrender thereof at the trustee's corporate trust office in San
Juan, Puerto Rico. The transfer of any bond may be registered only upon
surrender thereof to the trustee along with a duly executed assignment in form
satisfactory to the trustee. Upon any such registration of transfer, a new bond
or bonds of authorized denominations in an equal aggregate principal amount, of
the same maturity, bearing interest at the same rate and registered in the name
of the transferee will be executed by AFICA and authenticated by the trustee. No
charge may be made to the bondholders for any exchange or registration of
transfer of the bonds, but any bondholder requesting any such exchange shall pay
any tax or other governmental charge required to be paid with respect to such
exchange or registration of transfer. The trustee will not be required to
exchange or to register the transfer of any bond during the period of 15 days
preceding the date of giving of notice of redemption or after any bond or
portion thereof has been selected for redemption.

<PAGE>

<PAGE>
REDEMPTION

Mandatory Redemption Other Than Upon Event of Taxability. The bonds will be
subject to mandatory redemption at a price equal to the principal amount thereof
plus accrued and unpaid interest up to the redemption date, without premium,
(1) in whole or in part, to the extent of any condemnation, casualty or
insurance proceeds received upon the occurrence of an event of condemnation,
taking or destruction of, or damage to the resort under the conditions set forth
in the loan agreement, and (2) in whole upon cessation of operations of the
resort.

A cessation of operation of the resort will not be deemed to have occurred
(1) until 30 days have elapsed after notice has been given to El Conquistador by
AFICA that operations at the resort have ceased and El Conquistador has not
demonstrated to the satisfaction of AFICA that the resort is being operated as
an 'Industrial Facility' within the meaning of Act No. 121 of June 27, 1977 of
Puerto Rico, as amended, or that El Conquistador is, in good faith, seeking to
cause the resumption of an economically reasonable operation of the resort as an
Industrial Facility or (2) until receipt by AFICA and the trustee of notice from
El Conquistador that El Conquistador has no present intention of causing the
resumption of operations of the resort as an Industrial Facility or of seeking,
in good faith, to cause the resumption of an economically reasonable operation
of the resort as an Industrial Facility. A cessation of operation of the resort
will not be deemed to exist on account of an occurrence of an event of
condemnation, damage or destruction of the resort.

In addition, the term bonds, unless previously redeemed or purchased for
cancellation, are subject to mandatory redemption, in amounts equal to the
following amortization requirements:

<TABLE>
<CAPTION>
YEAR [DATE] [DATE]
------ ------------ ------------

<S> <C> <C> <C>
Term bonds maturing , 2014.......................... 2009 $ $
2010
2011
2012
2013
2014
Term bonds maturing , 2019.......................... 2014
2015
2016
2017
2018
2019
Term bonds maturing , 2024.......................... 2019
2020
2021
2022
2023
2024
Term bonds maturing , 2029.......................... 2024
2025
2026
2027
2028
2029
</TABLE>

The serial bonds mature at six-month intervals commencing ,
1999 as set forth on the inside front cover of this official statement and
prospectus.

Mandatory Redemption Upon Event of Taxability. The bonds are further
subject to mandatory redemption in whole at a price equal to the principal
amount thereof plus accrued and unpaid interest to the redemption date upon the
second occurrence of an Event of Taxability. An Event

<PAGE>

of Taxability will occur upon receipt by AFICA and the trustee of a report of El
Conquistador's accountants to the effect that because of the failure of El
Conquistador to comply with certain provisions of the U.S. Internal Revenue Code
of 1986, as amended and in effect on the date of issuance of the bonds, interest
paid or accrued on the bonds to a Qualifying Bondholder is includable in gross
income and subject to the payment of income taxes, a credit for the payment of
which is not otherwise available under the Internal Revenue Code as in effect on
the date of such report. If redeemed, such redemption shall occur not later than
45 days after the occurrence of such an Event of Taxability. No such mandatory
redemption shall be required as a result of a change in the tax laws in force on
the date of issuance of the bonds.

Optional Redemption. The bonds are subject to redemption, at the option of
El Conquistador, in whole or in part, on , 2009 or on any interest
payment date thereafter, which date shall not be less than 45 days from the date
that notice of such redemption is received by the trustee, at the redemption
prices set forth below, expressed as percentages of the outstanding principal
amount of such bonds, plus accrued interest to the redemption date:

<TABLE>
<CAPTION>
REDEMPTION PERIOD REDEMPTION PRICE
----------------- ----------------
<S> <C>
, 2009 - , 2010......... 102.0%
, 2010 - , 2011......... 101.0%
, 2011 and thereafter................. 100.0%
</TABLE>

To exercise the foregoing optional redemption, El Conquistador is required
to deposit with the trustee moneys necessary to effect such redemption on a
business day not less than 31 days before the date on which the corresponding
redemption price is due and payable.

Selection and Notice of Redemption. At least 30 days before any redemption
date, notice thereof will be sent by the trustee via first-class mail, postage
prepaid, to Cede & Co., as nominee of the Depository, or if the book-entry only
system is discontinued as described above, by first-class mail, postage prepaid,
to the holders of the bonds to be redeemed. If less than all of the bonds are
called for redemption, the particular bonds or portions thereof to be redeemed
will be selected as provided below, except that so long as the book-entry only
system shall remain in effect, in the event of any such partial redemption, the
Depository shall reduce the credit balances of the applicable participants in
respect of the bonds in inverse order of maturity; provided that if fewer than
all of the outstanding bonds of the same maturity are called for redemption, the
bonds or portions of such maturity date to be redeemed shall be selected by the
trustee by such method as the trustee deems fair and appropriate. Such
participants shall in turn select those beneficial owners of the bonds whose
ownership interests are to be extinguished by such partial redemption, each by
inverse order of maturity or as determined by the trustee as provided above.

Each notice of redemption shall set forth:

(1) the redemption date;

(2) the redemption price;

(3) if fewer than all of the bonds then outstanding shall be called
for redemption, the distinctive numbers and letters, if any, of such bonds
to be redeemed and, in the case of bonds to be redeemed in part only, the
portion of the principal amount thereof to be redeemed;

(4) that on the date fixed for redemption such redemption price will
become due and payable upon each bond or portion thereof called for
redemption, and that interest thereon shall cease to accrue on and after
said redemption date; and

(5) the place where such bonds or portions thereof called for
redemption are to be surrendered for payment of such redemption price.

In case any bond is to be redeemed in part only, the notice of redemption
shall state also that on or after the redemption date, upon surrender of such
bond, a new bond or bonds in principal amount equal to the unredeemed portion of
such bond will be issued. Failure to mail such notice

<PAGE>

<PAGE>
to any bondholder or any defect in any notice so mailed shall not affect the
validity of the proceedings for the redemption of the bonds of any other
bondholders.

Except with respect to the mandatory redemption of the term bonds in
accordance with the amortization requirements described above, if less than all
of the outstanding bonds shall be called for redemption, such bonds will be
redeemed in inverse order of maturity unless otherwise requested by El
Conquistador. If less than all of the bonds of any maturity are called for
redemption, the particular bonds or portions thereof to be redeemed shall be
selected by the trustee by such method as the trustee deems fair and
appropriate, in integral multiples of $5,000.

If notice of redemption is given and if sufficient funds are on deposit
with the trustee to provide for the payment of the principal of and premium, if
any, and interest on the bonds, or portions thereof, to be redeemed, then the
bonds, or portions thereof, so called for redemption will, on the redemption
date, cease to bear interest and shall no longer be deemed outstanding or be
entitled to any benefit or security under the trust agreement.

Any moneys which have been set aside for the purpose of paying any of the
bonds, either at the maturity thereof or upon a redemption or otherwise, and
which remain unclaimed by a bondholder for a period of two years after the date
on which such bonds shall have become due and payable or deemed tendered for
purchase, may, upon the request of El Conquistador, be paid to El Conquistador
or to such office, board or body as may be entitled by law to receive the same.
Thereafter, the holder of such bonds shall look only to El Conquistador or to
such office, board or body, as the case may be, for payment and then only to the
extent of the amount so received, without interest. AFICA and the trustee shall
have no responsibility with respect to such moneys.

SOURCES OF PAYMENT AND SECURITY FOR THE BONDS

In General. The bonds are limited obligations of AFICA payable solely from
monies derived pursuant to the loan agreement and from such other amounts as may
be available to the trustee under the trust agreement and the related collateral
agreements. The bonds will not constitute a charge against the general credit of
AFICA and will not constitute an indebtedness of the government of Puerto Rico
or any of its political subdivisions other than AFICA. The partners and the
affiliates of El Conquistador are not liable with respect to the payment of
principal of, premium, if any, or interest on the bonds.

The Loan Agreement. Under the loan agreement, El Conquistador will agree to
deposit with the trustee in a bond fund established under the trust agreement
amounts sufficient to pay, together with the amounts then on deposit therein,
principal of and premium, if any, and interest on the bonds. Such deposit must
be made on the business day immediately preceding the day on which the
corresponding amounts of principal, premium, if any, and interest are due and
payable. Pursuant to the trust agreement, AFICA will assign its interest in the
loan agreement, except certain rights of AFICA to indemnification, exemption
from liabilities, notices and the payment of costs and expenses, to the trustee
as security for the bonds.

The Reserve Fund. On the date of issuance of the bonds, El Conquistador
shall cause $9,100,000 to be deposited from the proceeds of the bonds to the
credit of a reserve fund. Moneys held for the credit of the reserve fund shall
be used for the purpose of paying the principal of and interest on the bonds
when due, whenever and to the extent that the moneys held to the credit of the
bond fund established to facilitate payments on the bonds shall be insufficient
for such purposes. If El Conquistador has failed to deposit amounts sufficient
to pay principal of and interest on the bonds as required under the loan
agreement, the trustee will transfer funds from the reserve fund to the bond
fund, and will notify El Conquistador of the existence of a deficiency in the
reserve fund, on the business day immediately succeeding the next interest
payment date. In accordance with the loan agreement, El Conquistador has the
obligation to replenish the reserve fund within 20 business days after notice
from the trustee of the existence of a reserve fund deficiency; provided,
however, that a deficiency in the reserve fund will not be an event of default
under the loan agreement until such deficiency exceeds $4,550,000. Additionally,
commencing

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, 1999 and on each thereafter if the trustee
determines that there exists a deficiency in the reserve fund due to a reduction
in the market value of securities deposited in the reserve fund, as determined
by the trustee pursuant to a valuation effected as provided in the trust
agreement, El Conquistador shall be obligated to replenish the reserve fund
within 20 business days after receipt of notice from the trustee; provided,
however, that a deficiency in the reserve fund will not be an event of default
under the loan agreement until such deficiency exceeds $4,550,000. El
Conquistador shall direct the trustee to cause the moneys held in the reserve
fund to be invested in Investment Obligations (as defined in 'SUMMARY OF THE
TRUST AGREEMENT -- Investment of Funds' below) of such long-term or short-term
maturities as El Conquistador elects; provided that such Investment Obligations
deposited in the reserve fund shall mature or be subject to redemption, at the
option of the holder thereof, not later than the respective dates when moneys
held to the credit of such fund or account will be required for the purposes
intended.

Pledge Agreement and Mortgage. The bonds will be secured by a pledge of
real estate and leasehold mortgage notes in the principal amounts of
$105,200,000 and $2,000,000, respectively, and bearing interest at the rate of
12% per annum. The mortgage notes will be secured by a first priority mortgage
lien on the resort and on the Palominos Island lease, subject only to liens
permitted by the loan agreement.

The mortgage notes will be pledged to the trustee for the benefit of AFICA
and the bondholders pursuant to a pledge agreement as security for the
obligations of El Conquistador under the loan agreement.

A mortgagee title insurance policy insuring the real estate and leasehold
mortgages as a first priority lien on the resort, subject only to liens
permitted by the loan agreement, will be delivered on the date of issuance of
the bonds in an amount equal to the principal amount of the mortgage notes
referred to above.

Personal Property Security Agreements. The bonds additionally will be
secured by a personal property security agreement which will create a first
priority security interest in a substantial portion of El Conquistador's
tangible and intangible personal property, including tangible assets, used in
connection with the operation of the resort. If sufficient moneys were otherwise
not available in the bond fund established pursuant to the trust agreement and
the $9,100,000 reserve fund for the payment of the principal of and interest on
the bonds, the trustee may institute proceedings to cause the enforcement of its
security interests under such security agreements.

Assignments. As security for its obligations under the loan agreement, El
Conquistador will enter into an assignment of leases and rents and security
agreement and an assignment of the management agreement. The assignment
contracts perfect an assignment of certain contracts, leases, subleases,
concessions and other agreements and licenses related to the operation of the
resort.

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SUMMARY OF THE LOAN AGREEMENT

The following summary which describes certain provisions of the loan
agreement, does not purport to be complete and is subject to, and is qualified
by reference to, the loan agreement. A copy of the loan agreement is filed as an
exhibit to the registration statement of which this official statement and
prospectus is a part.

AFICA will issue the bonds and lend the proceeds to El Conquistador. El
Conquistador will agree to make payments directly to the trustee which, together
with amounts then held in the bond fund established under the trust agreement,
will be sufficient to make the payments of principal of and interest on such
bonds as the same become due. El Conquistador will make such payments from cash
it generates from operating activities. The obligations of El Conquistador under
the loan agreement will be absolute and unconditional without right of set-off
for any reason.

Pursuant to the loan agreement, El Conquistador will agree to indemnify
AFICA and to pay the costs and expenses of indemnifying the trustee against any
losses arising from the operation of the resort and Las Casitas Village or their
participation in this offering, subject to certain exceptions, and will agree to
pay the legal fees and expenses of AFICA and the trustee.

AFICA will assign all its rights under the loan agreement, except for
certain rights of AFICA to indemnification, exemption from liability and the
payment of costs and expenses, to the trustee pursuant to the trust agreement.

BOND PROCEEDS

The proceeds of the sale of the bonds will be used immediately after
completion of this offering to:

repay the $90,000,000 interim loan made on August 3, 1998 by Citicorp Real
Estate to El Conquistador and any unpaid interest thereon;

reimburse El Conquistador for interest previously paid on the interim
loan;

to fund the $9,100,000 reserve fund;

pay the $526,000 administrative fee to AFICA; and

pay costs and expenses associated with the issuance of the bonds,
including, printing fees, professional fees and fees of the trustee

MAINTENANCE AND OPERATION OF THE RESORT

El Conquistador will agree to cause the resort to be operated as an
'Industrial Facility' within the meaning of Act No. 121 of the Legislature of
Puerto Rico and to be maintained, preserved and kept in good repair, working
order and condition and from time to time to make all necessary and proper
repairs, replacements and renewals; provided, however, that El Conquistador will
have no obligation to cause to be maintained, preserved, repaired, replaced or
renewed any element or unit of the resort the maintenance, repair, replacement
or renewal of which, in the opinion of El Conquistador, becomes uneconomical to
El Conquistador because of damage or destruction or obsolescence, or change in
economic or business conditions, or change in government standards and
regulations, or the termination by El Conquistador of the operation of the
facilities to which such element or unit of the resort is an adjunct.

DISPOSITION OF PROJECT; ASSIGNMENT OF LOAN AGREEMENT; MERGER OR CONSOLIDATION OF
EL CONQUISTADOR

The resort may be sold, leased or otherwise disposed of with the prior
written consent of AFICA and the trustee. The said consent shall not be required
if the following conditions are met:

(1) El Conquistador (A) notifies AFICA, the trustee and the rating
agency rating the bonds of the proposed transaction, and (B) provides to
AFICA and the trustee proof reasonably satisfactory

<PAGE>

to them, which may include an opinion of counsel approved by AFICA and the
trustee, that the consummation of the proposed transaction will not result
in the interest payable on the bonds not continuing to constitute income
from sources within Puerto Rico under the Internal Revenue Code; and

(2) the rating agency provides confirmation that the rating on the
bonds will not be withdrawn or downgraded below investment grade as a
result of the consummation of the proposed transaction. No such sale, lease
or other disposition will relieve El Conquistador of its obligations to
make payments under the loan agreement sufficient to pay principal of and
interest on the bonds as the same become due.

El Conquistador may assign the loan agreement with the prior written
consent of AFICA and the trustee. The said consent shall not be required if:

(A) the conditions mentioned in (1) and (2) of the prior paragraph are
complied with by El Conquistador; and

(B) the assignee (1) expressly assumes in writing El Conquistador's
obligations under the loan agreement and (2) delivers to AFICA and the
trustee a certificate executed by its chief financial officer or treasurer
stating that none of the obligations and covenants under the loan
agreement, the trust agreement and the related collateral documents assumed
by it, or the performance thereof will conflict with, or constitute on the
part of such assignee a breach of, or default under, any indenture,
mortgage, agreement or other instrument to which such assignee is a party
or by which it is bound, or any existing law, rule, regulation, judgment,
order or decree to which such assignee is subject.

So long as any bonds are outstanding, El Conquistador will not dispose of
all or substantially all of its assets and will not consolidate or merge into
another entity; provided, however, that El Conquistador may do so if: (1) the
successor or transferee entity is organized under the laws of Puerto Rico or any
state of the United States and complies with the source of income covenants
contained in the loan agreement; and (2) if the conditions mentioned in (A) and
(B) of the prior paragraph are complied with by El Conquistador or the successor
or transferee, as the case may be.

MAINTENANCE OF SOURCE OF INCOME; ADDITIONAL INTEREST UPON EVENT OF TAXABILITY

El Conquistador will agree under the loan agreement that during each
taxable year while the bonds are outstanding it will comply with the source of
income covenants so that all interest paid or payable on the bonds will
constitute income from sources within Puerto Rico under the provisions of the
Internal Revenue Code as in effect on the date of issuance of the bonds. Failure
to comply with the source of income covenants shall constitute an Event of
Taxability. If an Event of Taxability occurs, El Conquistador is required to pay
additional interest to each Qualifying Bondholder who receives or accrues
interest on the bonds subject to federal income taxation as a result thereof.

The source of income covenants under the loan agreement require El
Conquistador, so long as it is a partnership under the Internal Revenue Code, on
any determination date, to:

(1) be a partnership;

(2) be engaged in trade or business only in Puerto Rico;

(3) not be engaged, directly or imputedly, in any trade or business
outside Puerto Rico; and

(4) not derive, directly or imputedly, any gross income which is, or
is treated as, effectively connected with, or attributable to, the conduct
of a trade or business outside Puerto Rico.

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The source of income covenants under the loan agreement further require, if
El Conquistador is deemed an association taxable as a corporation for purposes
of the Internal Revenue Code, on any determination date, that:

(1) at least 80% of the gross income from all sources has been and
will be

(A) derived from sources outside the United States, or attributable
to income so derived by a subsidiary of El Conquistador, and

(B) attributable to the active conduct of a trade or business
outside the United States by El Conquistador or by a subsidiary of El
Conquistador; and

(2) all interest on the bonds will be paid by a trade or business of
El Conquistador in Puerto Rico.

The source of income covenants also require that all interest paid to, or
accrued by, a bondholder on the bonds to constitute income from sources within
Puerto Rico for purposes of the Internal Revenue Code.

Under the loan agreement, El Conquistador will be required to cause its
independent accountants to submit, no later than the last day of the third month
following the close of each of its taxable years, a report, which shall be made
in accordance with generally accepted auditing standards, stating whether in
connection with their audit of the books and records of El Conquistador, it
failed to comply with any of the source of income covenants during the taxable
year just ended and if as a consequence thereof:

(1) the interest paid to, or accrued by a beneficial owner on the
bonds constituted income from sources outside Puerto Rico for purposes of
the Internal Revenue Code as in effect on the date of issuance of the
bonds; and

(2) in his opinion, under the Internal Revenue Code as in effect on
the date of such report, interest paid or accrued on bonds held by a
Qualifying Bondholder is includable in the gross income and subject to the
payment of income taxes, a credit for the payment of which is not otherwise
available to the Qualifying Bondholder.

Upon receipt of such report, the trustee shall promptly cause a copy
thereof to be mailed to each person who is a bondholder or who was a bondholder
during the then current calendar year and during the immediately preceding
calendar year. Thereafter, any Qualifying Bondholder who has paid or is required
to pay income taxes under the Internal Revenue Code in respect of the interest
paid or accrued on the bonds may submit a written claim for additional interest.
Such claim must set forth in reasonable detail the basis therefor and the
calculation of the additional interest and must be submitted to the trustee and
El Conquistador within 270 days from the date of receipt of the trustee's notice
of an independent accountants report showing that an Event of Taxability
occurred. El Conquistador will pay such claim for additional interest to the
Qualifying Bondholder within 30 days from the date El Conquistador receives the
notice of claim from the Qualifying Bondholder.

COVENANTS

In connection with this offering, El Conquistador agreed to certain
limitations on additional indebtedness and liens. El Conquistador will be
permitted to incur additional indebtedness provided it maintains, after taking
into consideration the principal amount of and debt service for such additional
indebtedness:

(1)(A) an Additional Indebtedness Loan-to-Value Ratio of no more than
65%; and

(B) an Additional Indebtedness Debt Service Coverage Ratio of no
less than 1.75; and

(2) in the case of additional indebtedness of more than $10,000,000,
El Conquistador must deliver a letter to the trustee from the rating agency
then rating the bonds, to the effect that the rating agency reviewed the
additional indebtedness and after the incurrence of the same, the bonds
will continue to have a rating not lower than the one assigned to the bonds
immediately prior to such incurrence.

<PAGE>

Additional Indebtedness Debt Service Converge Ratio means at the time of
calculation, the quotient resulting from dividing (A) the net operating income
before income taxes and interest and excluding depreciation and other noncash
items of the resort for the last full 12 month period by (B) the sum of the
amount necessary to pay the principal and the interest of (1) the bonds and (2)
the additional indebtedness scheduled for payment over the next 12 month period.
Additional Indebtedness Loan-to-Value Ratio means at the time of calculation,
the quotient resulting from dividing (1) the total principal amount of bonds
then outstanding, less the aggregate amount deposited to the credit of the bond
fund and the reserve fund, plus the principal amount of any additional
indebtedness, by (2) the appraised value of the resort as determined by the most
recent appraisal dated not more than three years prior to the date of
calculation.

El Conquistador will be permitted to make distributions to its partners on
a quarterly basis of up to 95% of its available cash; provided (1) at least
$2,500,000 remains undistributed, (2) in years in which principal is to be paid
on the bonds, El Conquistador must retain at the end of each of the first three
quarters in each year an aggregate amount equal to the next principal payment;
(3) all amounts owed with respect to the bonds during the previous fiscal year
have been paid and (4) the reserve fund balance is $9,100,000 at the time of
such distributions. For these purposes, available cash means the cash flow
generated by the resort, after payment of expenses of operations, interest on
the bonds and any required reserve deposits. El Conquistador will also be
permitted to distribute cash to the partners at any time provided such
distribution is secured by a letter of credit issued by an institution with at
least a Baa2 rating to the extent the cash distributed exceeds amounts otherwise
permitted to be distributed.

Additionally, El Conquistador agreed not to conduct any business other than
the ownership and operation of the resort. These covenants may be amended or
eliminated without the consent of or notice to any bondholder, so long as the
rating agency rating the bonds confirms that such action will not result in a
downgrading below investment grade or withdrawal of its rating of the bonds.

The loan agreement contains covenants of El Conquistador normally required
of borrowers with respect to properties similar to that of the resort, including
covenants with respect to compliance with environmental laws and regulations,
and maintenance of insurance. The loan agreement permits El Conquistador to
restore or replace the resort or portions thereof in the event of any damage due
to casualty or loss due to condemnation upon compliance with certain conditions
set forth therein.

EVENTS OF DEFAULT AND REMEDIES

Each of the following is an event of default under the loan agreement:

(1) failure by El Conquistador to pay the amounts required to be paid
with respect to principal of or premium, if any, or interest on the bonds
when the same shall become due and payable;

(2) failure by El Conquistador to make any other payments, excluding
payments referred to in (1) above and payments to replenish the $9,100,000
reserve fund prior to its balance falling below $4,550,000, required by the
loan agreement and continuation of such failure for 30 days after written
notice thereof unless an extension is granted by the trustee prior to its
expiration;

(3) failure by El Conquistador to observe and perform any other
covenant, condition, or agreement under the loan agreement, other than (1)
or (2) above, and continuation of such failure for 90 days after written
notice thereof from the trustee or AFICA unless an extension is granted by
the trustee prior to its expiration; provided, however, that if such
failure cannot be corrected within such 90-day period, it shall not
constitute an event of default if corrective action is instituted by El
Conquistador during such period and diligently pursued until such failure
is corrected; and

(4) certain events of bankruptcy, liquidation or similar proceedings
involving El Conquistador.

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If by reason of force majeure El Conquistador is unable to perform any of
its obligations under (2) and (3) above, El Conquistador shall not be deemed in
default during the continuance of such inability, including reasonable time for
the removal of the effect thereof. Force majeure is defined in the loan
agreement to mean, without limitation, the following: (1) acts of God; strikes,
lockouts or other industrial disturbances; acts of public enemies; orders or
restraints of any kind of the government of the United States or of Puerto Rico
or any of their respective departments, agencies, political subdivisions or
officials, or any civil or military authority; war; insurrections; civil
disturbances; riots, epidemics; landslides; lightning; earthquakes; fires;
hurricanes; storms; droughts; floods; washouts; arrests; restraint of government
and people; explosions; breakage, malfunction or accident to facilities,
machinery, transmission pipes or canals; partial or entire failure of utilities;
shortages of labor, materials, supplies or transportation; or (2) any cause,
circumstance or event not reasonably within the control of El Conquistador.

Upon the occurrence of any of the foregoing events of default, the trustee
may declare all unpaid amounts payable under the loan agreement in respect of
the bonds to be immediately due and payable and may take any action at law or
equity necessary to collect the payments then due and thereafter to become due,
or to enforce any obligation of El Conquistador under the loan agreement. No
remedial steps shall be taken, however, the effect of which would be to provide
funds for the payment of principal of and interest on the bonds which have not
yet matured or otherwise become due unless such principal and interest shall
have been declared due and payable under the trust agreement.

AFICA has no power to waive any default under the loan agreement or extend
the time for the correction of any default that could become an event of default
under the loan agreement without the consent of the trustee.

LIMITATION ON PARTNER'S LIABILITY

The loan agreement provides that no recourse may be had against any partner
of El Conquistador or any stockholder, officer, director, employee or agent,
among others, of such partner for any obligation under the loan agreement and
the remedies available under the loan agreement upon a default in any such
obligation shall be only against El Conquistador and its assets, including the
resort, and shall include foreclosure pursuant to the related collateral
documents.

AMENDMENTS AND SUPPLEMENTS TO THE LOAN AGREEMENT AND THE RELATED DOCUMENTS

The loan agreement and the related documents may be amended or supplemented
without the consent of the bondholders: (1) to cure any ambiguity or formal
defect or omission therein or, in any supplement thereto; (2) to grant to or
confer upon AFICA or the trustee for the benefit of the bondholders any
additional rights, remedies, powers, benefits, authority or security that may
lawfully be granted to or conferred upon AFICA, the trustee or the bondholders;
and (3) to add to the covenants of El Conquistador for the benefit of the
bondholders.

Other than for the purposes of the above paragraph, the loan agreement and
the related documents may be amended or supplemented with the approval of the
bondholders of not less than a majority of the principal of the bonds
outstanding at the time. No amendment or supplement to the loan agreement or the
related documents will become effective without the consent of the trustee.

<PAGE>

<PAGE>
SUMMARY OF THE TRUST AGREEMENT

The following summary which describes certain provisions of the trust
agreement, does not purport to be complete and is subject to, and is qualified
by reference to, the trust agreement. A copy of the trust agreement is filed as
an exhibit to the registration statement of which this official statement and
prospectus is a part.

The trust agreement will constitute an assignment by AFICA to the trustee
of all of AFICA's right, title and interest in the loan agreement and the
related collateral documents, except for certain rights of AFICA to
indemnification, exemption from liability, the payment of costs and expenses and
the receipt of notices, in trust as security for the payment of the principal of
and interest on the bonds.

PROJECT FUND

The proceeds of the bonds, excluding the $9,100,000 reserve fund amount,
will be deposited with the trustee in the project fund established pursuant to
the trust agreement. The trustee will make disbursements from the project fund
immediately after completion of this offering to:

repay the $90,000,000 interim loan made on August 3, 1998 by Citicorp Real
Estate to El Conquistador and any unpaid interest thereon

reimburse El Conquistador for interest previously paid on the interim loan

pay the $526,000 administrative fee to AFICA

pay costs and expenses associated with the issuance of the bonds,
including printing fees, professional fees and fees of the trustee

BOND FUND

The trust agreement will establish with the trustee a bond fund that shall
be used for the payment of the principal of and interest on the bonds. The
following amounts will be deposited in the bond fund:

(1) all amounts paid pursuant to the loan agreement with respect to
principal of and interest on the bonds, including payments with respect to
optional and mandatory prepayments of the bonds;

(2) all amounts derived from the related collateral documents securing
payment of the bonds; and

(3) all other moneys received by the trustee or otherwise which are
permitted or required, or are directed by El Conquistador or AFICA to be
paid into the bond fund.

RESERVE FUND

On the date of issuance of the bonds, an amount equal to $9,100,000 will be
deposited in the reserve fund created under the trust agreement. Thereafter, El
Conquistador is required to make additional deposits from time to time so that
the amounts held to the credit of the reserve fund are not less than $9,100,000.
The trustee shall use amounts held to the credit of the reserve fund to make
transfers to the bond fund to the extent necessary to pay interest on and
principal of the bonds, whether at maturity, or upon acceleration or redemption,
whenever and to the extent that the monies on deposit in the bond fund are
insufficient therefor.

After the trustee makes any disbursement from the reserve fund, El
Conquistador is obligated to deposit with the trustee, on the 20th business day
succeeding the receipt of notice from the trustee, sufficient funds to cause the
amount then to the credit of the reserve fund to equal $9,100,000. El
Conquistador is also required to similarly deposit any amount necessary to cover
any loss resulting from a decline in value of Investment Obligations held to the
credit of the reserve fund if on any date of valuation the value of such
Investment Obligations and other amounts on deposit in the reserve fund is less
than $9,100,000. Investment Obligations is defined below under the section
' -- Investment of Funds.' However, a deficiency in the reserve fund will not be
an event of default under the loan agreement until such deficiency exceeds
$4,550,000.

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RENEWAL AND REPLACEMENT FUND

The trust agreement will establish with the trustee a renewal and
replacement fund that shall be used for the payment of repair, renewal and
replacement of furniture, fixtures and equipment for the resort. El Conquistador
is obligated to deposit $333,333.34 in the renewal and replacement fund on each
monthly interest payment date, up to an initial aggregate amount of $4,000,000.

After the trustee makes any disbursement from the renewal and replacement
fund, El Conquistador is required to make additional deposits with the trustee
on each monthly interest payment date of $333,333.34 until the balance of such
fund equals $4,000,000. El Conquistador is also required to similarly deposit
any amount necessary to cover any loss resulting from a decline in value of
Investment Obligations held to the credit of the renewal and replacement fund if
on any date the value of such Investment Obligations and other amounts on
deposit in the renewal and replacement fund is less than (1) the aggregate
amount deposited to date in such fund less (2) amounts disbursed by the trustee
from such fund. El Conquistador's obligations to make payments to the renewal
and replacement fund are limited to a maximum of $333,333.34 per month and
$4,000,000 in the aggregate during the first five years after the issuance of
the bonds. Thereafter, the aggregate maximum amount of the renewal and
replacement fund will be adjusted to equal 4.0% of El Conquistador's average net
revenues for the three years immediately prior to the year of the adjustment;
provided that such amount shall not be less than $4,000,000. Such adjustment
will be made every five years. However, the required monthly amount to be
deposited in the fund will remain $333,333.34 throughout the term of the bonds.

INVESTMENT OF FUNDS

Moneys held for the credit of all funds and accounts under the trust
agreement shall be invested in Investment Obligations in accordance with the
instructions of El Conquistador. Any such Investment Obligations shall mature
not later than the respective dates when the money held for the credit of such
funds or accounts will be required for the purposes intended.

Investment Obligations are defined as government obligations and
obligations of any agency or instrumentality whose obligations are backed by the
full faith and credit of the United States of America and, to the extent from
time to time permitted by law,

(A) the obligations of the

(1) Federal National Mortgage Association,

(2) Federal Home Loan Banks,

(3) Federal Farm Credit System,

(4) Federal Home Loan Mortgage Corporation, and

(5) Government National Mortgage Association, to the extent not included in
government obligations;

(B) repurchase agreements with financial institutions which are members of
the Federal Reserve System or primary dealers in the United States Treasury
market the short-term obligations of which institutions or dealers are rated at
least 'A' by Moody's, or any similar rating to which it may be changed by each
such rating agency, or whose long-term obligations are rated in one of the three
highest rating categories by Moody's, without regard to any gradations within
such categories, secured by government obligations or by securities described in
clause (A); provided, that such repurchase agreement must provide that the value
of the underlying obligations shall be maintained at a current market value,
calculated at least weekly, of not less than 104% of the repurchase price, or in
the case such underlying obligations are obligations of the Federal National
Mortgage Association or the Federal Home Loan Mortgage Corporation, of not less
than 105% of the repurchase price, a legal opinion shall be furnished to the
trustee to the effect that

(1) the repurchase agreement meets guidelines under the laws of Puerto Rico
for the legal investment of public funds,

(2) the trustee shall be given a first priority security interest,

(3) no independent third party shall have a lien,

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<PAGE>
(4) such obligations repurchased must be transferred to the trustee or an
independent third party agent by physical delivery or by an entry made
on the records of the issuer of such obligations,

(5) in either case, the entity should receive confirmation from the
independent third party that those securities are being held in a
safekeeping account in the name of the entity, and the trust or
safekeeping departments of broker-dealers or financial institutions
selling investments or pledging collateral or underlying securities, or
their custodial agents, are not considered independent third parties
for the foregoing purposes,

(6) such repurchase agreement shall constitute a 'repurchase agreement'
within the meaning of Section 101 of the United States Bankruptcy Code,
as amended, and

(7) any investment in a repurchase agreement shall mature within 30 days;

(D) U.S. Treasury Strips, REFCORP Strips and FICO Strips;

(E) money market funds registered under the Federal Investment Company Act
of 1940, whose shares are registered under the Securities Act of 1933, and
having a rating of 'P-1' by Moody's;

(F) certificates of deposit secured at all times by government obligations
or collateral described in (A) which certificates are issued by commercial
banks, savings and loan associations or mutual savings banks; provided that the
collateral must be held by a third party and the trustee must have a perfected
first priority security interest in the collateral;

(G) certificates of deposit, savings accounts, deposit accounts or money
market deposits which are fully insured by the Federal Deposit Insurance
Corporation, including the Bank Insurance Fund and the Savings Association
Insurance Fund;

(H) bonds or notes issued by any state, territory or municipality which are
rated by Moody's in one of the two highest rating categories, without regard to
any gradations within such categories, assigned by such agencies;

(I) federal funds or bankers' acceptances with a maximum term of one year
of any bank which has an unsecured, uninsured and unguaranteed obligation rating
of 'A' or better by Moody's;

(J) any Puerto Rico administered pool investment fund in which AFICA is
statutorily permitted or required to invest; and

(K) any other obligation, security or investment for which the trustee
shall have received written confirmation from Moody's to the effect that no
reduction in the rating on the bonds will result from the addition of such other
obligation, security or investment.

Any investment in government obligations or in obligations described in
(A) above may be made in the form of an entry made on the records of the issuer
of the particular obligation.

Government obligations are defined as

(1) direct obligations of, or obligations the timely payment of principal
of and interest on which are unconditionally guaranteed by, the United States of
America,

(2) bonds, debentures or notes issued by Government National Mortgage
Association, and

(3) any certificates or other evidences of an ownership of a proportionate
interest in obligations or in specified portions thereof, which may consist of
specified portions of the principal thereof or the interest thereon, of the
character described in clause (1).

EVENTS OF DEFAULT

Each of the following events is an event of default under the trust
agreement:

(1) failure to pay the principal of and premium, if any, and interest
on the bonds when the same shall become due and payable by AFICA;

(2) certain events of bankruptcy, receivership, insolvency,
liquidation or similar proceedings involving El Conquistador; or

<PAGE>

<PAGE>
(3) any 'event of default', other than an event of default of the type
described in (1) or (2) above, shall have occurred under the loan agreement
and such event of default shall not have been remedied or waived.

ACCELERATION OF MATURITIES

Upon the happening and continuance of an event of default specified above,
the trustee may, and upon the written request of holders of not less than 25% in
aggregate principal amounts of bonds then outstanding shall, by notice in
writing to AFICA, declare the principal of all the bonds then outstanding, if
not then due and payable, to be due and payable immediately, and upon such
declaration the same shall become and be immediately due and payable.

If at any time after the principal of the bonds shall have been declared to
be due and payable, and before the entry of a final judgment or decree in any
suit, action or proceeding instituted on account of such default, or before the
completion of the enforcement of any other remedy under the trust agreement,
moneys shall have accumulated in the bond fund sufficient to pay the principal
of all bonds then outstanding, except the principal of any bonds due and payable
solely as a result of such acceleration, and the interest accrued on such bonds
since the last payment date to which interest shall have been paid or duly
provided for, interest on overdue installments of interest, to the extent
permitted by law, at the rate or rates then borne by the bonds, and the charges,
compensation, expenses, disbursements, advances and liabilities of the trustee,
and all other amounts then payable by AFICA under the trust agreement shall have
been paid or a sum sufficient to pay the same shall have been deposited with the
trustee, and every other default known to the trustee in the observance or
performance of any covenant, condition, agreement or provision contained in the
bonds or in the trust agreement shall have been cured or waived, then and in
every such case the trustee may, and upon the written direction of the holders
of not less than a majority in aggregate principal amount of the bonds then
outstanding shall, by a notice in writing to AFICA and El Conquistador, rescind
and annul such declaration and its consequences, but no such rescission or
annulment shall extend to or affect any subsequent default or impair any right
consequent thereon.

ENFORCEMENT OF REMEDIES

The holders of a majority of the aggregate principal of bonds then
outstanding will have the right, subject to indemnification of the trustee, by
an instrument or concurrent instruments in writing delivered to the trustee, to
direct the remedial proceedings to be taken by the trustee under the trust
agreement provided such directions are in accordance with law and the trust
agreement and the trustee may take any other action deemed proper by the trustee
which is not inconsistent with such directions. Except as to the indemnity
provided in the loan agreement with respect to an Event of Taxability, no
bondholder will have any right to institute any suit, action or proceeding in
equity or at law on any bond or for the execution of any trust under the trust
agreement, or for any other remedy under the trust agreement unless:

(1) such boldholder has previously given to the trustee written notice of
the event of default on account of which such suit, action or proceeding is to
be instituted;

(2) the holders of not less than 25% of the aggregate principal of bonds
then outstanding have requested the trustee, after the right to execute such
powers or right of action, as the case may be, has accrued, and have afforded
the trustee a reasonable opportunity, either to proceed to exercise such powers
or to institute such action, suit or proceeding in its or their name;

(3) the trustee has been offered reasonable security and indemnity against
the costs, expenses and liabilities to be incurred, including, without
limitation, indemnification for environmental liability; and

(4) the trustee has refused or neglected to comply with such request within
a reasonable time.

No one or more bondholders will have any right, in any manner, to affect,
disturb or prejudice any rights under the trust agreement, or to enforce any
right thereunder, except in the manner therein provided. All suits, actions and
proceedings at law or in equity must be instituted, had and maintained in the
manner provided in the trust agreement and for the benefit of the

<PAGE>

<PAGE>
bondholders. Any individual right of action or other right given to one or more
bondholder by law is restricted by the trust agreement to the rights and
remedies therein provided.

AMENDMENTS AND SUPPLEMENTS TO THE TRUST AGREEMENT

The trust agreement may be amended or supplemented without the consent of
the bondholders:

(1) to cure any ambiguity or to make any other provisions with respect
to matters or questions arising under the trust agreement consistent with
the provisions of the trust agreement; or

(2) to grant or confer upon the trustee for the benefit of the
bondholders any additional rights, remedies, powers, benefits, authority or
security that may lawfully be so granted or conferred; or

(3) to add to the covenants of AFICA for the benefit of the
boldholders or to surrender any right or power conferred upon AFICA under
the trust agreement; or

(4) to permit the qualification of the trust agreement under the Trust
Indenture Act of 1939 or any similar federal statute hereafter in effect or
to permit the qualification of the bonds for sale under the securities laws
of any of the states of the United States, and to add to the trust
agreement or any supplement or amendment thereto such other terms,
conditions and provisions as may be required by said Trust Indenture Act of
1939 or similar federal statute.

The trust agreement may be amended or supplemented with the consent of the
holders of a majority of the principal of the bonds outstanding at the time.
However, without the consent of each bondholder affected, any amendment to the
trust agreement may not:

(1) extend the time for the payment of the principal of or the
interest on any bond; or

(2) reduce the principal of any bond or the redemption premium, if
any, or the rate of interest thereon; or

(3) create any lien or security interest with respect to the loan
agreement or the payments thereunder; or

(4) give a preference or priority to any bond or bonds over any other
bond or bonds; or

(5) reduce the aggregate principal of the bonds required for consent
to such supplement or amendment or any waiver thereunder.

The trustee is not obligated to execute any proposed supplement or
amendment if its rights, obligations and interests would be affected thereby.
Nothing herein will affect any preexisting rights to create liens set forth in
the trust agreement.

No amendment or supplement to the trust agreement, other than to cure any
ambiguity, will become effective without the consent of El Conquistador.

DEFEASANCE

Any bond will be deemed paid and no longer entitled to any security under
the trust agreement upon satisfaction of certain conditions and the deposit with
the trustee of sufficient funds, or direct obligations of the United States of
America or obligations unconditionally guaranteed by the United States of
America, the principal of and the interest on which, when due, without any
reinvestment thereof, will provide moneys which will be sufficient to pay when
due the principal of and premium, if any, and interest due and to become due,
excluding any additional interest payable upon the second occurrence of an Event
of Taxability, on such bond. El Conquistador will be required to indemnify the
beneficial owners for any additional interest. If any bond is not to be redeemed
or does not mature within 60 days after such deposit, El Conquistador must give
irrevocable instructions to the trustee to give notice, in the same manner as
notice of redemption, that such deposit has been made. The bonds shall have not
been deemed paid unless the trustee shall have received an opinion of counsel
experienced in bankruptcy matters to the effect that payment to the beneficial
owners would not constitute a transfer which may be voided under the provisions
of the United States Bankruptcy Code, and an opinion of counsel experienced in
tax matters under the Internal Revenue Code to the effect that, assuming

<PAGE>

<PAGE>
El Conquistador will continue to comply with the source of income covenants in
the loan agreement, the deposit of said obligations or moneys would not
adversely affect the treatment of interest received by the beneficial owners as
income from sources within Puerto Rico.

AFICA

GENERAL

AFICA is a body corporate and politic constituting a public corporation and
governmental instrumentality of Puerto Rico. The Legislature of Puerto Rico
determined that the development and expansion of commerce, industry, and health
and educational services within Puerto Rico is essential to the economic growth
of Puerto Rico and to attain full employment and preserve the health, welfare,
safety and prosperity of all its citizens. The Legislature also determined that
new methods of financing capital investments were required to promote industry
in Puerto Rico and to provide modern and efficient medical facilities for the
citizens of Puerto Rico. Accordingly, AFICA was created under Act No. 121 of the
Legislature of Puerto Rico, approved June 27, 1977, as amended, for the purpose
of promoting the economic development, health, welfare and safety of the
citizens of Puerto Rico. AFICA is authorized to borrow money through the
issuance of revenue bonds and to loan the proceeds thereof to finance and
refinance the acquisition, development, construction and equipping of
industrial, tourist, educational, medical and environmental pollution control
and solid waste disposal facilities. AFICA has no taxing power. AFICA's offices
are located at Minillas Government Center, De Diego Avenue, Stop 22, San Juan,
Puerto Rico 00940. AFICA's telephone number is (787) 782-4060.

GOVERNING BOARD

Act No. 121 of the Legislature of Puerto Rico provides that the governing
board of AFICA shall consist of seven members. The President of the Government
Development Bank for Puerto Rico, the Executive Director of the Puerto Rico
Industrial Development Company, the Executive Director of the Puerto Rico
Aqueduct and Sewer Authority, the President of the Puerto Rico Environmental
Quality Board and the Executive Director of the Puerto Rico Tourism Company are
each ex officio members of the governing board. The remaining two members of the
governing board are appointed by the Governor of Puerto Rico for terms of four
years. The following individuals are the current members of the governing board:

<TABLE>
<CAPTION>
NAME POSITION TERM OCCUPATION
---- -------- ---- ---------

<S> <C> <C> <C>
Lourdes M. Rovira............... Chairperson Indefinite President, Government
Development Bank for Puerto
Rico
Jaime Morgan Stubbe............. Member Indefinite Executive Director, Puerto
Rico Industrial Development
Company
Perfecto Ocasio................. Member Indefinite Executive Director, Puerto
Rico Aqueduct and Sewer
Authority
Hector Russe-Martinez........... Member Indefinite President, Puerto Rico
Environmental Quality Board
Jorge Davila.................... Member Indefinite Executive Director, Puerto
Rico Tourism Company
James Thordsen.................. Member June 27, 2002 President, James Thordsen,
Inc.
Jose Salas-Soler................ Member October 22, 2001 Attorney-at-Law
</TABLE>

Act No. 121 of the Legislature of Puerto Rico provides that the affirmative
vote of four members is sufficient for any action taken by the governing board.

<PAGE>

<PAGE>
The following individuals are currently officers of AFICA:

LOURDES M. ROVIRA, Executive Director of AFICA, is also President of
the Government Development Bank for Puerto Rico. Ms. Rovira was the
Executive Vice President of the Government Development Bank from 1996 until
her appointment as President. Prior to her appointment at the Government
Development Bank, Ms. Rovira was the chief financial officer of the
University of Puerto Rico system. Ms. Rovira received a bachelor's degree
in Business Administration from the University of Puerto Rico in 1972.

VELMARIE BERLINGERI, Assistant Executive Director of AFICA, is also a
Vice President of the Government Development Bank for Puerto Rico. Ms.
Berlingeri has been associated with the Government Development Bank since
1993. Prior to her appointment, Ms. Berlingeri worked in the investments
area of a major private sector corporation in Puerto Rico. Ms. Berlingeri
received a Bachelor of Science in Business Administration degree from the
University of Puerto Rico in 1982.

DELFINA BETANCOURT-CAPO, Secretary and General Counsel of AFICA, is
also Senior Vice President and General Counsel of the Government
Development Bank for Puerto Rico. Ms. Betancourt has been associated with
the Government Development Bank since 1984. She received a law degree from
Cornell University in 1982.

OUTSTANDING REVENUE BONDS AND NOTES OF AFICA

As of June 30, 1998, AFICA had revenue bonds and notes issued and
outstanding in the aggregate principal amount of approximately $2.2 billion.

All such bond and note issues have been authorized and issued pursuant to
trust agreements or resolutions separate from and unrelated to the trust
agreement relating to the bonds and are payable from sources other than the
payments under the loan agreement.

Under Act No. 121 of the Legislature of Puerto Rico, AFICA may issue
additional bonds and notes from time to time to finance and refinance
industrial, tourist, educational, medical or pollution control facilities.
However, any such bonds and notes would be authorized and issued pursuant to
other trust agreements or resolutions separate from and unrelated to the trust
agreement relating to the bonds described in this official statement and
prospectus and would be payable from sources other than the payments under the
loan agreement.

GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

As required by Act No. 272 of the Legislature of Puerto Rico, approved May
15, 1945, as amended, the Government Development Bank has acted as a financial
advisor to AFICA in connection with the issuance and sale of the bonds.

The Government Development Bank is a public corporation with varied
governmental financial functions. Its principal functions are to act as
financial advisor to and fiscal agent for Puerto Rico, its municipalities and
its public corporations in connection with the issuance of bonds and notes, to
make advances to public corporations and to make loans to private enterprises
that will aid in the economic development of Puerto Rico. The underwriters have
been selected by the Government Development Bank to act from time to time as
underwriters of its obligations and the obligations of Puerto Rico, its
instrumentalities and public corporations. The underwriters or their affiliates
also participate in other financial transactions with the Government Development
Bank.

<PAGE>

<PAGE>
TAX CONSEQUENCES

In the opinion of Fiddler Gonzalez & Rodriguez, LLP, bond counsel, under
the provisions of the Acts of Congress and the laws of Puerto Rico now in force:

1. The bonds, and the transfer of the bonds, including any gain
derived upon the sale of the bonds, are exempt from Puerto Rico income tax
pursuant to Article 8(b) of Act No. 121 of the Legislature of Puerto Rico.

2. Interest on the bonds is:

(A) excluded from the gross income of the recipient thereof for
Puerto Rico income tax purposes pursuant to Section 1022(b)(4)(B) of the
Puerto Rico Internal Revenue Code of 1986, as amended;

(B) exempt from Puerto Rico income tax and alternative minimum tax
pursuant to Section 1022(b)(4)(B) of the Puerto Rico Internal Revenue
Code, Article 8(b) of Act No. 121 of the Legislature of Puerto Rico, and
Section 3 of the Puerto Rico Federal Relations Act; and

(C) exempt from Puerto Rico municipal license tax pursuant to
Section 9(25) of the Puerto Rico Municipal License Tax Act of 1974, as
amended, and Section 3 of the Puerto Rico Federal Relations Act.

3. The bonds are exempt from Puerto Rico personal property tax
pursuant Section 3.11 of the Puerto Rico Municipal Property Tax Act of
1991, as amended, and Section 3 of the Puerto Rico Federal Relations Act.

4. The bonds are exempt from Puerto Rico (A) gift tax with respect to
donors who are residents of Puerto Rico at the time the gift is made and
(B) estate tax with respect to estates of decedents who are residents of
Puerto Rico at the time of death, excluding, in each case, United States
citizens who acquired their United States citizenship other than by reason
of birth or residence in Puerto Rico.

In the opinion of Fiddler Gonzalez & Rodriguez, LLP, bond counsel, based
upon the provisions of the Internal Revenue Code now in force and assuming that
El Conquistador complies with the source of income covenants contained in the
loan agreement, then:

1. interest on the bonds received by, or accrued to, an individual who
is a bona fide resident of Puerto Rico during the entire taxable year in
which such interest is received or accrued is excludable from gross income
for income tax purposes under the Internal Revenue Code;

2. interest on the bonds received by, or accrued to, a corporation
organized under the laws of Puerto Rico or any foreign country is not
subject to federal income taxation provided such interest or original issue
discount is not effectively connected with the conduct of a trade or
business in the United States by such corporation; and

3. interest on the bonds is not excludable from the gross income of
the recipients thereof for federal income tax purposes under Section 103(a)
of the Internal Revenue Code.

United States taxpayers, other than individuals who are bona fide residents
of Puerto Rico during the entire taxable year, will be subject to federal income
tax on any gain realized upon the sale or exchange of the bonds. Pursuant to
Notice 89-40 issued by the United States Internal Revenue Service on March 27,
1989, gain on the sale of the bonds, excluding 'original issue discount' accrued
under the Internal Revenue Code as of the date of such sale or exchange, by an
individual who is a bona fide resident of Puerto Rico during the entire taxable
year and that is a resident of Puerto Rico for purposes of Section 865(g)(1) of
the Internal Revenue Code will constitute Puerto Rico source income and,
therefore, qualify for the exclusion provided in Section 933(1) of the Internal
Revenue Code, provided such bonds do not constitute inventory in the hands of
such individual.

<PAGE>

<PAGE>
You should be aware that ownership of the bonds may result in having a
portion of your interest expense allocable to interest on the bonds disallowed
for purposes of computing the regular tax and the alternative minimum tax for
Puerto Rico income tax purposes.

The opinion of Fiddler Gonzalez & Rodriguez, LLP, bond counsel, regarding
the tax consequences under the Internal Revenue Code and the Puerto Rico
Internal Revenue Code arising from ownership or disposition of the bonds is
limited to the above.

RATING

The bonds will be rated 'Baa2' by Moody's Investors Service, Inc. There is
no assurance that the rating given to the bonds will remain in effect for any
given period or that it will not be revised downward or withdrawn entirely by
Moody's if, in its sole judgment, circumstances so warrant. Any such downward
revision or withdrawal of such rating may have an adverse effect on the market
prices of the bonds. The rating of the bonds by Moody's is not a recommendation
to buy, sell or hold the bonds.

The rating given to the bonds reflects only the views of Moody's. An
explanation of the significance of such rating may be obtained only from Moody's
at 99 Church Street, New York, New York 10007. The rating does not constitute a
recommendation to buy, sell or hold the bonds.

Moody's was provided with materials relating to El Conquistador, the
resort, the bonds and other relevant information, and no application has been
made to any other rating agency for purposes of obtaining a rating on the bonds.
In addition, if requested, El Conquistador shall deliver to Moody's, from time
to time, such documents and other relevant information required for purposes of
its due diligence on the assigned rating to the bonds.

LEGAL INVESTMENT

The bonds will be eligible for deposit by banks in Puerto Rico to secure
public funds and will be approved investments for insurance companies to qualify
them to do business in Puerto Rico as required by law.

UNDERWRITING

The underwriters of the bonds are as follows:

Citicorp Financial Services Corporation
Citibank Center
Lomas Verdes Avenue
Cupey, Puerto Rico

Subject to the terms and conditions of a certain bond purchase agreement to
be entered into among AFICA, El Conquistador and the underwriters, AFICA will
agree to sell to the underwriters, and the underwriters will agree to purchase
from AFICA, all of the bonds listed on the inside front cover page of this
official statement and prospectus. The underwriters will purchase the bonds at
the public offering price thereof less the underwriting discount set forth
below:

<TABLE>
<CAPTION>
AGGREGATE PUBLIC UNDERWRITING
OFFERING PRICE UNDERWRITING STRUCTURING/MANAGEMENT PROCEEDS TO
OF THE BONDS DISCOUNT FEE EL CONQUISTADOR(1)
------------ -------- --- ------------------

<S> <C> <C> <C>
$105,200,000 $ $ $

</TABLE>

- ------------

(1) The proceeds to El Conquistador set forth above is before deducting expenses
of this offering payable by El Conquistador estimated at $5,000,000, and
$9,100,000 which will be deposited in the reserve fund.

The underwriters propose initially to offer the bonds to the public, when,
as and if issued by AFICA and accepted by the underwriters, at the initial
public offering prices set forth or derived

<PAGE>

<PAGE>
from information shown on the inside front cover page of this official statement
and prospectus. The initial offering prices may be changed from time to time by
the underwriters. The underwriters may offer and sell the bonds to certain
dealers, including dealers depositing bonds into investment trusts, and others
at prices lower than the initial public offering prices stated or derived from
information shown on the inside front cover page hereof.

The bond purchase agreement will provide that the obligations of the
underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other conditions. The underwriters are committed to
purchase all of the bonds if any are purchased.

Prior to this offering, there has been no active market for the bonds. The
underwriters have advised El Conquistador that they presently intend to make a
market in the bonds as permitted by applicable laws and regulations. The
underwriters are not obligated, however, to make a market in the bonds and any
such market making may be discontinued at any time at the sole discretion of the
underwriters. Accordingly, no assurance can be given as to the liquidity of, or
trading markets for, the bonds.

El Conquistador will agree to indemnify the underwriters and AFICA against
certain civil liabilities, including liabilities under the Securities Act of
1933. IN THE OPINION OF THE SEC, INDEMNIFICATION FOR LIABILITIES ARISING UNDER
THE SECURITIES ACT OF 1933 IS AGAINST PUBLIC POLICY AND THEREFORE UNENFORCEABLE.

The underwriters have in the past and may from time to time in the future
provide underwriting and other investment banking services to El Conquistador.
Citicorp Real Estate, Inc., an affiliate of Citicorp Financial Services
Corporation, is the lender under the interim loan made to El Conquistador on
August 3, 1998 and, in such capacity received customary fees for such services.

LEGAL MATTERS

Legal matters incident to the authorization, issuance and sale of the bonds
are subject to the unqualified approving opinion of Fiddler Gonzalez &
Rodriguez, LLP, San Juan, Puerto Rico, bond counsel. Certain legal matters will
be passed upon for El Conquistador by Shack & Siegel, P.C., New York, New York
and by McConnell Valdes, San Juan, Puerto Rico, and for the underwriters by
Pietrantoni Mendez & Alvarez, San Juan, Puerto Rico.

CONTINUING DISCLOSURE COVENANT

El Conquistador will enter into a continuing disclosure agreement with the
trustee wherein El Conquistador will covenant for the benefit of the holders and
the beneficial owners of the bonds to file within 120 days after the end of each
fiscal year beginning after their fiscal year 1999, with each nationally
recognized municipal securities information repository and with any Puerto Rico
state information depository financial information and operating data for such
fiscal year. Such disclosure will include (1) audited financial statements,
prepared in accordance with generally accepted accounting principles in effect
from time to time, and (2) operating data and revenues, expenditures, financial
operations and indebtedness generally found in this official statement and
prospectus, such as Selected Financial Data and, Results of Operations and
Financial Condition as provided in Management's Discussion and Analysis of
Financial Condition and Results of Operations.

El Conquistador will covenant also to file in a timely manner, with each
nationally recognized municipal securities information repository or with the
Municipal Securities Rulemaking Board, and with any Puerto Rico state
information depository, notice of any of the following events with respect to
the bonds, if material:

(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) substitution of credit or liquidity providers, or their failure to
perform;

<PAGE>

<PAGE>
(5) adverse tax opinions or events affecting the tax-exempt status of
the bonds, including the occurrence of an Event of Taxability;
(6) modifications to rights of bondholders;
(7) bond calls;
(8) defeasances;
(9) release, substitution, or sale of property securing repayment of
the bonds; and
(10) rating changes.

These covenants have been made in order to assist the underwriters in
complying with paragraph (b)(5) of Rule 15c2-12 promulgated under the Securities
Exchange Act of 1934.

El Conquistador does not undertake to provide the above-described event
notice of a scheduled redemption, not otherwise contingent upon the occurrence
of an event, if the terms, dates and amounts of redemption are set forth in
detail in this official statement and prospectus under 'THE
BONDS -- Redemption.'

El Conquistador expects to provide the financial information and operating
data described above by delivering its audited financial statements prepared in
accordance with generally accepted accounting principles for the applicable
fiscal year and a supplemental report containing other information such as
Selected Financial Data and, Results of Operations and Financial Condition as
provided in Management's Discussion and Analysis of Financial Condition and
Results of Operations to the extent necessary to provide the financial
information and operating data described above by such deadline.

As of the date of this official statement and prospectus, there was no
Puerto Rico state information depository, and the nationally recognized
municipal securities information repositories are: Bloomberg Municipal
Repository, P.O. Box 840, Princeton, New Jersey 08542-0840; Kenny Information
Systems, Inc., Attn: Kenny Repository Service, 65 Broadway, New York, New York
10006; Thompson NRMSIR, 395 Hudson Street, New York, New York 10004, Attn:
Municipal Disclosure; and DPC Data Inc., One Executive Drive, Fort Lee, New
Jersey 07024.

El Conquistador may from time to time choose to provide notice of the
occurrence of certain other events in addition to those listed above if, in the
judgment of El Conquistador, such other events are material with respect to the
bonds, but El Conquistador does not undertake to provide any such notice of the
occurrence of any material event except those events listed above.

No bondholder may institute any suit, action or proceeding at law or in
equity for the enforcement of the foregoing covenants or for any remedy for
breach thereof, unless such bondholder shall have filed with El Conquistador
written notice of any request to cure such breach, and El Conquistador shall
have refused to comply within a reasonable time. All actions, suits or
proceedings shall be instituted only as specified in the continuing disclosure
agreement in any federal or Puerto Rico court located in the Municipality of San
Juan, and for the equal benefit of all bondholders of the outstanding bonds
benefitted by the same or a substantially similar covenant, and no remedy shall
be sought or granted other than specific performance by El Conquistador of the
covenant at issue. Notwithstanding the foregoing, no challenge to the adequacy
of the information provided in accordance with the filings mentioned above may
be prosecuted by any bondholder except in compliance with the remedial and
enforcement provisions contained in the trust agreement.

The above covenants may only be amended or waived if:

(A) the amendment or waiver is made in connection with a change in
circumstances that arises from a change in legal requirements, change in
law, or change in the identity, nature or status of El Conquistador; the
covenants, as amended, or the provision as waived, would have complied with
the requirements of Rule 15c2-12 promulgated under the Securities Exchange
Act of 1934 at the time of issuance of the bonds, after taking into account
any amendments or change in circumstance as evidenced by the receipt of an
opinion of counsel experienced in federal securities laws acceptable to the
trustee and El Conquistador; and the amendment or waiver does not
materially impair the interests of the bondholders, as determined by the

<PAGE>

<PAGE>
trustee or by counsel experienced in federal securities laws acceptable to
the trustee and El Conquistador; and

(B) the annual financial information containing, if applicable, the
amended operating data or financial information will explain, in narrative
form, the reasons for the amendment or waiver and the impact of the change
in the type of operating data or financial information being provided.

REPORTS OF EL CONQUISTADOR PARTNERSHIP

As a result of this offering, El Conquistador will be required to file all
reports with the SEC required by Sections 13 and 15(d) of the Securities
Exchange Act of 1934 from the date hereof at least through the end of the
reporting period for the fiscal year ending December 31, 1999. After such time,
El Conquistador does not intend to file annual or quarterly financial
information with the SEC. However, El Conquistador will file its audited annual
financial statements with each nationally recognized municipal securities
information repository and state information depository as required by Rule
15c2-12 promulgated under the Securities Exchange Act as well as provide certain
notices to such entities as well as the Municipal Securities Rulemaking Board
pursuant to such rule. Such financial statements will also be available from El
Conquistador upon written request, but will not be sent to bondholders without
such request. Requests for any of the aforementioned reports should be addressed
to El Conquistador Partnership L.P., S.E., c/o El Conquistador Resort & Country
Club, 1000 El Conquistador Avenue, Fajardo, Puerto Rico, 00738, Attention: Chief
Financial Officer.

EXPERTS

The (1) Balance Sheet of El Conquistador as of December 31, 1998 and
December 31, 1997, and the related statements of operations and deficiency in
partners' capital, and cash flows for the period March 1, 1998 through December
31, 1998 (successor partnership) and for the period January 1, 1998 through
February 28, 1998, the nine month period ended December 31, 1997 and the year
ended March 31, 1997 (predecessor partnership), (2) Consolidated Balance Sheet
of WKA El Con as of December 31, 1998, and (3) Consolidated Balance Sheet of WHG
El Con Corp. as of December 31, 1998 appearing in this official statement and
prospectus and registration statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon, which contain an
explanatory paragraph describing conditions that raise substantial doubt about
each of El Conquistador's, WKA El Con's and WHG El Con Corp.'s ability to
continue as a going concern as described in: (A) the seventh paragraph of Note 9
to the audited Financial Statements of El Conquistador, (B) the fifth paragraph
of Note 8 to the audited Consolidated Balance Sheet of WKA El Con, and (C) the
fifth paragraph of Note 8 to the audited Consolidated Balance Sheet of WHG El
Con Corp., appearing elsewhere herein, and are included in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.

The Balance Sheet of Conquistador Holding, Inc. as of December 31, 1998
appearing in this official statement and prospectus and registration statement
has been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon, which contains an explanatory paragraph describing
conditions that raise substantial doubt about Conquistador Holding, Inc.'s
ability to continue as a going-concern as described in Note 3 to the
Conquistador Holding, Inc. Balance Sheet, appearing elsewhere herein, and are
included in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.

<PAGE>

GLOSSARY

AFICA means the Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority, a governmental
instrumentality of Puerto Rico.

An Event of Taxability will occur when AFICA and the trustee with respect
to the bonds receive a report from El Conquistador's accountants stating that El
Conquistador failed to comply with the source of income covenants under the loan
agreement and as a result of such failure interest on the bonds is taxable to
you.

Hotel Operator means collectively, Williams Hospitality Group Inc., Wyndham
Management Corporation and Grand Bay Management Company.

Qualifying Bondholder means a beneficial owner of the bonds that is (1) an
individual who during the entire taxable year in which he receives or accrues
interest on the bonds that due to the occurrence of an Event of Taxability is
not income from within Puerto Rico under the U.S. Internal Revenue Code of 1986,
as amended, was a bona fide resident of Puerto Rico or (2) a Puerto Rico
corporation or other foreign corporation, for purposes of the Internal Revenue
Code, that is not engaged in trade or business in the United States.

MISCELLANEOUS

Appended as Appendix A and constituting part of this official statement and
prospectus is the proposed form of opinion of Fiddler Gonzalez & Rodriguez, LLP,
bond counsel.

The execution and delivery of this official statement and prospectus have
been duly authorized by AFICA, and this official statement and prospectus has
been approved by El Conquistador.

This official statement and prospectus will be filed with each nationally
recognized municipal securities information repository and with the Municipal
Securities Rulemaking Board.

PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL,
MEDICAL AND ENVIRONMENTAL CONTROL
FACILITIES FINANCING AUTHORITY

By: /s/
.........................................
ASSISTANT EXECUTIVE DIRECTOR

<PAGE>

<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
EL CONQUISTADOR PARTNERSHIP L.P.
Pro Forma Condensed Financial Statements (Unaudited)
Introduction.......................................................................................... F-2
Pro Forma Condensed Balance Sheet as of December 31, 1998............................................. F-3
Pro Forma Condensed Statement of Operations for the Fiscal Year Ended December 31, 1998............... F-5
Audited Financial Statements
Report of Independent Auditors........................................................................ F-7
Balance Sheets at December 31, 1998 and 1997.......................................................... F-8
Statements of Operations for the Period of March 1, 1998 to December 31, 1998 (successor partnership),
for the Period of January 1, 1998 to February 28, 1998, and for the Fiscal Years Ended December 31,
1997 (9 Months) and March 31, 1997 (predecessor partnership)......................................... F-9
Statements of Partners' Capital (Deficiency) at April 1, 1996, March 31, 1997, December 31, 1997,
February 28, 1998 and December 31, 1998.............................................................. F-10
Statements of Cash Flows for the Period of March 1, 1998 to December 31, 1998 (successor partnership),
for the Period of January 1, 1998 to February 28, 1998, and for the Fiscal Years Ended December 31,
1997 (9 Months) and March 31, 1997 (predecessor partnership)......................................... F-11
Notes to Financial Statements......................................................................... F-12

WKA EL CON ASSOCIATES
Audited Consolidated Balance Sheet
Report of Independent Auditors........................................................................ F-22
Consolidated Balance Sheet as of December 31, 1998.................................................... F-23
Notes to Consolidated Balance Sheet................................................................... F-24

WHG EL CON CORP.
Audited Consolidated Balance Sheet
Report of Independent Auditors........................................................................ F-30
Consolidated Balance Sheet as of December 31, 1998.................................................... F-31
Notes to Consolidated Balance Sheet................................................................... F-32

CONQUISTADOR HOLDING, INC.
Audited Balance Sheet
Report of Independent Auditors........................................................................ F-37
Balance Sheet as of December 31, 1998................................................................. F-38
Notes to Balance Sheet................................................................................ F-39
</TABLE>

F-1

<PAGE>

<PAGE>
EL CONQUISTADOR PARTNERSHIP L.P.
PRO FORMA CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

The following unaudited pro forma condensed financial statements of El
Conquistador Partnership L.P. (the 'Partnership') reflect the following
transactions: (i) the offering and related transactions, including repayment of
the interim loan with Citicorp Real Estate; (ii) reduction in base management
fees and elimination of additional incentive management fees pursuant to the
amended and restated management agreement; and (iii) the repayment of the
Partnership's $25,000,000 indebtedness to the Government Development Bank with
$10,000,000 cash from operations and the proceeds of a $15,000,000 capital
contribution to be made to the Partnership. The pro forma condensed balance
sheet as of December 31, 1998, shows the effects of these transactions as if
they had occurred at the date of the balance sheet. The unaudited pro forma
condensed statement of operations for the fiscal year ended December 31, 1998
shows the effects of these transactions as if they had occurred January 1, 1998.

The pro forma condensed financial statements were prepared by the
management of the Partnership. These pro forma condensed financial statements
may not be indicative of the results that actually would have occurred if the
transactions had been effected on the dates indicated or which may be obtained
in the future. The pro forma condensed financial statements should be read in
conjunction with the financial statements and notes thereto of the Partnership
included elsewhere in this official statement and prospectus.

F-2

<PAGE>

EL CONQUISTADOR PARTNERSHIP L.P.
PRO FORMA CONDENSED BALANCE SHEET
AS OF DECEMBER 31, 1998

<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS(1) PRO FORMA(2)
------------ -------------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash.................................................... $ 1,557,728 $ 789,231 $ 2,346,959
Restricted cash and investments held by bank............ 10,289,856 (1,189,856) 9,100,000
Trade accounts receivable, net of allowance for doubtful
accounts.............................................. 7,407,983 7,407,983
Due from affiliated companies........................... 423,683 423,683
Inventories............................................. 1,461,757 1,461,757
Prepaid expenses and others current assets.............. 5,910,962 5,910,962
------------ -------------- ------------
Total current assets............................... 27,051,969 (400,625) 26,651,344
Land, building and equipment:
Land.................................................... 20,255,500 20,255,500
Building................................................ 190,607,449 190,607,449
Furniture, fixture and equipment........................ 21,631,402 21,631,402
Construction in progress................................ 3,639,122 3,639,122
------------ -------------- ------------
236,133,473 236,133,473
Less accumulated depreciation........................... 6,274,591 6,274,591
------------ -------------- ------------
229,858,882 229,858,882
Other assets................................................. 335,750 335,750
Operating equipment, net..................................... 1,538,227 1,538,227
Deferred debt issuance costs, net............................ 262,622 4,737,378 5,000,000
Goodwill, net................................................ 3,320,290 3,320,290
------------ -------------- ------------
Total assets............................................ $262,367,740 $ 4,336,753 $266,704,493
------------ -------------- ------------
------------ -------------- ------------

LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Trade accounts payable.................................. $ 8,764,237 $ $ 8,764,237
Advance deposits........................................ 9,463,505 9,463,505
Accrued interest........................................ 600,625 (600,625) 0
Other accrued liabilities............................... 5,695,417 5,695,417
Due to affiliated companies............................. 34,045,596 34,045,596
Note payable............................................ 90,000,000 (90,000,000) 0
------------ -------------- ------------
Total current liabilities.......................... 148,569,380 (90,600,625) 57,968,755
Long-term debt............................................... 25,000,000 80,200,000 105,200,000
Due to affiliated companies.................................. 21,442,761 21,442,761
Due to partners.............................................. 15,592,563 15,592,563
Partners' capital:
Limited partners........................................ 36,234,125 10,316,165 46,550,290
General partners........................................ 15,528,911 4,421,213 19,950,124
------------ -------------- ------------
Total partners' capital............................ 51,763,036 14,737,378 66,500,414
------------ -------------- ------------
Total liabilities and partners' capital............ $262,367,740 $ 4,336,753 266,704,493
------------ -------------- ------------
------------ -------------- ------------
</TABLE>

- ------------

(1)

<TABLE>
<CAPTION>
DEFERRED
DEBT
RESTRICTED ISSUANCE ACCRUED NOTE LONG-TERM PARTNERS
CASH CASH COSTS INTEREST PAYABLE DEBT CAPITAL
---- ---- ----- -------- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C>
(a) $ 10,289,856 $(10,289,856)
(b) (600,625) $600,625
(c) $ (262,622) $ 262,622
(d) 1,100,000 9,100,000 5,000,000 $90,000,000 $(105,200,000)
(e) (10,000,000) 25,000,000 (15,000,000)
------------ ------------ ---------- -------- ----------- ------------- ------------
$ 789,231 $ (1,189,856) $4,737,378 $600,625 $90,000,000 $ (80,200,000) $(14,737,378)
------------ ------------ ---------- -------- ----------- ------------- ------------
------------ ------------ ---------- -------- ----------- ------------- ------------

</TABLE>

(footnotes continued on next page)

F-3

<PAGE>

<PAGE>
(footnotes continued from previous page)

<TABLE>
<S> <C> <C>
(a) Represents receipts of restricted cash associated with the interim loan with Citicorp Real Estate for
interest reserves.
(b) Represents the payment of accrued interest associated with the interim loan.
(c) Represents the write-off of deferred financing costs associated with the interim loan.
(d) Represents the gross proceeds from the offering and the application of those proceeds.

Repay interim loan $ 90,000,000
Reimbursement for interest paid on
interim loan........................ 1,100,000
Restricted cash required by offering 9,100,000
Payment of deferred financing costs 5,000,000
------------
$105,200,000
------------
------------

(e) Represents the reduction in long term debt of $25,000,000 related to the Government Development Bank
debt which will be repaid by the Partnership with $10,000,000 cash from operations and the proceeds of
a $15,000,000 capital contribution by Conquistador Holding, Inc. The repayment of such debt and the
capital contribution are subject to and conditions to completion of the offering.
(2) Assumes that the offering and related transactions, including repayment of the interim loan, were
completed as of the balance sheet date.

</TABLE>

F-4

<PAGE>

EL CONQUISTADOR PARTNERSHIP L.P.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR FISCAL YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS(1) PRO FORMA(2)
------------- -------------- ------------
(UNAUDITED)

<S> <C> <C> <C>
Revenues:
Rooms.................................................... $ 42,290,621 $ 42,290,621
Food and beverage........................................ 28,845,368 28,845,368
Casino................................................... 5,057,992 5,057,992
Other income............................................. 26,239,795 26,239,795
------------- -------------
102,433,776 102,433,776
Less casino promotional allowances....................... 778,203 778,203
------------- -------------
Net revenues.................................................. 101,655,573 101,655,573

Costs and expenses:
Rooms.................................................... 14,620,517 14,620,517
Food and beverage........................................ 18,095,850 18,095,850
Casino................................................... 3,138,269 3,138,269
Selling, general and administrative...................... 15,080,882 15,080,882
Management and incentive management fees................. 6,581,913 $ (3,626,114) 2,955,799
Property operation, maintenance and energy costs......... 10,086,061 10,086,061
Depreciation and amortization............................ 9,145,854 (841,542) 8,304,312
Other expenses........................................... 9,770,059 9,770,059
------------- -------------- -------------
86,519,405 (4,467,656) 82,051,749
------------- -------------- -------------
Income from operations........................................ 15,136,168 4,467,656 19,603,824

Interest income............................................... 244,802 244,802
Interest expense.............................................. (15,642,420) 4,585,079 (11,057,341)
Income (loss) before extraordinary item....................... (261,450) 9,052,735 8,791,285
Extraordinary item:
Loss from early extinguishment of debt................... (1,676,613) 1,676,613 --
------------- -------------- -------------
Net income (loss)................................... $ (1,938,063) $ 10,729,348 $ 8,791,285
------------- -------------- -------------
------------- -------------- -------------
</TABLE>

- ------------

(1)

<TABLE>
<CAPTION>
MANAGEMENT
FEE AND DEPRECIATION
INCENTIVE AND INTEREST EXTRAORDINARY NET
FEE AMORTIZATION EXPENSE ITEMS INCOME
--- ------------ ------- ----- ------

(a) Represents the elimination in historical base management fees of 3.5%
($3,585,182) and incentive management fees of 10% ($2,996,731) which were
accrued based on the resort's gross revenues and gross operating profit,
respectively, and interest thereon.

(footnotes continued on next page)

F-5

<PAGE>

<PAGE>
(footnotes continued from previous page)

(b) Represents the base management fees of 2.5% of gross revenues of the resort
and the implementation of a trade name fee of 0.5% of gross room revenues of
the resort. No adjustment has been made with respect to the new marketing
fee of 1.5% of gross room revenues of the resort and 1.0% of gross room
revenues of Las Casitas Village payable to Williams Hospitality pursuant to
the management agreement. The Partnership had previously incurred marketing
expenses internally at approximately the same costs. As the marketing
function will now be outsourced to its affiliate, the Partnership believes
that the resort's total historical marketing expenses will be substantially
the same on a pro forma basis.

<TABLE>
<S> <C>
Base management fee............................................................... $2,744,346
Trade name fee.................................................................... 211,453
----------
$2,955,799
----------
----------
</TABLE>

(c) Represents the elimination of the deferred loan cost amortization associated
with the 1991 AFICA bonds and the interim loan with Citicorp Real Estate.
The 1991 AFICA bonds were repaid with the net proceeds from the interim loan
with Citicorp Real Estate on August 3, 1998.

(d) Represents the amortization of the deferred loan costs associated with the
offering estimated at approximately $5.0 million. The costs are amortized on
a straight-line basis over the 30-year term of the bonds at a rate of
$166,667 for the fiscal year beginning January 1, 1998 through December 31,
1998.

(e) Represents the elimination of the interest associated with the 1991 AFICA
bonds, the interim loan with Citicorp Real Estate and the $25,000,000 loan
from the Government Development Bank.

(f) Represents the interest on the bonds at an assumed rate of 6.08% per annum.

(g) Represents extraordinary loss from early extinguishment of the 1991 AFICA
bond debt.

(2) Assumes that the offering and related transactions, including repayment of
the interim loan with Citicorp Real Estate, were completed on January 1,
1998. Also, assumes that the management agreement became effective as of
January 1, 1998.

F-6

<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Partners
EL CONQUISTADOR PARTNERSHIP L.P.

We have audited the accompanying balance sheets of El Conquistador
Partnership L.P. as of December 31, 1998 and 1997, and the related statements of
operations, partners' capital, and cash flows for the period March 1, 1998
through December 31, 1998 (successor partnership) and for the period January 1,
1998 through February 28, 1998, the nine month period ended December 31, 1997,
and the year ended March 31, 1997 (predecessor partnership). These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of El Conquistador Partnership
L.P. at December 31, 1998 and 1997, and the results of its operations and its
cash flows for the period March 1, 1998 through December 31, 1998 (successor
partnership) and for the period January 1, 1998 through February 28, 1998, the
nine month period ended December 31, 1997, and the year ended March 31, 1997
(predecessor partnership), in conformity with generally accepted accounting
principles.

The accompanying financial statements have been prepared assuming that El
Conquistador Partnership L.P. will continue as a going-concern. As more fully
described in Note 9, El Conquistador Partnership L.P. is engaged in the process
of refinancing the balance due to Citicorp Real Estate, Inc. of $90,000,000,
which is required to be repaid on June 30, 1999, through a new bond to be issued
by the Puerto Rico Industrial, Tourist, Educational, Medical and Environmental
Control Facilities Financing Authority (see Note 18). If such refinancing is not
obtained, it raises substantial doubt about the Partnership's ability to
continue as a going-concern. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classifications of assets or the amounts and classifications of liabilities that
may result from the outcome of this uncertainty.

ERNST & YOUNG LLP

February 5, 1999, except for
the second paragraph of
Note 18 as to which
the date is March 31, 1999

F-7

<PAGE>

EL CONQUISTADOR PARTNERSHIP L.P.
BALANCE SHEETS

<TABLE>
<CAPTION>
December 31,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash........................................................................ $ 1,557,728 $ 1,128,177
Restricted cash and investments held by bank................................ 10,289,856 3,480,539
Trade accounts receivable, less allowance for doubtful accounts of $146,482
in 1998 and $346,436 in 1997.............................................. 7,407,983 5,851,394
Due from affiliated companies............................................... 423,683 96,365
Inventories................................................................. 1,461,757 1,673,266
Prepaid expenses and other current assets................................... 5,910,962 1,723,603
------------ ------------
Total current assets................................................... 27,051,969 13,953,344
Due from affiliated company...................................................... -- 71,429
Land, building and equipment:
Land........................................................................ 20,255,500 14,372,707
Building.................................................................... 190,607,449 158,039,190
Furniture, fixtures and equipment........................................... 21,631,402 34,658,913
Construction in progress.................................................... 3,639,122 --
------------ ------------
236,133,473 207,070,810
Less accumulated depreciation............................................... 6,274,591 25,944,072
------------ ------------
229,858,882 181,126,738
Other assets..................................................................... 335,750 --
Operating equipment, net......................................................... 1,538,227 1,488,342
Deferred debt issuance costs, net of accumulated amortization of $437,702 in 1998
and $6,443,252 in 1997......................................................... 262,622 2,247,117
Deferred pre-opening costs, net of accumulated amortization of $11,844,985....... -- 1,534,694
Goodwill, net of accumulated amortization of $296,444............................ 3,320,290 --
------------ ------------
Total assets........................................................... $262,367,740 $200,421,664
------------ ------------
------------ ------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIENCY)
Current liabilities:
Trade accounts payable...................................................... $ 8,764,237 $ 6,035,380
Advance deposits............................................................ 9,463,505 10,104,458
Accrued interest............................................................ 600,625 1,597,476
Other accrued liabilities................................................... 5,695,417 5,058,633
Due to affiliated companies................................................. 34,045,596 972,686
Notes payable to bank....................................................... 90,000,000 6,000,000
Current portion of long-term debt........................................... -- 120,000,000
Current portion of chattel mortgages and
capital lease obligations................................................. -- 1,893,063
------------ ------------
Total current liabilities.............................................. 148,569,380 151,661,696
Long-term debt................................................................... 25,000,000 25,000,000
Due to affiliated companies...................................................... 21,442,761 10,386,002
Due to partners.................................................................. 15,592,563 41,344,551
Partners' capital (deficiency):
Limited partners............................................................ 36,234,125 (23,774,997)
General partners............................................................ 15,528,911 (4,195,588)
------------ ------------
Total partners' capital (deficiency)............................................. 51,763,036 (27,970,585)
------------ ------------
Total liabilities and partners' capital (deficiency)................... $262,367,740 $200,421,664
------------ ------------
------------ ------------
</TABLE>

See accompanying notes.

F-8

<PAGE>

EL CONQUISTADOR PARTNERSHIP L.P.
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
JANUARY 1
TO NINE MONTH
MARCH 1 TO FEBRUARY PERIOD ENDED YEAR ENDED
DECEMBER 31, 28, DECEMBER 31, MARCH 31,
1998 1998 1997 1997
---- ---- ---- ----

<S> <C> <C> <C> <C>
Revenues:
Rooms........................................ $ 31,535,091 $10,755,530 $ 25,129,621 $ 40,023,903
Food and beverage............................ 22,370,192 6,475,176 17,428,549 26,235,365
Casino....................................... 4,126,490 931,502 3,553,713 6,005,242
Other income................................. 19,490,397 6,749,398 14,473,191 21,959,328
------------ ----------- ------------ ------------
77,522,170 24,911,606 60,585,074 94,223,838
Less casino promotional allowances........... 619,783 158,420 458,447 1,265,710
------------ ----------- ------------ ------------
Net revenues............................ 76,902,387 24,753,186 60,126,627 92,958,128
Costs and expenses:
Rooms........................................ 11,511,757 3,108,760 9,603,101 12,377,694
Food and beverage............................ 14,572,791 3,523,059 12,314,635 17,602,484
Casino....................................... 2,398,225 740,044 2,383,568 3,848,981
Selling, general and administrative.......... 12,446,893 2,633,989 11,996,536 14,657,312
Management and incentive management fees..... 4,637,544 1,944,369 2,984,995 5,680,355
Property operation, maintenance and energy
costs...................................... 8,046,657 2,039,404 9,094,645 12,382,577
Depreciation and amortization................ 7,590,338 1,555,516 6,886,836 9,146,664
Other expenses............................... 7,932,578 1,837,481 6,875,562 9,702,212
------------ ----------- ------------ ------------
69,136,783 17,382,622 62,139,878 85,398,279
Income (loss) from operations..................... 7,765,604 7,370,564 (2,013,251) 7,559,849
Interest income................................... 201,502 43,300 127,840 199,110
Interest expense.................................. (12,341,454) (3,300,966) (13,156,711) (17,162,132)
------------ ----------- ------------ ------------
Income (loss) before extraordinary item........... (4,374,348) 4,112,898 (15,042,122) (9,403,173)
Extraordinary item:
Loss from early extinguishment of debt....... (1,676,613) -- -- --
------------ ----------- ------------ ------------
Net income (loss)................................. $ (6,050,961) $ 4,112,898 $(15,042,122) $ (9,403,173)
------------ ----------- ------------ ------------
------------ ----------- ------------ ------------
</TABLE>

See accompanying notes.

F-9

<PAGE>

EL CONQUISTADOR PARTNERSHIP L.P.
STATEMENTS OF PARTNERS' CAPITAL (DEFICIENCY)

<TABLE>
<CAPTION>
Partners'
Limited General Capital
Partners Partners (Deficiency)
------------ ----------- ------------

<S> <C> <C> <C>
Balance at April 1, 1996......................................... $ (2,996,496) $ (528,794) $ (3,525,290)
Net loss......................................................... (7,992,697) (1,410,476) (9,403,173)
------------ ----------- ------------
Balance at March 31, 1997........................................ (10,989,193) (1,939,270) (12,928,463)
Net loss......................................................... (12,785,804) (2,256,318) (15,042,122)
------------ ----------- ------------
Balance at December 31, 1997..................................... (23,774,997) (4,195,588) (27,970,585)
Net income....................................................... 3,495,963 616,935 4,112,898
------------ ----------- ------------
Balance at February 28, 1998..................................... $(20,279,034) $(3,578,653) $(23,857,687)
------------ ----------- ------------
------------ ----------- ------------
Partners' capital contribution................................... $ 60,748,832 $20,922,852 $ 81,671,684
Net loss......................................................... (4,235,673) (1,815,288) (6,050,961)
------------ ----------- ------------
Balance at December 31, 1998..................................... $ 36,234,125 $15,528,911 $ 51,763,036
------------ ----------- ------------
------------ ----------- ------------
</TABLE>

See accompanying notes.

F-10

<PAGE>

EL CONQUISTADOR PARTNERSHIP L.P.
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
JANUARY 1
TO NINE MONTH
MARCH 1 TO FEBRUARY PERIOD ENDED YEAR ENDED
DECEMBER 31, 28, DECEMBER 31, MARCH 31,
1998 1998 1997 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss)..................................... $ (6,050,961) $ 4,112,898 $(15,042,122) $(9,403,173)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization.................... 7,590,338 1,555,516 6,886,836 9,146,664
Provision for losses on accounts receivable...... 87,265 24,567 119,000 205,400
Loss on early extinguishment of debt............. 1,676,613 -- -- --
Incentive management fees........................ 1,913,172 1,072,463 860,043 2,375,526
Deferred interest expense to partners and
affiliates..................................... 1,695,577 311,571 2,417,475 3,100,085
Changes in operating assets and liabilities:
Restricted cash and investments held by
bank...................................... (8,442,751) 1,633,434 (119,932) (481,252)
Trade accounts receivable................... (2,109,375) 440,954 (1,205,787) 332,877
Affiliated companies, net................... 5,290,512 125,779 690,646 99,017
Inventories................................. 330,714 (119,205) (10,389) (140,414)
Prepaid expenses and other current assets... (4,734,643) 211,533 (702,887) (74,811)
Trade accounts payable and advance
deposits.................................. 6,923,880 (4,835,976) 5,093,025 (179,123)
Accrued interest and other accrued
liabilities............................... 473,454 221,161 (400,913) 873,753
------------ ----------- ------------ -----------
Net cash provided by (used in) operating activities... 4,643,795 4,754,695 (1,415,005) 5,854,549
INVESTING ACTIVITIES
Purchases of property and equipment................... (7,062,192) (272,876) (1,994,117) (1,305,594)
Net (purchases) usage of operating equipment.......... -- (49,885) 103,877 (122,869)
------------ ----------- ------------ -----------
Net cash used in investing activities................. (7,062,192) (322,761) (1,890,240) (1,428,463)
FINANCING ACTIVITIES
Payments of principal on long-term debt............... (121,505,134) (387,929) (2,446,796) (2,429,492)
Proceeds from notes payable to bank................... 90,000,000 -- 4,500,000 9,500,000
Payments of principal on notes payable to bank........ (4,000,000) (2,000,000) -- (10,773,359)
Proceeds from partners' and affiliated loans, and
capital contributions............................... 37,009,401 -- -- 800,000
Payment of loan extension costs....................... (700,324) -- -- --
------------ ----------- ------------ -----------
Net cash provided by (used in) financing activities... 803,943 (2,387,929) 2,053,204 (2,902,851)
------------ ----------- ------------ -----------
Net (decrease) increase in cash....................... (1,614,454) 2,044,005 (1,252,041) 1,523,235
Cash at beginning of period........................... 3,172,182 1,128,177 2,380,218 856,983
------------ ----------- ------------ -----------
Cash at end of period................................. $ 1,557,728 $ 3,172,182 $ 1,128,177 $ 2,380,218
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------
Supplemental disclosure of cash flow information:
Interest paid.................................... $ 9,552,988 $ 3,078,480 $ 10,927,447 $13,789,097
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------
Supplemental schedule of noncash investing activities:
Equipment transferred from an affiliate.......... -- -- $ 439,600 --
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------
</TABLE>

See accompanying notes.

F-11

<PAGE>

EL CONQUISTADOR PARTNERSHIP L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998

1. ORGANIZATION AND PRINCIPAL ACCOUNTING POLICIES

ORGANIZATION

El Conquistador Partnership L.P. (the Partnership), is a limited
partnership organized under the laws of Delaware pursuant to a Joint Venture
Agreement dated January 12, 1990, as amended (the Agreement). The Partnership is
50% owned by WKA El Con Associates (WKA El Con), a New York partnership, and 50%
by Conquistador Holding, Inc. (Conquistador Holding), a Delaware corporation,
each of which is substantially ultimately owned by Wyndham International, Inc.
(Wyndham) and Patriot American Hospitality, Inc. (Patriot). WKA El Con and
Conquistador Holding each own a 35% limited partnership interest and a 15%
general partnership interest in the Partnership. The Partnership shall continue
to exist until March 31, 2030, unless terminated earlier by mutual agreement of
the General Partners. The Agreement provides that net profits or losses of the
Partnership, after deducting a preferred cumulative annual return of 8.5% on the
Partners unrecovered capital accounts, as defined, will be allocated to the
Partners on a 50-50 ratio subject to certain exceptions, as defined.

The Partnership owns and operates a luxury resort hotel and casino in
Fajardo, Puerto Rico (the Resort).

CHANGE IN FISCAL YEAR

The Partnership changed its fiscal year from March 31 to December 31
beginning with the period ended December 31, 1997.

BASIS OF PRESENTATION

The financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

The financial information relating to the Partnership's statements of
operations, partners' capital and cash flows for the year ended December 31,
1998 is presented separately for the periods January 1, through February 28 and
from March 1 through December 31 due to the new basis of accounting which
resulted from the acquisition of the Partnership (see Note 2).

INVENTORIES

Inventories, which consist mainly of food, beverages and supplies, are
valued at the lower of cost (first-in, first-out method) or market.

LAND, BUILDING AND EQUIPMENT

Land, building and equipment are stated on the basis of cost. Building and
equipment are depreciated by the straight-line method over their estimated
useful lives. Building is depreciated over a 30 year period. Equipment is
depreciated over a 10 year period.

DEFERRED DEBT ISSUANCE COSTS

Debt issuance costs include legal and underwriting fees, other fees
incurred in connection with the financing and other costs. These costs are being
amortized on a straight-line basis over the term of the debt.

F-12

<PAGE>

EL CONQUISTADOR PARTNERSHIP L.P.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998

DEFERRED PRE-OPENING COSTS

Pre-opening costs consist of amounts incurred in connection with the
marketing, organization, planning and development of the Resort. Such costs
include staffing, marketing, legal and other costs incurred prior to the
commencement of operations of the Resort. The costs were amortized on a
straight-line basis over a five year period.

GOODWILL

Goodwill represents the excess of the purchase price over the amount
assigned to net assets acquired and is being amortized over 20 years by the
straight-line method. At each balance sheet date the Partnership evaluates the
realizability of goodwill based on expectations of non-discounted cash flows or
whenever events or changes in circumstances indicate that it may not be
recoverable.

CASINO REVENUES

Casino revenues are the net win from gaming activities, which is the
difference between gaming wins and losses.

CASINO PROMOTIONAL ALLOWANCES

Casino promotional allowances represent the retail value of complimentary
rooms, food and beverage, and hotel services furnished to patrons.

OTHER INCOME

Other income includes revenues from telephone, golf and tennis,
transportation and miscellaneous income.

2. ACQUISITION PARTNERSHIP

On January 16, 1998, Patriot American Hospitality Operating Company
Acquisition Subsidiary, a wholly-owned subsidiary of Wyndham merged with and
into WHG Resorts & Casinos Inc. (WHG), a 46.54% indirect owner of WKA El Con. As
part of the transaction WHG stockholders received for each issued and
outstanding share of common stock .784 shares of Wyndham and Patriot, a
self-administered REIT, which trade as 'Paired Shares' on the New York Stock
Exchange.

Effective February 28, 1998, Patriot acquired an additional 50% interest in
the Partnership for approximately $22,728,000, which interest was owned by
Kumagai Caribbean, Inc. (Kumagai), and an additional 37.23% interest in WKA El
Con for approximately $15,384,000.

On July 13, 1998, Patriot acquired the remaining 16.23% interest in WKA El
Con for approximately $3,890,000. The purchase transactions were accounted for
under the purchase method and the cumulative purchase price paid by Wyndham and
Patriot was the basis used to record net assets on the records of WHG and its
subsidiaries.

3. RESTRICTED CASH AND INVESTMENTS HELD BY BANK

As of December 31, 1998, pursuant to the terms of the Assignment and
Modification Agreement of the Letter of Credit and Reimbursement Agreement (see
Note 9), the Partnership had cash and investments on deposit for the payment of
interest, insurance and real property taxes amounting to $1,312,817, $5,688,012
and $3,289,027, respectively.

F-13

<PAGE>

EL CONQUISTADOR PARTNERSHIP L.P.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998

As of December 31, 1997, pursuant to the terms of the Loan Agreement (see
Note 9), the Partnership had cash and investments on deposit with the trustee
for the payment of interest due on February 1, 1998 and May 1, 1998 amounting to
$1,773,000 and $1,707,539, respectively.

4. TRADE ACCOUNTS RECEIVABLE

At December 31, 1998 and 1997, trade accounts receivable consisted of the
following:

<TABLE>
<CAPTION>
1998 1997
---- ----

<S> <C> <C>
Trade accounts receivable -- hotel.......................................... $6,714,517 $5,580,876
Less allowance for doubtful accounts........................................ 120,127 234,614
---------- ----------
6,594,390 5,346,262
---------- ----------
Trade accounts receivable -- casino......................................... 839,948 616,954
Less allowance for doubtful accounts........................................ 26,355 111,822
---------- ----------
813,593 505,132
---------- ----------
Trade accounts receivable, net.............................................. $7,407,983 $5,851,394
---------- ----------
---------- ----------
</TABLE>

5. TRANSACTIONS WITH RELATED PARTIES

The Partnership had an Operating and Management Agreement (the Management
Agreement) with Williams Hospitality Group Inc. (Williams Hospitality) which
terminated effective December 31, 1998. The Management Agreement provided that
the Partnership would pay Williams Hospitality a basic management fee of 3.5% of
the Resort's gross revenues, as defined, and an incentive management fee of 10%
of the Resort's operating profit, as defined. Incentive management fees accrued
each year and were not payable until significant cash flow levels were achieved.
In addition, the Partnership was required to pay certain administrative expenses
incurred by Williams Hospitality in connection with management of the Resort.

Effective January 1, 1999, the Partnership entered into an Amended and
Restated Management Agreement (the Amended Management Agreement) with Williams
Hospitality which expires on January 31, 2014. The Amended Management Agreement
provides that the Partnership will pay Williams Hospitality a management fee of
3% of gross room revenues derived from condominiums and 2.5% of gross revenues
derived from the hotel, plus a hotel trade name fee of .5% of gross room
revenues. In addition, the Partnership is required to pay certain administrative
expenses incurred by Williams Hospitality in connection with managing the
Resort.

During the periods March 1, 1998 through December 31, 1998, January 1, 1998
through February 28, 1998, the nine month period ended December 31, 1997, and
the year ended March 31, 1997, basic management fees amounted to approximately
$2,724,000, $872,000, $2,125,000 and $3,305,000, respectively. Incentive
management fees amounted to approximately $1,913,000, $1,072,000, $860,000 and
$2,376,000, respectively. In addition, Williams Hospitality charged the
Partnership approximately $1,275,000, $525,000, $83,000 and $3,258,000 for the
periods March 1, 1998 through December 31, 1998, January 1, 1998 through
February 28, 1998, the nine month period ended December 31, 1997, and the year
ended March 31, 1997, respectively, for services provided to the Resort. In
addition, from March 1, 1998 to December 31, 1998, Wyndham charged the
Partnership approximately $1,933,000 for sales and administrative costs incurred
on behalf of the Partnership.

In addition, the Partnership was charged by Posadas de Puerto Rico
Associates, Incorporated (Posadas de Puerto Rico), affiliated through common
ownership, approximately $275,000, $176,000, $791,000 and $410,000 for services
provided to the Resort for the periods March 1, 1998 through

F-14

<PAGE>

EL CONQUISTADOR PARTNERSHIP L.P.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998

December 31, 1998, January 1, 1998 through February 28, 1998, the nine month
period ended December 31, 1997, and the year ended March 31, 1997, respectively.

As of December 31, 1997, each partner had advanced $8,765,684 to the
Partnership under notes that are due for various periods up to ten years with
interest at the Citibank, N.A. in New York base rate. Repayment of interest and
principal is subordinate to other long-term debt. In addition, each partner had
advanced to the Partnership $4,000,000 under a May 5, 1992 loan agreement. The
loan agreement provided for the payment of interest at a variable rate, computed
quarterly, equal to LIBOR plus 1.75% (7.30% and 7.46% at December 31, 1998 and
1997, respectively). Interest payments were deferred during the first five
years. The principal and deferred interest accrued at December 31, 1997 was to
be payable in quarterly installments of $250,000 commencing in March 2000 and a
final lump-sum payment in February 2002. The loan was collateralized by a
subordinated pledge of the Partnership's assets. The principal and interest due
to Kumagai was paid in 1998 when Patriot acquired Kumagai's 50% interest in the
Partnership. Interest and principal of $4,629,900 due to WKA El Con was paid in
1998 when Patriot acquired the remaining 16.23% interest in WKA El Con.

As of December 31, 1997, each partner had provided $3,800,000 to cover cash
flow deficiencies in the Partnership's operations as provided by the Agreement.
The deficiency loans consist of $3,800,000 in cash by Kumagai, and the
conversion of amounts due from the Partnership to Williams Hospitality to loans
for WKA El Con. The deficiency loans bear interest at 9.16%. Repayment of
interest and principal is subordinated to other long-term debt. The principal
and interest due to Kumagai was paid in 1998 when Patriot acquired the former
partners' interest in the Partnership.

In 1993, the Partnership advanced approximately $2,000,000 to Williams
Hospitality for the purchase of transportation equipment leased to the
Partnership under a five year service agreement. Service agreement payments by
the Partnership were equal to the $39,819 monthly amounts receivable under the
advance. Repayment of the advances by Williams Hospitality were limited to
amounts payable under the service agreement. During the nine month period ended
December 31, 1997, Williams Hospitality transferred the transportation equipment
to the Partnership. The Partnership then sold the transportation equipment at a
loss of approximately $70,000.

In addition, a subsidiary of Williams Hospitality financed other
transportation equipment from an external borrowing amounting to $441,000
repayable over five years. Monthly payments were $9,699. Also, in February 1997,
a subsidiary of Williams Hospitality financed a ferryboat from an external
borrowing amounting to $456,000, repayable over seven years. Monthly payments
amount to $7,561. The Partnership chartered the transportation equipment and
ferryboat under terms similar to the transaction described in the preceding
paragraph.

On August 3, 1998, the Partnership borrowed $32,021,172 from Posadas de
Puerto Rico, the proceeds of which were used, together with the $90,000,000
advance from Citicorp Real Estate, Inc. (CRE) (see Note 6), to repay the
$120,000,000 1991 AFICA bonds (see Note 9). The loan bears interest at the prime
rate (7.75% at December 31, 1998). As of December 31, 1998, the amount of such
indebtedness together with accrued interest totaled $33,065,730. The loan is
payable on demand but is subordinate in all respects to the Partnership's
obligations to CRE with respect to the $90,000,000 advance.

6. NOTES PAYABLE TO BANK

On October 4, 1996, the Partnership entered into an amendment to a loan
agreement whereby the Government Development Bank for Puerto Rico (GDB) extended
the Partnership a $6,000,000 credit facility which was terminated in May 1998.
The notes issued under the credit facility bore

F-15

<PAGE>

EL CONQUISTADOR PARTNERSHIP L.P.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998

interest at 1% over LIBOR. The notes were secured by a mortgage note on the
Partnership's real property, a leasehold mortgage note on leased land and a lien
on accounts receivable (see Note 9). At December 31, 1998, the notes had been
paid.

CRE made a $90,000,000 interim loan to the Partnership on August 3, 1998.
The note matured on November 3, 1998 and bore interest, computed monthly, equal
to LIBOR plus 2.25% (7.80% at December 31, 1998). The maturity date of the loan
was extended to March 31, 1999 (see Notes 9 and 18).

7. DUE TO AFFILIATED COMPANIES AND PARTNERS

Amounts due to affiliated companies consist of fees earned by Williams
Hospitality, funds advanced to the Partnership, other payments made by Williams
Hospitality, and for services rendered by Posadas de Puerto Rico and Posadas de
San Juan Associates.

At December 31, 1998 and 1997 amounts due to affiliated companies consisted
of the following:

<TABLE>
<CAPTION>
1998 1997
---- ----

<S> <C> <C>
Current:
Due to Williams Hospitality:
Basic management fees............................................... $ 804,043 $ 746,659
Other............................................................... 142,370 167,314
----------- -----------
946,413 913,973
Due to Posadas de San Juan............................................. 33,453 --
Due to Posadas de Puerto Rico.......................................... 33,065,730 58,713
----------- -----------
$34,045,596 $ 972,686
----------- -----------
----------- -----------
Non current:
Due to Williams Hospitality:
Incentive management fees........................................... $ 9,388,207 $ 6,402,571
Interest at 10% on incentive management fees........................ 1,274,200 676,592
Advances............................................................ 1,500,000 1,500,000
Interest on advances................................................ 987,120 852,076
Other............................................................... -- 375,529
----------- -----------
13,149,527 9,806,768
Due to Patriot......................................................... 8,293,234 --
Due to KG Caribbean.................................................... -- 579,234
----------- -----------
$21,442,761 $10,386,002
----------- -----------
----------- -----------
Partners:
Due to WKA El Con:
Advances............................................................ $11,315,015 $15,065,684
Interest on advances................................................ 4,277,548 4,430,554
----------- -----------
15,592,563 19,496,238
Due to Kumagai:
Advances............................................................ -- 16,565,683
Interest on advances................................................ -- 5,282,630
----------- -----------
-- 21,848,313
----------- -----------
$15,592,563 $41,344,551
----------- -----------
----------- -----------
</TABLE>

F-16

<PAGE>

<PAGE>
EL CONQUISTADOR PARTNERSHIP L.P.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998

8. CHATTEL MORTGAGES AND CAPITAL LEASE OBLIGATIONS

At December 31, 1998 and 1997, chattel mortgages and capital lease
obligations on equipment consisted of the following:

<TABLE>
<CAPTION>
1998 1997
---- ---

<S> <C> <C>
Chattel mortgage notes payable which bore interest at 9%, payable in
monthly installments of $215,784, including interest, through October,
1998, collateralized with personal property............................ $ -- $ 1,675,855
Capital lease obligations which bore interest at 11.5%, payable in
monthly installments of $28,335, including interest, through July,
1998, collateralized with personal property............................ -- 217,208
----------- -----------
$ -- $ 1,893,063
----------- -----------
----------- -----------
</TABLE>

9. LONG-TERM DEBT

At December 31, 1998 and 1997 long-term debt consisted of the following:

<TABLE>
<CAPTION>
1998 1997
---- ---

<S> <C> <C>
Industrial Revenue Bonds Series A........................................ $ -- $90,000,000
Industrial Revenue Bonds Series B........................................ -- 30,000,000
Government Development Bank for Puerto Rico.............................. 25,000,000 25,000,000
----------- -----------
25,000,000 145,000,000
Less current portion..................................................... -- 120,000,000
----------- -----------
$25,000,000 $25,000,000
----------- -----------
----------- -----------
</TABLE>

On February 7, 1991 the Puerto Rico Industrial, Tourist, Educational,
Medical and Environmental Control Facilities Financing Authority (the Authority)
sold industrial revenue bonds (Bonds) for $120,000,000 and loaned the proceeds
to the Partnership to be used for the payment of project costs pursuant to a
Loan Agreement. The Loan Agreement provided that the Partnership would pay all
interest and principal on the Bonds.

The Authority issued 1991 Series A, Industrial Revenue Bonds for
$90,000,000 and 1991 Series B, Industrial Revenue Bonds for $30,000,000.

Commencing on May 1, 1996, the Bonds were subject to redemption at the
Partnership's option at par plus accrued interest, if any. The Bonds were due on
November 1, 1999 and interest was payable quarterly. The 1991 Series A Bonds and
the 1991 Series B Bonds bore interest at a variable rate, computed quarterly,
equal to 100% and 94%, respectively, of a LIBOR rate minus 1/8th of 1%.

Effective November 1, 1996, the interest rate on the 1991 Series A Bonds
increased to 100% of the LIBOR rate. On February 7, 1991 the Partnership entered
into an Interest Rate Swap Agreement that expired on March 8, 1998 by which the
Partnership agreed to pay, effective May 1, 1991, a fixed rate of 7.55% on the
outstanding principal of $120,000,000 in exchange for the counterparty's
obligation to pay the variable interest rate equal to 86% and 94%, respectively,
of the LIBOR rate minus 1/8th of 1%.

The Loan Agreement provided that the Partnership would deposit with the
trustee all interest which would become due not later than the 124th day
preceding the date of payment. The Bonds were collateralized by a letter of
credit, that terminated on September 9, 1998, issued by The Bank of
Tokyo-Mitsubishi, Ltd. (formerly The Mitsubishi Bank, Limited). Under the terms
of the Loan Agreement, such debt was required to be repaid on August 3, 1998
since the letter of credit

F-17

<PAGE>

<PAGE>
EL CONQUISTADOR PARTNERSHIP L.P.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998

was not renewed or replaced prior to June 9, 1998. On August 3, 1998, the letter
of credit was honored and the $120,000,000 was paid in full.

In accordance with the Letter of Credit and Reimbursement Agreement, the
Partnership was obligated to immediately reimburse the letter of credit issuer
the full amount drawn under the letter of credit. On August 3, 1998, the
Partnership made a partial payment of $30,000,000 and entered into an Assignment
and Modification Agreement of the Letter of Credit and Reimbursement Agreement
with CRE. CRE reimbursed the letter of credit issuer with respect to the
$90,000,000 balance due under the Letter of Credit and Reimbursement Agreement.
All fees with respect to the letter of credit terminated on August 3, 1998.
Additionally, CRE became successor in interest to the collateral liens which
were in favor of The Bank of Tokyo-Mitsubishi, Ltd. on such date. As part of the
Assignment and Modification Agreement, the $90,000,000 advanced by CRE matured
on November 3, 1998 and was extended to March 31, 1999 (see Notes 6 and 18). In
connection with the repayment of the long-term debt the Partnership recorded an
extraordinary loss of approximately $1,700,000 related to the write-off of the
unamortized deferred issuance costs during the period from March 1, 1998 to
December 31, 1998.

The Partnership is engaged in the process of refinancing the balance due to
CRE through a new bond to be issued by the Authority. Based on the operating
history of the Resort, the Partnership's management believes such refinancing
will be achieved, but there can be no assurance thereof. If such refinancing is
not obtained, it raises substantial doubt about the Partnership's ability to
continue as a going-concern.

As of December 31, 1997, the Partnership was subject to an annual letter of
credit fee of approximately 1.25% of the Bond principal, except under certain
circumstances when the rate could be reduced to 1.2%. In addition, in connection
with the letter of credit the Partnership paid an annual agent's fee of
approximately .25% of the Initial Stated Amount, as defined.

Under the provisions of a term loan agreement with GDB, the Partnership
borrowed $25,000,000 for the payment of project costs. The loan is due on
February 7, 2006. The loan agreement provides for a variable interest rate
equivalent to a LIBOR rate minus .5% plus an add-on margin as provided in the
loan agreement (6.06% and 6.52% at December 31, 1998 and 1997, respectively).
Interest is payable quarterly in arrears.

Commencing on April 1, 1993, the Partnership was required to deposit
annually with an escrow agent 50% of the Available Cash Flow, as defined in the
Loan Agreement with GDB, up to a maximum of $1,666,700 plus any prior year
requirement in arrears. There had been no amounts deposited in escrow under this
provision.

The Bonds were and the term loan with GDB is collateralized by a first and
second mortgage lien on the Resort, a chattel mortgage on personal property, and
an assignment of various contracts and the Management Agreement (and effective
January, 1, 1999, the Amended Management Agreement) with Williams Hospitality.
The collateral is subject to a subordination agreement in favor of CRE, as
successor to The Bank of Tokyo-Mitsubishi, Ltd.

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial Accounting Standards Board Statement No. 107 'Disclosures About
Fair Value of Financial Instruments', requires the disclosure of the fair value
of the Partnership's financial instruments at December 31, 1998 and 1997. The
carrying amount of notes payable to bank, chattel mortgage notes and capitalized
leases approximates fair value because of the short maturity of the instruments
or recent issuance. The fair value of the Partnership's long-term debt has not
been determined because similar terms and conditions may no longer be available.

F-18

<PAGE>

<PAGE>
EL CONQUISTADOR PARTNERSHIP L.P.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998

11. INCOME TAXES

The Partnership is not taxable for Puerto Rico income tax purposes pursuant
to an election submitted to the Puerto Rico Treasury Department. Instead, each
Partner reports their distributive share of the Partnership's profits and losses
in their respective Puerto Rico and Federal income tax returns and, therefore,
no provision for income taxes has been made in the accompanying financial
statements.

The Partnership was granted a tax exemption grant under the provisions of
the Puerto Rico Tourism Incentives Act of 1993 (the Tourism Act). The Tourism
Act provides for a ten-year grant which may be extended for an additional
ten-year term. Major benefits of this Act are: a 90% exemption from income taxes
on hotel income, and a 90% exemption from municipal real and personal property
taxes through the entire term of the grant. The Partnership's casino operations
are not covered by the tax exemption grant and are fully taxable.

12. CASINO PROMOTIONAL ALLOWANCES

Casino promotional allowances consisted of the following:

<TABLE>
<CAPTION>
NINE MONTH
MARCH 1 TO JANUARY 1 TO PERIOD ENDED YEAR ENDED
DECEMBER 31, FEBRUARY 28, DECEMBER 31, MARCH 31,
1998 1998 1997 1997
---- ---- ---- ----

<S> <C> <C> <C> <C>
Rooms........................................ $212,466 $ 32,846 $112,229 $ 334,775
Food and beverage............................ 256,601 41,030 197,022 402,772
Other........................................ 150,716 84,544 149,196 528,163
------------ ------------ ------------ ----------
$619,783 $158,420 $458,447 $1,265,710
------------ ------------ ------------ ----------
------------ ------------ ------------ ----------
</TABLE>

13. ADVERTISING COSTS

The Partnership recognizes the costs of advertising as expense in the
period in which they are incurred. Advertising costs amounted to approximately
$1,003,000, $216,000, $1,430,000 and $1,446,000 for the periods March 1, 1998
through December 31, 1998, January 1, 1998 through February 28, 1998, the nine
month period ended December 31, 1997, and the year ended March 31, 1997,
respectively.

14. COMMITMENTS

The Partnership leases land under an operating lease agreement for
thirty-two years with renewal options for two five-year periods. Following are
the minimum annual rental payments on the operating lease subsequent to December
31, 1998:

<TABLE>
<S> <C>
1999........................................................ $ 210,000
2000........................................................ 210,000
2001........................................................ 210,000
2002........................................................ 210,000
2003........................................................ 240,000
Thereafter.................................................. 5,440,000
----------
$6,520,000
----------
----------
</TABLE>

Total rent expense for the periods March 1, 1998 through December 31, 1998,
January 1, 1998 through February 28, 1998, the nine month period ended December
31, 1997, and the year ended

F-19

<PAGE>

<PAGE>
EL CONQUISTADOR PARTNERSHIP L.P.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998

March 31, 1997 amounted to approximately $1,349,000, $384,000, $982,000 and
$1,391,000, respectively.

15. EMPLOYEES' SAVINGS PLAN

Effective January 1, 1997, the Partnership adopted an employees' savings
plan for all hourly employees after one year of service or 1,000 hours.
Employees covered by any collective bargaining agreement are not eligible to
participate in the plan. Members of the plan can contribute an unlimited
percentage of their after tax compensation. The Partnership's contribution is
$300 per employee per year and a discretionary additional contribution.

The Partnership's contribution to the savings plan amounted to
approximately $166,000, $27,000, and $44,000 for the periods March 1, 1998
through December 31, 1998, January 1, 1998 through February 28, 1998, and the
nine month period ended December 31, 1997, respectively.

Effective January 1, 1997, the Partnership adopted a salary savings plan
for all salaried employees after one year of service or 1,000 hours. Employees
covered by any collective bargaining agreement are not eligible to participate
in the plan. The plan is subject to the provisions of the Employee Retirement
Income Security Act of l974 (ERISA) and Section 1165(e) of the Puerto Rico
Income Tax Act of 1994, as amended. The employee's contribution is limited to
$7,500 or 10% of their compensation, whichever is less. Under the provisions of
the plan, the Partnership makes a minimum base contribution of $300 per
participant plus a discretionary contribution based on sick leave accrued in
excess of 240 hours and matches the employee's contribution based on the
percentage the gross operating profit, as defined, exceeds the Partnership's
annual operating budget as follows:

<TABLE>
<CAPTION>
MATCHING
G.O.P. EXCEEDS CONTRIBUTION
BUDGET BY PERCENTAGE
--------- ----------

The Partnership's contribution to the salary savings plan amounted to
approximately $70,000 $18,000, and $29,000 for the periods March 1, 1998 through
December 31, 1998, January 1, 1998 through February 28, 1998, and the nine month
period ended December 31, 1997, respectively.

16. HURRICANE GEORGES

On September 21 and 22, 1998, Hurricane Georges affected Puerto Rico and
caused certain damage to the Resort. The financial effects of the physical
damage caused by the hurricane were estimated at $32,000,000. However, the
Partnership believes that the nature of the damage and its insurance coverage is
such that there will not be a significant impact on the Partnership's results of
operations and financial condition.

17. ACCOUNTING CHANGE

In 1998, the Accounting Standards Executive Committee issued Statement of
Position (SOP) No. 98-5, 'Reporting on the Costs of Start-up Activities', which
requires the cost of start-up activities to be expensed as incurred. At December
31, 1998, the Partnership had approximately $462,000 of start-up costs incurred
in connection with the construction of a new spa, which are included in prepaid
expenses and other current assets. Effective January 1, 1999, the Partnership is

F-20

<PAGE>

<PAGE>
EL CONQUISTADOR PARTNERSHIP L.P.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998

required to adopt SOP No. 98-5 and the effect in the accompanying balance sheet
of the adoption will be to decrease partners capital by approximately $462,000.

18. SUBSEQUENT EVENT

On January 29, 1999, the Partnership and CRE amended the Assignment and
Modification Agreement to provide for a maturity date of March 31, 1999, with an
additional extension option up to June 30, 1999, if certain conditions are met.
From February 1, 1999 until the maturity date, the interest rate changed to
LIBOR plus 2.75%.

On March 31, 1999, the Partnership exercised its extension option to extend
the maturity date to June 30, 1999.

F-21

<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Partners
WKA EL CON ASSOCIATES

We have audited the accompanying consolidated balance sheet of WKA El Con
Associates (the Partnership) as of December 31, 1998. This balance sheet is the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on this balance sheet based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit of the balance sheet provides a reasonable basis for our
opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the consolidated financial position of WKA El Con Associates
at December 31, 1998, in conformity with generally accepted accounting
principles.

The accompanying consolidated balance sheet has been prepared assuming that
WKA El Con Associates will continue as a going-concern. As more fully described
in Note 8, El Conquistador Partnership L.P., in which the Partnership has a 50%
ownership interest, is engaged in the process of refinancing the balance due to
Citicorp Real Estate, Inc. of $90,000,000, which is required to be repaid on
June 30, 1999, through a new bond issuance to be issued by the Puerto Rico
Industrial, Tourist, Educational, Medical and Environmental Control Facilities
Financing Authority (see Note 14). If such refinancing is not obtained, it
raises substantial doubt about the Partnership's ability to continue as a
going-concern. The balance sheet does not include any adjustments to reflect the
possible future effects on the recoverability and classifications of assets or
the amounts and classifications of liabilities that may result from the outcome
of this uncertainty.

ERNST & YOUNG LLP

April 8, 1999

F-22

<PAGE>

<PAGE>
PURCHASERS OF THE BONDS ARE NOT ACQUIRING ANY INTEREST IN,
OR SECURITIES OF, WKA EL CON ASSOCIATES

WKA EL CON ASSOCIATES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash......................................................................................... $ 1,561,328
Restricted cash and investments held by bank................................................. 10,289,856
Trade accounts receivable, less allowance for doubtful accounts of $146,482.................. 7,407,983
Due from affiliated companies................................................................ 423,683
Inventories.................................................................................. 1,461,757
Prepaid expenses and others current assets................................................... 5,910,962
------------
Total current assets.................................................................... 27,055,569
Land, building and equipment:
Land......................................................................................... 20,255,500
Building..................................................................................... 191,904,360
Furniture, fixture and equipment............................................................. 21,631,402
Construction in progress..................................................................... 3,639,122
------------
237,430,384
Less accumulated depreciation................................................................ 6,329,399
------------
231,100,985
Other assets...................................................................................... 335,750
Operating equipment, net.......................................................................... 1,538,227
Deferred debt issuance costs, net of accumulated amortization of $448,772......................... 357,590
Goodwill, net of accumulated amortization of $296,444............................................. 3,320,290
------------
Total assets............................................................................ $263,708,411
------------
------------

LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Trade accounts payable....................................................................... $ 8,764,237
Advance deposits............................................................................. 9,463,505
Accrued interest............................................................................. 600,625
Other accrued liabilities.................................................................... 5,752,917
Due to affiliated companies.................................................................. 34,045,596
Notes payable to bank........................................................................ 90,000,000
------------
Total current liabilities............................................................... 148,626,880
Long-term debt.................................................................................... 25,000,000
Due to affiliated companies....................................................................... 22,387,557
Due to partner.................................................................................... 6,027,918
Minority interest................................................................................. 15,641,086
Partners' capital................................................................................. 46,024,970
------------
Total liabilities and partners' capital................................................. $263,708,411
------------
------------
</TABLE>

See accompanying notes.

F-23

<PAGE>

WKA EL CON ASSOCIATES
NOTES TO CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998

1. ORGANIZATION AND PRINCIPAL ACCOUNTING POLICIES

ORGANIZATION

WKA El Con Associates (the Partnership) is a joint venture organized under
the General Partnership Law of the State of New York, pursuant to a Joint
Venture Agreement (the Agreement) dated January 9, 1990, as amended, for the
purpose of becoming a general and limited partner of El Conquistador Partnership
L.P. (El Con). The Partnership is owned 46.54% by WHG El Con Corp. (WHG El Con),
a wholly-owned subsidiary of Wyndham International, Inc. (Wyndham) and 53.46% by
Conquistador Holding, Inc., which is owned by Patriot American Hospitality, Inc.
(Patriot) and Wyndham. The Partnership shall continue to exist until January 9,
2040, unless terminated earlier pursuant to the Agreement. Net profits or losses
of the Partnership will be allocated to the partners in accordance with the
terms of the Agreement.

The consolidated balance sheet includes the accounts of El Con., a limited
partnership organized under the laws of Delaware, pursuant to a Joint Venture
Agreement dated January 12, 1990, as amended (the El Con Agreement). El Con is
50% owned by the Partnership and 50% by Conquistador Holding, Inc. The joint
venture partners (Partners) are both General Partners and Limited Partners in
the Partnership. By agreement between Wyndham and Patriot, the Partnership's
interest is the controlling 50% in El Con. El Con shall continue to exist until
March 31, 2030, unless terminated earlier by mutual agreement of the General
Partners.

El Con owns a luxury resort hotel and casino in Fajardo, Puerto Rico (the
Resort).

The Partnership is a 50% limited partner in Las Casitas Development Company
I, S en C (S.E.) (Las Casitas), a joint venture that constructed and sold
condominiums on property adjacent to El Con.

BASIS OF PRESENTATION

The consolidated balance sheet has been prepared in conformity with
generally accepted accounting principles which requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the balance sheet. Actual results could differ from those estimates.

INVENTORIES

Inventories, which consist mainly of food, beverages and supplies, are
valued at the lower of cost (first-in, first-out method) or market.

LAND, BUILDING AND EQUIPMENT

DEFERRED DEBT ISSUANCE COSTS

F-24

<PAGE>

WKA EL CON ASSOCIATES
NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)
DECEMBER 31, 1998

GOODWILL

2. ACQUISITION OF PARTNERSHIP

On January 16, 1998, Patriot American Hospitality Operating Company
Acquisition Subsidiary, a wholly-owned subsidiary of Wyndham merged with and
into WHG Resorts & Casinos Inc. (WHG), a 46.54% owner of the Partnership. As
part of the transaction WHG stockholders received for each issued and
outstanding share of common stock .784 shares of Wyndham and Patriot, a
self-administered REIT, which trade as 'Paired Shares' on the New York Stock
Exchange.

Effective February 28, 1998, Patriot acquired an additional 37.23% interest
in the Partnership for approximately $15,384,000. Patriot also acquired an
additional 50% interest in El Con for approximately $22,728,000, which interest
was owned by Kumagai Caribbean, Inc.

On July 13, 1998, Patriot acquired the remaining 16.23% interest in the
Partnership for approximately $3,890,000. The purchase transactions were
accounted for under the purchase method and the cumulative purchase price paid
by Wyndham and Patriot was the basis used to record net assets on the records of
WHG and its subsidiaries.

3. RESTRICTED CASH AND INVESTMENTS HELD BY BANK

As of December 31, 1998, pursuant to the terms of the Assignment and
Modification Agreement of the Letter of Credit and Reimbursement Agreement (see
Note 8), El Con had cash and investments on deposit for the payment of interest,
insurance and real property taxes amounting to $1,312,817, $5,688,012 and
$3,289,027, respectively.

4. TRADE ACCOUNTS RECEIVABLE

At December 31, 1998, trade accounts receivable consisted of the following:

<TABLE>
<S> <C>
Trade accounts receivable -- hotel.............................................. $6,714,517
Less allowance for doubtful accounts............................................ 120,127
----------
6,594,390
----------
Trade accounts receivable -- casino............................................. 839,948
Less allowance for doubtful accounts............................................ 26,355
----------
813,593
----------
Trade accounts receivable, net.................................................. $7,407,983
----------
----------
</TABLE>

5. TRANSACTIONS WITH RELATED PARTIES

El Con had an Operating and Management Agreement (the Management Agreement)
with Williams Hospitality Group Inc. (Williams Hospitality) which terminated
effective December 31, 1998. The Management Agreement provided that El Con would
pay Williams Hospitality a basic management fee of 3.5% of the Resort's gross
revenues, as defined, and an incentive management fee of 10% of the Resort's
operating profit, as defined. Incentive management fees accrued each year were
not payable until significant cash flow levels were achieved. In addition, El
Con was

F-25

<PAGE>

WKA EL CON ASSOCIATES
NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)
DECEMBER 31, 1998

required to pay certain administrative expenses incurred by Williams Hospitality
in connection with management of the Resort.

Effective January 1, 1999, El Con entered into an Amended and Restated
Management Agreement (the Amended Management Agreement) with Williams
Hospitality which expires on January 31, 2014. The Amended Management Agreement
provides that El Con will pay Williams Hospitality a management fee of 3% of
gross room revenues derived from condominiums and 2.5% of gross revenues derived
from the hotel, plus a hotel trade name fee of .5% of gross room revenues. In
addition, El Con is required to pay certain administrative expenses incurred by
Williams Hospitality in connection with managing the Resort.

In February 1997, a subsidiary of Williams Hospitality financed a ferryboat
from an external borrowing amounting to $456,000, repayable over seven years.
Monthly payments amount to $7,561. El Con chartered the ferryboat from the
subsidiary.

6. NOTE PAYABLE TO BANK

Citicorp Real Estate, Inc. (CRE) made a $90,000,000 interim loan to El Con
on August 3, 1998. The note matured on November 3, 1998 and bore interest,
computed monthly, equal to LIBOR plus 2.25% (7.75% at December 31, 1998). The
maturity date of the loan was extended to March 31, 1999 (see Notes 8 and 14).

7. DUE TO AFFILIATED COMPANIES AND PARTNERS

Amounts due to affiliated companies consist of fees earned by Williams
Hospitality, funds advanced to El Con, other payments made by Williams
Hospitality, and for services rendered by Posadas de Puerto Rico Associates,
Incorporated and Posadas de San Juan Associates.

At December 31, 1998, amounts due to affiliated companies consisted of the
following:

<TABLE>
<S> <C>
Current:
Due to Williams Hospitality:
Basic management fees................................................ $ 804,043
Other................................................................ 142,370
-----------
946,413
Due to Posadas de San Juan................................................ 33,453
Due to Posadas de Puerto Rico............................................. 33,065,730
-----------
$34,045,596
-----------
-----------
Non current:
Due to Williams Hospitality:
Incentive management fees............................................ $ 9,388,207
Interest at 10% on incentive management fees......................... 1,274,200
Advances............................................................. 1,500,000
Interest on advances................................................. 987,120
-----------
13,149,527
Due to Patriot............................................................ 9,238,030
-----------
$22,387,557
-----------
-----------
</TABLE>

WHG El Con loaned the Partnership $8,229,700 under the terms of loan
agreements. As of December 31, 1998, the outstanding balance of such loans was
$6,027,918. The notes are payable in 2003 to 2005 and bear interest at the prime
rate. The interest rate on such notes as of December 31, 1998 was 7.75%.

F-26

<PAGE>

WKA EL CON ASSOCIATES
NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)
DECEMBER 31, 1998

8. LONG-TERM DEBT

Under the provisions of a term loan agreement with GDB, El Con borrowed
$25,000,000 for the payment of project costs. The loan is due on February 7,
2006. The loan agreement provides for a variable interest rate equivalent to a
LIBOR rate minus .5% plus an add-on margin as provided in the loan agreement
(6.06% at December 31, 1998). Interest is payable quarterly in arrears.

In 1991 the Puerto Rico Industrial, Tourist, Medical, Educational and
Environmental Control Facilities Financing Authority (the Authority) sold
industrial revenue bonds (Bonds) for $120,000,000 and loaned the proceeds to El
Con to be used for the payment of project costs pursuant to a Loan Agreement.
The Loan Agreement provided that El Con would pay all interest and principal on
the Bonds. Under the terms of the Loan Agreement, such debt was required to be
repaid on August 3, 1998 since the letter of credit collateralizing the Bonds
was not renewed or replaced prior to June 9, 1998. On August 3, 1998, the letter
of credit was honored and the $120,000,000 was paid in full.

In accordance with the Letter of Credit and Reimbursement Agreement, El Con
was obligated to immediately reimburse the letter of credit issuer the full
amount drawn under the letter of credit. On August 3, 1998, El Con made a
partial payment of $30,000,000 and entered into an Assignment and Modification
Agreement of the Letter of Credit and Reimbursement Agreement with CRE. CRE
reimbursed the letter of credit issuer with respect to the $90,000,000 balance
due under the Letter of Credit and Reimbursement Agreement. Additionally, CRE
became successor in interest to the collateral liens. As part of the Assignment
and Modification Agreement, the $90,000,000 advanced by CRE matured on November
3, 1998 and was extended to March 31, 1999 (see Notes 6 and 14).

The Bonds were and the term loan with GDB is collateralized by a first and
second mortgage lien on the Resort, a chattel mortgage on personal property, and
an assignment of various contracts and the Management Agreement (and effective
January 1, 1999, the Amended Management Agreement) with Williams Hospitality.
The collateral is subject to a subordination agreement in favor of CRE.

El Con is engaged in the process of refinancing the balance due to CRE
through a new bond to be issued by the Authority. Based on the operating history
of the Resort, El Con's management believes such refinancing will be achieved,
but there can be no assurance thereof. If such refinancing is not obtained, it
raises substantial doubt about El Con's ability to continue as a going-concern
and, therefore, the Partnership's ability to continue as a going concern.

9. FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial Accounting Standards Board Statement No. 107 'Disclosures About
Fair Value of Financial Instruments', requires the disclosure of the fair value
of the Partnership's financial instruments at December 31, 1998. The carrying
amount of the note payable to bank approximates fair value because of the short
maturity of the instruments or recent issuance. The fair value of the
Partnership's long-term debt has not been determined because similar terms and
conditions may no longer be available.

10. INCOME TAXES

The Partnership and El Con are not taxable for Puerto Rico income tax
purposes pursuant to an election submitted to the Puerto Rico Treasury
Department. Instead, each partner reports their distributive share of the
Partnership's and El Con's profit and losses in their respective income tax

F-27

<PAGE>

WKA EL CON ASSOCIATES
NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)
DECEMBER 31, 1998

returns. Profit or losses of the Partnership and El Con for Federal income tax
purposes is reported by the partners.

El Con was granted a tax exemption grant under the provisions of the Puerto
Rico Tourism Incentives Act of 1993 (the Tourism Act). The Tourism Act provides
for a ten-year grant which may be extended for an additional ten-year term.
Major benefits of this Act are: a 90% exemption from income taxes on hotel
income, and a 90% exemption from municipal real and personal property taxes
through the entire term of the grant. El Con's casino operations are not covered
by the tax exemption grant and are fully taxable.

11. COMMITMENTS

El Con leases land under an operating lease agreement for thirty-two years
with renewal options for two five-year periods. Following are the minimum annual
rental payments on the operating lease subsequent to December 31, 1998:

<TABLE>
<S> <C>
1999.................................................................. $ 210,000
2000.................................................................. 210,000
2001.................................................................. 210,000
2002.................................................................. 210,000
2003.................................................................. 240,000
Thereafter............................................................ 5,440,000
----------
$6,520,000
----------
----------
</TABLE>

12. EMPLOYEES' SAVINGS PLAN

Effective January 1, 1997, El Con adopted an employees' savings plan for
all hourly employees after one year of service or 1,000 hours. Employees covered
by any collective bargaining agreement are not eligible to participate in the
plan. Members of the plan can contribute an unlimited percentage of their after
tax compensation. El Con's contribution is $300 per employee per year and a
discretionary additional contribution.

Effective January 1, 1997, El Con adopted a salary savings plan for all
salaried employees after one year of service or 1,000 hours. Employees covered
by any collective bargaining agreement are not eligible to participate in the
plan. The plan is subject to the provisions of the Employee Retirement Income
Security Act of l974 (ERISA) and Section 1165(e) of the Puerto Rico Income Tax
Act of l994, as amended.

Under the provisions of the plan, El Con makes a minimum base contribution
of $300 per participant plus a discretionary contribution based on sick leave
accrued in excess of 240 hours and matches the employee's contribution based on
the percentage the gross operating profit, as defined, exceeds El Con's annual
operating budget as follows:

<TABLE>
<CAPTION>
G.O.P. MATCHING
EXCEEDS CONTRIBUTION
BUDGET BY PERCENTAGE
--------- ------------

F-28

<PAGE>

WKA EL CON ASSOCIATES
NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)
DECEMBER 31, 1998

13. HURRICANE GEORGES

On September 21 and 22, 1998, Hurricane Georges affected Puerto Rico and
caused certain damage to the Resort. The financial effects of the physical
damage caused by the hurricane were estimated at $32,000,000. However, El Con's
management believes that the nature of the damage and its insurance coverage is
such that there will not be a significant impact on El Con's financial
condition.

14. SUBSEQUENT EVENT

On January 29, 1999, El Con and CRE amended the Assignment and Modification
Agreement to provide for a maturity date of March 31, 1999, with an additional
extension option up to June 30, 1999, if certain conditions are met. From
February 1, 1999 until the maturity date, the interest rate changed to LIBOR
plus 2.75%. On March 31, 1999, El Con exercised its extension option to extend
the maturity date to June 30, 1999.

F-29

<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholder
WHG EL CON CORP.

We have audited the accompanying consolidated balance sheet of WHG El Con
Corp. as of December 31, 1998. This balance sheet is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
balance sheet based on our audit.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the consolidated financial position of WHG El Con Corp. at
December 31, 1998, in conformity with generally accepted accounting principles.

The accompanying consolidated balance sheet has been prepared assuming that
WHG El Con Corp. will continue as a going-concern. As more fully described in
Note 8, El Conquistador Partnership L.P., in which WHG El Con Corp. has a 23.27%
ownership interest, is engaged in the process of refinancing the balance due to
Citicorp Real Estate, Inc. of $90,000,000, which is required to be repaid on
June 30, 1999, through a new bond issuance to be issued by the Puerto Rico
Industrial, Tourist, Educational, Medical and Environmental Pollution Control
Facilities Financing Authority (see Note 14). If such refinancing is not
obtained, it raises substantial doubt about the Company's ability to continue as
a going-concern. The balance sheet does not include any adjustments to reflect
the possible future effects on the recoverability and classifications of assets
or the amounts and classifications of liabilities that may result from the
outcome of this uncertainty.

ERNST & YOUNG LLP

April 8, 1999

F-30

<PAGE>

<PAGE>
PURCHASERS OF THE BONDS ARE NOT ACQUIRING ANY INTEREST IN,
OR SECURITIES OF, WHG EL CON CORP.

WHG EL CON CORP.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash......................................................................................... $ 1,561,328
Restricted cash and investments held by bank................................................. 10,289,856
Trade accounts receivable, less allowance for doubtful accounts of $146,482.................. 7,407,983
Due from affiliated companies................................................................ 423,683
Inventories.................................................................................. 1,461,757
Prepaid expenses and other current assets.................................................... 5,910,962
------------
Total current assets.................................................................... 27,055,569
Due from affiliated company....................................................................... 3,125,837
Land, building and equipment:
Land......................................................................................... 20,255,500
Building..................................................................................... 191,904,360
Furniture, fixture and equipment............................................................. 21,631,402
Construction in progress..................................................................... 3,639,122
------------
237,430,384
Less accumulated depreciation................................................................ 6,329,399
------------
231,100,985
Other assets...................................................................................... 335,750
Operating equipment, net.......................................................................... 1,538,227
Deferred debt issuance costs, net of accumulated amortization of $448,772......................... 357,590
Goodwill, net of accumulated amortization of $296,444............................................. 3,320,290
------------
Total assets............................................................................ $266,834,248
------------
------------

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Trade accounts payable....................................................................... $ 8,764,237
Advance deposits............................................................................. 9,463,505
Accrued interest............................................................................. 600,625
Other accrued liabilities.................................................................... 5,752,855
Due to affiliated companies.................................................................. 34,045,596
Notes payable to bank........................................................................ 90,000,000
------------
Total current liabilities............................................................... 148,626,818
Long-term debt.................................................................................... 25,000,000
Deferred income tax liability..................................................................... 4,884,855
Due to affiliated companies....................................................................... 22,387,557
Minority interest................................................................................. 31,801,815
Shareholder's equity:
Common Stock, no par value:
Authorized shares -- 3,000..............................................................
Issued and outstanding -- 1,000......................................................... 11,494,000
Additional paid-in capital................................................................... 22,902,979
Accumulated deficit.......................................................................... (263,776)
------------
Total shareholder's equity.............................................................. 34,133,203
------------
Total liabilities and shareholder's equity.............................................. $266,834,248
------------
------------
</TABLE>

See accompanying notes.

F-31

<PAGE>

WHG EL CON CORP.
NOTES TO CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998

1. ORGANIZATION AND PRINCIPAL ACCOUNTING POLICIES

ORGANIZATION

WHG El Con Corp. (the Company), organized under the laws of Delaware, is a
wholly-owned subsidiary of Patriot American Hospitality Operating Company
Acquisition Subsidiary, a wholly owned subsidiary of Wyndham International, Inc.
(Wyndham). The Company owns 46.54% of WKA El Con Associates (WKA El Con), a
joint venture organized under the General Partnership Law of the State of New
York for the purpose of becoming a general and a limited partner of El
Conquistador Partnership L.P. (El Con). The remaining 53.46% is owned by
Conquistador Holding, Inc.

El Con is a limited partnership organized under the laws of Delaware,
pursuant to a Joint Venture Agreement dated January 12, 1990, as amended. El Con
is 50% owned by WKA El Con and 50% by Conquistador Holding, Inc., which is owned
by Patriot American Hospitality, Inc. (Patriot) and Wyndham. By agreement
between Wyndham and Patriot, the Company's interest is the controlling interest
in WKA El Con. El Con owns a luxury resort hotel and casino in Fajardo, Puerto
Rico (the Resort).

The consolidated balance sheet includes the accounts of WKA El Con and its
50% ownership in El Con.

BASIS OF PRESENTATION

INVENTORIES

Inventories, which consist mainly of food, beverages and supplies, are
valued at the lower of cost (first-in, first-out method) or market.

LAND, BUILDING AND EQUIPMENT

DEFERRED DEBT ISSUANCE COSTS

GOODWILL

Goodwill represents the excess of the purchase price over the amount
assigned to net assets acquired and is being amortized over 20 years by the
straight-line method. At each balance sheet date the Company evaluates the
realizability of goodwill based on expectations of non-discounted cash flows or
whenever events or changes in circumstances indicate that it may not be
recoverable.

2. ACQUISITION OF COMPANY

On January 16, 1998, Patriot American Hospitality Operating Company
Acquisition Subsidiary, a wholly-owned subsidiary of Wyndham merged with and
into WHG Resorts & Casinos Inc.

F-32

<PAGE>

WHG EL CON CORP.
NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)
DECEMBER 31, 1998

(WHG), a 46.54% owner of WKA El Con. As part of the transaction WHG stockholders
received for each issued and outstanding share of common stock .784 shares of
Wyndham and Patriot, a self-administered REIT, which trade as 'Paired Shares' on
the New York Stock Exchange.

Effective February 28, 1998, Patriot acquired an additional 37.23% interest
in WKA El Con for approximately $15,384,000. Patriot also acquired an additional
50% interest in El Con for approximately $22,728,000, which interest was owned
by Kumagai Caribbean, Inc.

3. RESTRICTED CASH AND INVESTMENTS HELD BY BANK

4. TRADE ACCOUNTS RECEIVABLE

At December 31, 1998, trade accounts receivable consisted of the following:

<TABLE>

<S> <C>
Trade accounts receivable -- hotel.............................................. $6,714,517
Less allowance for doubtful accounts............................................ 120,127
----------
6,594,390
Trade accounts receivable -- casino............................................. 839,948
Less allowance for doubtful accounts............................................ 26,355
----------
813,593
----------
Trade accounts receivable, net.................................................. $7,407,983
----------
----------
</TABLE>

5. TRANSACTIONS WITH RELATED PARTIES

F-33

<PAGE>

WHG EL CON CORP.
NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)
DECEMBER 31, 1998

6. NOTE PAYABLE TO BANK

7. DUE TO AFFILIATED COMPANIES AND PARTNERS

Amounts due to affiliated companies consist of fees earned by Williams
Hospitality, funds advanced to El Con and other payments made by Williams
Hospitality, and for services rendered by Posadas de Puerto Rico Associates,
Incorporated and Posadas de San Juan Associates.

At December 31, 1998, amounts due to affiliated companies consisted of the
following:

8. LONG-TERM DEBT

In 1991 the Puerto Rico Industrial, Tourist, Medical, Educational and
Environmental Control Facilities Financing Authority (the Authority) sold
industrial revenue bonds (Bonds) for $120,000,000 and loaned the proceeds to El
Con to be used for the payment of project costs pursuant to a Loan Agreement.
The Loan Agreement provided that El Con would pay all interest and principal on
the Bonds. Under the terms of the Loan Agreement, such debt was required to be
repaid on August 3, 1998 since the letter of credit was not renewed or replaced
prior to June 9, 1998. On August 3, 1998, the letter of credit collateralizing
the Bonds was honored and the $120,000,000 was paid in full.

F-34

<PAGE>

WHG EL CON CORP.
NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)
DECEMBER 31, 1998

Assignment and Modification Agreement of the Letter of Credit and Reimbursement
Agreement with CRE. CRE reimbursed the letter of credit issuer with respect to
the $90,000,000 balance due under the Letter of Credit and Reimbursement
Agreement. Additionally, CRE became successor in interest to the collateral
liens. As part of the Assignment and Modification Agreement, the $90,000,000
advanced by CRE matured on November 3, 1998 and was extended to March 31, 1999
(see Notes 6 and 14).

The Bonds were and the term loan with GDB is collateralized by a first and
second mortgage lien on the Resort, a chattel mortgage on personal property, and
an assignment of various contracts and the Management Agreement (and effective
January 1, 1999, the Amended Management Agreement) with Williams Hospitality.
The collateral is subject to a subordination agreement in favor of CRE.

9. FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial Accounting Standards Board Statement No. 107 'Disclosures About
Fair Value of Financial Instruments', requires the disclosure of the fair value
of the Company's financial instruments at December 31, 1998. The carrying amount
of the note payable to bank approximates fair value because of the short
maturity of the instruments or recent issuance. The fair value of the Company's
long-term debt has not been determined because similar terms and conditions may
no longer be available.

10. INCOME TAXES

The Company's operations are included with Wyndham's Federal income tax
return. Statement of Financial Accounting Standards No. 109, 'Accounting for
Income Taxes', requires that a portion of the income tax expense (benefit) be
allocated to the Company. The 'Separate Return Method' was utilized to calculate
the Federal income tax expense (benefit) allocated to the Company.

WKA El Con and El Con are not taxable for Puerto Rico income tax purposes
pursuant to an election submitted to the Puerto Rico Treasury Department.
Instead, each partner reports their distributive share of WKA El Con's and El
Con's profit and losses in their respective income tax returns. Profits and
losses of WKA El Con and El Con for Federal income tax purposes is reported by
the partners.

Deferred income taxes reflect the net tax effects of temporary differences
between the amount of assets and liabilities for financial reporting purposes
and the amounts used for income taxes in the income tax return of the Company.
The deferred tax liability as of December 31, 1998 relates to the different
depreciation methods used for book and tax purposes.

F-35

<PAGE>

WHG EL CON CORP.
NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)
DECEMBER 31, 1998

11. COMMITMENTS

12. EMPLOYEES' SAVINGS PLAN

<TABLE>
<CAPTION>
G.O.P. MATCHING
EXCEEDS CONTRIBUTION
BUDGET BY PERCENTAGE
--------- ------------
<S> <C>
Less than 5%................................. 25%
5%........................................... 35%
10%.......................................... 45%
15%.......................................... 55%
20%.......................................... 65%
</TABLE>

13. HURRICANE GEORGES

On September 21 and 22, 1998, Hurricane Georges affected Puerto Rico and
caused certain damage to the Resort. The financial effects of the physical
damage caused by the hurricane were estimated at $32,000,000. However, El Con's
management believes that the nature of the damage and its insurance coverage is
such that there will not be a significant impact on El Con's financial
condition.

14. SUBSEQUENT EVENT

On January 29, 1999, El Con and CRE amended the Assignment and Modification
Agreement to provide for a maturity date of March 31, 1999, with an additional
extension option up to June 30, 1999, if certain conditions are met. From
February 1, 1999 until the maturity date, the interest rate changed to LIBOR
rate plus 2.75%. On March 31, 1999, El Con exercised its extension option to
extend the maturity date to June 30, 1999.

F-36

<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors
CONQUISTADOR HOLDING, INC.

We have audited the accompanying balance sheet of Conquistador Holding,
Inc., a Delaware corporation, as of December 31, 1998. This balance sheet is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this balance sheet based on our audit.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Conquistador Holding, Inc. as of
December 31, 1998, in conformity with generally accepted accounting principles.

The accompanying balance sheet has been prepared assuming that Conquistador
Holding, Inc. will continue as a going-concern. As more fully described in Notes
3 and 6, El Conquistador Partnership L.P., is engaged in the process of
refinancing the balance due to a lender in the amount of $90,000,000, which
matures on June 30, 1999, through a new bond issuance to be issued by the Puerto
Rico Industrial, Tourist, Educational, Medical and Environmental Control
Facilities Financing Authority. If such financing is not obtained, it raises
substantial doubt about the Company's ability to continue as a going-concern.
The balance sheet does not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classifications of liabilities that may result from the outcome of this
uncertainty.

/s/ ERNST & YOUNG LLP

Dallas, Texas
April 12, 1999

F-37

<PAGE>

PURCHASERS OF THE BONDS ARE NOT ACQUIRING ANY INTEREST IN,
OR SECURITIES OF, CONQUISTADOR HOLDING, INC.

CONQUISTADOR HOLDING, INC.
BALANCE SHEET
DECEMBER 31, 1998

<TABLE>
<S> <C>
ASSETS
Cash............................................................................................... $ 101
Investments in unconsolidated subsidiaries......................................................... 31,801,815
-----------
Total assets........................................................................ $31,801,916
-----------
-----------

SHAREHOLDERS' EQUITY
Shareholders' equity
Class A voting common stock, $0.01 par value; 50,000 shares authorized;
100 shares issued and outstanding........................................................... 1
Class B non-voting common stock, $0.01 par value; 50,000 shares authorized; 9,900 shares
issued and outstanding....................................................................... 99
Additional paid in capital.................................................................... 38,064,946
Retained deficit.............................................................................. (4,925,231)
-----------
33,139,815
Less: subscription note receivable............................................................ (1,337,899)
-----------
Total shareholders' equity.......................................................... $31,801,916
-----------
-----------
</TABLE>

See accompanying notes.

F-38

<PAGE>

CONQUISTADOR HOLDING, INC.
NOTES TO BALANCE SHEET
DECEMBER 31, 1998

1. ORGANIZATION

Conquistador Holding, Inc. (the 'Company') is owned by Patriot American
Hospitality, Inc. ('PAH') and a subsidiary of Wyndham International, Inc.
('Wyndham'). The Company was incorporated for the purpose of acquiring general
partnership interests in El Conquistador Partnership L.P. ('El Con') and WKA El
Con Associates ('WKA'). WKA owns the remaining partnership interests in El Con
while El Con owns the El Conquistador Resort & Country Club located in Fajardo,
Puerto Rico.

2. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The preparation of the balance sheet in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the balance sheet and accompanying notes. Actual
results could differ from those estimates.

INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS

Effective March 1, 1998, the Company acquired a 50% interest in El Con and
a 37.23% interest in WKA from PAH. The remaining partnership interests of El Con
and WKA are owned by a subsidiary of Wyndham. By agreement between Wyndham and
PAH, WKA's interest is the controlling 50% interest in El Con. Accordingly, the
Company accounts for its investments in El Con and WKA under the equity method.

On July 13, 1998, the Company acquired an additional 16.23% interest in WKA
for approximately $3,890,000.

INCOME TAXES

The Company records its provision for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 ('SFAS 109'). Under the
liability method of SFAS 109, deferred taxes are determined based on the
difference between the financial statement and tax bases of assets and
liabilities using the enacted tax rates in effect in the years the differences
are expected to reverse.

As of December 31, 1998, the Company has a net operating loss carryforward
of $4,925,231 which is available through December 31, 2018. The net operating
loss created a deferred tax asset of $1,723,831 which has been fully reserved.

3. INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS

Investments in unconsolidated partnerships as of December 31, 1998 are as
follows:

<TABLE>
<S> <C>
Investment in El Con........................................................... $15,641,086
Investment in WKA.............................................................. 16,160,729
-----------
$31,801,815
-----------
-----------
</TABLE>

Summarized financial information for El Con as of December 31, 1998 is as
follows:

<TABLE>
<S> <C>
Total assets.................................................................. $262,367,740
Total liabilities............................................................. 210,604,704
Partners' capital............................................................. 51,763,036
</TABLE>

F-39

<PAGE>

<PAGE>
CONQUISTADOR HOLDING, INC.
NOTES TO BALANCE SHEET -- (CONTINUED)
DECEMBER 31, 1998

Summarized financial information for WKA as of December 31, 1998 is as
follows:

<TABLE>
<S> <C>
Total assets.................................................................. $263,708,411
Total liabilities............................................................. $217,683,441
Partners' capital............................................................. $ 46,024,970
</TABLE>

Certain debt of El Con was collateralized by a letter of credit which
expired on September 9, 1998. On August 3, 1998, the letter of credit was
honored and drawn on. In accordance with the Letter of Credit and Reimbursement
Agreement, El Con was obligated to immediately reimburse the letter of credit
issuer the full $120,000,000 drawn. On August 3, 1998, El Con repaid the letter
of credit issuer by making a partial payment of $30,000,000 and obtaining a
$90,000,000 interim loan from a lender to pay the remainder. The loan matured on
November 3, 1998, with an additional extension option to March 15, 1999
available if certain conditions were met (see Note 6). El Con is engaged in the
process of refinancing the $90,000,000 debt through a new bond issue. The
Company believes such refinancing will be achieved, but there can be no
assurance thereof. This raises substantial doubt about the Company's ability to
continue as a going-concern.

4. SUBSCRIPTION NOTE RECEIVABLE

Upon incorporation, Wyndham, through one of its subsidiaries, contributed
cash of $101 and a note payable to the Company in the amount of $1,337,899 in
exchange for 100 shares of the Company's Class A common stock.

5. HURRICANE GEORGES

On September 21 and 22, 1998, Hurricane Georges affected Puerto Rico and
caused certain damage to the hotel owned by El Con. The financial effects of the
physical damage caused by the hurricane were estimated at $32,000,000. However,
the Company believes that the nature of the damage and insurance coverage is
such that there will not be a significant impact on the Company's financial
condition.

6. SUBSEQUENT EVENTS

On January 29, 1999, El Con and the lender of the $90,000,000 amended their
agreement to provide for a maturity date of March 31, 1999, with an additional
extension option up to June 30, 1999, if certain conditions are met. On March
31, 1999, El Con exercised its extension option to extend the maturity date to
June 30, 1999.

F-40

<PAGE>

<PAGE>
APPENDIX A

FORM OF OPINION OF FIDDLER GONZALEZ & RODRIGUEZ, LLP, BOND COUNSEL

[ ,] 1999

Puerto Rico Industrial, Tourist, Educational,
Medical and Environmental Control Facilities
Financing Authority
San Juan, Puerto Rico

Gentlemen:

We have examined Act No. 121 of the Legislature of Puerto Rico, approved
June 27, 1977, as amended (the 'Act'), creating Puerto Rico Industrial, Medical,
Educational and Environmental Pollution Control Facilities Financing Authority
(the 'Authority'), a body corporate and politic constituting a public
corporation and governmental instrumentality of Puerto Rico ('Puerto Rico').

We have also examined certified copies of the proceedings of the Board of
Directors of the Authority in authorizing the execution and delivery of the
Trust Agreement and the Loan Agreement hereinafter referred to, and certified
copies of the proceedings and other proofs submitted relative to the
authorization, issuance, and sale of the following bonds (the 'Bonds'):

$105,200,000
PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL, MEDICAL
AND ENVIRONMENTAL CONTROL
FACILITIES FINANCING AUTHORITY
TOURISM REVENUE BONDS, 1999 SERIES A
(EL CONQUISTADOR RESORT PROJECT)

Said Bonds are issued under and pursuant to a Deed of Trust Agreement (the
'Trust Agreement'), dated the date hereof, by and between the Authority and
Banco Santander Puerto Rico, Trustee (the 'Trustee').

The proceeds of the sale of the Bonds are to be used for the purpose of
repaying the principal of and interest on an interim loan provided by Citicorp
Real Estate, Inc. to El Conquistador Partnership L.P., S.E. (the 'Borrower'),
funding certain reserves and paying certain costs and expenses of issuing the
Bonds. The proceeds of said interim financing were used to pay Borrower's
obligations under a certain reimbursement agreement resulting from the
redemption of bonds issued by the Authority for the financing, in part, of the
purchase, renovation, development, construction, equipping and operation of a
hotel in Fajardo, Puerto Rico, known as El Conquistador Resort & Country Club.

The Authority has entered into a Loan Agreement, dated the date hereof (the
'Loan Agreement'), with the Borrower providing for the loan of the proceeds of
the sale of the Bonds to the Borrower and for repayment by the Borrower of the
loan in amounts sufficient to pay the principal of and interest on the Bonds as
the same will become due and payable. The Loan Agreement provides that the loan
repayments will be paid directly to the Trustee and will be deposited to the
credit of a special fund created by the Trust Agreement and designated 'Tourism
Revenue Bonds 1999 Series A (El Conquistador Resort Project) Bonds Fund' (the
'Bond Fund'), which special fund is charged with the payment of the principal of
and interest on the Bonds. In addition, the Loan Agreement, except for certain
rights of the Authority, and the repayments thereunder, has been assigned to the
Trustee.

The Bonds are subject to redemption as provided in the Trust Agreement.

As to any questions of fact material to our opinion, we have relied upon
representations of the Authority and the Borrower contained in the Trust
Agreement and the Loan Agreement, the

A-1

<PAGE>

<PAGE>
certified proceedings and other certifications by officials of the Authority and
the Borrower, without undertaking to verify the same by independent
investigation.

We have also examined one of the Bonds as executed and authenticated.

All capitalized terms used in this opinion letter and not otherwise defined
herein will have the meanings ascribed to them in the Trust Agreement.

From such examination, we are of the opinion that:

1. The Act is valid.

2. The proceedings of the Board of Directors of the Authority required
in connection with the authorization, issuance and sale of the Bonds and
the authorization, execution, and delivery of the Loan Agreement and the
Related Documents to which the Authority is a party and the Trust Agreement
have been validly and legally taken.

3. The Trust Agreement and the Related Documents to which the
Authority is a party have been duly authorized, executed and delivered by
the Authority and assuming due authorization, execution and delivery by the
other parties thereto, constitute the legal, valid, binding and enforceable
obligations of the Authority in accordance with their terms, except to the
extent such enforceability may be limited by bankruptcy, insolvency or
other laws affecting creditors' rights generally, and subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

4. The Bonds have been duly authorized by the Authority and constitute
legal, valid, and binding obligations of the Authority, payable solely from
the Bond Fund and entitled to the benefit of the Trust Agreement.

5. All right, title and interest of the Authority in and to the
Related Documents (except certain rights of the Authority including its
rights to payment of expenses indemnity) have been validly assigned to the
Trustee.

6. The Bonds do not constitute an indebtedness of either Puerto Rico
or any of its principal subdivisions, other than the Authority, and neither
Puerto Rico nor any of such political subdivisions, other than the
Authority, will be liable thereon.

7. The Bonds and the transfer of the Bonds, including gain derived
upon the sale of the Bonds, are exempt from Puerto Rico income tax pursuant
to Article 8(b) of the Act.

8. Interest on the Bonds is (i) excluded from the gross income of the
recipient thereof for Puerto Rico income tax purposes pursuant to Section
1022(b)(4)(B) of the Puerto Rico Internal Revenue Code of 1994, as amended
(the 'PR-Code'); (ii) exempt from Puerto Rico income tax and alternative
minimum tax pursuant to Section 1022(b)(4)(B) of the PR-Code, Article 8(b)
of the Act and Section 3 of the Puerto Rico Federal Relations Act ('PRFRA')
and; (iii) exempt from Puerto Rico municipal license tax pursuant to
Section 9(25) of the Puerto Rico Municipal License Tax Act of 1974, as
amended, and Section 3 of the PRFRA.

9. The Bonds are exempt from Puerto Rico personal property tax
pursuant to Section 3.11 of the Puerto Rico Municipal Property Tax Act of
1991, as amended, and Section 3 of the PRFRA.

10. The Bonds are exempt from Puerto Rico (i) gift tax with respect to
donors who are residents of Puerto Rico at the time the gift is made and
(ii) estate tax with respect to estates of decedents who are residents of
Puerto Rico at the time of death, excluding, in each case, United States
citizens who acquired their United States citizenship other than by reason
of birth or residence in Puerto Rico.

11. Assuming that the Partnership complies with the source of income
representations, warranties and covenants contained in the Loan Agreement,
then:

a. Interest received or accrued on the Bonds is excludable from
gross income pursuant to Section 933(1) of the Code if the holder of the
Bonds is an individual who is a bona fide resident of Puerto Rico during
the entire taxable year in which the interest is received or accrued.

A-2

<PAGE>

<PAGE>
b. Interest received or accrued on the Bonds is not subject to
United States federal income tax if the holder of the Bonds is a
corporation organized under the laws of Puerto Rico or any foreign
country and such interest is not effectively connected with the conduct
of a trade or business in the United States by such corporation.

12. Interest on the Bonds is not excluded from the gross income of the
recipient thereof for United States federal income tax purposes under
Section 103(a) of the Code.

United States taxpayers, other than individuals who are bona fide
residents of Puerto Rico during the entire taxable year, will be subject to
United States federal income tax on gain realized upon the sale or exchange
of the Bonds. Pursuant to Notice 89-40, 1989-1 CB 681, gain on the sale of
the Bonds (not including original issue discount accruing under the Code as
of the date of such sale or exchange) by an individual who is bona fide
resident of Puerto Rico for purposes of Section 865(g)(1) of the Code will
constitute income from sources within Puerto Rico and will qualify for the
exclusion provided in Section 933(1) of the Code, provided that the Bonds
do not constitute inventory property in such individual's hands.

Ownership of the Bonds may result in having a portion of the interest
expense allocable to interest on the Bonds disallowed for purposes of
computing the regular tax and the alternative minimum tax for Puerto Rico
income tax purposes.

This opinion is limited to the above, and we express no other opinion
regarding Puerto Rico or United States tax consequences arising from ownership
or disposition of the Bonds.

This letter is furnished by us solely for the benefit of the Authority and
the holders from time to time of the Bonds and may not be relied upon by any
other person.

Respectfully submitted,

A-3

<PAGE>

<PAGE>
_____________________________ _____________________________
_____________________________ _____________________________

NONE OF EL CONQUISTADOR, AFICA OR THE UNDERWRITERS HAVE AUTHORIZED ANY
PERSON TO MAKE A STATEMENT THAT DIFFERS FROM WHAT IS IN THIS OFFICIAL STATEMENT
AND PROSPECTUS. IF ANY PERSON DOES MAKE A STATEMENT THAT DIFFERS FROM WHAT IS IN
THIS OFFICIAL STATEMENT AND PROSPECTUS, YOU SHOULD NOT RELY ON IT. THIS OFFICIAL
STATEMENT AND PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO
BUY THE BONDS IN ANY JURISDICTION THE OFFER OR SALE IS NOT PERMITTED. THE
INFORMATION IN THIS OFFICIAL STATEMENT AND PROSPECTUS IS COMPLETE AND ACCURATE
AS OF ITS DATE, BUT THE INFORMATION MAY CHANGE AFTER THAT DATE.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary.................................................................................................... 3
Risk Factors............................................................................................... 12
Use of Proceeds............................................................................................ 21
El Conquistador Resort & Country Club...................................................................... 22
El Conquistador Partnership ............................................................................... 30
Security Ownership of Management and Certain Beneficial Owners............................................. 32
Management of El Conquistador Partnership ................................................................. 35
Selected Financial Data.................................................................................... 39
Management's Discussion and Analysis
of Financial Condition and Results
of Operations............................................................................................ 41
Legal Proceedings.......................................................................................... 50
Policy with Respect to Certain Activities.................................................................. 50
Investment Objectives and Policies......................................................................... 51
Policies with Respect to Certain Transactions.............................................................. 51
Certain Relationships and Related Transactions............................................................. 52
The Bonds.................................................................................................. 53
Summary of the Loan Agreement.............................................................................. 60
Summary of the Trust Agreement............................................................................. 65
AFICA...................................................................................................... 70
Government Development Bank for
Puerto Rico.............................................................................................. 71
Tax Consequences........................................................................................... 72
Rating..................................................................................................... 73
Legal Investment........................................................................................... 73
Underwriting............................................................................................... 73
Legal Matters.............................................................................................. 74
Continuing Disclosure Covenant............................................................................. 74
Reports of El Conquistador
Partnership ............................................................................................. 76
Experts.................................................................................................... 76
Glossary................................................................................................... 77
Miscellaneous.............................................................................................. 77
Index to Financial Statements.............................................................................. F-1
Form of Opinion of Bond Counsel............................................................................ A-1
</TABLE>

------------------------

UNTIL ALL DEALERS EFFECTING TRANSACTIONS IN THE BONDS,
WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

$105,200,000

AFICA
TOURISM REVENUE BONDS,
1999 SERIES A
(EL CONQUISTADOR
RESORT PROJECT)

--------------------------------------
OFFICIAL STATEMENT
AND PROSPECTUS
--------------------------------------

CITICORP FINANCIAL
SERVICES CORPORATION

_____________________________ _____________________________
_____________________________ _____________________________

<PAGE>

<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 31. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than
underwriting commissions. All of the amounts shown are estimates except for the
Securities and Exchange Commission registration fee.

<TABLE>
<CAPTION>
ITEM AMOUNT
---- --------

<S> <C>
SEC registration fee.............................................................. $ 30,946
Printing expenses.................................................................
Accounting fees and expenses......................................................
Legal fees and expenses...........................................................
Trustee fees...................................................................... 30,000
AFICA fees........................................................................ 526,000
Miscellaneous expenses............................................................
--------
TOTAL........................................................................ $
--------
--------
</TABLE>

ITEM 32. SALES TO SPECIAL PARTIES.

Not applicable.

ITEM 33. RECENT SALES OF UNREGISTERED SECURITIES.

Not applicable.

ITEM 34. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Partnership Agreement of El Conquistador Partnership L.P., S.E.
provides that no general partner and none of its officers, directors, partners,
employees or agents, whether acting as a general partner, a member of the
Development Committee (as defined in the Partnership Agreement) or otherwise,
has any liability to El Conquistador or any other partner for any acts performed
by such general partner, officer, director, partner, employee or agent, by or on
behalf of El Conquistador in its capacity as such except for gross negligence or
willful misconduct. The Partnership Agreement of El Conquistador also provides
that the liability of each limited partner is limited to its capital
contribution and that no limited partner as such has any other liability to
contribute money to, or in respect of the liabilities or obligations of, El
Conquistador, nor is any limited partner as such personally liable for any
obligations of El Conquistador except as otherwise provided by law.

Each of the general partner and limited partners of El Conquistador will be
a Delaware corporation at the time of the offering.

Each partner's authority to indemnify its respective officers and directors
will be governed by the provisions of Section 145 of the General Corporation Law
of the State of Delaware and by the Certificate of Incorporation of such
partner. The Certificate of Incorporation of each partner will provide that it
shall, to the fullest extent permitted by Section 145 of the Delaware General
Corporation Law, (1) indemnify any and all persons whom it shall have power to
indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and (2)
advance expenses to any and all said persons, and that such indemnification and
advances shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in their official
capacities and as to action in another capacity while holding such offices, and
shall continue as to persons who have ceased to be directors, officers,
employees or agents and shall inure to the benefit of the heirs, executors and

II-1

<PAGE>

<PAGE>
administrators of such person. In addition, the Certificate of Incorporation of
each partner will provides for the elimination of personal liability of
directors of such partner to such partner or its stockholders for monetary
damages for breach of fiduciary duty as a director, to the fullest extent
permitted by the Delaware General Corporation Law, as amended and supplemented.

ITEM 35. TREATMENT OF PROCEEDS FROM STOCK BEING REGISTERED.

Not applicable.

ITEM 36. FINANCIAL STATEMENT AND EXHIBITS.

(a) Financial Statements.

<TABLE>
<S> <C>
EL CONQUISTADOR PARTNERSHIP L.P.
Pro Forma Condensed Financial Statements (Unaudited)
Introduction.......................................................................................... F-2
Pro Forma Condensed Balance Sheet as of December 31, 1998............................................. F-3
Pro Forma Condensed Statement of Operations for the Fiscal Year Ended December 31, 1998............... F-5
Audited Financial Statements
Report of Independent Auditors........................................................................ F-7
Balance Sheets at December 31, 1998 and 1997.......................................................... F-8
Statements of Operations for the Period of March 1, 1998 to December 31, 1998 (successor partnership),
for the Period of January 1, 1998 to February 28, 1998, and for the Fiscal Years Ended December 31,
1997 (9 Months) and March 31, 1997 (predecessor partnership)........................................ F-9
Statements of Partners' Capital (Deficiency) at April 1, 1996, March 31, 1997, December 31, 1997,
February 28, 1998 and December 31, 1998.............................................................. F-10
Statements of Cash Flows for the Period of March 1, 1998 to December 31, 1998 (successor partnership),
for the Period of January 1, 1998 to February 28, 1998, and for the Fiscal Years Ended December 31,
1997 (9 Months) and March 31, 1997 (predecessor partnership)......................................... F-11
Notes to Financial Statements......................................................................... F-12

II-2

<PAGE>

(b) Exhibits.

<TABLE>
<S> <C>
*1 -- Contract of Purchase among El Conquistador Partnership L.P., S.E., Citicorp Financial Services
Corporation, PaineWebber Incorporated of Puerto Rico, Salomon Smith Barney Inc. and Puerto Rico
Industrial, Tourist, Educational, Medical and Environmental Control Facilities Authority ('AFICA').
'D'3.1 -- El Conquistador Partnership L.P. Venture Agreement dated January 12, 1990 between WKA El Con Associates
and Kumagai Caribbean, Inc., as amended May 4, 1992, March 31, 1998 and April 29, 1998.
'D'3.2 -- Certificate of Limited Partnership, as amended, of El Conquistador Partnership L.P.
*3.3 -- Amended and Restated Partnership Agreement of El Conquistador Partnership L.P., S.E.
3.4 -- Amendment to Certificate of Limited Partnership of El Conquistador Partnership L.P.
*3.5 -- Amendment to Certificate of Limited Partnership of El Conquistador Partnership L.P., S.E.
*4.1 -- Loan Agreement between AFICA and El Conquistador Partnership L.P., S.E.
*4.2 -- Trust Agreement between AFICA and Banco Santander Puerto Rico, as trustee.
*4.3 -- Serial Bond (included in Exhibit 4.2 hereof).
*4.4 -- Term Bond (included in Exhibit 4.2 hereof).
*5.1 -- Opinion of Shack & Siegel, P.C. with respect to legality of securities being registered.
*5.2 -- Opinion of McConnell Valdez with respect to the legality of the securities being registered.
'D'8 -- Opinion of Fiddler Gonzalez & Rodriguez, LLP, with respect to certain tax matters included as Appendix
A to the official statement and prospectus.
'D'10.1 -- El Conquistador Partnership L.P. Development Services and Management Agreement dated January 12, 1990
between El Conquistador Partnership L.P. and Williams Hospitality Management Corporation (now known as
Williams Hospitality Group Inc.), as amended as of September 30, 1990 and January 31, 1991.
'D'10.2 -- Deed of Lease dated December 15, 1990 by Alberto Bachman Umpierre and Lilliam Bachman Umpierre to El
Conquistador Partnership L.P.
'D'10.3 -- Letter of Credit and Reimbursement Agreement dated as of February 7, 1991 between El Conquistador
Partnership L.P. and The Mitsubishi Bank, Limited acting through its New York Branch (now known as The
Bank of Tokyo-Mitsubishi, Ltd.) and the Irrevocable Transferable Standby Letter of Credit dated
February 7, 1991 issued pursuant thereto.
'D'10.4 -- First Amendment to the Letter of Credit and Reimbursement Agreement dated as of May 5, 1992 between El
Conquistador Partnership L.P., WKA El Con Associates, Kumagai Caribbean, Inc. and The Mitsubishi Bank,
Limited acting through its New York Branch (now known as The Bank of Tokyo-Mitsubishi, Ltd).
'D'10.5 -- Assignment and Modification Agreement dated as of August 3, 1998 among El Conquistador Partnership
L.P., Citicorp Real Estate, Inc., Banco Popular de Puerto Rico, as trustee, AFICA and The Mitsubishi
Bank, Limited acting through its New York Branch (now known as The Bank of Tokyo-Mitsubishi, Ltd).
'D'10.6 -- Replacement Reserve Agreement dated as of August 3, 1998 between El Conquistador Partnership L.P. and
Citicorp Real Estate, Inc.
'D'10.7 -- Debt Service Reserve Agreement (Citicorp Real Estate, Inc.) dated as of August 3, 1998 between El
Conquistador Partnership L.P. and Citicorp Real Estate, Inc.
'D'10.8 -- Debt Service Reserve Agreement (Government Development Bank) dated as of August 3, 1998 between El
Conquistador Partnership L.P. and Citicorp Real Estate, Inc.
'D'10.9 -- Environmental Indemnity Agreement dated as of August 3, 1998 by El Conquistador Partnership L.P. and
Patriot American Hospitality, Inc. in favor of Citicorp Real Estate, Inc.
'D'10.10 -- Security Agreement dated as of August 3, 1998 between El Conquistador Partnership L.P. and Citicorp
Real Estate, Inc.
</TABLE>

II-3

<PAGE>

<TABLE>
<S> <C>
'D'10.11 -- Assignment of Leases and Rents dated as of August 3, 1998 by El Conquistador Partnership L.P. to
Citicorp Real Estate, Inc.
'D'10.12 -- Assignment of Licenses, Permits and Contracts dated as of August 3, 1998 by El Conquistador Partnership
L.P. to Citicorp Real Estate, Inc.
'D'10.13 -- Assignment of Management Agreement and Subordination of Management Fees dated as of August 3, 1998 by
El Conquistador Partnership L.P. to Citicorp Real Estate, Inc. and acknowledged and consented to by
Williams Hospitality Group Inc.
'D'10.14 -- Promissory Note dated August 3, 1998 in the aggregate principal amount of $32,021,172 made by El
Conquistador Partnership L.P. in favor of Posadas de Puerto Rico Associates, Incorporated.
'D'10.15 -- Loan Agreement dated February 7, 1991 between The Government Development Bank for Puerto Rico and El
Conquistador Partnership L.P.
'D'10.16 -- First Amendment to Loan Agreement dated May 5, 1992 between The Government Development Bank for Puerto
Rico and El Conquistador Partnership L.P.
'D'10.17 -- Second Amendment to Loan Agreement dated as of October 4, 1996 between The Government Development Bank
for Puerto Rico and El Conquistador Partnership L.P.
'D'10.18 -- Management Agreement Subordination and Attornment Agreement dated as of February 7, 1991 between
Williams Hospitality Management Corporation (now known as Williams Hospitality Group Inc.) and The
Mitsubishi Bank, Limited acting through its New York Branch (now known as The Bank of Tokyo-Mitsubishi,
Ltd).
'D'10.19 -- Collateral Pledge Agreement dated as of February 7, 1991 among El Conquistador Partnership L.P., AFICA
and The Mitsubishi Bank, Limited acting through its New York Branch (now known as The Bank of
Tokyo-Mitsubishi, Ltd).
'D'10.20 -- Mortgage dated February 7, 1991 by El Conquistador Partnership L.P. in favor of AFICA.
'D'10.21 -- Deed of Mortgage dated February 7, 1991 by El Conquistador Partnership L.P. in favor of The Government
Development Bank for Puerto Rico.
'D'10.22 -- Leasehold Mortgage dated February 7, 1991 by El Conquistador Partnership L.P. in favor of AFICA.
'D'10.23 -- Deed of Leasehold Mortgage dated February 7, 1991 by El Conquistador Partnership L.P. in favor of The
Government Development Bank for Puerto Rico.
'D'10.24 -- Deed of Segregation and Ratification of Lease dated May 28, 1991 between Alberto Bachman Umpierre and
Lilliam Bachman Umpierre, and El Conquistador Partnership L.P.
'D'10.25 -- Amendment to Reimbursement Agreement and Ratification of Guaranties dated as of November 3, 1998 among
El Conquistador Partnership L.P., Patriot American Hospitality, Inc. and Citicorp Real Estate, Inc.
*10.26 -- Continuing Disclosure Agreement between El Conquistador Partnership L.P., S.E. and Banco Santander
Puerto Rico, as trustee.
*10.27 -- Master Security Agreement between El Conquistador Partnership L.P., S.E. and Banco Santander Puerto
Rico, as trustee on behalf of and for the benefit of AFICA.
*10.28 -- Assignment of Leases and Rents and Security Agreement between El Conquistador Partnership L.P., S.E.
and Banco Santander Puerto Rico, as trustee on behalf of and for the benefit of AFICA.
*10.29 -- Assignment of Hotel Management Agreement between El Conquistador Partnership L.P., S.E. and Banco
Santander Puerto Rico, as trustee on behalf of and for the benefit of AFICA.
*10.30 -- Mortgage made by El Conquistador Partnership L.P., S.E. in favor of Banco Santander Puerto Rico, as
trustee on behalf of and for the benefit of AFICA.
*10.31 -- Leasehold Mortgage made by El Conquistador Partnership L.P., S.E. in favor of Banco Santander Puerto
Rico, as trustee on behalf of and for the benefit of AFICA.
*10.32 -- Mortgage Notes Pledge and Security Agreement between El Conquistador Partnership L.P., S.E. and Banco
Santander Puerto Rico, as trustee on behalf of and for the benefit of AFICA.
</TABLE>

II-4

<PAGE>

<TABLE>
<S> <C>
10.33 -- Amended and Restated Management Agreement between El Conquistador Partnership L.P. and Williams
Hospitality Group Inc.
10.34 -- Form of El Conquistador Resort and Country Club Condominium Unit Management and Rental Agreement.
10.35 -- Amendment to Reimbursement Agreement and Ratification of Guaranties dated as of January 29, 1999 among
El Conquistador Partnership L.P., Patriot American Hospitality, Inc. and Citicorp Real Estate, Inc.
10.36 -- Assignment of Management Agreement and Subordination of Management Fees dated as of January 1, 1999 by
El Conquistador Partnership L.P. to Citicorp Real Estate, Inc. and acknowledged and consented to by
Williams Hospitality Group Inc.
10.37 -- Letter Agreement dated March 31, 1999 among El Conquistador Partnership L.P., Patriot American
Hospitality, Inc. and Citicorp Real Estate, Inc.
12 -- Statement with respect to computation of ratios.
23.1 -- Consent of Ernst & Young LLP with respect to El Conquistador Partnership L.P., WKA El Con Associates
and WHG El Con Corp.
23.2 -- Consent of Ernst & Young LLP with respect to Conquistador Holding, Inc.
*23.3 -- Consent of McConnell Valdez (contained in their opinion filed as Exhibit 5.2 hereto).
23.4 -- Consent of Fiddler Gonzalez & Rodriguez, LLP.
*23.5 -- Consent of Shack & Siegel, P.C. (contained in their opinion filed as Exhibit 5.1 hereto).
'D'24 -- Powers of Attorney.
'D'25 -- Statement of Eligibility of Trustee (filed separately on January 13, 1999).
27 -- Financial Data Schedule (filed with EDGAR version only).
</TABLE>

- ------------

'D' Previously filed.

* To be filed by amendment.

ITEM 37. UNDERTAKINGS.

(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

(i) The undersigned registrant hereby undertakes that:

1. For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(l) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

2. For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-5

<PAGE>

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-11 and has duly caused this Amendment No. 2 to
the Registration Statement (333-65889) to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Dallas, Texas on the 15th
day of April, 1999.

EL CONQUISTADOR PARTNERSHIP L.P., S.E.
(Registrant)

By: CONQUISTADOR HOLDING, INC.

By: /s/ JAMES D. CARREKER
...................................
NAME: JAMES D. CARREKER
TITLE: CHIEF EXECUTIVE OFFICER

POWER OF ATTORNEY

Pursuant to the Securities Act of 1933, this Amendment No. 2 to the
Registration Statement (333-65889) has been signed below by the following
persons in the capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE CAPACITIES IN WHICH SIGNED DATE
--------- -------------------------- ----

<C> <S> <C>
/s/ JAMES D. CARREKER Chief Executive Officer (Principal Executive April 15, 1999
......................................... Officer) of the Registrant and Director of
JAMES D. CARREKER Conquistador Holding, Inc.

/s/ LAWRENCE S. JONES Executive Vice President and Treasurer April 15, 1999
......................................... (Principal Financial Officer and Principal
LAWRENCE S. JONES Accounting Officer) of the Registrant and
Director of Conquistador Holding, Inc.

</TABLE>

II-6

STATEMENT OF DIFFERENCES
------------------------

The trademark symbol shall be expressed as ............................ 'TM'
The registered trademark symbol shall be expressed as ................. 'r'
The dagger symbol shall be expressed as ............................... 'D'

<PAGE>

CERTIFICATE OF AMENDMENT

CERTIFICATE OF LIMITED PARTNERSHIP

EL CONQUISTADOR PARTNERSHIP L.P.

(A DELAWARE LIMITED PARTNERSHIP)

The undersigned, being a general partner of EL CONQUISTADOR PARTNERSHIP
L.P., a Delaware limited partnership (the "Partnership"), does hereby certify as
follows:

1. The name of the Partnership is EL CONQUISTADOR PARTNERSHIP L.P.

2. The Certificate of Limited Partnership of the Partnership (the
"Certificate") was filed in the Office of the Secretary of State of the State of
Delaware on January 16, 1990, and was amended by Certificates of Amendment filed
on March 21, 1991, on March 5, 1992 and on May 5, 1998, respectively.

3. This Certificate of Amendment is filed (a) to reflect the change of
the name of the Partnership to EL CONQUISTADOR PARTNERSHIP L.P., S.E. and (b)
pursuant to the rules promulgated under the Limited Partnership Act.

4. Item 1 of the Certificate is hereby amended to read as follows:

"1. The name of the Partnership is EL CONQUISTADOR
PARTNERSHIP L.P., S.E."

IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment of the Certificate of Limited Partnership this 14th day of April,
1999.

CONQUISTADOR HOLDING, INC., a
Delaware corporation, a general partner

By: /s/ Larry Vitale
----------------------------------
Name: Larry Vitale
Title: Vice President

<PAGE>

MANAGEMENT AGREEMENT

EL CONQUISTADOR HOTEL

AMENDED AND RESTATED MANAGEMENT AGREEMENT

THIS AMENDED AND RESTATED MANAGEMENT AGREEMENT ("Agreement") is made
and entered into as of January 1, 1999 (the "Effective Date") by and between EL
CONQUISTADOR PARTNERSHIP L.P., a Delaware limited partnership, having an office
at 6063 East Isla Verde Avenue, Carolina, Puerto Rico 00979 (the "Owner") and
WILLIAMS HOSPITALITY GROUP INC., a Delaware corporation, having an office at
6063 East Isla Verde Avenue, Carolina, Puerto Rico 00979 (the "Manager").

RECITALS:

Owner owns fee simple title to the Site (hereinafter defined) and all
improvements now situated thereon.

Owner desires to retain Manager's services in managing and operating
the hotel situated on the Site and providing certain services in respect of
certain condominium units situated adjacent to the Site, and Manager is willing
to provide such services, all upon the terms and conditions set forth in this
Agreement. For and in consideration of the premises and of the mutual covenants
and agreements set forth herein, Owner and Manager agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Defined Terms. Certain terms in this Agreement have been
given specially defined meanings. The defined terms may be used in the singular
or plural or in varying tenses or forms, but such variations shall not affect
their defined meaning so long as they are written with initial capital letters.

Section 1.2 Definitions. As used herein, the following terms shall have
the respective meanings indicated (reference also is made to the Addendum for
certain other defined terms used in this Agreement):

Addendum shall mean the Addendum to Management Agreement attached to
this Agreement.

-1

<PAGE>

MANAGEMENT AGREEMENT

Affiliate shall mean (a) any person or entity that directly or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with another person or entity, (b) any other person that
owns, beneficially, directly or indirectly, ten percent or more of the
outstanding capital stock, shares or equity interests of such person, or (c) any
officer, director, employee, partner or trustee of such person or any person
controlling, controlled by or under common control with such person (excluding
trustees and persons serving in similar capacities who are not otherwise an
Affiliate of such person). The term "person" means and includes individuals,
corporations, general and limited partnerships, limited liability companies,
stock companies or associations, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts, or other entities
and governments and agencies and political subdivisions thereof. For the
purposes of this definition, "control" (including the correlative meanings of
the terms "controlled by" and "under common control with"), as used with respect
to any person, shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such person,
through the ownership of voting securities, partnership interest or other equity
interests, by contract or otherwise. Without limiting the foregoing, an
Affiliate of Manager or Owner shall include each of Patriot American
Hospitality, Inc., Wyndham International, Inc. and their respective Affiliates.

Annual Plan shall mean an annual plan for the operation of the Project
prepared by the Manager and approved by Owner in accordance with Section 6.1,
consisting of the Operating Budget, Capital Improvements Budget and FF&E Budget
and a description or narrative which shall reasonably describe the methods to be
employed and the strategies to be adopted in order to achieve the results set
forth in such Budgets. For purposes of the foregoing, Owner and Manager
acknowledge that Manager has only limited responsibilities in respect of the
Condominiums, as provided in Section 2.1.

Average Monthly Management Fee shall mean (a) after this Agreement has
been in effect for a period of at least twelve (12) calendar months, one-twelfth
(1/12) of the total Management Fees for the twelve (12) full calendar months
immediately preceding the event requiring a determination of the Average Monthly
Management Fee or (b) prior to such time as this Agreement has been in effect
for twelve (12) calendar months, the monthly average of the Management Fees for
the number of full calendar months during which this Agreement has been in
effect.

Base Fee shall have the meaning provided therefor in the Addendum.

Base Rate shall mean the prime rate (or base rate) reported in the
Money Rates column or comparable section of The Wall Street Journal as the rate
then in effect for corporate loans at large U.S. money center commercial banks,
whether or not such rate has actually been charged by any such bank. If no such
rate is reported in The Wall Street Journal or if such rate is discontinued,
then Base Rate shall mean such other successor comparable rate as Owner and
Manager may agree.

-2

<PAGE>

MANAGEMENT AGREEMENT

Bond Documents shall mean, collectively, all of those certain documents
evidencing or relating to the issuance and repayment of those certain Puerto
Rico Industrial, Tourist, Educational, Medical and Environmental Control
Facilities Financing Authority Tourism Revenue Refunding Bonds, 1998 Series A
(El Conquistador Resort Project).

Capital Improvements shall mean any and all major alterations and
improvements to the Hotel and all major repairs and replacements to the
structural, mechanical, electrical, HVAC, plumbing or vertical transportation
elements of the Hotel other than certain non-routine repairs and maintenance to
the Project which are normally capitalized under generally accepted accounting
principles.

Capital Improvements Budget shall mean each annual budget prepared by
the Manager and approved by Owner as part of the Annual Plan, reflecting the
estimated costs for all Capital Improvements which in the reasonable opinion of
Manager are necessary to keep and maintain the Project during the applicable
Operating Year in good condition and in keeping with the Operating Standards.

Condemnation shall mean the acquisition of all or any portion of the
Project by any Governmental Authority having the power of condemnation or
eminent domain, by compulsory acquisition, conveyance in lieu of or under threat
of condemnation or like procedure.

Condominium Base Fee shall have the meaning provided therefor in the
Addendum.

Condominium Marketing Contribution shall have the meaning provided
therefor in Section 7.4.

Condominiums shall mean and include the condominiums (known as the "Las
Casitas" condominiums) situated adjacent to the Site. Manager has only limited
responsibilities in respect of the Condominiums, as provided in Section 2.1.

Default Rate shall mean the lesser of (i) the Base Rate plus four
percent (4%) or (ii) the highest lawful rate permitted by applicable Legal
Requirements.

Executive Personnel shall mean all or any one of the following: general
manager, assistant general manager, director of food and beverage, director of
sales, director of marketing, controller and any other key executive of the
Project designated by Manager.

-3

<PAGE>

MANAGEMENT AGREEMENT

Force Majeure shall mean acts of God, war, insurrection, civil
commotion, riots, strikes, lockouts, labor unrest embargoes, shortages of labor
or materials specified or reasonably necessary in connection with the
construction, refurbishment, equipping, ownership or management of the Project
or the Condominiums, power failure, fire, unavoidable casualties, Condemnation,
failure of any applicable Governmental Authority to issue required Governmental
Permits and any other occurrence, event or condition beyond the reasonable
control of Owner or Manager, whichever shall be applicable, provided that it is
an extraordinary (as opposed to a routine or cyclical) material event, and
provided further, that lack of funds shall not be deemed a cause beyond the
reasonable control of either party hereto unless such lack of funds is caused by
the breach of the other party's obligation to perform any obligations of such
other party under this Agreement.

FF&E shall mean all furniture, fixtures, furnishings and specialized
equipment and systems (exclusive of Operating Equipment) necessary or customary
(now or in the future) in the reasonable opinion of Manager in order to operate
the Project in accordance with the terms of this Agreement and the Operating
Standards, including but not limited to all equipment required for the operation
of kitchens, laundries, dry cleaning facilities and bars, special lighting and
other equipment, signs, carpets, drapes, shades, tapestries, pictures,
paintings, beds, mattresses, chairs, desks, tables, sofas, wall coverings,
televisions, radios, intercoms, telephones and office equipment and machinery.

FF&E Budget shall mean each annual budget prepared by the Manager and
approved by Owner as part of the Annual Plan, reflecting the estimated costs and
expenses for all FF&E which in the reasonable opinion of Manager are necessary
or customary in order to operate the Project during the applicable Operating
Year in accordance with the terms of this Agreement and the Operating Standards.

Governmental Authority shall mean the United States of America, any
foreign nation, any city, county, state, province, dominion, district,
department, territory or other political division thereof, or any political
subdivision of any of the foregoing, and any agency, department, commission,
board, bureau, court or instrumentality of any of them which now or hereafter
has jurisdiction over the Owner, the Manager, any part of the Project or the
Condominiums or operation or management of the Project or the Condominiums.

Governmental Permits shall mean all certificates, licenses and permits
from any Governmental Authority required to evidence full compliance by Owner or
Manager with all Legal Requirements or required to evidence conformance of the
Project and the Condominiums with all Legal Requirements.

Gross Revenues in respect of any period shall mean all revenues,
receipts and income of every kind derived directly or indirectly during such
period from all or any part of the Project and the Condominiums (but with
respect to revenues from the Condominiums and the casino, limited as

-4

<PAGE>

MANAGEMENT AGREEMENT

provided in clause (i) below), as finally determined on an accrual basis in
accordance with the Uniform System of Accounts and generally accepted accounting
principles consistently applied, including but not limited to (i) all rentals
and charges for guest rooms, suites, meeting rooms, conference rooms, ballrooms
and other public rooms, including but not limited to all charges for room
reservations and deposits not refunded to guests, provided, however, that with
respect to the Condominiums, Gross Revenues shall mean only the net revenues to
the Owner and, with respect to revenues from the casino, Gross Revenues shall
mean only the "net wins"; (ii) all sales of food and beverages, whether served
on or off the premises, including but not limited to all charges for room
service, banquets and catering fees; (iii) all sales or leases of miscellaneous
and sundry merchandise and services including but not limited to laundry, valet,
garage, parking, telephone, telex, check room, vault and other miscellaneous
services, cover and minimum charges for guest entertainment, fees charged for
the temporary use of facilities at the Project, all sales through vending
machines and all other receipts from business conducted by, through or under
Manager at, in, on, about or from the Project; (iv) all business interruption
insurance awards received in respect of the Project or the Condominiums; (v)
Condemnation awards for temporary use of the Project or the Condominiums; and
(vi) all rentals, fees, commissions, concessions and other payments derived from
lessees, licensees and concessionaires. Gross Revenues for any such period shall
not include:

(1) Excise, sales and use taxes or similar impositions collected
directly from patrons or guests or included as part of the sales price of any
goods or services and paid to any Governmental Authority, such as gross
receipts, admission or similar equivalent taxes;

(2) Sales and other receipts of tenants, licensees and concessionaires,
except to the extent payable as rent under a lease or occupancy agreement;

(3) Insurance proceeds (subject, however, to the inclusion of business
interruption insurance awards as provided in clause (iv) above);

(4) Condemnation awards, except as provided in clause (v) above;

(5) Proceeds from sale of the Project; and

(6) Proceeds from the sale of golf club memberships.

Gross Room Revenues in respect of any period shall mean all revenues
derived during such period, as finally determined on an accrual basis in
accordance with the Uniform System of Accounts and generally accepted accounting
principles consistently applied, from (i) rentals and charges for guest rooms
and suites at the Project and in respect of the Condominiums ("Rooms"); (ii) all
business interruption insurance awards in respect of the Rooms; and (iii)
Condemnation awards for temporary use of the Rooms.

-5

<PAGE>

MANAGEMENT AGREEMENT

Hazardous Materials shall mean (i) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et
seq.), as amended from time to time, and regulations promulgated thereunder;
(ii) any "hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et
seq.), as amended from time to time, and regulations promulgated thereunder
(including petroleum-based products as described therein); (iii) asbestos in any
quantity or form which would subject it to regulation under any applicable
environmental law; (iv) polychlorinated biphenyls; (v) any substance, the
presence of which on the Project is prohibited by any Legal Requirements; (vi)
underground storage tanks; and (vii) any other substance which by any Legal
Requirements requires special handling in its collection, storage, treatment or
disposal. In no event, however, shall the term "Hazardous Materials" include (1)
chemicals routinely used in office areas or (2) janitorial supplies, cleaning
fluids or chemicals necessary for the day-to-day operation or other maintenance
of the Project or the Condominiums if the disposition, handling, storage or
quantity of the items described in (1) and (2) herein are at all times in
compliance with all applicable Legal Requirements.

Hazardous Materials Contamination shall mean the contamination (whether
presently existing or hereafter occurring) of the improvements, facilities,
soil, groundwater, air or other elements on or of the Project or the
Condominiums by Hazardous Materials, or the contamination of the buildings,
facilities, soil, groundwater, air or other elements on or of any other property
as a result of Hazardous Materials at any time (whether before or after the date
of this Management Agreement) emanating from the Project or the Condominiums.

Hotel shall mean and include (i) the hotel situated on the Site, all
restaurants and other facilities therein and all related improvements, equipment
and facilities and (ii) all FF&E, Inventories and Operating Equipment now or
hereafter placed or installed therein.

Hotel Base Fee shall have the meaning provided therefor in the
Addendum.

Hotel Trade Name Fee shall have the meaning provided therefor in the
Addendum. The Hotel Trade Name Fee is payable in consideration of the benefits
to be derived by the Hotel from Manager's use of the "Wyndham" trade name in
connection with Manager's operation of the Hotel pursuant to this Agreement, and
such Fee is in no way intended to confer upon Owner any right in or right to use
such trade name or to otherwise detract from the provisions of Section 13.1.

Hotel Marketing Contribution shall have the meaning provided therefor
in Section 7.3.

Hotel Marketing Services shall have the meaning provided therefor in
Section 7.3.

Impositions shall mean all real estate, personal property, utility,
business or occupation taxes that cannot be passed along to customers of the
Project or the Condominiums and other taxes

-6

<PAGE>

MANAGEMENT AGREEMENT

(other than income, payroll and casino), imposed by any Governmental Authority
which at any time may be assessed, levied or imposed on or with respect to the
Project or the Condominiums.

Income Before Fixed Charges for any period shall mean an amount equal
to total income before fixed charges for such period as calculated pursuant to
the Uniform System of Accounts.

Inventories shall mean all food and beverages, fuel, soap, light bulbs,
mechanical supplies, cleaning supplies, stationery, paper supplies and other
similar consumable and expendable items necessary or customary (now or in the
future) in the reasonable opinion of Manager in order to operate the Project in
accordance with the terms of this Agreement and the Operating Standards.

Legal Requirements shall mean any law, ordinance, order, rule or
regulation of any Governmental Authority and any requirement, term or condition
contained in any restriction or restrictive covenant affecting Owner, Manager,
the Project, the Condominiums or the construction or operation of the Project or
the Condominiums.

Management Fee shall have the meaning provided therefor in the
Addendum.

Mortgage shall mean any mortgage or deed of trust encumbering all or
any portion of the Project or the Condominiums, whether now in existence or
hereafter created.

Mortgagee shall mean the mortgagee or beneficiary (whether one or more)
under any Mortgage.

Operating Accounts shall mean one or more accounts with a bank or banks
designated by Owner and approved by Manager, such approval not to be
unreasonably withheld or delayed and, subject to the requirements of any
Mortgage or the Bond Documents, such account or accounts shall bear a name
identifying the Project and styled Operating Account, into which all funds
advanced to the Project by Owner as working capital or otherwise derived from
the operation of the Project shall be deposited and from which sums shall be
withdrawn in accordance with this Agreement. To the extent required in
connection with its management of the Condominiums, Manager also may establish
Operating Accounts in respect of the Condominiums.

Operating Budget shall mean an annual budget prepared by the Manager
and approved by Owner as part of the Annual Plan, reflecting in reasonable
detail the projected or estimated revenues and expenses in respect of the
Project for the applicable Operating Year.

Operating Equipment shall mean all blankets, linens, uniforms, silver,
china, glassware, crockery, kitchen utensils, cleaning equipment or any other
similar items necessary or customary (now or in the future) in the reasonable
opinion of Manager in order to operate the Project in accordance with the terms
of this Agreement and the Operating Standards.

-7

<PAGE>

MANAGEMENT AGREEMENT

Operating Standards shall mean the operation of the Project in a manner
consistent with (i) the condition of the Project as of the Effective Date (or,
after the completion of any renovation specifically contemplated by this
Agreement, the condition of the Project as of the date of completion of such
renovation) and the condition and level of operation of hotels of comparable
class, standing and location to the Project, (ii) then current market conditions
regarding rental rates and lease terms and conditions with respect to hotels of
comparable class, standing and location to the Project, and (iii) then current
prudent business and management practices applicable to the leasing, operation,
repair, maintenance and management of a hotel comparable in size, character and
location to the Project, including those concerning compliance with applicable
Legal Requirements.

Operating Year shall mean each twelve (12) month period during the Term
commencing on January 1 and ending on December 31, except that the first
Operating Year shall be that period commencing on the Effective Date and ending
on the next succeeding December 31. In the event that this Agreement shall
terminate on a date other than December 31, the last Operating Year hereunder
shall end on the date of termination.

Prior Management Agreement shall have the meaning provided therefor in
Section 13.22.

Project shall mean the Hotel and the Site.

Reimbursable Expenses shall mean all travel, lodging, entertainment,
telephone, telecopy, postage, courier, delivery, employee training and other
expenses incurred by Manager which are directly related to its performance of
this Agreement, other than those incurred in connection with the performance of
Marketing Services, national sales office services and centralized reservation
services provided by Manager.

Reserve shall mean the reserve established pursuant to Section 5.2(b)
of this Agreement, which, subject to the requirements of any Mortgage or the
Bond Documents, shall be deposited in one or more accounts with a bank or banks
designated by Owner and approved by Manager, such approval not to be
unreasonably withheld or delayed, bearing the name of the Project and styled
Repairs and Replacement Account.

Restoration shall mean the repairing, rebuilding and replacing of the
Hotel upon the destruction or damage of the Project or any part thereof or upon
the taking of the Project or any part thereof by Condemnation to a value,
condition and character substantially the same as (in the case of damage or
destruction) or as near as possible to (in the event of Condemnation) the value,
condition and character of the Project immediately prior to such damage,
destruction or Condemnation.

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MANAGEMENT AGREEMENT

Site shall mean that certain tract of land located in the country,
city, county and state, province, dominion, district or territory set forth in
the Addendum, and being more particularly described on Exhibit A to this
Agreement.

Term shall mean that period commencing on the Effective Date and ending
on the fifteenth (15th) anniversary of the last day of the month in which the
Effective Date occurs, unless this Agreement shall be sooner terminated or
extended as herein provided, in which case the word "Term" shall mean such
lesser or extended period of time.

Termination Fee, in respect of any termination of this Agreement
pursuant to which a Termination Fee is payable, shall mean the present value, as
of the date of such termination, of the profit portion of the Management Fees
projected to be paid to Manager for the period from and after such date through
the stated expiration date of the Term. The discount rate to be utilized for
purposes of determining such present value shall be, for each projected
Management Fee payment, the Treasury constant maturity yield value displayed for
the termination date in "Statistical Release H.15(519), Selected Interest Rates"
of the Board of Governors of the Federal Reserve System, or any comparable
successor publication, for actively traded U.S. Treasury securities having a
constant maturity equal to the period of time that will elapse between the
termination date and the projected payment dated for such Management Fee
payment. Such implied yield will be determined, if necessary, by (x) converting
U.S. Treasury bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (y) interpolating linearly between reported
yields.

Uniform System of Accounts shall mean the Uniform System of Accounts
for the Lodging Industry, Ninth Revised Edition, 1996, as adopted by the
American Hotel and Motel Association and all future amendments and supplements
thereto approved by Manager and Owner (such approval not to be unreasonably
withheld or delayed).

ARTICLE II

APPOINTMENT OF MANAGER AND RENEWAL RIGHTS

Section 2.1 Appointment of Manager. Owner hereby appoints Manager as
its sole and exclusive agent to manage and operate the Project and to provide
certain services described herein in respect of the Condominiums during the Term
in accordance with the Operating Standards and the terms and conditions set
forth in this Agreement. Manager agrees to manage the Project and to provide
such services in respect of the Condominiums during the Term as the agent of
Owner in accordance with the Operating Standards and the terms and conditions of
this Agreement. Owner and Manager agree that the agency created by this
Agreement is coupled with an interest and is terminable only in accordance with
the express provisions of this Agreement. Notwithstanding the

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foregoing or any other provision of this Agreement, Manager's responsibilities
in respect of the Condominiums shall include those management responsibilities
(but only those management responsibilities) specifically provided for in those
certain annual service agreements between the individual Condominium owners and
Owner and shall not include any other management or other duties or obligations
(including, but not limited to, any obligations concerning budgeting, the making
of repairs and Capital Improvements, the acquisition of Inventories and
Operating Equipment and the replacement of FF&E).

Section 2.2 Renewal of Term. Upon expiration of the original Term of
this Agreement, it shall be automatically renewed from year to year thereafter
unless terminated by Owner or Manager effective at the end of any such year by
notice in writing to the other given not later than ninety (90) days prior to
the end of such year. Unless otherwise agreed, upon the effective date of any
renewal, the Term of this Agreement and all other terms, covenants and
conditions set forth in this Agreement shall be automatically extended to the
expiration of the applicable renewal term.

ARTICLE III

OPERATION OF THE PROJECT

Section 3.1 Duties and Authority of Manager. Subject to and consistent
with the Operating Standards, Manager shall have exclusive supervision, control
and discretion in the management, maintenance and operation of the Project,
including, but not limited to, the right, power and authority to (a) enter into
such contracts and agreements in the name and at the expense of Owner as Manager
may deem to be reasonably necessary or advisable in connection with the
management, maintenance and operation of the Project; (b) determine and
implement terms of admittance, charges for rooms and commercial space, charges
for entertainment and food and beverages, which right shall specifically allow
Manager to charge varying rates to different customers or groups of customers
and allow Manager, in the exercise of reasonable and sound business judgment
consistent with the Operating Standards, to permit persons to occupy rooms or
suites at the Project at rates lower than published rates or free of charge or
permit persons to dine at the restaurants or lounges located at the Project free
of charge; (c) determine and implement all phases of advertising, promotion and
publicity relating to the Project; (d) determine and implement all employment
policies (including salaries, wages, fringe benefits and other compensation, the
hiring and discharge of employees and the establishment of employee retirement,
severance and other benefit plans); (e) determine and implement credit policies
(including arrangements with credit card organizations); (f) subject to the
requirements of any Mortgage or the Bond Documents, receive, hold and disburse
funds, maintain bank accounts, procure Inventories, Operating Equipment,
supplies and services; (g) engage independent contractors to provide legal,
accounting or other professional or technical services in connection with the
operation of the Project; (h) initiate, settle or otherwise dispose of
litigation or claims which might give rise to litigation, including the
adjustment of insurance claims; and (i) manage and direct generally all
activities

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MANAGEMENT AGREEMENT

incidental to the operation of the Project in the ordinary course of
business. In addition to the foregoing, Manager shall have all authority as may
be required, in Manager's reasonable judgment, to discharge its responsibilities
with respect to the Condominiums. Manager shall operate the Project in a
businesslike and efficient manner and shall operate the Project solely for the
operation of a hotel business (but Manager also shall provide the services
contemplated by Section 2.1 in respect of the Condominiums) and for such other
activities which are customary and usual in connection therewith.

Section 3.2 Leases and Concessions. Neither party hereto, without the
approval of the other party hereto, which shall not be unreasonably withheld or
delayed, shall arrange leases or concessions for any restaurant, food service
operation or any other commercial or other operation in or about the Project.
Any such lease or concession so approved shall be entered into in Owner's name
and shall be executed by Owner. As agent for Owner, Manager shall use all
reasonable efforts to perform or cause to be performed all of Owner's
obligations under all present and future leases and concessions made or granted
with respect to the Project. Manager shall use reasonable efforts to collect all
rents and other sums falling due during the Term under any such leases and
concessions and shall deposit the same in the Operating Accounts.

Section 3.3 Working Capital. Owner shall at all times cause sufficient
funds to be on hand in the Operating Accounts to assure the timely payment of
all current liabilities of the Project, including but not limited to all items
entering into the calculation of Income Before Fixed Charges, all other costs
and expenses incurred in connection with the Project pursuant to this Agreement
and the performance by Manager of its obligations under this Agreement, all
fees, charges and reimbursements payable to Manager hereunder and all amounts
required hereunder to be transferred into the Reserve. In no event shall Owner
permit the balance in the Operating Accounts to be less than an amount equal to
the estimated average monthly operating expenses of the Project as reflected in
the then current Operating Budget. From time to time, upon five (5) days prior
written notice from Manager that such funds are required, Owner shall furnish to
Manager funds which Manager deems reasonably necessary to assure that the
Project shall have adequate working capital as herein provided and to assure
that there shall be adequate working capital for the timely payment of all
current liabilities of the Condominiums (to the extent that Manager's
responsibilities hereunder in respect of the Condominiums include the payment of
any such current liabilities on behalf of, and from funds provided by, Owner).

Section 3.4 Owner to Bear All Expenses. In performing its duties under
any provision of this Agreement and in managing and operating the Project and
providing certain services in respect of the Condominiums, Manager shall act
solely for the account of and as the agent of Owner. All expenses incurred by
Manager in performing its duties hereunder and in managing and operating the
Project and providing such services in respect of the Condominiums shall be
borne exclusively by Owner. To the extent that the funds necessary therefor are
not generated by the operation of the Project, they shall be promptly supplied
by Owner in the manner provided in

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Section 3.3 above. Manager shall in no event be required to advance any of its
funds or utilize Manager's credit for the operation of the Project or the
Condominiums, nor shall Manager be required to incur any liability in connection
therewith, unless Owner shall have furnished Manager with funds necessary for
the discharge thereof.

Section 3.5 Transactions with Affiliates. Manager may engage one or
more of its Affiliates or other related parties to furnish goods or services to
the Project or the Condominiums, provided, however, that the terms of any such
arrangement shall be no less favorable in any material respect to the Project or
the Condominiums than those reasonably obtainable from an unrelated party.
Manager will promptly notify Owner of any such engagement of Manager's
Affiliates. Amounts payable pursuant to such arrangements shall be in addition
to the Management Fee and other amounts payable to Manager under this Agreement.

Section 3.6 Centralized or Pooled Purchasing. Manager may cause the
Project to participate, along with other hotels owned, managed or franchised by
Manager or one of its Affiliates, in one or more centralized or pooled
purchasing programs or arrangements for the procurement of goods or services
used in connection with the operation of the Project, provided, however, that
the terms of any such program or arrangement shall be no less favorable to the
Project in any material respect than those reasonably obtainable from an
unrelated party.

ARTICLE IV

PERSONNEL

Section 4.1 Employment of Personnel. Manager shall be responsible for
and shall have the sole and exclusive right to hire, promote, discharge,
supervise, train, transfer and determine the terms of employment of the
Executive Personnel and, through the Executive Personnel, all other
administrative, service and operating employees of the Project. All such
employees of the Project shall be employees of Manager or one of Manager's
Affiliates. In addition, Manager may, from time to time, assign one or more of
its employees to the staff of the Project on a full-time, part-time or temporary
basis. Notwithstanding the provisions of this Section 4.1 or any other provision
of this Agreement, all costs, expenses and liabilities relating to Project
employees shall be expenses of operating the Project and the responsibility of
Manager for acts or omissions of Project employees shall not extend beyond
responsibility for the gross negligence or willful misconduct of, or the willful
violation of Legal Requirements by, the Executive Personnel. Manager
acknowledges, however, that such Executive Personnel have the duties specified
in the first sentence of this Section 4.1 with respect to other Project
employees.

Section 4.2 Union Negotiations. Manager will negotiate, subject to
Owner's right to have a representative present at any time, with any labor union
lawfully entitled to represent employees of the Project. Manager shall not enter
into any collective bargaining agreements or

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MANAGEMENT AGREEMENT

labor contracts with respect to employees of the Project without the prior
written consent of Owner, which consent shall not be unreasonably withheld or
delayed.

Section 4.3 Payment of Employees. Manager shall be entitled to withdraw
from the Operating Accounts all wages, salaries, fringe benefits and other
compensation paid or payable with respect to all Project employees and Manager
shall pay such compensation directly to such employees.

Section 4.4 Personnel Accommodations. Manager shall decide which, if
any, of the Executive Personnel shall reside at the Project. Manager shall be
permitted to provide free room and board to one member of the Executive
Personnel and his or her family. In addition, Manager shall be permitted to
provide free accommodations and amenities to Manager's employees and
representatives visiting the Project on a temporary basis in connection with the
management and operation of the Project.

Section 4.5 Employee Health Insurance. Subject to reasonable
availability, Manager shall, at no cost to Manager, be responsible for arranging
health insurance coverage for employees of the Project. Subject to the prior
agreement of Owner and Manager and subject to reimbursement of Manager of all
applicable costs and expenses (including, but not limited to, those associated
with compliance with the Consolidated Omnibus Budget Reconciliation Act of 1985
and an exit premium in connection with the termination of such coverage),
Manager may permit the enrollment of some or all of such employees under health
insurance plans maintained by Manager.

ARTICLE V

REPAIRS, MAINTENANCE AND CAPITAL IMPROVEMENTS

Section 5.1 Repairs and Maintenance. During the Term, Manager, at the
expense of Owner, shall take good care of the Project (other than such portions
thereof as are leased to tenants who undertake a duty of repair and maintenance)
and maintain the same in good order and condition and make all repairs thereto
as may be necessary to maintain and operate the Project in accordance with the
Operating Standards; provided, however, that in no event shall the
responsibilities of Manager include the obligation to repair or otherwise
maintain the structural integrity of the Hotel or other matter relating to
defects in design, materials or workmanship in the construction of the Hotel,
all of which shall be the responsibility of Owner.

Section 5.2 Repairs and Replacements.

(a) Subject to the requirements of any Mortgage or the Bond Documents,
Manager shall, from funds derived from the operation of the Project or funds
contributed by Owner, establish the Reserve to cover the cost of (i) additions
to and substitutions, replacements and renewals of FF&E

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MANAGEMENT AGREEMENT

and (ii) certain non-routine repairs and maintenance to the Project which are
normally capitalized under generally accepted accounting principles such as
exterior and interior repainting, resurfacing building walls, floors, roof and
parking areas, replacing folding walls and similar items. Subject to the
requirements of any Mortgage or the Bond Documents, the Reserve shall be
maintained in an interest-bearing account or, if directed by Owner, shall be
invested in short-term obligations approved by Owner and Manager. Subject to the
requirements of any Mortgage or the Bond Documents, all amounts in the Reserve
shall be the property of Owner, and any interest on amounts in the Reserve shall
remain a part of the Reserve. To the extent that Manager shall be required to
pay any income taxes on any interest paid on amounts in the Reserve, the same
shall be payable out of the Reserve.

(b) Subject to the requirements of any Mortgage or the Bond Documents,
once each calendar month Manager shall transfer from the Operating Accounts into
the Reserve an amount equal to four percent (4%) of the Gross Revenues for each
such month during the Term. The amount to be contributed to the Reserve is an
estimate of amounts required for the purposes set forth in Section 5.2(a). The
parties recognize that the passage of time or unforeseen events or conditions
may render such amount insufficient to keep the Reserve at the level required to
maintain the Project in good repair and condition in keeping with the Operating
Standards and this Agreement.

(c) To the extent funds are available in the Reserve or are otherwise
supplied by Owner, Manager shall from time to time make such additions to and
substitutions, replacements and renewals of FF&E and all such non-routine
repairs to the Hotel (as described in Section 5.2(a)(ii) above) as Manager shall
reasonably deem necessary or desirable and Manager shall be entitled to withdraw
funds from the Reserve for such purpose. Proceeds from the sale of FF&E no
longer necessary to the operation of the Project shall be deposited in the
Reserve in addition to the amounts otherwise required to be deposited into the
Reserve under Section 5.2(b). Subject to the requirements of any Mortgage or the
Bond Documents, at the end of each Operating Year, any amounts remaining in the
Reserve shall be carried forward to the next Operating Year, and any amount
remaining in the Reserve upon termination of this Agreement shall be transferred
to Owner.

Section 5.3 Capital Improvements.

(a) Manager shall promptly notify Owner of the need for all Capital
Improvements provided for in the Annual Plan then in effect, whereupon work in
respect of such Capital Improvements will be promptly commenced and completed by
Owner in accordance with plans, schedules and specifications therefor approved
by Manager. Except as otherwise provided herein or in the Annual Plan then in
effect, Manager shall make no Capital Improvements in or to the Project without
the express written approval of Owner. Owner shall not unreasonably withhold its
approval with respect to such Capital Improvements as are required in Manager's
reasonable opinion to keep the Project in a competitive, efficient and
economical operating condition in

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MANAGEMENT AGREEMENT

accordance with the Operating Standards. Notwithstanding the foregoing, if
Manager shall, at any time, believe that (i) a dangerous condition exists at the
Project, (ii) repairs or Capital Improvements are required to comply with any
applicable Legal Requirement or (iii) expenditures are required to remedy any
condition caused by fire, Act of God, flood, earthquake or other like casualty
or other emergency, Manager shall (except in the case of an emergency) notify
Owner and Manager shall as promptly as possible take all steps and make all
expenditures necessary to remedy or cure any such condition or to comply with
any applicable Legal Requirement. Manager shall be entitled to terminate this
Agreement upon sixty (60) days' prior written notice to Owner if Owner fails to
approve any Capital Improvements necessary to allow the Project to be operated
in accordance with the Operating Standards and this Agreement.

(b) The cost of all Capital Improvements made under this Section
(except as otherwise expressly provided in (a) above) shall be borne and paid
for directly by Owner.

Section 5.4 Enforcement of Guaranties and Warranties. Owner shall
furnish to Manager copies of all guaranties and warranties relating to the
Project. Manager shall use all reasonable efforts to enforce all such guaranties
or warranties and Owner shall cooperate with Manager in such efforts.

Section 5.5 Ownership of Replacements. All changes, repairs,
alterations, improvements, renewals or replacements of FF&E and Capital
Improvements to the Project shall be the property of Owner.

ARTICLE VI

ANNUAL PLAN, BOOKS, RECORDS AND REPORTS

Section 6.1 Annual Plan.

(a) At least thirty (30) days prior to the commencement of each
Operating Year (except the first Operating Year), Manager shall submit to Owner
for Owner's written approval the Annual Plan for the following Operating Year.
Manager shall submit the Annual Plan for the first Operating Year within sixty
(60) days after the Effective Date.

(b) Owner shall give its written approval or disapproval of the Annual
Plan not later than thirty (30) days after its submission to Owner by Manager.
Owner's approval of the Annual Plan shall not be unreasonably withheld or
delayed.

(c) If Owner does not approve or disapprove such Annual Plan within
such thirty (30) day period, then Owner shall be deemed to have approved the
Annual Plan as submitted by Manager. If Owner objects to all or any portion of
such Annual Plan, then Owner shall notify

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MANAGEMENT AGREEMENT

Manager of the reasons for its objection, and Owner and Manager shall use their
best efforts to agree in respect of the items to which Owner objects. Should
Owner and Manager not reach agreement on all or any portion of the Annual Plan,
pending agreement being reached, and in the case of the first Operating Year,
during the period prior to submission of the Annual Plan, Manager shall operate
the Project in accordance with the Operating Standards and this Agreement and,
if such disagreement relates to an Operating Year after the first Operating
Year, at rates or levels of expenditures comparable to those of the preceding
Operating Year with suitable adjustments of rates and expenses for such items or
portions thereof as dictated by inflationary factors, seasonality and the
necessity of operating the Project in accordance with the Operating Standards
and this Agreement. The foregoing procedure shall also apply to approval of
proposed revisions to the Annual Plan pursuant to Section 6.1(d).

(d) Manager shall monitor the Annual Plan throughout the Operating
Year. Should Manager consider it necessary to revise the Annual Plan during the
course of the Operating Year, whether due to changed trading climate, unforeseen
capital requirements or for any other reason, Manager shall submit such
revisions to Owner for Owner's approval (which shall not be unreasonably
withheld or delayed), setting forth the reasons for the revisions.

(e) The Operating Budget is intended as, and will represent only, an
estimate of the anticipated results for the Operating Year in question, based
upon assumptions believed by Manager to be reasonable at the time of the
preparation of such Operating Budget, and the same shall not be construed as a
guarantee of actual results which may be experienced during and for such
Operating Year.

Section 6.2 Books and Records; Operating Accounts.

(a) Manager shall keep full and adequate books of account and such
other records as are necessary to reflect the results of operation of the
Project. Such books of account shall be kept in all material respects in
accordance with the Uniform System of Accounts. The books of account and all
other records relating to, or reflecting the operation of, the Project shall be
kept at the Project or at the corporate office of Manager and shall be available
to Owner and its representatives at all reasonable times for examination,
inspection and copying. Upon any termination of this Agreement, all of such
books and records (or copies thereof) shall be turned over to Owner forthwith so
as to insure the orderly continuance of the operation of the Project, but the
books and records through such date of termination shall thereafter be available
to Manager at all reasonable times for inspection, examination and copying.

(b) Manager shall cause all funds advanced to the Project by Owner as
working capital and all funds derived from the operation of the Project to be
deposited in the Operating Accounts. Subject to the requirements of any Mortgage
or the Bond Documents, Manager shall have sole control of the Operating Accounts
and Manager shall be entitled to pay out of the Operating

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MANAGEMENT AGREEMENT

Accounts all costs and expenses incurred in connection with the operation of the
Project, including without limitation all wages, salaries, fringe benefits and
other compensation and expenses relating to Project employees, all costs and
expenditures which Manager is permitted or required to make pursuant to this
Agreement, all fees, charges, reimbursements and other amounts due Manager under
this Agreement and all other amounts required to perform Manager's obligations
hereunder. Checks or other documents of withdrawal drawn upon the Operating
Accounts shall be signed by representatives of Manager or Project employees
designated by Manager. Owner shall be responsible for and shall pay directly
from funds outside the Operating Accounts and the Reserve all costs of Capital
Improvements, as well as the payments and related costs and expenses for which
Owner is responsible pursuant to Section 11.1 hereof. In addition to the
Operating Accounts, Manager shall be entitled to maintain such funds as it deems
necessary in house banks or in petty cash funds at the Project.

Section 6.3 Reports.

(a) On or before the fifteenth (15th) day of each calendar month during
the Term, Manager shall deliver to Owner monthly unaudited financial statements
prepared from the books of account maintained by Manager, consisting of a
balance sheet and a profit and loss statement for the Project for the preceding
calendar month and the Operating Year to date. The monthly financial statements
shall also contain or be accompanied by statements and calculations of the
Management Fee for the preceding calendar month.

(b) Within forty-five (45) days after the end of each Operating Year,
Manager shall cause to be delivered to Owner financial statements for such
Operating Year consisting of at least a balance sheet and related statement of
profit and loss, together with a source and application of funds analysis for
such Operating Year. The annual financial statements shall also include or be
accompanied by a statement showing the calculation of the Management Fee for
such Operating Year. If Owner desires to arrange for the preparation of audited
financial statements for the Project for any Operating Year, Manager shall
cooperate with Owner and the independent auditor (which shall be a national firm
of independent certified public accountants having hotel experience) responsible
for preparing the audited financial statements. If audited financial statements
are prepared for the Project for any Operating Year, such audited financial
statements shall include the statement showing the calculation of the Management
Fee for the applicable Operating Year. The cost of any annual audit shall be an
operating expense of the Project. Unless Owner and Manager agree otherwise, the
annual financial statements shall be conclusive upon the parties and shall be
deemed to be a final determination of the Management Fee for such Operating Year
(and, for such purposes, if audited financial statements are prepared, such
audited financial statements shall control over any previously delivered
unaudited financial statements).

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ARTICLE VII

MANAGEMENT FEE, EXPENSE REIMBURSEMENT AND REMITTANCES TO OWNER

Section 7.1 Management Fee. The Management Fee shall be calculated and
paid as set forth in the Addendum.

Section 7.2 Expense Reimbursement. Owner shall be obligated to
reimburse Manager for all Reimbursable Expenses incurred by it in connection
with the performance of this Agreement. Manager shall submit a monthly invoice
for its Reimbursable Expenses showing in reasonable detail the nature and amount
of such expenses, and such invoices shall be payable within five (5) days after
submission.

Section 7.3 Hotel Marketing, National Sales Office and Centralized
Reservations Services.

(a) To the extent provided generally by Manager for the benefit of the
Hotel and other Wyndham hotels in the same division as the Hotel, Manager will
provide for the Hotel during the Term marketing services (the "Hotel Marketing
Services") consisting of chain-wide and/or division level marketing programs,
marketing collateral, research services, advertising and public relations
efforts.

(b) On or before the tenth (10th) day of each calendar month during the
Term, Owner shall pay or reimburse Manager, for the provision of the Hotel
Marketing Services, an amount to be provided for in the Annual Plan (the "Hotel
Marketing Contribution") that is not less than one and one-half percent (1.5%)
of Gross Room Revenues of the Hotel (or such other amount as may be provided for
in the Annual Plan) for the period from the commencement of the then current
Operating Year to the end of the immediately preceding calendar month or the
date of the expiration or sooner termination of the Term, as the case may be,
less the aggregate amount of monthly payments theretofore paid in respect of the
Marketing Contribution for such Operating Year. Manager in its discretion may
collect less than the amount provided for in the preceding sentence. The Hotel
Marketing Contribution will be collected and applied to pay actual costs
incurred and allocated in respect of the provision of the Hotel Marketing
Services. A marketing budget setting forth the estimated costs and expenses of
the Hotel Marketing Services for each Operating Year shall be set forth in each
Annual Plan delivered under this Agreement. The Hotel Marketing Contribution
shall not include, and Owner shall pay separately, the costs of any local,
regional or property-specific advertising and the costs of any third party
marketing partner programs (such as frequent flyer and similar programs) in
which the Hotel participates that are direct-billed to participating hotels,
such as costs of airline mileage or other direct operating costs to marketing
partners.

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MANAGEMENT AGREEMENT

(c) Manager will collect the Hotel Marketing Contribution payable under
this Agreement and shall expend the same at such time and in such manner as it
reasonably deems appropriate for the provision of the Hotel Marketing Services.
Prior to the expenditure thereof, the collected Hotel Marketing Contributions
may be held or maintained in one or more accounts, any of which also may include
funds other than Hotel Marketing Contributions, but Manager in any event shall
account to Owner for the Hotel Marketing Contribution collected under this
Agreement. Manager will permit Owner access to Manager's records concerning the
holding and expenditure of such Hotel Marketing Contribution at any reasonable
time or times during Manager's regular business hours.

(d) Notwithstanding the foregoing provisions of this Section 7.3, any
service that otherwise would constitute a Hotel Marketing Service covered by the
Hotel Marketing Contribution hereunder instead may be provided on a cost
allocation basis administered in a reasonable and non-discriminatory manner. In
either case, the amount thereof shall be provided for in the Annual Plan.

(e) Owner shall pay the Hotel's allocable share of the cost of
Manager's national sales office efforts for group sales services. The Hotel's
allocable share of Manager's cost of providing group sales services generally
will be computed based on a calculation of the Gross Room Revenues produced by
the group sales efforts of the national sales offices for the Hotel in relation
to the Gross Room Revenues produced by the Group sales efforts of the national
sales offices for all hotels for which such services are provided.

(f) Owner shall pay the Hotel's allocable share of the cost of resort
sales office services provided generally for the Hotel and other Wyndham hotels
in the same division as the Hotel. The costs and expenses of the resort sales
office services shall be allocated among all resort hotels managed by Manager in
a reasonable manner.

(g) Centralized reservation costs incurred in respect of the Hotel
shall be paid or reimbursed on the basis of an initial link-up charge and
subsequent charges based on the cost of handling reservations made and actually
consumed at the Hotel.

Section 7.4 Condominium Marketing, National Sales Office and
Centralized Reservations Services.

(a) On or before the tenth (10th) day of each calendar month during the
Term, Owner shall pay to Manager an amount (the "Condominium Marketing
Contribution") that is equal to one percent (1.0%) of Gross Room Revenues of the
Condominiums (or such other amount as may be provided for in the Annual Plan)
for the period from the commencement of the then current Operating Year to the
end of the immediately preceding calendar month or the date of the expiration or
sooner termination of the Term, as the case may be, less the aggregate amount of

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MANAGEMENT AGREEMENT

monthly payments theretofore paid in respect of the Condominium Marketing
Contribution for such Operating Year. The Condominium Marketing Contribution
shall be used to defray the cost of marketing expenses related to all Grand Bay
hotels and other lodging facilities. The Condominium Marketing Contribution
shall not include, and Owner shall pay separately, the costs of any local,
regional or property-specific advertising and the costs of any third party
marketing partner programs (such as frequent flyer and similar programs) in
which the Condominiums participate that are direct-billed to participating
hotels and other lodging facilities, such as costs of airline mileage or other
direct operating costs to marketing partners.

(b) Manager also will provide the Condominiums with access to and use
of the "Grand Bay" reservation system and with representation through the
national sales offices utilized by hotels and other lodging facilities in the
"Grand Bay" system.

Section 7.5 Purchasing and Technical Services Fees. To the extent
provided for in the Annual Plan or otherwise approved by Owner, Manager or one
of its Affiliates shall be entitled to the payment of purchasing and technical
services fees with respect to the acquisition, or supervision of installation or
construction, of Capital Improvements, FF&E, Operating Equipment and Inventories
at the Project.

Section 7.6 Remittances to Owner. On or before the fifteenth (15th) day
of each calendar quarter of each Operating Year, Manager shall remit to Owner
all sums in the Operating Accounts in excess of the then working capital
requirements of the Project determined in accordance with Section 3.3 of this
Agreement.

ARTICLE VIII

INSURANCE AND INDEMNITIES

Section 8.1 Insurance. Subject to reasonable availability, Manager
shall, at no cost to Manager, procure and maintain with responsible and properly
licensed companies reasonably acceptable to Owner insurance in such amounts,
written on such forms and covering such risks as shall be required by any
Mortgage or the Bond Documents or as shall otherwise be reasonably required by
Owner or Manager, including but not limited to the insurance in respect of the
Project described in Exhibit B to this Agreement.

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Section 8.2 Evidence of Insurance. Upon written request of Owner,
Manager agrees to deliver to Owner evidence reasonably satisfactory to Owner
that all insurance required to be maintained under this Agreement is in full
force and effect. In addition, prior to the date on which any such insurance
premiums must be paid to prevent delinquency thereof, Manager will, upon request
of Owner, deliver to Owner a statement or statements showing the amount of the
premiums required to be paid, the name and mailing address of the party to whom
the same is payable and receipts reflecting that all such amounts have been
fully paid.

Section 8.3 Investigation of Claims and Reports. Manager shall promptly
investigate and, as soon as reasonably practicable, make a full written report
to Owner as to all material (in excess of $50,000) accidents, claims for damage
relating to the ownership, operation and maintenance of the Project and the
estimated cost of repair thereof, and shall prepare at the expense of and for
the approval of Owner, any and all reports required by any insurance company in
connection therewith. All such reports shall be promptly filed with the
applicable insurance company. All policies of insurance required under this
Agreement shall provide for adjustment of losses of less than Fifty Thousand
Dollars ($50,000) by Manager alone and of greater losses by Owner and Manager
jointly.

Section 8.4 Indemnities.

(a) Manager shall indemnify and hold harmless Owner and its Affiliates
and their respective partners, shareholders, directors, officers, employees and
agents from and against any and all liability, loss, damages, costs and expenses
("Liabilities") incurred by reason of the management and operation of the
Project by Manager during the Term and by reason of the performance of Manager's
responsibilities in respect of the Condominiums insofar and only insofar as such
Liabilities are caused by the gross negligence or willful misconduct of, or the
willful violation of Legal Requirements by, the Executive Personnel. Project or
Condominium employees other than the Executive Personnel shall not be deemed to
be employees or agents of, or otherwise acting on behalf of, Manager.

(b) Owner shall indemnify and hold harmless Manager and its
shareholders and Affiliates and their respective partners, shareholders,
directors, officers, employees and agents from and against any and all
Liabilities (including those caused by the simple negligence of the indemnitee
and those as to which the indemnitee may be strictly liable) (i) arising out of
or incurred in connection with the construction, renovation, management or
operation of the Project or the Condominiums or (ii) which may be asserted or
arise as a direct or indirect result of the presence on or under, or escape,
seepage, leakage, spillage, discharge, emission or release from the Project or
the Condominiums of any Hazardous Materials or any Hazardous Materials
Contamination or arise out of or result from the environmental condition of the
Project or the Condominiums or the applicability of any Legal Requirements
relating to Hazardous Materials, except, in the case of both

<
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MANAGEMENT AGREEMENT

(i) and (ii) above, those Liabilities caused by the gross negligence or willful
misconduct of, or the willful violation of Legal Requirements by, the Executive
Personnel during the Term.

(c) In case an action covered by this Section 8.4 is brought against
any indemnified party, the indemnifying party will be entitled to assume the
defense thereof, subject to the provisions herein stated, with counsel
reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election to so assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof. The indemnified party shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall not be at
the expense of the indemnifying party if the indemnifying party has assumed the
defense of the action with counsel reasonably satisfactory to the indemnified
party; provided that the fees and expenses of the indemnified party's counsel
shall be at the expense of the indemnifying party if (i) the employment of such
counsel has been specifically authorized in writing by the indemnifying party or
(ii) such indemnified party shall have been advised by counsel that there is a
conflict of interest or issue conflict involved in the representation by counsel
employed by the indemnifying party in the defense of such action on behalf of
the indemnified party or that there may be one or more legal defenses available
to such indemnified party which are not available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of such indemnified party, it being understood,
however, that the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys for the indemnified party, which firm shall be designated in writing
by the indemnified party).

(d) The provisions of this Section shall survive any termination or
expiration of this Agreement, whether by lapse of time or otherwise, and shall
be binding upon the parties hereto and their respective successors and assigns.

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ARTICLE IX

DAMAGE AND CONDEMNATION

Section 9.1 Damage or Destruction.

(a) If the Hotel shall be totally destroyed or substantially damaged by
fire or other casualty, either party may, within sixty (60) days after the
occurrence of such event, give written notice to the other terminating this
Agreement. For purposes of this Section, the Hotel shall be deemed to have been
substantially damaged if the estimated cost of Restoration shall exceed twenty
percent (20%) of the cost of replacing the Hotel by constructing, furnishing and
equipping a new hotel on the site substantially the same as the Hotel prior to
such casualty. In the event Owner terminates this Agreement by reason of such
damage or destruction, Owner shall, contemporaneously with the giving of notice
of such termination and as a condition (which may be waived by Manager) to the
effectiveness of such termination, pay to Manager the applicable Termination
Fee.

(b) In the event of (i) any damage to the Hotel by fire or other
casualty which does not amount to "substantial damage" as described in
subsection (a) above, or (ii) the total destruction of or substantial damage to
the Project and the failure of either party to terminate this Agreement pursuant
to subsection (a) above, then this Agreement shall not terminate, and Owner
shall, at its own expense and in accordance with plans and specifications
therefor developed by Owner and approved by Manager (which approval shall not be
unreasonably withheld or delayed), promptly commence and expeditiously complete
the Restoration and, subject to the requirements of any Mortgage or the Bond
Documents, all proceeds of property and casualty insurance shall be made
available to Owner for this purpose; provided, however, that Manager shall have
the right to ensure that such proceeds of insurance shall be applied to the
Restoration. Owner shall promptly commence and diligently pursue the Restoration
to completion; provided, however, that if Owner shall not fully complete the
Restoration within a reasonable period of time after the date of such casualty
or one hundred eighty (180) days, whichever is earlier (or such longer period as
Manager may approve), then Manager shall have the right to terminate this
Agreement upon thirty (30) days' prior written notice to Owner, whereupon Owner
shall, within ten (10) days following such notice and as a condition (which may
be waived by Manager) to the effectiveness of such termination, pay to Manager
the applicable Termination Fee.

(c) Manager's monthly compensation following damage to the Project
until the Restoration with respect to such damage is completed shall in no event
be less than fifty percent (50%) of the Average Monthly Management Fee at the
time the damage occurs.

(d) Notwithstanding anything herein to the contrary, Owner shall be
under no obligation to repair or restore the Project as a result of any casualty
in the event that, pursuant to the

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terms of any Mortgage or the Bond Documents, the Mortgagee or trustee, as
applicable, elects not to do so, prevents Owner from doing so or does not
release proceeds to do so.

Section 9.2 Condemnation.

(a) If all or a substantial portion of the Project shall be taken by
Condemnation (other than for temporary use), this Agreement shall terminate as
of the date of such taking. A substantial portion of the Project shall be deemed
taken if in the reasonable opinion of Manager or Owner the part not taken may
not be repaired, restored, replaced, rebuilt or utilized so as to constitute a
hotel facility in keeping with this Agreement. If this Agreement shall terminate
pursuant to the foregoing provisions of this Section, (i) the Condemnation
award, after payment of all sums due and payable to any Mortgagee, shall be paid
to Owner as its property, provided, however, that Manager may make a separate
and distinct claim against the condemning authority for the value of the loss of
its interest in this Agreement, and (ii) Owner shall, within ten (10) days
following such termination and as a condition (which may be waived by Manager)
to the effectiveness thereof, pay to Manager the applicable Termination Fee.
Provided Owner pays the applicable Termination Fee, Manager shall remit to Owner
any amount received by it pursuant to any claim it pursues in accordance with
clause (i) above.

(b) If a portion of the Project shall be taken by Condemnation and this
Agreement is not terminated pursuant to subsection (a) above, subject to the
requirements of any Mortgage or the Bond Documents, the Condemnation award
relating to damage to or the taking of the Project, including any interest
thereon, shall be made available to Owner for application to the Restoration of
the Project made necessary by such taking (provided, however, that Manager shall
have the right to ensure that such Condemnation award, together with interest
thereon, shall be applied to the Restoration). Subject to the requirements of
any Mortgage or the Bond Documents, such Restoration shall be promptly commenced
and expeditiously completed by, and at the expense of, Owner in accordance with
plans and specifications therefor developed by Owner and approved by Manager
(which approval shall not be unreasonably withheld or delayed) so as to restore
the Project as nearly as possible to its value, condition and character
immediately prior to the Condemnation.

(c) In the event of a Condemnation of all or part of the Project for
temporary use, this Agreement shall remain in full force and effect, and the
following shall be applicable:

(i) If the Condemnation is for a period not extending beyond
the Term, the Condemnation award, including any interest not paid to
any Mortgagee pursuant to the terms of any Mortgage or to any trustee
pursuant to the terms of the Bond Documents, shall be included in Gross
Revenues for the Operating Year or Years in which received. When and if
during the Term the period of temporary use shall terminate, Owner
shall, at its own expense, after the approval of plans and
specifications by Manager, promptly commence

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MANAGEMENT AGREEMENT

and expeditiously complete the Restoration necessary to restore the
Project to its condition prior to the Condemnation for temporary use;
or

(ii) If the Condemnation is for a period extending beyond the
Term, that portion of the Condemnation award which is attributable to
the period up to the expiration of the Term shall be included in Gross
Revenues for the Operating Year or Years in which received. The
remainder of the Condemnation award shall be paid to Owner as its
property.

(d) Manager's monthly compensation following a Condemnation until the
Restoration with respect to such Condemnation is completed or during any period
of Condemnation for temporary use shall in no event be less than fifty percent
(50%) of the Average Monthly Management Fee at the time the Condemnation occurs.

(d) Notwithstanding anything herein to the contrary, Owner shall be
under no obligation to repair or restore the Project as a result of any
Condemnation in the event that, pursuant to the terms of any Mortgage or the
Bond Documents, the Mortgagee or trustee, as applicable, elects not to do so,
prevents Owner from doing so or does not release proceeds to do so.

ARTICLE X

ASSIGNMENT

Section 10.1 Assignment by Manager. Except as herein provided,
Manager shall not assign its rights and obligations under this Agreement without
the approval of Owner. Manager shall have the right, without the consent of
Owner, to delegate some or all of its responsibilities and/or assign some or all
of its interest in this Agreement to (i) any Affiliate or Affiliates of Manager
having full right, power and authority to provide to Owner all services and
organizational expertise (including applicable trademarks, service marks and
Marketing Services) which Manager is required to provide hereunder (in the case
of a delegation and/or assignment of some, but not all, of Manager's
responsibilities hereunder, such Affiliate must have full right, power and
authority to perform the delegated responsibilities), or (ii) any assignee who
also acquires all, or substantially all, of the assets of Manager and assumes
its obligations, provided such assignee is financially responsible and capable
of performing the duties of Manager hereunder and has the right to use the name
"Wyndham" or "Grand Bay," as applicable. In such latter event, Manager's
liability hereunder shall terminate upon such assignment, but in the event of
such an assignment to an Affiliate of Manager, Manager shall continue to be
liable under this Agreement to the same extent as though such assignment had not
been made. Manager shall also have the right to assign its rights to receive
payments hereunder as security for indebtedness or any other obligation;
provided, the holder of such security shall not have the right to perform the
duties of Manager hereunder or to delegate or assign such duties to any person.

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Section 10.2 Assignment by Owner. Except as otherwise
expressly provided for herein, Owner may not sell, transfer or otherwise convey
all or any part of the Project or Owner's interest therein or assign this
Agreement or any interest herein without the express prior written consent of
Manager. Manager agrees that it will not use its right to grant or withhold
consent as a means to extract economic concessions from Owner. Instead, Manager
agrees to make its decision based on its evaluation of whether the proposed
transferee or assignee has adequate net worth to timely discharge all of the
obligations of Owner under this Agreement and whether the persons identified
with the proposed transferee or assignee will be persons of high character and
with a favorable reputation for integrity, honesty and veracity and whether a
proposed transfer or assignment will adversely affect the ownership, operation
and management of the Project subject to and in accordance with the provisions
of this Agreement. In addition, Manager may consider whether the proposed
transferee is, or is affiliated with, another hotel manager or franchisor.
Accordingly, Manager shall grant or withhold consent to any proposed transfer or
assignment on the basis of Manager's evaluations and determinations of the
factors enumerated in the preceding sentences. Any transferee or assignee by
reason of any such transfer or assignment shall assume and agree to perform all
of Owner's duties, obligations and liabilities herein contained pursuant to a
written instrument in form and substance satisfactory to Manager and reflecting
any amendments to this Agreement reasonably necessary in order to preserve and
protect Manager's rights hereunder in light of the change in ownership. The sale
or other disposition of fifty percent (50%) or more of the beneficial interests
in Owner (whether partnership interests, shares of stock or other beneficial
interests), whether in a single transaction or in a series of transactions,
shall be deemed to constitute the sale or disposition of an interest in the
Project for purposes of this Article. Notwithstanding any other provision of
this Section 10.2, in the event and so long as Owner and Manager are Affiliates,
Owner may transfer or convey its interest in the Project and this Agreement
without the consent of Manager; provided that the transferee or assignee by
reason of any such transfer or assignment shall assume and agree to perform all
of Owner's duties, obligations and liabilities herein contained pursuant to a
written instrument in form and substance reasonably satisfactory to Manager and
reflecting any amendments to this Agreement reasonably necessary in order to
preserve and protect Manager's rights hereunder in light of the change in
ownership.

Section 10.3 Binding Effect. Subject to the terms of this Article, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.

ARTICLE XI

OWNER'S COVENANTS, TITLE AND ENCUMBRANCES

Section 11.1 Covenants and Warranties. With respect to any ground or
underlying leases, mortgages, deeds of trust, security agreements or other
encumbrances affecting the Project, Owner

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agrees to use all reasonable efforts to secure for Manager's benefit a
non-disturbance agreement (in form and substance satisfactory to Manager) to the
effect that this Agreement shall not be subject to forfeiture or termination
except in accordance with the provisions hereof, notwithstanding a default,
termination, foreclosure or exercise of a power of sale with respect to any such
lease or encumbrance. Owner warrants that the interest of Manager under this
Agreement shall not be subject or subordinate to any other matters affecting
title to the Project, except for Impositions not yet due and payable and such
other matters as shall not materially and adversely affect the operation of the
Project by Manager. Owner further warrants that, so long as Manager shall not be
in default hereunder, Manager shall be entitled to operate the Project for the
Term, and Owner shall, at no expense to Manager, undertake and prosecute all
appropriate actions, judicial or otherwise, required to assure such right of
operation to Manager. Owner further agrees that it shall:

(a) Keep and maintain, or cause to be kept and maintained, any leases
covering real or personal property or other agreements necessary to the
ownership or control of the Project, or any part thereof, in full force and
effect and free from default, and in this connection Owner shall pay and
discharge, or cause to be paid and discharged, any ground rents or other rental
payments or other charges payable by Owner in respect of the Project;

(b) Observe, or cause to be observed, and comply with or cause to be
complied with, any and all other liens, encumbrances, covenants, charges,
burdens or restrictions pertaining to the Project or any part thereof;

(c) Comply in all material respects with the terms and provisions of
all documents and instruments evidencing or securing any Mortgages or other
loans secured by an interest in or otherwise related to the ownership or
operation of the Project and all other agreements (whether written or oral) to
which Owner is a party;

(d) Pay all Impositions prior to delinquency, and upon request of
Manager, furnish Manager with evidence that all such Impositions have been so
paid; provided, however, that Owner shall have the right to contest in good
faith the validity or amount of any Impositions by appropriate proceedings, so
long as such proceedings do not interfere with the operation of the Hotel or
result in a default under any Mortgage or any loans secured by an interest in or
otherwise related to the ownership or operation of the Project or any ground
lease affecting the Project and provided, further, that during the time any such
contest is pending, Owner shall pay all Impositions being contested unless
collecting or enforcement of any lien securing payment thereof is effectively
stayed during such pendency; and

(e) Obtain and maintain in good standing all Governmental Permits,
except those which under applicable Legal Requirements are required to be
obtained and maintained by Manager.

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Section 11.2 Estoppel Certificates. Manager agrees, at any time and
from time to time, upon not less than fifteen (15) days' prior notice by Owner
or any Mortgagee, to execute, acknowledge and deliver to Owner or such Mortgagee
a statement in writing certifying that this Agreement has not been modified and
is in full force and effect (or, if there have been modifications, that the same
is in full force and effect as modified and specifying the modifications) and
stating whether or not to the best knowledge of the party providing such
certificate there exists any default of which such party may have knowledge.
Upon similar notice, Manager shall be entitled to a similar certificate from
Owner.

ARTICLE XII

DEFAULT AND TERMINATION

Section 12.1 Events of Default.

(a) The following shall constitute events of default:

(i) The filing of a voluntary petition in bankruptcy
or insolvency or a petition for reorganization under
any bankruptcy law by either party;

(ii) The consent to an involuntary petition in bankruptcy
or the failure to vacate within sixty (60) days from
the date of entry thereof any order approving an
involuntary petition by either party;

(iii) The entering of an order, judgment or decree by any
court of competent jurisdiction, on the application
of a creditor, adjudicating either party as bankrupt
or insolvent or approving a petition seeking
reorganization or appointing a receiver, trustee or
liquidator of all or a substantial part of such
party's assets, and such order, judgment or decree
shall continue unstayed and in effect for sixty (60)
days after its entry;

(iv) The appointment of a receiver or trustee for all or
any substantial portion of the property of either
party and the order, judgment or decree appointing
any such receiver or trustee shall continue unstayed
and in effect for sixty (60) days after its entry;

(v) The death, legal incapacity, liquidation, termination
or dissolution of either party;

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(vi) Any representation or warranty made in this Agreement
by either party shall be false or misleading in any
material respect on the date as of which it is made
or deemed made;

(vii) The failure of either party to make any payment or
provide funds to or on behalf of the other party in
accordance with the terms hereof and the continuation
of such failure for ten (10) days after written
notice to the defaulting party of such failure; or

(viii) The failure of either party to perform, keep or
fulfill any of the other covenants, undertakings,
obligations or conditions set forth in this
Agreement, and the continuance of such default for a
period of thirty (30) days after written notice is
given by the other party specifying said failure;
provided that in the event such failure is of the
nature that it cannot, with due diligence, be cured
within thirty (30) days, it shall not constitute an
event of default unless the defaulting party fails to
proceed promptly and with due diligence to cure the
same, it being the intention of the parties that with
respect to a failure not susceptible of being cured
within thirty (30) days, the time of such defaulting
party within which to cure the same shall be extended
for such period as may be necessary for the curing
thereof with the exercise of due diligence.

(b) Upon the occurrence of any event of default, in addition to and
cumulative of any and all rights and remedies available to the non-defaulting
party under this Agreement, at law or in equity, the non-defaulting party may
give to the defaulting party notice of intention to terminate this Agreement,
whereupon this Agreement shall terminate upon the expiration of thirty (30) days
after the giving of such notice. In addition to and cumulative of the foregoing,
upon the occurrence of any event of default on the part of Owner, all earned
Management Fees and all other sums payable to Manager under this Agreement shall
be immediately due and payable without notice. In no event shall the provisions
of this Agreement with respect to the payment of a Termination Fee upon
termination of this Agreement under certain circumstances be construed as
defining or limiting the amount recoverable by Manager from Owner by reason of
any event of default on the part of Owner.

Section 12.2 Manager's Right to Perform Owner's Obligations.

(a) If Owner shall fail to make any payment or to perform any act to be
made or performed by Owner pursuant to this Agreement, then Manager may (but
shall not be obligated to) without further notice to, or demand upon, Owner, and
without waiving or releasing Owner from any obligations under this Agreement,
make such payment (either with its own funds or with funds

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MANAGEMENT AGREEMENT

withdrawn for such purpose from the Operating Accounts or the Reserve) or
perform such act. All sums so paid by Manager and all necessary incidental costs
and expenses incurred by Manager in connection with the performance of any such
act, together with interest thereon at the Default Rate from the date of making
such expenditure or expenditures by Manager, shall be payable to Manager upon
demand.

(b) Manager shall have the right to set-off against any payments to be
made to Owner by Manager under any provision of this Agreement and against all
funds from time to time in the Operating Accounts and the Reserve, any and all
liabilities of Owner to Manager. Manager may withdraw from the Operating
Accounts and the Reserve from time to time such amounts as Manager deems
desirable in partial or full payment of all or any portion of said liabilities,
the amount of such withdrawals to be paid by Owner to Manager on demand and to
be replaced in the respective account and fund.

Section 12.3 Default Interest. If either party hereto shall fail to pay
to the other party hereto any sum payable when due hereunder, then such
defaulting party shall, without notice or demand, be liable to the
non-defaulting party for the payment of all such sums together with interest
thereon at the Default Rate. The terms and provisions of this Section shall
survive any termination of this Agreement for any reason whatsoever (including
the expiration of the Term) and shall continue until all such amounts, together
with interest thereon, are paid in full.

Section 12.4 Special Right of Manager to Terminate. In addition and
without prejudice to any other right Manager may have to terminate this
Agreement under any other provision of this Agreement, Manager shall have the
right to terminate this Agreement upon the occurrence of any of the following
events:

(1) Any Governmental Permit required to be maintained by Owner
for the operation of the Project, including without limitation any
certificate of occupancy or restaurant or liquor license, shall at any
time be suspended, terminated or revoked and such suspension,
termination or revocation is not due to the fault of Manager and shall
continue for a period of thirty (30) days, unless such suspension,
termination or revocation is subject to cure within such period by
reasonable efforts on the part of Manager and Manager fails to take
such action; or

(2) Due to Force Majeure or any Legal Requirement, the
operation of the Project in accordance with this Agreement is not
economical, feasible or reasonably practical, as determined in the
reasonable, good faith opinion of Manager.

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MANAGEMENT AGREEMENT

In the event that Manager elects to terminate this Agreement pursuant to this
Section, Manager shall give Owner written notice of such election whereupon this
Agreement shall terminate as of the date set forth in any such notice of
termination, which date shall be not less than thirty (30) days after the date
such notice is given.

Section 12.5 Termination of Employees. In connection with any
termination of this Agreement, Manager shall, unless otherwise requested in
writing by Owner, give notice of termination of employment to all Project
employees containing such information as is required by any severance policy
applicable to such employees and the provisions of any applicable federal or
state plant closing or similar laws. The notice to employees shall be given
within ten (10) days after notice of termination is given. Owner shall bear the
severance and related costs of terminating such employees and of any applicable
federal or state plant closing or similar laws in connection with any
termination of this Agreement.

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ARTICLE XIII

MISCELLANEOUS

Section 13.1 Use of Names. During the Term of this Agreement, the Hotel
and the Condominiums shall at all times be known and designated under such names
as Owner and Manager may agree. Initially, the Hotel shall be known as "Wyndham
El Conquistador," and the Condominiums shall be known as "Grand Bay Las
Casitas." Upon the termination of this Agreement, such portion of the Project
name and the name of the Condominiums which does not contain the word "Wyndham"
or "Grand Bay" shall continue to be the property of Owner. Owner further agrees
that the names, trade names, trademarks and service marks "Wyndham" and "Grand
Bay," when used alone or in conjunction with some other emblem, design, slogan,
word or words, and all other trademarks, service marks, trade names and names
owned in whole or in part by Manager or an Affiliate or Affiliates of Manager,
when used alone or in conjunction with some other design, emblem, slogan, word
or words, are the exclusive property of Manager or such Affiliate or Affiliates,
as the case may be, and shall not be used by Owner in any manner. Accordingly,
Owner agrees that no right or remedy of Owner for any default of Manager or
delivery or possession of the Project to Owner upon the expiration or sooner
termination of this Agreement, shall confer, nor shall any provisions of this
Agreement confer, upon the Owner or any person acquiring an interest in Owner or
the Project, the right to use the name "Wyndham" or the name "Grand Bay," either
alone or in conjunction with some other emblem, design, slogan, word or words,
or any other name, trade name, trademark or service mark owned in whole or in
part by Manager or any of its Affiliates, either alone or in conjunction with
some other design, emblem, slogan, words or words, in the use and operation of
the Project, the Condominiums or any other property. In the event of any breach
of this covenant by Owner, then Manager shall be entitled to damages, relief by
injunction and to any other right or remedy at law or equity. Upon the
expiration or sooner termination of this Agreement, (i) Manager may, at its
option, purchase from Owner any Operating Equipment, Inventories and other
supplies bearing any name, trade name, trademark, service mark, design, emblem
or slogan owned by Manager or an Affiliate of Manager which is the subject of
this Section at a cash purchase price equal to the cost thereof as reflected on
the books and records of the Project or (ii) Manager may, at its option, permit
Owner to continue to use (but not replace) any such Operating Equipment,
Inventories or supplies until the same shall have been used up (provided,
however, that in such event, Manager may require Owner to execute any and all
documents and instruments, including without limitation a licensing agreement,
as Manager may reasonably require to effectuate the purposes of this Section).
The provisions of this Section shall survive the expiration or sooner
termination of this Agreement and shall be binding upon Owner, its successors
and assigns.

Section 13.2 Limitations on Ability to Perform. Notwithstanding any
other provision in this Agreement to the contrary, Manager or Owner, as the case
may be, shall be excused from the performance of its obligations under this
Agreement (i) to the extent and whenever it shall be

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prevented from such compliance by Force Majeure, (ii) to the extent of any
breach by the other party of any material provision of this Agreement, including
but not limited to a breach by Owner of any of its obligations under Sections
3.3 and 3.4 of this Agreement, and (iii) in the case of excusing Manager only,
to the extent and whenever there is provided in this Agreement a limitation upon
the ability of Manager to expend funds in respect of the Project or the
Condominiums. If at any time Manager shall be excused, in whole or in part, from
the performance of its obligations under this Agreement pursuant to the terms
and provisions of this Section or otherwise, then, in addition to any other
right or remedy available to Manager by reason thereof, Manager may, in its sole
and absolute discretion, and for so long as Manager shall be so excused, exclude
the use of the name, trade name, trademark and service mark "Wyndham" and the
name "Grand Bay," and all other names, trade names, trademarks and service marks
owned in whole or in part by Manager or an Affiliate or Manager, whether alone
or in conjunction with any other design, emblem, slogan, word or words, in
connection with the Project and the Condominiums. The provisions of this Section
shall operate without prejudice to any other remedy which Manager may have under
the terms of this Agreement.

Section 13.3 Negation of Partnership or Joint Venture. Nothing in this
Agreement shall constitute or be construed to constitute or create a
partnership, joint venture or lease between Owner and Manager with respect to
the Project or the Condominiums.

Section 13.4 Right to Make Agreement. Each party warrants and
represents, with respect to itself, that the execution, delivery and performance
of this Agreement have been duly authorized by all necessary corporate,
partnership, or limited liability company action (as the case may be) and are
legal, valid and binding obligations of such party, enforceable in accordance
with the terms hereof; and that neither the execution of this Agreement nor
performance of the obligations contemplated hereby shall violate any Legal
Requirement, result in or constitute a breach or default under any material
indenture, contract or other commitment or restriction to which it is a party or
by which it is bound, or require any consent, vote or approval which has not
been obtained, or at the appropriate time shall not have been given or obtained.
Each party covenants that it has and will continue to have throughout the Term
full right and authority to enter into this Agreement and to perform its
obligations hereunder and each party agrees to supply to the other party upon
request evidence of such right and authority.

Section 13.5 Further Assurances. Each party hereto will execute and
acknowledge any and all agreements, contracts, leases, licenses, applications,
verifications and such other additional instruments and documents in recordable
form as may be requested by the other party hereto in order to carry out the
intent of this Agreement and to perfect or give further assurances of any of the
rights granted or provided for herein.

Section 13.6 Form of Documents and Evidence. Each written instrument or
other document required by this Agreement to be furnished by either party to the
other in connection with

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<PAGE>

MANAGEMENT AGREEMENT

this Agreement shall be duly executed, and, in the case of affidavits, waivers
and similar sworn instruments, duly sworn to and subscribed before a notary
public or similar public official authorized to act in the premises by
Governmental Authority and shall be furnished to the recipient in one or more
copies as reasonably required by the recipient and shall in all respects be in
form and substance reasonably satisfactory to the recipient.

Section 13.7 Approvals by Manager. Owner and Manager agree that
whenever Manager is required to give its approval of plans, specifications,
budgets, drawings, schedules or financing, pursuant to this Agreement or
otherwise, such approval shall not imply or be deemed to constitute an opinion
by Manager nor impose upon Manager any responsibility for the design or
construction of the Hotel or any part thereof, including but not limited to its
structural integrity and/or life safety requirements, compliance with Legal
Requirements, or the adequacy of any such budgets or financing. All reviews and
approvals by Manager under the terms of this Agreement or otherwise are for the
sole and exclusive benefit of Manager and no other person or party shall have
the right to rely on any such reviews or approvals. Manager shall have absolute
right, in its sole discretion, to waive any such reviews or approvals required
under this Agreement.

Section 13.8 Sale of Securities. This Section 13.8 shall apply at any
time that Owner is not an Affiliate of Manager. In the event Owner, or any
Affiliate of Owner, shall at any time, sell or offer to sell any securities in
any way relating to the Project, through the medium of any prospectus or
otherwise, it shall do so only in compliance with all applicable Legal
Requirements and shall clearly disclose to all purchasers and offerees that (i)
neither Manager nor any of its shareholders or partners nor any of their
respective officers, directors, agents or employees shall in any way be deemed
an issuer or underwriter of said securities, and (ii) Manager and said
shareholders, partners, officers, directors, agents and employees have not
assumed and shall not have any liability arising out of or relating to the sale
or offer of said securities, including but not limited to any liability or
responsibility for any financial statements, projections or other financial
information contained in the prospectus or similar written or oral
communication. Manager shall have the right to approve any description of
Manager, or any description of this Agreement or of the Owner's relationship
with Manager hereunder, which may be contained in any prospectus or other
communication, and Owner further agrees to furnish copies of all such materials
to Manager for such purpose not less than thirty (30) days prior to delivery
thereof to any prospective purchaser.

Section 13.9 Third Party Beneficiaries. This Agreement has been made
and entered into for the sole protection and benefit of the Manager and Owner
and their respective successors and assigns (but in the case of assigns, so long
as any such assignment has been made in accordance with this Agreement), and no
other person or entity shall have any right or action under this Agreement,
except as otherwise expressly provided in Section 8.4.

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MANAGEMENT AGREEMENT

Section 13.10 Notices. All notices to be given hereunder shall be in
writing, and all payments to be made hereunder shall be by check, and may be
given, served or made by depositing the same in the United States mail addressed
to the party to be notified, postpaid and registered or certified with return
receipt requested, or by delivering the same in person or by reputable overnight
courier to such party. Notice deposited in the mail in accordance with the
provisions hereof shall be deemed to have been given on the fourth day next
following the date postmarked on the envelope containing such notice, or when
actually received, whichever is earlier, and notice delivered by overnight
courier shall be deemed to have been given on the second day next following the
date on which it is entrusted to the courier, or when actually received,
whichever is earlier. Notice given in any other manner shall be effective only
if and when received by the party to be notified. Copies of all notices given to
Manager shall be delivered in the manner provided above to the attention of the
General Counsel for the Manager. All notices to be given to the parties hereto
shall be sent to or delivered at the addresses set forth at the beginning of
this Agreement, and copies of all such notices (including copies of any notices
to be delivered to the Manager's General Counsel) shall be sent or delivered to
the party to whom the notice is given at 1950 Stemmons Freeway, Suite 6001,
Dallas, Texas 75207. By giving the other party at least fifteen (15) days
written notice thereof, each party hereto shall have the right to change its
address and specify as its new address for the purposes hereof any other address
in the United States of America.

Section 13.11 Waiver. No consent or waiver, express or implied, by
either party to this Agreement to or of any breach or default by the other in
the performance of any obligations hereunder shall be deemed or construed to be
consent or waiver to or of any other breach or default by such party hereunder.
Except as otherwise provided herein, failure on the part of any party hereto to
complain of any act or failure to act by the other party or to declare the other
party in default hereunder, irrespective of how long such failure continues,
shall not constitute a waiver of the rights of such party hereunder.

Section 13.12 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which,
taken together, shall be construed as a single instrument.

Section 13.13 Captions. The captions used for the Articles and Sections
in this Agreement are inserted only as a matter of convenience and for reference
and in no way define, limit or describe the scope or the intent of this
Agreement or any Article or Section hereof.

Section 13.14 Gender. Unless the context clearly indicates to the
contrary, words singular or plural in number shall be deemed to include the
other and pronouns having a neuter, masculine or feminine gender shall be deemed
to include the others. The term "person" shall be deemed to include an
individual, corporation, partnership, trust, unincorporated organization,
government and governmental agency or subdivision, as the context shall require.

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MANAGEMENT AGREEMENT

Section 13.15 Unenforceable Provisions. In the event any provision of
this Agreement is declared or adjudged to be unenforceable or unlawful by any
Governmental Authority, then such unenforceable or unlawful provision shall be
excised herefrom, and the remainder of this Agreement, together with all rights
and remedies granted thereby, shall continue and remain in full force and
effect.

Section 13.16 Cumulative Remedies. All rights, powers, remedies,
benefits and privileges available under any provision of this Agreement to any
party hereunder are in addition to and cumulative of any and all rights, powers,
remedies, benefits and privileges available to such party under all other
provisions of this Agreement, at law or in equity.

Section 13.17 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters covered hereby.
All prior negotiations, representations and agreements with respect thereto not
incorporated in this Agreement are hereby canceled. This Agreement can be
modified or amended only by a written document duly executed by the parties
hereto or their duly appointed representatives.

Section 13.18 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF THE COMMONWEALTH OF PUERTO RICO AND THE UNITED
STATES OF AMERICA.

Section 13.19 Exhibits and the Addendum. Exhibits and the Addendum
referred to in this Agreement and attached hereto are incorporated herein in
full by this reference as if each of such exhibits and the Addendum were set
forth in the body of this Agreement and duly executed by the parties hereto.

Section 13.20 Confidentiality. Owner agrees not to disclose the terms
or conditions of this Agreement to any person other than a Permitted Person (as
hereinafter defined), provided, however, that the restrictions of this Section
13.20 shall not apply to any information required to be disclosed by applicable
law or to information that becomes public other than by virtue of a breach of
this Section. For purposes of this Section, the term "Permitted Person" shall
mean (i) Owner's Affiliates, (ii) the partners, shareholders, directors,
officers and employees of Owner and Owner's Affiliates, (iii) accountants,
attorneys, consultants and other professionals engaged to render services in
connection with the Project or in connection with the ownership or operation of
Owner or Owner's Affiliates, (iv) lenders and investors, and prospective lenders
and investors, to or in Owner or Owner's Affiliates and (v) potential purchasers
of the Project. Permitted Persons shall be informed of the confidential nature
of the information disclosed to them and shall be required to agree to act in
accordance with the provisions of this Section 13.20 with respect to such
information.

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<PAGE>

MANAGEMENT AGREEMENT

Section 13.21 Owner Approvals. Except as otherwise expressly provided
in this Agreement, to the extent that Owner's approval is required for any
matter in connection with this Agreement, Owner shall approve or disapprove such
matter within ten (10) days after being notified thereof by Manager; provided,
however, that Owner shall approve or disapprove any such matter involving
pending litigation concerning the Project or, to the extent applicable, the
Condominiums within five (5) business days after being notified thereof by
Manager. If Owner does not approve or disapprove any such matter within the
specified time period, Owner shall be deemed to have approved such matter.

Section 13.22 Prior Management Agreement. From and after the Effective
Date, this Agreement supersedes and replaces that certain Development Services
and Management Agreement between Owner and Manager (then named Williams
Hospitality Management Corporation) dated as of January 12, 1990, as amended by
that certain First Amendment to the Development Services and Management
Agreement between Owner and Manager dated as of September 30, 1990 (the "Prior
Management Agreement"). Owner and Manager acknowledge that this Agreement is
being entered into in connection with the closing of certain refinancing for the
Project. Owner and Manager agree that, notwithstanding their entry into this
Agreement, they shall continue to be responsible for the performance of any and
all of their respective obligations that have accrued under the Prior Management
Agreement prior to the date hereof, and any and all of their respective
obligations under the Prior Management Agreement that by their terms or by
operation of law are to survive any termination thereof.

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<PAGE>

MANAGEMENT AGREEMENT

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.

EL CONQUISTADOR PARTNERSHIP L.P.,
a Delaware limited partnership

By: El Conquistador Holdings, Inc.,
General Partner

By: /s/ Lawrence S. Jones
---------------------------------
Name: Lawrence S. Jones CSM
---------------------------------
Title: Executive Vice President
Treasurer
---------------------------------

WILLIAMS HOSPITALITY GROUP
INC., a Delaware corporation
("Manager")

By: /s/ Lawrence S. Jones
---------------------------------
Name: Lawrence S.Jones CSM
---------------------------------
Title: Executive Vice President/
Treasurer
---------------------------------

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<PAGE>

<PAGE>
ADDENDUM TO MANAGEMENT AGREEMENT
DATED JANUARY 1, 1999
BETWEEN WILLIAMS HOSPITALITY GROUP INC.,
A DELAWARE CORPORATION ("MANAGER"), AND
EL CONQUISTADOR PARTNERSHIP L.P.,
A DELAWARE LIMITED PARTNERSHIP ("OWNER")

1. Project Location and Term Expiration Date.

Project Location:

Jurisdiction: Puerto Rico

City: Fajardo

Term Expiration Date: January 31, 2014

2. Definitions. Each of the following terms shall have the
meaning indicated.

Base Fee in respect of any period shall mean an amount equal to
the sum of the Hotel Base Fee and the Condominium Base Fee for such period.

Condominium Base Fee in respect of any period shall mean an
amount equal to two and one-half percent (2.5%) of Gross Revenues derived from
the Hotel for such period.

Hotel Base Fee in respect of any period shall mean an amount
equal to two and one-half percent (2.5%) of Gross Revenues derived from the
Hotel for such period.

Hotel Trade Name Fee in respect of any period shall mean an
amount equal to one-half of one percent (.5%) of Gross Room Revenues derived
from the Hotel for such period.

Management Fee in respect of any period shall mean the sum
of the Base Fee and the Hotel Trade Name Fee payable for such period.

3. Payment of Management Fee. On or before the tenth (10th) day
of each calendar month during the Term, and at the expiration or sooner
termination of the Term, Owner shall pay to Manager an amount equal to the
Management Fee for the period from the commencement of the then current
Operating Year to the end of the immediately preceding calendar month or the
date of such expiration or sooner termination of the Term, as the case may be,
less the aggregate amount of

<PAGE>

monthly payments theretofore paid in respect of the Management Fees for
such Operating Year.

4. Year-End Adjustment to Management Fees. If for any Operating
Year, the aggregate amount of the monthly payments of the Management Fee
theretofore paid by owner to manager shall be more or less than the Management
Fee payable for such Operating Year based upon the final determination of such
Management Fee as reflected in the annual financial statements prepared and
delivered in accordance with Section 6.3, then, by way of year-end adjustment,
within fifteen (15) days after the delivery of such annual financial statements
to Owner, Manager shall pay into the Operating Accounts the amount of any
overpayment or withdraw from the Operating Accounts the amount of any
underpayment; provided, however, that in the event that funds in the Operating
Accounts are not sufficient to pay fully the Management Fee payable to Manager
hereunder, owner shall promptly pay to Manager on demand the amount of such
deficiency.

5. Section References; Capitalized Terms. References in the
preceding paragraphs to any "Sections" are references to the specified Sections
of the Management Agreement to which this Addendum is attached. Terms with
initial capital letters that are not defined in this Addendum but are defined in
Section 1.2 of the Management Agreement referenced above are used in this
Addendum as so defined.

<PAGE>

EL CONQUISTADOR RESORT AND COUNTRY CLUB
CONDOMINIUM UNIT
MANAGEMENT AND RENTAL AGREEMENT

This Agreement, made and entered into this day of 1994, by and
between EL CONQUISTADOR PARTNERSHIP, L.P. (hereinafter referred to as "Agent")
at El Conquistador Resort and Country Club, Fajardo, Puerto Rico (the
"Resort") and:

Name: Mr.__________________________ and Mrs._______________________

Home Phone No._____________________ Office Phone No._______________

Taxpayer Identification No. ____________________________ Social

Security No.________________ Address:________________________________________

_____________________________________________________________________________

Apartment Number:_________ Room number(s)__________ Las Casitas I Resort
Condominium (hereinafter referred to as the "Owner").

WHEREAS, the Owner is the owner of the condominium apartment unit
identified as Apartment_________ (the "Unit"), forming part of Las Casitas
Resort Condominium Regime I, and

WHEREAS, Agent is the owner of the Resort; and

WHEREAS, the Owner wishes to engage the services of the Agent to manage
the Unit and to offer the Unit for rental under the terms and conditions set
forth below, and

WHEREAS, the Agent is willing to accept such engagement on the terms
stated herein;

NOW THEREFORE, in consideration of the terms and conditions and the
mutual covenants herein set forth, the parties agree as follows:

1. APPOINTMENT OF AGENT:

The Owner hereby appoints the Agent as its sole and exclusive

agent for the term indicated herein, to offer and rent the Unit as a hotel
accommodation for transient guests, and to perform certain maintenance and
housekeeping functions on the Unit, to the extent and in the manner indicated
herein. Agent hereby accepts such appointment and agrees to offer the Unit for
rental as a hotel accommodation in the Resort on the terms and subject to the
conditions set forth herein, and agrees to provide maintenance services to the
Unit, as indicated herein.

2. TERM:

The term of this agreement shall be twelve (12) consecutive months
commencing on _________________, 19______ and terminating on ________________,
19_____, (said initial twelve (12) month term and each subsequent renewal
thereof, shall hereinafter be referred to as the "Term"). This Agreement shall
be automatically renewed for consecutive twelve month periods at the end of the
initial Term and, thereafter, at the end of each renewal Term, unless either
party shall notify the other in writing not less than four months prior to the
termination of the then current Term, of its intention not to renew the same, in
which case this Agreement shall terminate upon the expiration of the then
current Term.

3. AUTHORITY TO RENT:

The Owner authorizes the Agent to offer the Unit for rent to transient
guests and to execute and deliver throughout the Term, rental agreements with
such transient guests on such terms as the Agent shall determine in its sole
discretion to be necessary or appropriate. The Agent is further authorized to
demand, receive

<PAGE>

and collect all rental payments generated by the Unit and apply and distribute
the same in the manner indicated herein.

The Agent is authorized to maintain at the Unit an inventory of point
of sale merchandise items including items of the type customarily found in room
mini-bars in first-class hotels, and to carry out the sale of such merchandise
in the Unit. The Owner shall not share in the proceeds of any such sale nor in
the sale of any other merchandise item or service.

4. RENTAL RATES:

The Owner agrees that Agent will have full discretion in fixing and
charging rates for the rental of the Unit and in determining which hotel room or
condominium unit is rented when occupancy of the Resort is less than 100%
occupied.

5. POSTED RATES:

The Agent shall from time to time determine the rates at which the Unit
will be offered for rent (the Posted Rates) and shall advise the Owner of such
rates. "Posted Rates", is a hospitality industry term which denotes the highest
rate at which a room or facility will be rented to "walk-in" guests. It also
serves as the base rate from which discounts will be granted to establish
"commercial rates", "group rates" and similar incentive rates. Due to the resort
nature of Las Casitas I Resort Condominium, the Agent expects that a substantial
amount of rentals will be at group or other incentives rates. The Owner
expressly authorizes the Agent to offer discounts from the Posted Rates at its
sole discretion, and expressly waives notice of such discounts. The

<PAGE>

Owner acknowledges that any such discounts will reduce the rentals the Owner may
receive for his Unit. The Owner acknowledges that the Agent has made no
commitment that the Unit will in fact be rented at any particular time or for
any particular consideration. The Agent shall endeavor to give the Owner thirty
(30) days prior written notice of any permanent changes in the Posted Rates for
the Unit.

6. ADVERTISING AND PROMOTION:

The Agent shall advertise and promote the Resort and the rental of the
Unit and all other units and hotel rooms within the Resort, in such manner, and
upon such terms and conditions as the Agent shall determine in its sole
judgement. The Agent shall have the right and authority to perform any and all
acts which Agent in its sole discretion determines are necessary or appropriate
to promote, operate, and maintain the Resort as a first class resort and country
club, and shall have the continuing right to institute controls, operating
procedures, and regulations which in its sole discretion, it determines
necessary or desirable. The Agent shall retain such personnel, employees, agents
and contractors as in its sole discretion it deems necessary or desirable to
perform its functions hereunder.

7. RESERVATION OF UNIT; ACCESS TO UNIT:

The Agent shall maintain a reservation system through which all
reservations for the Unit shall be processed. The Owner agrees not to enter the
Unit or to permit any person, such as a family member, repairman, Owner's guest
or others to enter the Unit,

<PAGE>

unless such entry is during the confirmed times of Owner's Occupancy. If the
Owner desires to enter or permit others to enter the Unit during times other
than those of confirmed Owner's Occupancy, he must have the prior written
approval of the Agent to do so.

8. ACCOUNTING:

The Agent shall process all rental transactions relating to the Unit.
The Agent shall submit to the Owner on a monthly basis, a Unit Rental Statement,
containing in reasonable detail the rental activities and maintenance services
rendered to the Unit during the preceding month. The Owner shall have thirty
(30) days from date of receipt of said statement, to notify the Agent, in
writing, of any claims, errors or discrepancies pertaining to such statement.
Failure of the Owner to so notify the Agent within the aforemen-tioned thirty
(30) days term, shall constitute a waiver of any claim he may have in reference
thereof.

9. COLLECTIONS:

The Agent shall bill for and shall collect all rents arising from the
rental of the Unit during the Term hereof. Agent shall bear the cost of all
uncollectible rental fees, as well as all credit card discounts.

10. COMPENSATION TO AGENT:

The Owner shall pay to the Agent a commission (the Agent's Commission)
for the services to be rendered hereunder, of an amount equal to 50% of all Net
Rentals generated by the Unit during the Term hereof. Such commission shall be
payable monthly not later

<PAGE>

than on the tenth day of each month. For purposes hereof, Net Rentals shall mean
the aggregate of all Gross Rental Income generated by the Unit each month during
the Term hereof, less the following deductions (the "Operational Charges"):

(a) A marketing and administrative charge payable to the Agent equal to
15% of the Gross Rental Income generated by the Unit during each month,

(b) Travel agency and/or tour operator commission charge equal to the
actual expense of travel agent's or tour operator's commissions incurred each
month in the rental of the Unit, but not to exceed an amount equal to 5% of the
aggregate Gross Rental Income generated by the Unit during the same period,

(d) Water and sewer expense incurred by the Unit each month,

(e) Cable T.V. charges incurred by the Unit each month,

(f) Regular monthly regime maintenance fee ("Regime Maintenance Fee")
assessed on the Unit, excluding any special assessments for paint, extraordinary
repairs, replacement of capital common assets and insurance,

(g) Repair and maintenance expense of household appliances and
furniture of the Unit in an amount not to exceed $400, as actually incurred each
month, but excluding the replacement of any furniture, lamps, rugs, curtains or
major electrical, plumbing or other appliances. The annual fees of the
Preventive Maintenance Plan Agreement

<PAGE>

shall be deemed an Operational Charge.

(h) Expenses incurred each month in the replacement of glass, silver,
china and other minor household items of the Unit,

(i) A guest amenity charge of five dollars per day, per guest occupying
the Unit during each month, to contribute towards the cost of complimentary
food, beverage and other gratuitous services offered by the Agent to guests
staying at the Unit, and

(j) housekeeping charges ("Housekeeping Charges"), as indicated on
Exhibit A.

(k) Annual premium of the home-owners policy referenced in Section
29(e) of this Agreement shall be deemed an Operation Charge up to the sum of
$520.00.

Gross Rental Income and Gross Rentals shall refer to the total
aggregate rentals generated by the Unit for the period in question, but shall
exclude any occupancy or room tax, and any other revenue generated from any
occupant of the Unit for the sale of products and services.

The deduction of Operational Charges from Gross Rentals is solely for
purposes of calculating the Agent's Commission, and the Agent shall not be
liable for, nor is it assuming any obligation of paying such expenses, other
than from rentals generated by the Unit which might be available for such
payment.

11. DISTRIBUTION OF RENTALS, PAYMENT OF OPERATIONAL CHARGES:

The Agent shall collect all Gross Rentals generated by the

<PAGE>

Unit during the Term hereof. Owner hereby irrevocably empowers and directs the
Agent to (i) pay the Operational Charges out of Gross Rentals, (ii) calculate
the Agent's Commission and pay the same to Agent, and (iii) remit the balance of
Net Rentals to Owner (the Owner's Share"). The Agent will make every effort to
ensure that payment of the Owner's Share will be made to the Owner no later than
thirty (30) days after the end of the preceding month.

12. UTILITY BILLS, REPAIRS:

The Owner shall be responsible for the timely payment of all utility
bills of the Unit and repairs to items therein during the Term hereof. The Agent
will pay such charges on behalf of Owner solely from funds generated by the
rental of the Unit or from funds in the Owner's account with Agent and only if
the Unit has generated sufficient rental income during each particular month to
cover such expenses. The Owner hereby authorizes the Agent to retain from the
Gross Rentals of the Unit, the amounts necessary for the payment of the
marketing and administrative fee, travel agency and tour operator's commissions,
monthly electricity service, water and sewer service, cable TV service,
replacement of glass, silver, china and other minor household items, maintenance
or repair items of the interior of the Unit, provided however, that any
maintenance repair item in excess of $400.00 for labor and materials shall be
considered an extraordinary maintenance repair item requiring prior approval
from Owner, and Housekeeping Charges. Notwithstanding the aforesaid, Owner
recognizes that he is solely and primarily responsible for the payment of all
utility charges,

<PAGE>

Regime Maintenance Fee, repairs, and other Operational Charges and that, failure
of the Agent to withhold such funds and/or to effect such payments shall not
result in any liability whatsoever to the Agent or release Owner of its
obligation with respect thereto.

13. REGIME MAINTENANCE FEES:

The Owner authorizes the Agent to retain from the Gross Rentals of the
Unit amounts sufficient to pay the monthly Regime Maintenance Fee pertaining to
the Unit. Owner recognizes that he is solely responsible for the payment of
Regime Maintenance Fees, and failure of the Agent to withhold such funds, or the
insuffi-ciency of funds from rental operations shall not relieve the Owner from
its obligation to make such payment. The Agent will pay such charge on behalf of
Owner solely from funds generated by the rental of the Unit or from funds
available in the Owner's account with Agent and only if the Unit has generated
sufficient rental income during each particular month to cover such expense.

If at any time the Agent ceases to be the Management Agent for Las
Casitas I Resort Condominium, then the Unit's regular monthly Regime Maintenance
Fees shall not be deemed an Operational Charge for purposes of calculating the
Agent's Commission.

14. AMENITY CHARGE/HOUSEKEEPING CHARGE/TRAVEL AGENCY AND TOUR OPERATORS
COMMISSIONS:

(a) The Agent shall impose an "Amenity Charge" of five dollars per day
for each guest renting the Unit, to contribute towards any complimentary food,
beverage or other complimentary amenity offered to such guest. No charge shall
be imposed in the

<PAGE>

case of complimentary promotional occupancy.

(b) The Agent shall impose a Housekeeping Charge on each Unit as
outlined in Exhibit "A", for each day the Unit is rented to a guest. Such charge
shall be satisfied out of Gross Rentals of the Unit. The Agent shall satisfy
such expense on behalf of the Owner solely from funds generated by the rental of
the Unit.

The Owner shall not be required to request daily housekeeping
services during the period of Owner's Occupancy. However, the Owner agrees to
pay at the end of each Owner's Occupancy period the special Housekeeping Charge
specified in Exhibit "A", which will be billed to the Owner's account at the end
of each period of Owner's Occupancy either by Owner or its invitees.

(c) A Travel Agency and Tour Operators Commission charge shall be
imposed monthly on all commissionable Gross Rentals generated by the Unit during
such period, at a 5% rate. Once a year Agent shall adjust the aggregate Travel
Agency and Tour Operator commission charges to reflect the actual commission
expense incurred during the year, provided that such expense shall not exceed 5%
of all Gross Rentals generated by the Unit during that period. Any accrued
overcharge shall be reimbursed to Owner with the following payment of the
Owner's Share.

15. AVAILABILITY OF UNIT AND OWNER'S OCCUPANCY:

The Unit must be made available by Owner for rental by the Agent for
during at least eleven months each year. The Unit must be made available at
least twenty three (23) weeks out of the

<PAGE>

twenty five (25) high season weeks which extend from December 15 to April 30
each year. The Unit must be made available for rental specifically during
Christmas Week, Easter Week, the months of February and March of each year, and
such other time not to exceed 15 additional days as the Agent may determine from
time to time and notified in writing to the Owner not less than 120 days prior
to such additional term. The Owner may retain the use, or assign the use of the
Unit to his own guests or invitees on a reserved basis during an aggregate of 30
days during each Term. The Owner shall notify the Agent in writing at least 30
days in advance of the particular dates the Owner wishes to use his Unit for
purpose of Owner's Occupancy. The times requested by Owner shall be reserved by
Agent subject to availability as set forth in Section 16. Agent shall confirm to
Owner whether the dates requested by Owner are available.

As provided for in the Regulations adopted under the Puerto Rico
Tourism Act of 1993, the Owner may also use his Unit on sporadic days, without
prior reservation, up to a maximum of 60 days per year, provided that the Owner
pays a reduced rent to cover operational expenses of the rental program. In
order for the Owner to use his Unit without prior reservation, the Owner must
call the Agent not earlier than at 11:00 a.m. on the particular day in which the
Owner wishes to use his Unit. If the Unit has not been previously reserved for a
transient guest at the time of such call, the Owner may then request the Agent
to keep the same available for his use on that date.

In order for the Owner to use his Unit at any time other than during
the 30 day reserved Owner's Occupancy period, or during the 60 day maximum
sporadic, non-reserved use period, the Owner must

<PAGE>

pay the Agent the regular rental rate then in effect for his Unit.

For purposes herein, Owner's Occupancy period shall refer to the thirty
(30) days reserved use period as well as the sporadic, non-reserved use period.

16. RESERVATION COMMITMENTS:

The Owner authorizes the Agent to accept reservations for the Unit any
time during the Term except for excluded dates previously reserved for Owner's
Occupancy during the thirty (30) day reserved used period. Reservations accepted
by Agent shall be binding on the Owner. All instructions not to rent the Unit
submitted by the Owner consistent with this Agreement will be acknowledged in
writing by Agent, subject to existing reservations confirmed to guests. Both the
Owner and the Agent shall use their best efforts to avoid reservations
conflicts. If, through an error of Agent, a guest is occupying the Unit on dates
previously reserved by the Owner and confirmed in writing by the Agent, and if
substitute accommodations are available when the error is discovered, such
substitute accommodations shall be provided to the Owner free of occupancy
charges. Owner will be required to accept such substitute accommodations and
will not be permitted to force removal of occupant of his Unit. Agent shall have
no liability or responsibility to Owner other than as aforesaid.

17. CHECK-IN BY OWNER:

During the periods of Owner Occupancy, the Owner or Owner's invitee
shall comply with the standard check-in and check-out procedures established by
the Agent for Resort guests and guest

<PAGE>

renters of all other units. Failure to do so will result in a late departure
fee, which will be billed to the Owner's account, plus all expenses incurred by
the Agent in accommodating a renter that has a confirmed reservation for the
Unit.

18. PROMOTIONAL USE:

The Owner authorizes the use of the Unit by the Agent free of rent for
a period of seven (7) nights during each Term of this Agreement, to be used by
the Agent for the complimentary lodging of persons that have or could have an
impact on the operational success of the Resort. The frequency of the use of the
Unit for promotional purposes will be selected by the Agent in a fair and
equitable manner in order to ensure, to the extent possible, substantially even
distribution of such promotional usage among similar condominium units
participating in the Agent's rental program. The Owner will be informed of use
of the Unit for promotional purposes on the monthly statement. The Owner shall
not be responsible for the Housekeeping Charge associated with the promotional
use of the Unit.

19. PUERTO RICO TAXES:

The Owner shall be solely responsible to file for and to qualify for
any tax incentives that might be afforded under the provisions of the Puerto
Rico Tourism Development Act of 1993, or other statute that may be approved in
the future granting similar benefits. Likewise, the Owner shall be required to
abide by the requirements of such Act and of the Regulations adopted thereunder,
in order that his Unit continues to qualify under such Act and

<PAGE>

Regulations, as a condohotel unit during the Term.

The Owner recognizes, agrees and understands, that the whole or a part
of the rental income from his Unit may be subject to Puerto Rico income
taxation. The Owner also recognizes that if he is not a bonafide resident of
Puerto Rico such tax, if required, will be collected through withholding at the
source from the total rental amounts payable to Owner. In such event, the Owner
expressly authorizes the Agent to withhold Puerto Rico taxes from the rentals
payable to him, at the applicable rate established by Puerto Rico law and to pay
to the Puerto Rico Secretary of the Treasury the withheld amounts at the time
and in the manner required by law and regulation. The Owner recognizes that
under current Puerto Rico law, non-resident Owners who are United States
citizens, and certain non resident alien Owners, will be under the obligation to
file annual Puerto Rico income tax returns. Depending upon their personal tax
circumstances, such individuals may either have an additional Puerto Rico tax
liability over and above the amount of tax withheld from the rentals, or be
entitled to a full or partial refund of the amount withheld. The Owner expressly
recognizes that the filing of any Puerto Rico income tax return due, or payment
of any additional Puerto Rico tax due over and above the amount withheld from
the rentals payable to Owner, is entirely outside the scope of this Agreement,
and that the Agent shall not be deemed to be the Owner's representative or agent
for these or any other purpose related to Puerto Rico taxation other than the
actual withholding of tax from the rentals payable to

<PAGE>

Owner in the case of non-resident owners. The Owner understands that he is
solely and exclusively responsible for meeting his Puerto Rico tax obligations.
The Agent will provide the Owner a tax withheld form annually, reasonably prior
to the statutory date for filing income tax returns, the 15th of April.

20. REPORTS TO GOVERNMENT AGENCIES:

The Owner herewith authorizes the Agent to submit to the Tourism
Company and the Treasury Department of the Commonwealth of Puerto Rico a written
statement(s) indicating the Owner's name, social security number, address, the
date the Unit was acquired, the date the Unit joined the rental program, the
date the Unit was withdrawn from the rental program, the number of days the Unit
was reserved and used by the Owner and the number of days the Owner used the
Unit without prior reservation, and the gross proceeds paid by Agent to the
Owner, as well as any other information required under the 1993 Puerto Rico
Tourism Development Act, the regulations approved thereunder, as well as under
any other applicable statute, rule or ordinance. The Agent shall send a copy of
the aforesaid statement to the Owner.

21. OCCUPANCY TAXES, CREDIT CARD DISCOUNTS:

All occupancy and room taxes shall be charged and collected by Agent in
addition to the Gross Rentals and such taxes shall be retained by Agent to be
paid to the Treasury Department of the Commonwealth of Puerto Rico. Occupancy
and room taxes shall not be deemed part of the Gross Rentals. Owner shall not be
liable for the payment of occupancy or room taxes.

<PAGE>

Credit card discounts and service charges shall be for the account of
Agent and shall not be deemed an Operational Charge.

22. TELEPHONE FACILITIES:

The Agent shall provide a telephone in each living/sitting room and in
each bedroom of the Unit which shall be connected to the Resort's telephone
switchboard. All phone charges incurred by a guest of the Unit shall be billed
and collected by the Agent and shall not be part of the Gross Rentals of the
Unit. Upon the termination of this Agreement, the Resort shall remove such
telephone equipment from the Unit.

23. CABLE TV FACILITIES:

The Owner shall provide cable TV service connection in each bedroom.
Each bedroom must have a TV set with a TV stand as indicated on Exhibit "C"
hereto. The Owner shall be liable for payment of Cable TV service charges,
except for pay per view services. Cable TV charges shall be included as an
Operational Charge.

24. INVENTORIES:

The Agent, in order to assist the Owner in the promotion and rental of
the Unit, and maintain quality standards shall:

(a) conduct as often as Agent considers appropriate but not
less than twice during the Term of this agreement an
inventory of all major furnishings and equipment;

(b) inspect the general condition of the Unit; and

<PAGE>

(c) provide the Owner with the inventory report, a statement
as to the condition of the Unit, and written
recommendations for improvements or repairs.

25. MAINTENANCE OF UNIT:

The Owner agrees to maintain the Unit at a par with quality standards
established by the Agent for the Resort in accordance with the standard list
included with this Agreement. The Owner hereby agrees to effect any
recommendation or improvement to the Unit or the contents thereof which, in the
sole opinion of the Agent, is deemed necessary to meet the quality standards
referred to above. The Owner agrees not to modify in any way the interior of the
Unit nor to substitute any furnishings or equipment therein, without prior
written consent from the Agent. The Owner further agrees that the storage closet
within the Unit may be used by Agent during the Term, to store cleaning supplies
and equipment, linen, bath supplies and inventory of household items. In the
event that the Unit is not kept up to acceptable standards, the Agent reserves
the right to have it removed from the rental program. When such determination is
made, the Agent will notify the Owner in writing. The Owner will have thirty
(30) days from notification to correct or authorize the Agent to correct the
deficiencies in the Unit at the expense of the Owner. Upon correction of the
deficiencies at the Owner's expense, the Unit will be placed back into the
rental program. After the thirty (30) days period, if the Unit has not been
placed up to standards, the Agent may proceed to cancel this Agreement.

<PAGE>

26. MAINTENANCE AGREEMENT:

To assure the quality and maintenance of the items, equipment and
furnishings of the Unit, an annual maintenance agreement is mandatory for Units
in the rental program (copy of the maintenance agreement is attached hereto as
Exhibit "B").

The Owner shall maintain the Unit (including furnishings), in first
class condition, and agrees to maintain a complete set of kitchen utensils,
glasses, dishes, and flatware and other equipment, as specified in the "Rental
Properties Basic Equipment List" (copy attached as Exhibit "C"), based upon the
number of rooms in the Unit. The Agent may replace missing and unserviceable
items and charge Owner's account for such costs, except that no more than
$150.00 will be expended during any month without first notifying the Owner. The
cost of such replacements shall be deemed an Operation Charge as provided for
herein. In the event that a sufficient supply of basic equipment is not present,
the Unit will be deemed not to meet the acceptable standards of the Agent and
shall be removed from the rental program.

27. CLEANING OF UNIT:

As part of the Housekeeping Charge the Agent shall undertake such
general interior house cleaning of the Unit, including window washing, as the
Agent deems necessary.

28. REBATES:

The Owner agrees that the Agent may offer a renter up to one hundred
percent (100%) rebate per night, in the event of failure of a major appliance
which cannot be repaired or replaced, or a

<PAGE>

temporary disconnection of any utility, due to non-payment of such service or
otherwise. The Owner agrees that the guest may be transferred to another
available comparable accommodation, if such rebate is unacceptable to the guest.
Owner authorizes the Agent to make, at Owner's expense and without Owner's prior
approval, any emergency repairs up to $400.00 in the event of the failure of the
cooling system or of any major appliance, or in the event of disruption of
essential utility services to the Unit during any period the Unit is rented. The
Agent is authorized to correct any such problems. Such emergency repairs up to
the sum of $400.00 shall be deemed an Operational Charge.

29. INDEMNITY AND HOLD-HARMLESS:

(a) Owner shall at all times during the term of this Agreement, at its
own cost and expense, indemnify and save, protect and keep the
Agent, its employees or agents, harmless against any and all
liability, cost, damage, expense and fine, whatsoever, which may
arise or be claimed by any person for any loss or damage to any
property or injury to or death of any person, arising from any
willful or negligent act of the Owner.

(b) In the event any claim, suit or proceeding shall be brought
against Agent or any of its agents, servants and employees as the
result of or based on any liability, loss, damage or injury, or
death arising from the willful or negligent act of the Owner, its
employees or agents (other than of the Agent), Owner shall assume
the payment

<PAGE>

of any and all costs, expenses, settlements or judgments amounts
which may be made or recovered against the Agent on account
thereof, including Agent's reasonable attorney's fees and
disbursements. In addition, in all proceedings against Agent, not
based on Owner's willful acts or negligence, Owner shall cooperate
with Agent in the defense of the case.

(c) Agent assumes no liability nor shall it be responsible for the
loss or damage to any property of the Owner, whether or not
located at the Unit, including losses due to theft, robbery or
mysterious disappearance.

(d) The Agent and its agents or employees shall not be liable for any
loss or damage to the Unit or to equipment, furnishings or
apparatus thereto or for any injury, death or loss to the Owner,
members of his family, employees or invitees, except for injuries,
death or loss arising from or caused by Agent's willful acts and
gross negligence. Agent shall not be liable for any damage to the
Unit or contents thereof or injury to the Owner, members of his
family, employees or invitees, resulting from any accident or
occurrence in or upon the Unit or the building of which it is a
part, including but not limited to claims for damages, resulting
from:

(i) negligent or willful action or omission of renters
occupants or their guests;

(ii) injury done or occasioned by wind, rain or other

<PAGE>

<PAGE>
elements;

(iii) theft, vandalism, fire, flood or acts of God; or (iv)
the physical condition of the Unit.

(e) Owner shall be responsible for procuring and maintaining at his
own cost and expense, a home-owners insurance policy, covering the
Unit and Owner's property inside the Unit and third party
liability insurance as a rental property, in a minimum amount of
$500,000.00. Said policy shall contain a stipulation that Owner's
insurer will provide a thirty (30) day written notice of
cancellation of insurance to Agent. Such policies shall be carried
by solvent and responsible insurance companies licensed to do
business in the Commonwealth of Puerto Rico. At the commencement
of the term hereof Owner shall deliver to Agent a Certificate(s)
issued and executed by Owner's insurer and evidencing the
insurance coverage required hereunder. In addition, Owner shall
deliver to Agent renewal policies or certificates thereof not
later than thirty (30) days prior to the expiration of any
policies which Owner is required to carry hereunder. Such policies
shall contain a waiver of subrogation clause in favor of the
Agent. Owner shall be responsible for paying the premium of the
home-owners insurance policy at its inception and at the time of
renewal. Owner will submit to the Agent a copy of the invoice for
such premium duly marked paid, to be credited as an

<PAGE>

Operational Charge. The Agent will credit such charge on an
installment basis at its discretion.

(f) Agent shall maintain at its own cost and expense public liability
insurance covering the risk of any loss, cost or expense arising
from any accident, injury or death arising or occurring within the
Unit, except during the term of Owner's Occupancy, and the common
areas of Las Casitas Resort Condominium or the Resort, as a
consequen-ce of Agent's negligence or liability, in amount not
less than $10,000,000 in the aggregate and $5,000,000 per
occurrence. Agent shall cause its insurance carrier to issue a
certificate of insurance naming Owner as additional insured.
Notwithstanding the aforesaid, all insurance adjustments for
losses shall be carried out solely by the Agent.

30. SALE OF UNIT:

In the event that the Owner sells his Unit, this Agreement shall stay
in effect for the balance of the then current Term and any effective renewal
thereof. Owner shall notify Agent in writing when the Unit is made available for
sale, whether listed with a real estate agent or for sale by Owner. The Unit
cannot be shown for sale during any period during which the Unit is occupied by
a guest. The Unit may be showed for sale at other times, provided the Owner
obtains the written authorization of the Agent, indicating the times and dates
when the Unit may be shown. Owner and/or his rental real estate agent shall sign
out the Unit key and

<PAGE>

return the same from and to the Agent's front desk or Unit Management Office.
Agent is authorized by the Owner to notify the Tourism Company and the Treasury
Department of the Commonwealth of Puerto Rico, of the sale of all Units
subject to the Rental Program.

31. DEFAULTS:

In the event Owner fails to comply with any of the terms and conditions
of this Agreement, the Agent may, upon written notice to Owner, suspend the
rental of the Unit for a specified period of time, for contact and
clarifications with Owner, or shall have the right, upon written notice to
Owner, to immediately terminate this Agreement. If Owner continually fails or
refuses to comply with its obligations hereunder, the Agent may, upon written
notice to Owner, immediately terminate this Agreement.

32. TERMINATION:

The Agent may terminate this Agreement at any time in its sole
discretion for any reason by giving thirty (30) days prior written notice to the
Owner of its intention to terminate, whereupon this Agreement shall terminate on
the date set forth in such notice. Upon termination of this Agreement, the Agent
is required to notify the Tourism Company and the Treasury Department that the
Unit is no longer part of the Agent's rental program.

33. ENTIRE AGREEMENT:

This Agreement constitutes the entire agreement between Owner and the
Agent, there being no understanding other than those written and specified
herein. This rental agreement supersedes

<PAGE>

all prior rental agreements between Owner and the Agent.

34. NOTICES:

All notices shall be in writing and shall be deemed given two business
days after mailed to the party's address stated herein, postage prepaid, return
receipt requested, or upon personal delivery or sent by telecopier answer back
confirmed, or overnight carrier:

(a) Notice to Agent shall be sent as follows:

El Conquistador Resort & Country Club
Williams Hospitality Group, Inc.
Post Office Box 70001
Fajardo, Puerto Rico 00738

Attention: Managing Director

with copy to:

Williams Hospitality Group, Inc.
Post Office Box 50003
San Juan, Puerto Rico 00902

Attention: President

(b) Notice to Owner shall be sent to the address shown on
the preamble to this Agreement.

35. MISCELLANEOUS:

(a) The Agent, its stockholders, partners or their affiliates are the
current managers of the Resort and may manage, own or build other hotels,
resorts, condominiums, or transient guest facilities, which may compete with the
Resort, and with the rental of the Unit and other units within the Resort. The
Agent has engaged the services of Williams Hospitality Group Inc. ("WHG"), to
manage the Resort and to manage its rental program for Las Casitas

<PAGE>

Resort Condominium. Owner will accept performance hereunder by WHG and any
subsequent manager of the Resort.

(b) The Agent, its stockholders, partners or their affiliates may
contract with the Resort as vendors, purchasers, contractors,
suppliers and purveyor of goods or services.

(c) The Agent, its stockholders, partners or affiliates reserve the
right to construct additional hotel rooms in the Resort and
additional condominium units which will compete with the Unit and
with all other units and rooms in the Resort, without such
construction constituting a violation of the terms hereof.

36. GOVERNING LAW:

This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Puerto Rico.

37. SUCCESSORS.

The provisions of this Agreement shall inure to the benefit of and
shall bind the successors and assigns of the respective parties hereto.

38. ASSIGNMENT:

The Agent may assign this contract to any party or successor in
interest of Agent. The Owner may not assign this contract except in connection
with the sale of the Unit as provided for herein.

39. WAIVER OF TRIAL BY JURY:

Except as may be prohibited by law, neither party hereto shall

<PAGE>

seek jury trial on any lawsuit, proceeding or counterclaim based upon or arising
from this Agreement.

40. PARTIAL INVALIDITY:

If any term of this Agreement is held invalid or unenforceable, the
remainder of this Agreement or the application of such term to circumstances
other than those as to which it is held invalid, shall not be affected thereby.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

EL CONQUISTADOR PARTNERSHIP
L.P.

- ---------------------------- --------------------------
By OWNER

--------------------------
CO-OWNER

The Owner represents and warrants that he/she / / is / / is not, a bonafide
resident of Puerto Rico for tax purposes.

- ---------------------------
Owner

- ---------------------------
Co-Owner

<PAGE>

AMENDMENT TO REIMBURSEMENT AGREEMENT
AND RATIFICATION OF GUARANTIES

THIS AMENDMENT TO REIMBURSEMENT AGREEMENT AND RATIFICATION OF
GUARANTIES (this "Amendment") is made as of the 29th day of January, 1999, by
and among EL CONQUISTADOR PARTNERSHIP L.P., a Delaware limited partnership,
having an address at 1000 El Conquistador Avenue, Las Croabas, Fajardo, Puerto
Rico 00738 ("Borrower"), PATRIOT AMERICAN HOSPITALITY, INC., a Delaware
corporation. having an address at 590 Madison Avenue, New York, New York 10022
("Guarantor"), and CITICORP REAL ESTATE, INC., a Delaware corporation, having an
address at 599 Lexington Avenue, New York, New York 10043 ("Lender").

RECITALS:

A. Lender is the owner and holder of certain reimbursement obligations in
the principal amount of $90,000,000 (collectively, the "Reimbursement
Obligations") which are outstanding pursuant to that certain Letter of Credit
and Reimbursement Agreement, dated as of February 7, 1991, by and between The
Bank of Tokyo-Mitsubishi, Ltd. (f/k/a The Mitsubishi Bank, Limited) ("BTM") and
the Borrower (as amended by the Modification Agreement (as hereinafter defined)
and the Amendment Agreement (as hereinafter defined) and as otherwise heretofore
amended, the "Reimbursement Agreement").

B. The Reimbursement Obligations are secured, in part, by certain
Collateral Pledge Agreements more particularly described in the Reimbursement
Agreement and by certain other notes, deeds of mortgage, assignments, guaranties
and other documents and instruments executed in connection with the
Reimbursement Agreement (including those documents executed in connection with
that certain Assignment and Modification Agreement dated as of August 3, 1998 by
and among the Borrower, the Lender, the Puerto Rico Industrial, Medical,
Educational and Environmental Pollution Control Facilities Financing Authority,
Banco Popular de Puerto Rico, as trustee, and BTM (the "Modification
Agreement")) or otherwise with respect to the Reimbursement Obligations. The
term "L/C Documents", as used herein, shall have the meaning ascribed thereto in
the Reimbursement Agreement.

C. The Reimbursement Obligations are guaranteed by Guarantor pursuant to a
Guaranty dated as of August 3, 1998 in favor of Lender (the "Patriot Guaranty")
and that certain Guaranty, dated as of May 5, 1992, made by WMS Industries Inc.,
Hugh Andrews, Burton I. Koffman and Richard E. Koffman for the benefit of BTM,
as assumed in part by Guarantor pursuant to that certain Assumption of Guaranty,
dated as of March 31, 1998, executed by Guarantor, and that certain guaranty by
Guarantor dated as of March 31, 1998 to assume the obligations of KGC under
paragraph 4 of the First Amendment to Letter of Credit and Reimbursement
Agreement (the "Deficiency Loan Guaranty"; the Patriot Guaranty and the
Deficiency Loan Guaranty are hereinafter sometimes collectively referred to as
the "Guaranties").

D. The Reimbursement Agreement has been amended by that certain Amendment
to Reimbursement Agreement and Ratification of Guaranties, dated as of November
3, 1998, by and among the Borrower, the Guarantor and Lender (the "Amendment
Agreement").

<PAGE>

E. The Reimbursement Obligations are due and payable in full no later than
January 29, 1999 (the "First Extended Maturity Date") and Borrower has requested
that Lender extend the First Extended Maturity Date to March 31, 1999 (the
"Second Extended Maturity Date") and provide the Borrower with the option to
extend the Second Extended Maturity Date to June 30, 1999 (the "Third Extended
Maturity Date") upon satisfaction of certain conditions as more particularly
provided herein; and

F. Lender has agreed to extend the First Extended Maturity Date to the
Second Extended Maturity Date, to provide such extension option and to make
certain other modifications to the Reimbursement Agreement and the other L/C
Documents, but only on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Lender, Borrower and Guarantor hereby agree as
follows:

1. Recitals; Definitions. The recitals set forth herein are true and
accurate and are incorporated herein by reference. Capitalized terms not
otherwise defined herein shall have the meaning ascribed thereto in the
Reimbursement Agreement.

2. Maturity Date; Extension Option.

a. Section 1 of the Reimbursement Agreement is hereby amended to add the
following defined terms:

JANUARY 1999 AMENDMENT AGREEMENT shall mean that certain Amendment to
Reimbursement Agreement and Ratification of Guaranties dated as of
January 29, 1999 by and among the Company, the Bank and Patriot.

SECOND EXTENDED MATURITY DATE shall mean March 31, 1999.

THIRD EXTENDED MATURITY DATE shall mean June 30, 1999.

b. Section 1 of the Reimbursement Agreement is hereby amended to delete
the term "Maturity Date" and to substitute the following in lieu thereof:

MATURITY DATE shall mean the earlier to occur of (a) the Second
Extended Maturity Date, or, if extended pursuant to Section 3A hereof,
the Third Extended Maturity Date, or (b) any earlier date on which the
entire Reimbursement Amount is required to be paid in full, by
acceleration or otherwise, under this Agreement or any of the other L/C
Documents.

c. Section 3A(e) of the Reimbursement Agreement is hereby deleted in
its entirety and the following is hereby substituted in lieu thereof:

(e) Provided that (i) on the Notice Date (defined below) and on March
31, 1999, interest payable on the Reimbursement Amount shall be
current and the indebtedness outstanding hereunder shall be in full
force and effect, (ii) on the Notice Date and on March 31, 1999, no
Event of Default or Default shall exist and no "event of default"

<PAGE>

under any of the L/C Documents, shall exist, (iii) on or before
March 30, 1999, the Company shall have entered into a written
agreement with GDB, in form and substance reasonably satisfactory to
the Bank ("GDB Agreement"), pursuant to which GDB shall have agreed
to release the mortgage and all other security documents encumbering
the Hotel (or any portion thereof) which are securing the GDB Loan
upon the issuance of the Refunding Bonds, (iv) on or before the Notice
Date, the Company shall have provided to the Bank evidence reasonably
satisfactory to the Bank that (1) there has been no material adverse
change in the financial condition of the Company or any of the
Guarantors and no such change shall have occurred between the Notice
Date and March 31, 1999, (2) the term of each of the loans evidenced
by or made pursuant to the terms of the Patriot Loan Agreement has
been unconditionally extended to a date not earlier than June 30,
1999, and (3) Definitive Equity Agreements (as such term is defined
in the Patriot Loan Agreement) have been executed and delivered in
accordance with and satisfying the terms of the Patriot Loan
Agreement, and (v) on or before March 30, 1999, the Company shall
have made or caused to be made the additional deposits with the Bank
as required under Section 6.b. of the January 1999 Amendment
Agreement, then the Company shall have the one time option and right
of extending the Second Extended Maturity Date until the Third
Extended Maturity Date by notifying the Bank in writing of the
Company's desire to exercise its option to extend the Second
Extended Maturity Date until the Third Extended Maturity Date, which
notice must be given, if at all, on or before March 15, 1999. The date
on which such notice is given is called the "Notice Date". The Company
shall pay all costs incurred by the Bank in connection with the
extension of the Second Extended Maturity Date to the Third Extended
Maturity Date including, without limitation, reasonable attorneys'
fees and expenses incurred by the Bank, and all costs and expenses in
verifying that the Company has satisfied each of the conditions to the
extension as described in this Section 3A(e). Upon confirmation in
writing from the Bank to the Company that all of the above conditions
have been fully and timely satisfied, the Second Extended Maturity
Date shall be automatically extended to the Third Extended Maturity
Date.

3. Extension Fee. In connection with and as a condition to the extension of
the First Extended Maturity Date to the Second Extended Maturity Date and the
other modifications being made herein, Borrower shall pay to Lender an extension
fee in the amount of $90,000 (the "Extension Fee"). The Extension Fee shall be
deemed fully earned by Lender upon receipt and shall be non-refundable to
Borrower under all circumstances.

4. Bank Rate. Section 1 of the Reimbursement Agreement is hereby amended to
delete the term "Bank Rate" and to substitute the following in lieu thereof:

BANK RATE shall mean (a) from August 3, 1998 until the first day of
September, 1998, a rate equal to 7.91% per annum; (b) from the first
day of September, 1998 until January 31, 1999, an interest rate per
annum equal to the sum of (i) the LIBOR Rate plus (ii) 225 basis points
(rounded upwards, if necessary, to the nearest one-eighth percent
(.125%)); and (c) from February 1, 1999 until the Maturity Date, an
interest rate per annum equal to the sum of (i) the LIBOR Rate plus
(ii) 275 basis points (rounded upwards, if necessary, to the nearest
one-eighth percent (.125%)). The Bank Rate shall be adjusted on each
LIBOR Determination Date to account for any changes in the LIBOR Rate,
which

<PAGE>

adjustment shall be effective on the commencement of the next
succeeding LIBOR Reference Period.

5. Cash Flow Reserve.

a. Deposits. Commencing on February 10, 1999 and on the tenth (10th)
day of each calendar month thereafter (each such date being referred to herein
as a "Cash Flow Deposit Date"), Borrower shall deposit with Lender an amount
(each, a "Cash Flow Deposit" and collectively, the "Cash Flow Reserve") equal to
the amount, if any, that (i) one hundred percent (100%) of all Cash Flow (as
defined below) for the previous calendar month exceeds (ii) the amount set forth
on Schedule 1 hereto with respect to such previous calendar month. Borrower's
failure to deposit with Lender any Cash Flow Deposit on the applicable Cash Flow
Deposit Date shall constitute an Event of Default under the Reimbursement
Agreement without notice or demand and without the benefit of any grace period
provided for in any L/C Document. Except as expressly provided in Section 6.b.
hereof, no portion of the Cash Flow Reserve shall be advanced to Borrower until
such time as the Reimbursement Obligations have been repaid and satisfied in
full and all other amounts and obligations of the Borrower under the
Reimbursement Agreement and the other L/C Documents have been fully repaid and
satisfied.

b. Cash Flow Reserve Fund. Lender shall deposit the Cash Flow Reserve
in an interest-bearing escrow account (the "Cash Flow Reserve Fund"). Borrower
hereby acknowledges and confirms that (i) the Cash Flow Reserve shall not
constitute a trust fund and may be commingled with other monies held by Lender;
(ii) Lender or its designee shall have the sole right to make withdrawals from
the Cash Flow Reserve Fund; and (iii) Lender shall have no responsibility or
liability for the amount of interest earned on the Cash Flow Reserve. All
interest earned from investment of the funds deposited in the Cash Flow Reserve
Fund shall be credited to the Cash Flow Reserve Fund. Borrower shall include and
report such interest in its income for Federal, state, commonwealth and local
income and franchise tax purposes.

c. Security Interest. As additional security for the payment of all
sums due under the L/C Documents and the performance by Borrower of its
obligations thereunder, Borrower hereby pledges, assigns and grants to Lender a
continuing perfected security interest (to the extent Lender maintains
possession of same) in and to and a first lien upon, the Cash Flow Reserve Fund
and the Cash Flow Reserve.

d. Default. Borrower shall be in default under the Reimbursement
Agreement if it fails to make when due any Cash Flow Deposit as provided herein.
Upon the occurrence of such a default and during the continuance thereof, in
addition to the remedies specified in the Reimbursement Agreement, Lender shall
be able to exercise all of its rights and remedies under any or all of the L/C
Documents. If Borrower defaults on any payment due under the Reimbursement
Agreement or any of the other L/C Documents, or if Borrower defaults under any
other provision in the L/C Documents, then, upon any such default and during the
continuance thereof, Lender may, in its sole and absolute discretion, use the
Cash Flow Reserve (or any portion thereof) for any purpose permitted under the
L/C Documents, including, but not limited to (i) payment of all or any portion
of the Reimbursement Obligations and other amounts due under the L/C Documents;
provided, however, that such application of funds shall not cure or be deemed to
cure any default; (ii) reimbursement of Lender for all losses and expenses
(including, without limitation, reasonable legal fees) suffered or incurred by
Lender as a result of

<PAGE>

such default; and/or (iii) payment of any amount expended in exercising any of
the rights and remedies available to Lender at law or in equity or under the L/C
Documents, all in such order, proportion and priority as Lender may determine in
its sole discretion. Lender's right to withdraw and apply the Cash Flow Reserve
Fund as provided herein shall be in addition to all other rights and remedies
provided to Lender under the L/C Documents and at law or in equity.

e. Insufficient Funds in the Cash Flow Reserve Fund. The insufficiency
of any balance in the Cash Flow Reserve Fund shall not relieve Borrower from its
obligations under the Reimbursement Agreement or any of the other L/C Documents.

f. Definitions. As used in this Paragraph 5, the following terms shall
have the meanings indicated:

(i) "Gross Receipts" for any period, means, without duplication,
the sum of all income, proceeds, receipts and revenues generated by or from the
operation or use of the Hotel or otherwise arising in respect of the Hotel from
and after January 1, 1999 which are properly allocable to the Hotel, including
Rents, insurance proceeds or condemnation awards paid to reimburse Borrower for
loss of business or rental income (but specifically excluding any insurance
proceeds actually deposited by Borrower into the Net Proceeds Reserve Fund (as
such term is defined in the Amendment Agreement) or otherwise paid to Lender),
proceeds from any loans obtained by Borrower and withdrawals from cash reserves
(except to the extent that any operating expenses paid therewith are excluded
from Operating Expenses), but excluding security deposits until forfeited by the
depositor. Gross Receipts shall be determined in accordance with the cash basis
method of accounting and applicable Hotel Accounting Standards, consistently
applied.

(ii) "Hotel Accounting Standards" means the accounting standards
set forth in the Uniform System of Accounts for the Lodging Industry (9th
Revised Edition, 1996) of the Hotel Association of New York City, Inc., as
adopted by the American Hotel and Motel Association.

(iii) " Cash Flow" for any period, means the amount, if any, by
which Gross Receipts received in such period exceeds the amount of Operating
Expenses paid in such period.

(iv) "Operating Expenses" means, without duplication, all normal,
reasonable and customary costs and expenses incurred by Borrower relating to the
operation and maintenance of the Hotel, including ad valorem real estate taxes
and assessments, income taxes, payroll and other taxes, insurance premiums,
escrow and reserve payments to Lender but excluding any amounts deposited into
the Net Proceeds Reserve Fund or the Insurance Reserve Fund (as defined in the
Amendment Agreement), maintenance costs, management fees and expenses to the
extent permitted to be paid under the terms of the Reimbursement Agreement and
the other L/C Documents (the "Permitted Management Fees"), accounting, legal and
other professional fees related to operation of the Hotel and wages, salaries
and personnel expenses, all as determined in accordance with the cash basis
method of accounting and applicable Hotel Accounting Standards, consistently
applied; provided that (A) Operating Expenses shall not include interest,
principal or other payments made with respect to the Reimbursement Obligations
or any other indebtedness of the Borrower to the extent paid

<PAGE>

from funds held by Lender in escrow, non-cash charges such as depreciation and
amortization, the costs of any capital improvements or repairs made to the
Hotel, the costs of Restoration, the costs of any furniture, fixtures or
equipment, any refunds of security deposits made to any tenants or
concessionaires at the Hotel, or any general or administrative expenditures of
the Borrower not, in the reasonable discretion of the Lender, attributable to
the Hotel, and (B) for the purpose of computing Operating Expenses, no fees,
commissions, charges, expenses or other amounts paid to any Affiliate of the
Borrower, including, without limitation, Manager, or any employee, agent, or
independent contractor of any such Affiliate of Borrower shall constitute an
Operating Expense except for Permitted Management Fees. Notwithstanding anything
to the contrary contained herein, the term "Operating Expenses" shall not
include any of the foregoing items to the extent paid directly or reimbursed by
any tenant or concessionaire of the Borrower or any other third party unless the
amount paid by such tenant or concessionaire is also included in Gross Receipts
for the same period.

g. Borrower hereby directs Manager to pay directly to Lender from
Gross Receipts held by Manager any Cash Flow required to be paid to Lender
hereunder.

6. Reserves.

a. Notwithstanding any provision of the Reimbursement Agreement
or in the Replacement Reserve Agreement, Debt Service Reserve Agreements or
Required Repair Reserve Agreement, each dated as of August 3, 1998, between
Borrower and Lender, on or before the date hereof and as a condition to the
extension of the First Extended Maturity Date to the Second Extended Maturity
Date, Borrower has caused the cash balances in each of the following escrows and
reserves to equal, at a minimum, the amounts set forth below:

Tax escrow established pursuant to Section 7(uu) $3,298,100.97
of the Reimbursement Agreement

Replacement Reserve Fund created pursuant to the $0.00
Replacement Reserve Agreement

Debt Service Reserve Fund pursuant to the Debt $1,689,834.38
Service Reserve Agreement

Debt Service Reserve Fund pursuant to the Debt $525,000
Service Reserve Agreement (re GDB Loan)

Insurance Reserve pursuant to Section 6 of the $7,500,000
Amendment Agreement

b. In the event that Borrower requests an extension of the Second
Extended Maturity Date until the Third Extended Maturity Date pursuant to the
terms of the Reimbursement Agreement, as amended hereby, then on or prior to
March 30, 1999, Borrower shall cause to be deposited with Lender, for further
deposit by Lender into the respective debt

<PAGE>

service reserve funds created under the Debt Service Reserve Agreements between
Borrower and Lender, each dated as of August 3, 1998, the following amounts: (i)
$1,689,834.38 (the "Reimbursement DSRF Amount"), to be deposited into the debt
service reserve fund created under the Debt Service Reserve Agreement respecting
the Reimbursement Obligations (the "Reimbursement DSRF Fund"), and (ii) $525,000
(the "GDB DSRF Amount"), to be deposited into the debt service reserve fund
under the Debt Service Reserve Agreement respecting the GDB Loan (the "GDB DSRF
Fund"). Notwithstanding the foregoing and provided that no Event of Default or
Default shall exist and no "event of default" or event which, with the passage
of time, the giving of notice, or both, would constitute an "event of default"
under any of the L/C Documents, shall exist, upon the written request of the
Borrower, Lender shall transfer (through a bookkeeping entry and a reallocation
of escrow funds on the books of the Lender) moneys from the Cash Flow Reserve
Fund, to the extent of any available moneys therein, into the Reimbursement DSRF
Fund and GDB DSRF Fund in amounts equal to the Reimbursement DSRF Amount and the
GDB DSRF Amount, respectively; provided, that, to the extent that the cash
balance in the Cash Flow Reserve Fund is insufficient to fully fund the
Reimbursement DSRF Amount and/or the GDB DSRF Amount, then the balance of the
Reimbursement DSRF Amount and/or the GDB DSRF Amount shall be funded by the
Borrower from its own funds and not from any other escrow or reserve fund being
held by Lender under the Reimbursement Agreement or any of the other L/C
Documents. In the event that for any reason the Second Extended Maturity Date is
not extended until the Third Extended Maturity Date, any moneys transferred by
Lender from the Cash Flow Reserve Fund to the Reimbursement DSRF Fund and/or GDB
DSRF Fund as provided herein may be transferred and reallocated back to the Cash
Flow Reserve Fund in Lender's sole and absolute discretion.

7. Patriot Subordinated Loan. As of the date hereof, the outstanding
principal balance of the Patriot Subordinated Loan (as such term is defined in
the Amendment Agreement) is $3,308,917. Borrower and Guarantor hereby confirm
that the Patriot Subordinated Loan may be repaid only from and to the extent of
any Available Insurance Funds (as such term is defined in the Amendment
Agreement) and, subject to repayment as provided in the Reimbursement Agreement,
is and shall remain fully subordinated to the Reimbursement Obligations in all
respects.

8. Confirmation of Re-Opening. Borrower hereby represents and warrants to
Lender that all guest rooms, the casino, pool and other amenities of the Hotel
have been fully re-opened so as to permit the Borrower to conduct its business
in the manner in which such business was conducted prior to the Hurricane Damage
(as such term is defined in the Amendment Agreement).

9. Project Items. Borrower's failure to deliver to Lender, on or before
February 15, 1999, (i) a detailed project schedule for completion of the
Restoration, (ii) a project budget reconciliation of the Approved Construction
Budget (as defined in the Amendment Agreement) with actual expenditures for the
Restoration, and (iii) a revised project budget for the remaining Restoration
for approval by Lender, shall constitute an Event of Default under the
Reimbursement Agreement without notice or demand and without the benefit of any
grace period provided for in any L/C Document.

<PAGE>

10. References. All references in the Reimbursement Agreement and each of
the other L/C Documents to the Reimbursement Agreement shall mean and refer to
the Reimbursement Agreement, as amended hereby.

11. Outstanding Indebtedness. Borrower and Guarantor represent and warrant
to Lender that, as of the date hereof, the outstanding principal balance of the
Reimbursement Obligations is $90,000,000 and that interest has been paid through
December 31, 1998.

12. Confirmation of Representations and Warranties. Except as set forth in
Schedule 2 hereto, each of Borrower and Guarantor hereby represents and warrants
to Lender that each of the representations and warranties of Borrower or
Guarantor, as the case may be, contained in the Modification Agreement, the
Amendment Agreement and each of the Additional Security Documents (as such term
is defined in the Modification Agreement) to which it is a party are true,
correct and complete as of the date hereof and apply to the execution and
delivery of this Amendment and any other documents executed in connection
herewith.

13. No Defenses. Each of Borrower and Guarantor hereby acknowledges,
confirms and warrants to Lender that as of the date hereof it has no defenses,
claims, rights of set-off or counterclaims against Lender under, arising out of,
or in connection with, this Amendment, the Reimbursement Agreement, the
Reimbursement Obligations, the Guaranties or any of the other L/C Documents, or
against any of the indebtedness evidenced, advanced or secured thereby or under
any other documents executed in connection therewith or relating thereto, any
and all of which Borrower and Guarantor hereby expressly waive.

14. Release. Each of Borrower and Guarantor acknowledges that it is
executing this Amendment as its own voluntary act and free from duress and undue
influence and upon and with the advice of counsel. Each of Borrower and
Guarantor hereby unconditionally and irrevocably forever releases, acquits and
discharges Lender, its predecessors, subsidiaries and affiliates and their
respective employees, officers, directors, shareholders, agents, servants and
counsel (collectively, the "Related Parties") from any and all claims, demands,
actions, causes of actions, suits, debts, costs, dues, sums of money, accounts,
bonds, bills, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments expenses and liabilities whatsoever,
known or unknown, at law or in equity, irrespective of whether such claims arise
out of contract, tort, violation of laws or regulations or otherwise, which
Borrower or Guarantor ever had, now has or hereafter can, shall or may have
against Lender or any of the Related Parties for, upon, or by reason of any
matter, cause or thing whatsoever from the beginning of the world to and
including the date hereof arising out of, in connection with, or related in any
manner to the Hotel, the Reimbursement Obligations, the Mortgaged Property (as
hereinafter defined), the Reimbursement Agreement, this Amendment, the
Guaranties or any of the other L/C Documents.

15. Confirmation of Mortgages and Liens.

a. Borrower acknowledges and agrees that the Fee Mortgage and the
Second Fee Mortgage (collectively, the "Fee Mortgages") constitute and continue
to be valid first mortgage liens and security interests upon the Mortgaged
Property (as defined therein) in favor of Lender, as the assignee of BTM under
the Collateral Pledge Agreement and the Second Collateral Pledge Agreement,
(collectively, the "Collateral Pledge Agreements"), and as the

<PAGE>

holder of the Notes and the holder of the rights of BTM under the Reimbursement
Agreement, subject only to permitted encumbrances as provided therein, that the
obligations of the Borrower under the Reimbursement Agreement, as modified
hereby, are secured by, among other things, the Collateral Pledge Agreements,
the Notes, the Fee Mortgages and that the Fee Mortgages and each of the other
L/C Documents constitute valid and subsisting agreements and obligations of the
Borrower. Nothing herein is intended to, nor shall it, constitute a novation of
the indebtedness secured by the Collateral Pledge Agreements, the Notes or the
Fee Mortgages. The Mortgaged Property (as defined in each of the Fee Mortgages,
respectively) is and shall remain subject to and encumbered by the lien, charge
and encumbrance of the applicable Fee Mortgage, and nothing herein contained
shall affect or be construed to affect the lien or encumbrance of either of the
Fee Mortgages or the priority thereof over other liens or encumbrances.

b. The Borrower acknowledges and agrees that the Leasehold
Mortgage constitutes, and continues to be, a valid first mortgage lien and
security interest upon the Mortgaged Property (as defined therein) in favor of
Lender, as assignee of BTM under the Collateral Pledge Agreements and as the
holder of the Notes and the holder of the rights of BTM under the Reimbursement
Agreement, subject only to permitted encumbrances as provided therein, that the
obligations of the Borrower under the Reimbursement Agreement, as modified
hereby, are secured by, among other things, the Collateral Pledge Agreements,
the Notes and Leasehold Mortgage, and that the Leasehold Mortgage and each of
the other L/C Documents, constitute valid and subsisting agreements and
obligations of the Borrower. Nothing herein is intended to, nor shall it,
constitute a novation of the indebtedness secured by the Collateral Pledge
Agreements, the Notes or the Leasehold Mortgage. The Mortgaged Property (as
defined in the Leasehold Mortgage) is and shall remain subject to and encumbered
by the lien, charge and encumbrance of the Leasehold Mortgage, and nothing
herein contained shall affect or be construed to affect the lien or encumbrance
of the Leasehold Mortgage or the priority thereof over other liens or
encumbrances.

16. Consent and Reaffirmation. Guarantor hereby confirms its
obligations under each of the Guaranties and any other L/C Document to which it
is a party and consents to the terms of this Amendment and the transactions
contemplated herein. Nothing contained in this Amendment or any of the other L/C
Documents or any of the transactions contemplated herein or thereby shall be
deemed to waive, release, or limit any obligation of the Guarantor relating to
or otherwise connected with the Guaranties or any of the other L/C Documents, as
modified hereby. Nothing herein is intended to, nor shall it, constitute a
novation of the indebtedness secured by the Guaranties. Except as expressly set
forth in this Amendment, nothing herein is intended to nor shall it expand the
liability of Guarantor under the Guaranties.

17. Expenses of Transaction. Simultaneously upon the execution of
this Amendment, Borrower and Guarantor shall pay all fees, costs, expenses and
disbursements of Lender and Lender's counsel in connection with the preparation,
execution and delivery of this Amendment and each of the other documents
executed in connection herewith and in connection with the transactions
contemplated hereby.

18. No Oral Modification. This Amendment may not be amended
except upon the written agreement of all of the parties hereto.

<PAGE>

19. Ratification. Except as expressly modified and amended
herein, each of Borrower and Guarantor covenants and agrees that all of the
terms, covenants, promises, warranties, representations and conditions of the
Reimbursement Agreement, the Guaranties, and each of the other L/C Documents
shall remain in full force and effect with respect to the Borrower and
Guarantor. Borrower hereby ratifies and confirms each of its obligations under
the Reimbursement Agreement, as modified hereby, and each of the other L/C
Documents. Guarantor hereby ratifies and confirms each of its obligations under
the Guaranties and each of the other L/C Documents to which it is a party.

20. Binding Upon Successors and Assigns. This Amendment shall
inure to the benefit of, and shall be binding upon, the parties hereto and their
respective successors and permitted assigns under the Reimbursement Agreement.

21. Headings. The headings of the sections and subsections of
this Amendment are for convenience of reference only and shall not be considered
a part hereof nor shall they be deemed to limit or otherwise affect any of the
terms or provisions hereof.

22. Validity of Provisions. Any provision of this Amendment which
may prove unenforceable under law shall not affect the validity of the other
provisions hereof.

23. Judicial Interpretation. Should any provision of this
Amendment, the Reimbursement Agreement or any of the L/C Documents require
judicial interpretation, it is agreed that a court interpreting or construing
the same shall not apply a presumption that the terms hereof shall be more
strictly construed against any party by reason of the rule of construction that
a document is to be construed more strictly against the party who itself or
through its agent prepared the same, it being agreed that all parties hereto
have participated in the preparation of this Amendment.

24. Time; Construction; Exhibits and Schedules. Time is of the
essence of each provision of this Amendment. All references to the singular or
plural number or masculine, feminine or neuter gender shall, as the context
requires, include all others. All references to sections, paragraphs, and
exhibits are to this Amendment unless otherwise specifically noted. The use of
the words "hereof", "hereunder", "herein" and words of similar import shall
refer to this entire Amendment and not to any particular section, paragraph or
portion of this Amendment unless otherwise specifically noted. All exhibits and
schedules attached hereto are by this reference made a part of this Amendment
for all purposes.

25. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one agreement. It shall not be necessary for the same counterpart to
be signed by all of the parties in order for this instrument to be fully binding
upon any party signing at least one counterpart.

26. Governing Law. THIS AMENDMENT SHALL BE GOVERNED, CONSTRUED,
APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND
THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

<PAGE>

27. Conflicting Provisions. In the event of any conflict between
this Amendment and the terms of the Reimbursement Agreement or any of the other
L/C Documents, the terms of this Amendment shall govern and control. Whenever
possible, the provisions of this Amendment shall be deemed supplemental to and
not in derogation of the terms of the Reimbursement Agreement and the other
L/C Documents.

28. Entire Agreement. This Amendment and the documents executed
and delivered in connection herewith constitute the entire agreement among the
parties with respect to the subject matter hereof, and all understandings (oral
or written) and agreements heretofore had among the parties are merged in or
contained in this Amendment and such documents.

29. Facsimile Execution. Delivery of an executed counterpart of a
signature page to this Amendment by facsimile transmission shall be effective as
delivery of a manually executed counterpart of this Amendment.

30. Waiver of Jury Trial. LENDER, BORROWER AND GUARANTOR HEREBY
KNOWINGLY, VOLUNTARILY, UNCONDITIONALLY, IRREVOCABLY AND INTENTIONALLY FOREVER
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
AMENDMENT OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT, THE
REIMBURSEMENT AGREEMENT, OR ANY OTHER DOCUMENTS EXECUTED IN CONJUNCTION HEREWITH
OR THEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY OR THE EXERCISE BY ANY PARTY OF ITS
RIGHTS UNDER THIS AMENDMENT OR ANY OF THE OTHER L/C DOCUMENTS OR IN ANY WAY
ARISING OUT OF OR RELATED IN ANY MANNER WITH THE HOTEL OR THE SUBJECT MATTER
HEREOF OR THEREOF (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR
CANCEL THIS AMENDMENT OR ANY OF THE L/C DOCUMENTS AND ANY CLAIM OR DEFENSE
ASSERTING THAT THIS AMENDMENT OR ANY OTHER L/C DOCUMENT WAS FRAUDULENTLY INDUCED
OR IS OTHERWISE VOID OR VOIDABLE); BORROWER AND GUARANTOR ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO AND ACCEPT THIS
AMENDMENT.

[THE REMAINDER OF THIS PAGE IS LEFT BLANK]

<PAGE>

IN WITNESS WHEREOF, THIS AMENDMENT has been executed by
Borrower, Guarantor and Lender as of the day and year first above written.

BORROWER:

EL CONQUISTADOR PARTNERSHIP, L.P., a Delaware
limited partnership

By: Conquistador Holding, Inc., a Delaware
corporation, its general partner

By: /s/ Larry Vitale
---------------------------------------
Larry Vitale
Vice President

LENDER:

CITICORP REAL ESTATE, INC., a Delaware
corporation

By: /s/ David Hirsh
--------------------------------------
David Hirsh, Authorized Signatory

GUARANTOR:

PATRIOT AMERICAN HOSPITALITY, INC., a Delaware
corporation

By: /s/ Larry Vitale
--------------------------------------
Larry Vitale
Vice President

<PAGE>

ASSIGNMENT OF MANAGEMENT AGREEMENT AND
SUBORDINATION OF MANAGEMENT FEES

THIS ASSIGNMENT OF MANAGEMENT AGREEMENT AND SUBORDINATION OF MANAGEMENT
FEES ("Assignment") is made as of the first day of January, 1999, by EL
CONQUISTADOR PARTNERSHIP L.P., a Delaware limited partnership, having an address
at 1000 El Conquistador Avenue, Las Croabas, Fajardo, Puerto Rico 00738
("Borrower"), to CITICORP REAL ESTATE, INC., a Delaware corporation, having an
address at 599 Lexington Avenue, New York, NY 10043 ("Lender"), and is
acknowledged and consented to by WILLIAMS HOSPITALITY GROUP INC. (formerly known
as Posadas of America Central, Inc.), a Delaware corporation, having its
principal place of business at 6063 East Isla Verde Avenue, Carolina, Puerto
Rico 00979 ("Agent").

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 August 3, 1998, 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. Pursuant to a certain Amended and Restated Management Agreement dated
January 1, 1999 between Borrower and Agent (the "Management Agreement")(a true
and correct copy of which Management Agreement is attached hereto as Exhibit A),
Borrower employed Agent exclusively to operate and manage the Hotel (as defined
in the Reimbursement Agreement) and Agent is entitled to certain management fees
(the "Management Fees")

<PAGE>

thereunder, including without limitation, the Hotel Marketing Contribution and
the Condominium Marketing Contribution (both as defined in the Management
Agreement).

E. Lender requires as a condition to its entering into the Modification
Agreement and modifying the Reimbursement Obligations that Borrower assign all
of rights in and to the Management 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 parties hereto agree as follows:

1. Assignment of Management Agreement.

(a) Assignment by Borrower. As additional collateral security for the
Loan, Borrower hereby unconditionally transfers, sets over and assigns to Lender
all of Borrower's right, title and interest in and to the Management Agreement,
said transfer and assignment to automatically become a present, unconditional
assignment, at Lender's option, upon the occurrence of an Event of Default (as
hereinafter defined).

(b) Assignment by Agent. As further additional collateral security for
the Loan, Agent hereby unconditionally transfers, sets over and assigns to
Lender all of Agent's right, title and interest in and to all permits, license
agreements, operating contracts, licenses (including liquor, gaming and other
licenses), franchise agreements and all management, service, supply and
maintenance contracts and agreements, and any other agreements, permits or
contracts of any nature whatsoever now or hereafter obtained or entered into by
Agent on behalf of Borrower with respect to the operation, maintenance and
administration of the Hotel (as defined in the Reimbursement Agreement)
(collectively, the "Agent Contracts").

2. Subordination of Management Fees. The Management Fees and all rights and
privileges of Agent to the Management Fees are hereby and shall at all times
continue to be subject and unconditionally subordinate in all respects in lien
and payment to the lien and payment of the Loan Documents and to any renewals,
extensions, modifications, assignments, replacements, or consolidations thereof
and the rights, privileges, and powers of Lender thereunder.

3. Termination. At such time as the Loan is paid in full and the Security
Instrument is released or assigned of record, this Assignment and all of
Lender's right, title and interest hereunder with respect to the Management
Agreement shall terminate. Lender, at Borrower's expense, shall execute and
deliver such instruments as Agent may reasonably request to evidence such
termination.

4. Estoppel. Agent represents and warrants that (a)the Management Agreement
is in full force and effect and has not been modified, amended or assigned with
respect to the Hotel,(b) except with respect to the payment of certain deferred
Management Fees reflected in Borrower's financial statements, to the best of
Agent's knowledge, neither Agent nor Borrower is in default under any of the
terms, covenants or provisions of the Management Agreement with respect to the
Hotel and Agent knows of no event which, but for the passage of time or the
giving

<PAGE>

of notice or both, would constitute an event of default under the
Management Agreement with respect to the Hotel, (c)neither Agent nor to Agent's
knowledge, Borrower, has commenced any action or given or received any notice
for the purpose of terminating the Management Agreement with respect to the
Hotel and the (d)Management Fees and all other sums due and payable to the Agent
under the Management Agreement have been paid in full with respect to the Hotel.

5. Covenants.

(a) Borrower's Covenants. Borrower hereby covenants with Lender that
during the term of this Assignment: (i) Borrower shall not transfer the
responsibility for the management of the Hotel from Agent to any other person or
entity without prior written notification to Lender and the prior written
consent of Lender, which consent may be withheld by Lender in Lender's sole
discretion except that Lender shall not unreasonably withhold its consent to the
transfer of the responsibility for management of the Hotel to an entity wholly
owned by Wyndham International or Wyndham International Operating Partnership
L.P. pursuant to a management agreement acceptable to Lender in its reasonable
discretion and provided that Borrower and transferee shall execute and deliver
to Lender any agreement in substantially the same form as this Assignment on or
prior to such transfer and (ii) Borrower shall not terminate or amend any of the
terms or provisions of the Management Agreement without the prior written
consent of Lender, which consent may be withheld by Lender in Lender's sole
discretion; and (iii) Borrower shall, in the manner provided for in this
Assignment, give notice to Lender of any notice or information that Borrower
receives which indicates that Agent is terminating the Management Agreement or
that Agent is otherwise discontinuing its management of the Hotel.

(b) Agent's Covenants. Agent hereby covenants with Lender that during
the term of this Assignment, Agent shall not assign, pledge, sell or transfer
the Agent Contracts to any party except to Borrower, which transfer to Borrower
shall be subject to the assignment to Lender made by Agent herein. Further,
Agent agrees as long as the Management Agreement remains in effect to comply
with the terms, covenants and provisions of all Agent Contracts and to keep all
Agent Contracts in full force and effect to the extent necessary or desirable to
the operation and management of the Hotel.

6. Agreement by Borrower and Agent. Borrower and Agent hereby agree that in
the event of a default by Borrower (beyond any applicable grace period) under
the Reimbursement Agreement, the Modification Agreement or any of the other Loan
Documents ("Event of Default") during the term of this Assignment, at the option
of Lender exercised by written notice to Borrower and Agent: Agent shall not
collect or be entitled to any Management Fees or other fee or commission due
under the Management Agreement following termination thereof; and Lender may
exercise its rights under this Assignment and may immediately terminate the
Management Agreement by written notice to the Agent that such Event of Default
has occurred and that Lender elects to exercise its option under this Section 7
by reason thereof, and require Agent to transfer its responsibility for the
management of the Hotel to Lender or to a management company selected by Lender
in Lender's sole and absolute discretion.

7. Lender's Right to Replace Agent. In addition to the foregoing, in the
event that (a) Agent becomes insolvent, or (b) an Event of Default occurs,
Lender may exercise its rights

<PAGE>

under this Assignment and direct Borrower to terminate the Management Agreement
and to replace Agent with a management company acceptable to Lender in Lender's
sole and absolute discretion.

8. Receipt of Management Fees. Borrower and Agent hereby agree that Agent
shall not be entitled to receive any Management Fees or other fee, commission or
other amount payable to Agent under the Management Agreement for and during any
period of time that any Event of Default has occurred and is continuing;
provided, however, that Agent shall not be obligated to return or refund to
Lender any Management Fees or other fee, commission or other amount already
received by Agent prior to the occurrence of the Event of Default, and to which
Agent was entitled under this Assignment.

9. Consent and Agreement by Agent. Agent hereby acknowledges and consents
to this Assignment and agrees that Agent will act in conformity with the
provisions of this Assignment and Lender's rights hereunder or otherwise related
to the Management Agreement. In the event that the responsibility for the
management of the Hotel is transferred from Agent in accordance with the
provisions hereof (whether to a new management company retained by Borrower or
after an Event of Default, to Lender or a new management company retained by
Lender), Agent shall, and hereby agrees to, fully cooperate in transferring its
responsibility and the Agent Contracts to Lender or a new management company, as
applicable, and effectuate such transfer no later than thirty (30) days from the
date the Management Agreement is terminated. Further, Agent hereby agrees (a)
not to contest or impede the exercise by Lender of any right it has under or in
connection with this Assignment; and (b) that it shall, in the manner provided
for in this Assignment, give at least thirty (30) days prior written notice to
Lender of its intention to terminate the Management Agreement or otherwise
discontinue its management of the Hotel.

10. Gaming Licenses. (a) Borrower and Agent hereby acknowledge and confirm
that the Agent holds in its name, as agent for, on behalf of and for the benefit
of the Borrower, the casino license attached as Exhibit B hereto (as the same
may hereafter be renewed, extended, substituted, replaced, supplemented, amended
or modified, the "Gaming License"), which Gaming License constitutes the only
license maintained by Agent in connection with the operation of the casino and
other gaming activities currently being operated at the Hotel (collectively, the
"Gaming Operations").

(b) As further security for the Loan, Agent hereby assigns and
transfers all of its right, title, interest and benefits in, to and under each
of the Gaming Licenses to Lender, and Borrower hereby agrees and consents to
such assignment and transfer. The foregoing assignment shall not be effective to
the extent that such assignment would constitute a default or grounds for
revocation of the Gaming License but the balance of the provisions contained
herein shall nevertheless remain effective. Agent and Borrower hereby agree to
cooperate with and assist Lender in creating, perfecting and/or enforcing its
security interest in the Gaming License and agree to execute any instruments
which may be necessary or required in connection with any such creation,
perfection and/or enforcement.

(c) Neither Borrower nor Agent shall in any way hinder, impede or
delay any procedure undertaken by the Lender or any agent of the Lender
("Lender's Agents"), at any time hereafter and prior to the payment and
performance in full of all of the obligations of Borrower

<PAGE>

under the Loan Documents, to obtain approval from any applicable gaming
commission or commissions for the issuance to Lender or Lender's Agent of all
necessary gaming licenses to enable the Lender to continue to operate the Gaming
Operations immediately upon Lender's acquiring possession of the Hotel.

(d) Borrower and Agent hereby agree that Agent shall not transfer any
of the Gaming Licenses to any other party, including to the Borrower, without
the prior written consent of the Lender, which consent may be denied in Lender's
sole and absolute discretion (except with respect to any transfer of all the
Gaming Licenses to the Borrower, which consent shall not be unreasonably
withheld).

11. Governing Law. This Assignment shall be deemed to be a contract entered
into pursuant to the laws of the Commonwealth of Puerto Rico and shall in all
respects be governed, construed, applied and enforced in accordance with the
laws of the Commonwealth of Puerto Rico, without regard to the principles of
conflicts of laws.

12. Notices. All notices or other written communications hereunder shall be
deemed to have been properly given (i) upon delivery, if delivered in person or
by facsimile transmission with receipt acknowledged by the recipient thereof,
(ii) one (1) Business Day (hereinafter defined) after having been deposited for
overnight delivery with any reputable overnight courier service, or (iii) three
(3) Business Days after having been deposited in any post office or mail
depository regularly maintained by the U.S. Postal Service and sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:

If to Borrower: El Conquistador Partnership, L.P.
c/o Patriot America Hospitality, Inc.
590 Madison Avenue
New York, NY 10022
Attention: William W. Evans, III
Facsimile No. (212) 355-7772

With a copy to: Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Pamela E. Flaherty, Esq.
Facsimile No. (212) 730-1964

If to Lender: Citicorp Real Estate, Inc.
399 Park Avenue
New York, New York 10043
Attention: Jeffrey A. Warner
Reference: Condado Plaza, Puerto Rico
Facsimile No.: (212) 793-6314

<PAGE>

With a copy to: Citicorp/Citibank REILD
599 Lexington Avenue
20th Floor/Zone 1
New York, New York 10043
Attention: General Counsel
Reference: Condado Plaza, Puerto Rico

With a copy to: Weil, Gotshal & Manges LLP
701 Brickell Avenue
Suite 2100
Miami, Florida 33131
Reference: Condado Plaza, Puerto Rico
Attention: Richard A. Morrison, Esq. (BEO)
Facsimile No.:(305) 374-7159

If to Agent: Williams Hospitality Group Inc.
6063 East Isla Verde Avenue
Carolina, Puerto Rico 00979
Attention: President
Facsimile No. (787) 791-7500

Wyndham International
1950 Stemmons Freeway, Suite 6001
Dallas, TX 75207
Attention: Carla Moreland, Esq.
Facsimile No. (214) 863-1986

With a copy to: Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Pamela E. Flaherty, Esq.
Facsimile No. (212) 730-1964

or addressed as such party may from time to time designate by written notice to
the other parties. For purposes of this Section 12, the term "Business Day"
shall mean a day on which commercial banks are not authorized or required by law
to close in the Commonwealth of Puerto Rico.

Any party by notice to the others may designate additional or different
addresses for subsequent notices or communications.

13. No Oral Change. This Assignment, 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.

<PAGE>

14. Liability. If Borrower consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. This Assignment shall be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns forever.

15. Inapplicable Provisions. If any term, covenant or condition of this
Assignment is held to be invalid, illegal or unenforceable in any respect, this
Assignment shall be construed without such provision.

16. Headings, etc. The headings and captions of various paragraphs of this
Assignment 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.

17. Duplicate Originals; Counterparts. This Assignment may be executed in
any number of duplicate originals and each duplicate original shall be deemed to
be an original. This Assignment 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 Assignment. The failure of any party hereto
to execute this Assignment, or any counterpart hereof, shall not relieve the
other signatories from their obligations hereunder.

18. 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.

19. Miscellaneous. (a) Wherever pursuant to this Assignment (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.

(b) Wherever pursuant to this Assignment it is provided that Borrower
pay any costs and expenses, such costs and expenses shall include, but not be
limited to, reasonable legal fees and disbursements of Lender, whether retained
firms, the reimbursement for the expenses of in-house staff or otherwise.

(c) Waiver of Trial by Jury. BORROWER, AGENT 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 ASSIGNMENT OR ANY OTHER LOAN DOCUMENTS, 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 ANY SUCH LOAN DOCUMENTS OR IN ANY WAY RELATING TO THE HOTEL (INCLUDING,
WITHOUT LIMITATION, WITH RESPECT TO ANY ACTION TO RESCIND OR CANCEL THIS
ASSIGNMENT, AND WITH RESPECT TO ANY CLAIM

<PAGE>

OR DEFENSE ASSERTING THAT THIS ASSIGNMENT WAS FRAUDULENTLY INDUCED OR IS
OTHERWISE VOID OR VOIDABLE). THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT
FOR LENDER TO ACCEPT THIS ASSIGNMENT.

20. Borrower and Lender agree to cooperate in good faith to bifurcate any
of the Assigned Contracts that relate to a property other than the Hotel.

21. Replacement. This Assignment is in substitution and replacement of the
Assignment of Management Agreement and Subordination of Management Fees dated
August 3, 1998 made by Borrower in favor of Lender and acknowledged and
consented to by Agent.

[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

<PAGE>

IN WITNESS WHEREOF Borrower and Agent have executed this Assignment as
of the date and year first written above.

BORROWER:

POSADAS DE PUERTO RICO ASSOCIATES,
INCORPORATED, a Delaware corporation

By: /s/ Larry M. Vitale
-----------------------------------------
Larry M. Vitale
Vice President

AGENT:

WILLIAMS HOSPITALITY GROUP INC.,
a Delaware corporation

By: /s/ Larry M. Vitale
-----------------------------------------
Larry M. Vitale
Vice President

<PAGE>

STATE OF TEXAS )
) ss.
COUNTY OF DALLAS )

The foregoing instrument was acknowledged before me this 29 day of
Jan., 1999, by Larry M. Vitale, as Vice President of POSADAS DE PUERTO RICO
ASSOCIATES, INCORPORATED, a Delaware corporation, on behalf of the corporation.
He is personally known to me or has produced _______________________________ as
identification.

/s/ Beverly Ann Houston
-----------------------------------
Notary Public

My commission expires:

- ----------------------

STATE OF TEXAS )
) ss.
COUNTY OF DALLAS )

The foregoing instrument was acknowledged before me this 29 day of
Jan., 1999, by Larry M. Vitale, as Vice President of WILLIAMS HOSPITALITY
GROUP, INC., a Delaware corporation, on behalf of the corporation. He is
personally known to me or has produced _______________________________ as
identification.

/s/ Beverly Ann Houston
---------------------------------
Notary Public

My commission expires:

- ----------------------

<PAGE>

March 31, 1999

El Conquistador Partnership L.P.
1000 El Conquistador Avenue
Las Croabas, Fajardo, Puerto Rico 00738

Re: Amendment to Reimbursement Agreement and Ratification of
Guaranties dated as of January 29, 1999 (the "Second
Extension Amendment") among El Conquistador Partnership L.P.
("Borrower"), Patriot American Hospitality, Inc. ("Patriot")
and Citicorp Real Estate, Inc. ("CRE")

Gentlemen:

Reference is made to the Second Extension Amendment and to Borrower's
written notice, dated March 12, 1999, of its exercise of the option to extend
the Second Extended Maturity Date to the Third Extended Maturity Date (the
"Extension Notice"). All initially capitalized terms used herein, unless
otherwise defined herein, shall have the respective meanings assigned to such
terms in the Second Extension Amendment.

As directed by the Borrower in the Extension Notice, CRE has
transferred the amount of $1,689,834.38 from the Cash Flow Reserve Fund into the
Reimbursement DSRF Fund and the amount of $525,000 from the Cash Flow Reserve
Fund into the GDB DSRF Fund, in satisfaction of Borrower's obligation under
Section 6.b. of the Second Extension Amendment to make such deposits in
connection with an extension of the Second Extended Maturity Date to the Third
Extended Maturity Date.

We understand that, as of the date hereof, the Borrower has not entered
into the GDB Agreement and has thus failed to satisfy that certain condition to
the extension of the Second Extended Maturity Date to the Third Extended
Maturity Date more specifically described in item (iii) of Section 3A(e) of the
Reimbursement Agreement (the "GDB Condition"). This shall confirm that CRE has
agreed to waive satisfaction of the GDB Condition as a condition precedent to
the extension of the Second Extended Maturity Date to the Third Extended
Maturity Date. Notwithstanding the foregoing or anything to the contrary
contained in the Reimbursement Agreement or any of the other L/C Documents,
Borrower, by its execution hereof, hereby covenants and agrees to enter into the
GDB Agreement on or prior to April 30, 1999. Borrower's failure to timely enter
into the GDB Agreement shall constitute an Event of Default under the
Reimbursement Agreement without notice or demand and without the benefit

<PAGE>

El Conquistador Partnership L.P.
March 31, 1999
Page 2

of any grace period provided for in any L/C Document. In addition, Borrower, by
its execution hereof, hereby represents and warrants to CRE that, as of the date
hereof, (i) interest payable on the Reimbursement Amount is current and the
indebtedness outstanding under the Reimbursement Agreement is in full force and
effect, (ii) no Event of Default or Default exists 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 exists, and
(iii) there has been no material adverse change in the financial condition of
Borrower or any of the Guarantors since the Notice Date. Kindly acknowledge and
confirm your agreement to the foregoing by signing below where indicated and
returning a copy of your signature and the signature of Patriot to the
undersigned via facsimile, which facsimile shall constitute an original for all
purposes.

Without in any way waiving, modifying, altering or otherwise
prejudicing CRE's rights and remedies under the Reimbursement Agreement and the
other L/C Documents, all of which rights and remedies are hereby expressly
reserved, this shall confirm that all conditions set forth in Section 3A(e) of
the Reimbursement Agreement with respect to the extension of the Second Extended
Maturity Date to the Third Extended Maturity Date have been fully and timely
satisfied or, with respect to the GDB Condition, expressly waived by CRE. As a
result, under the terms of the Reimbursement Agreement, the Second Extended
Maturity Date has been automatically extended to the Third Extended Maturity
Date.

Very truly yours,

CITICORP REAL ESTATE, INC.

By: /s/
---------------------------

[Signatures continued on the following page]

<PAGE>

El Conquistador Partnership L.P.
March 31, 1999
Page 3

ACKNOWLEDGED, CONFIRMED, ACCEPTED AND AGREED:

EL CONQUISTADOR PARTNERSHIP L.P.,
a Delaware limited partnership

By: Conquistador Holding, Inc.,
a Delaware corporation, its general partner

By: /s/ Larry Vitale
------------------------
Larry Vitale
Vice President

PATRIOT AMERICAN HOSPITALITY, INC.,
a Delaware corporation

By: /s/ Larry Vitale
-----------------------
Larry Vitale
Vice President

<PAGE>

<TABLE>
<CAPTION>
EL CONQUISTADOR
RATIO OF EARNINGS TO FIXED CHARGES
-----------------------------------------------------------------------------------------
FISCAL
FISCAL FISCAL FISCAL YEAR FISCAL
YEAR YEAR YEAR (9 MONTHS) YEAR
ENDING ENDING ENDING ENDING ENDING
MARCH 31, MARCH 31, MARCH 31, DECEMBER 31, DECEMBER 31,
1995 1996 1997 1997 1998
EARNINGS AUDITED AUDITED AUDITED AUDITED UNAUDITED
-------- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PRETAX INCOME (LOSS) FROM $(27,476,720) $(12,241,033) $(9,403,173) $(15,042,122) $(1,938,063)
CONTINUING OPERATIONS

CURRENT PERIOD AMORTIZATION OF
INTEREST CAPITALIZED IN PREVOIUS PERIODS $ 237,320 $ 237,343 $ 237,343 $ 178,007 $ 237,343

INTEREST EXPENSE $ 16,136,755 $ 17,021,764 $17,162,132 $ 13,156,711 $15,642,420

LESS INTEREST CAPITALIZED DURING PERIOD $ (1,138) $ 0 $ 0 $ 0

NET AMORTIZATION OF DEBT ISSUANCE $ 978,007 $ 978,012 $ 978,002 $ 733,509 $ 1,008,209

INTEREST PORTION
OF RENTAL EXPENSE $ 0 $ 0 $ 0 $ 0 $ 0

EARNINGS $(10,125,776) $ 5,996,086 $ 8,974,304 $ (973,895) $14,949,909
------------ ------------ ----------- ------------ -----------

FIXED CHARGES
INTEREST EXPENSE $ 16,136,755 $ 17,021,764 $17,162,132 $ 13,156,711 $15,642,420

NET AMORTIZATION OF DEBT ISSUANCE $ 978,007 $ 978,012 $ 978,002 $ 733,502 $ 1,008,209

INTEREST PORTION
OF RENTAL EXPENSE $ 0 $ 0 $ 0 $ 0 $ 0
------------ ------------ ----------- ------------ -----------
TOTAL FIXED CHARGES $ 17,114,762 $ 17,999,776 $18,140,134 $ 13,890,213 $16,650,290

RATIO OF EARNINGS TO FIXED $(27,240,538) $(12,003,690) $(9,165,830) $(14,864,107) $(1,700,720)
CHARGES(1) ------------ ------------- ----------- ------------ -----------
</TABLE>

(1) Earnings were insufficient to cover fixed charges by the amount set forth.

<PAGE>

EL CONQUISTADOR
RATIO OF EARNINGS TO FIXED CHARGES
-----------------
PRO FORMA
FISCAL
YEAR
ENDING
DECEMBER 31,
EARNINGS 1998
-------- -----------------
<S> <C>
PRETAX INCOME (LOSS) FROM $ 8,791,285
CONTINUING OPERATIONS

CURRENT PERIOD AMORTIZATION OF
INTEREST CAPITALIZED IN PREVOIUS PERIODS $ 237,343

INTEREST EXPENSE $11,057,341

LESS INTEREST CAPITALIZED DURING PERIOD

NET AMORTIZATION OF DEBT ISSUANCE $ 166,667

INTEREST PORTION
OF RENTAL EXPENSE

EARNINGS $20,252,636
-----------

FIXED CHARGES
INTEREST EXPENSE $11,057,341

NET AMORTIZATION OF DEBT ISSUANCE $ 166,667

INTEREST PORTION
OF RENTAL EXPENSE $ 0
-----------
TOTAL FIXED CHARGES $11,224,008

RATIO OF EARNINGS TO FIXED CHARGES 1.8
---
TO 1
-----------------

</TABLE>

(1) Earnings were insufficient to cover fixed charges by the amount set forth.

<PAGE>

<PAGE>
EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption 'Experts' in the
Second Amendment to the Registration Statement on Form S-11 and the related
Preliminary Official Statement and Prospectus for the Offering of the Undivided
Interests in the Loan Agreement between Puerto Rico Industrial, Tourist,
Educational, Medical and Environmental Control Facilities Financing Authority
and El Conquistador Partnership L.P., S.E. and to the use of our reports: (a)
dated February 5, 1999 (except for Note 18 as to which the date is March 31,
1999) with respect to the Financial Statements of El Conquistador Partnership
L.P.; (b) dated April 8, 1999 with respect to the Consolidated Balance Sheet of
WKA El Con Associates; and (c) dated April 8, 1999 with respect to the
Consolidated Balance Sheet of WHG El Con Corp.; all of which are included in the
Second Amendment to the Registration Statement on Form S-11 and the related
Preliminary Official Statement and Prospectus of El Conquistador Partnership
L.P., S.E. to be filed with the Securities and Exchange Commission on or about
April 15, 1999.

ERNST & YOUNG LLP

San Juan, Puerto Rico
April 14, 1999

<PAGE>

<PAGE>
EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption 'Experts' in the
Second Amendment to the Registration Statement on Form S-11 and the related
Preliminary Official Statement and Prospectus for the Offering of the Undivided
Interests in the Loan Agreement between Puerto Rico Industrial, Tourist,
Educational, Medical and Environmental Control Facilities Financing Authority
and El Conquistador Partnership L.P., S.E. and to the use of our report dated
April 12, 1999 with respect to the Balance Sheet of Conquistador Holding, Inc.
which is included in the Second Amendment to the Registration Statement on Form
S-11 and the related Preliminary Official Statement and Prospectus of El
Conquistador Partnership L.P., S.E. to be filed with the Securities and Exchange
Commission on or about April 15, 1999.

ERNST & YOUNG LLP

Dallas, Texas
April 12, 1999

<PAGE>

<PAGE>
EXHIBIT 23.4

CONSENT OF FIDDLER GONZALEZ & RODRIGUEZ

We consent to the reference to our firm under the captions 'Summary -- Tax
Consequences,' 'Tax Consequences' and 'Legal Matters' in the Registration
Statement on Form S-11 (File No. 333-65889) and the related Official Statement
and Prospectus and on the cover page of the Official Statement and Prospectus
for the Offering of Undivided Interests in the Loan Agreement between Puerto
Rico Industrial, Tourist, Educational, Medical and Environmental Control
Facilities Financing Authority and El Conquistador Partnership L.P., S.E. and to
the use of our opinion included as Appendix A in such Official Statement and
Prospectus.

FIDDLER GONZALEZ & RODRIGUEZ

San Juan, Puerto Rico
April 15, 1999

<PAGE>

<ARTICLE> 5

<S> <C> <C>
<PERIOD-TYPE> 9-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1998
<PERIOD-START> APR-1-1997 JAN-1-1998
<PERIOD-END> DEC-31-1997 DEC-31-1998
<CASH> 4,608,716 11,847,584
<SECURITIES> 0 0
<RECEIVABLES> 6,197,830 7,554,465
<ALLOWANCES> 346,436 146,482
<INVENTORY> 1,673,266 1,461,757
<CURRENT-ASSETS> 13,953,344 27,051,969
<PP&E> 207,070,810 236,133,473
<DEPRECIATION> 25,944,072 6,274,591
<TOTAL-ASSETS> 200,421,664 262,367,740
<CURRENT-LIABILITIES> 151,661,696 148,569,380
<BONDS> 120,000,000 0
<COMMON> 0 0
0 0
0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 200,421,664 262,367,740
<SALES> 0 0
<TOTAL-REVENUES> 60,126,627 101,655,573
<CGS> 0 0
<TOTAL-COSTS> 62,139,878 86,519,405
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 119,000 111,832
<INTEREST-EXPENSE> 13,156,711 15,642,420
<INCOME-PRETAX> (15,042,122) (261,450)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (15,042,122) (261,450)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 1,676,613
<CHANGES> 0 0
<NET-INCOME> (15,042,122) (1,938,063)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0

<PAGE>