<PAGE>

                                                                    EXHIBIT 10.6

                                 July 12, 1999

Mr. Lawrence S. Jones
[address]

Dear Larry:

     This letter agreement (the "Agreement") confirms the agreement that we have
reached regarding your resignation from your regular, full-time employment and
all offices you hold with Wyndham International, Inc. ("WII"), Patriot American
Hospitality, Inc. ("PAHI") and their respective related and affiliated entities
(collectively, the "Companies").

     The purpose of this Agreement is to establish mutually agreeable
arrangements for ending your employment and structuring your continuing
relationship with the Companies following your resignation. This Agreement does
not constitute and should not be construed as an admission by the Companies that
they have in any way violated any legal obligation that they owe to you or to
any other person or as an admission by you that you have in any way violated any
legal obligation that you owe to the Companies or to any other person. To the
contrary, the parties' willingness to enter into this Agreement demonstrates
that they are continuing to deal with each other fairly and in good faith.

     With those understandings and in exchange for the promises set forth below,
you and the Companies agree as follows:

     1.   Resignation

     You hereby resign as an employee of PAHI and WII effective as of July 13,
1999 (the "Resignation Date"). You also hereby resign from your offices of
Executive Vice President and Treasurer of each of PAHI and WII and any and all
employment, offices and board of directors seats that you may hold with any of
the other Companies as of the Resignation Date. Said resignations are hereby
accepted by the Companies.

     2.   Compensation and Benefits

          (a) Vesting of Outstanding Options. Effective as of June 30, 1999 (the
"Vesting Date"), all of your outstanding unvested options to purchase paired
shares of common stock of WII and PAHI ("Paired Shares") shall vest and remain
fully exercisable for the period of up to one (1) year from the Resignation
Date. Except to the extent inconsistent
<PAGE>

Mr. Lawrence S. Jones
July 12, 1999
Page 2


with the express terms of this Section 2(a), said options shall remain subject
to the terms of the Option Agreements dated as of November 13, 1998 by and
between you and WII.

          (b) Restricted Paired Units. Effective as of the Vesting Date, the
restrictions shall lapse on the remaining restricted Paired Units previously
granted to you by PAHI and WII pursuant to Section 3(d) of the Employment
Agreement, dated as of the 9th day of March, 1998, by and among PAHI, WII and
you (the "Employment Agreement").

          (c) Severance. PAHI and WII shall pay you severance in a gross amount
equal to Seven Hundred Fifty Thousand Dollars ($750,000) (the "Severance
Payment"). The Severance Payment shall be reduced by applicable withholding and
shall be payable by lump sum to you within five (5) business days following the
later of the Resignation Date or the Effective Date (as defined in Section 13(d)
below) by check or wire transfer as directed by you.

          (d) Loan Forgiveness. In accordance with Section 3(g) of the
Employment Agreement, Seven Hundred Fifty Thousand Dollars ($750,000) of the
outstanding principal and accrued interest on the loan described in said Section
3(g) is hereby forgiven. Any remaining indebtedness, including accumulated
interest, under that loan shall remain subject to the repayment terms of the
loan.

          (e) Benefit Continuation. You may continue to participate in WII's
group health and dental plans in which, and to the same extent as, you are
currently participating for up to one (1) year from the Resignation Date, with
the cost of the regular premium for such benefits shared in the same relative
proportion by you and WII as in effect for senior executives of WII on the
Resignation Date; provided that nothing in this Section 3(e) shall be construed
to affect your or your dependents' rights thereafter to receive continuation
coverage to the extent authorized by and consistent with 29 U.S.C. (S) 1161 et
seq. (commonly known as "COBRA") and applicable group health and dental plan
terms, entirely at your or their own cost after your right to cost sharing under
this Section 3(e) ends.

          (f) Other Benefits. Except as expressly provided above, your
eligibility to participate in any of the Companies' respective employee benefit
plans and programs ceases on or after the Resignation Date in accordance with
the terms and conditions of each of those benefit plans and programs and your
rights to benefits under any of the employee benefit plans and programs, if any,
are governed by the terms and conditions of each of those employee benefit plans
and programs.
<PAGE>

Mr. Lawrence S. Jones
July 12, 1999
Page 3


          (g) Payments through Resignation Date. You shall continue as an
employee of WII and PAHI and shall continue on WII's and PAHI's payroll and
receive your Adjusted Base Salary and all other benefits, through the
Resignation Date.

     4.   Release of Claims

          (a) Release by Mr. Jones. You voluntarily and irrevocably release and
discharge the Companies, their related or affiliated entities, and their
respective predecessors, successors, and assigns, and the current and former
officers, directors, shareholders, employees, and agents of each of the
foregoing (any and all of which are referred to as "Releasees") generally from
all charges, complaints, claims, promises, agreements, causes of action,
damages, and debts that relate in any manner to your employment with or services
for the Companies, known or unknown ("Claims"), which you have, claim to have,
ever had, or ever claimed to have had against any of the Releasees through the
date on which you execute this Agreement. This general release of Claims
includes, without implication of limitation, all Claims for or related to: the
Employment Agreement; the compensation provided to you by the Companies; your
resignations as described in Section 1; wrongful or constructive discharge;
breach of contract; breach of any implied covenant of good faith and fair
dealing; tortious interference with advantageous relations; intentional or
negligent misrepresentation, fraud or deceit; infliction of emotional distress,
and unlawful retaliation or discrimination under the common law or any federal,
state or local statute or law (including, without implication of limitation, the
Employee Retirement Income Security Act, Title VII of the Civil Rights Act of
1964, the American with Disabilities Act, the Age Discrimination in Employment
Act, Tex. Lab. Code (S)~ 21.001, et seq., and Tex. Hum. Res. Code (S)~ 121.001,
et seq.). You also waive any Claim for reinstatement, severance, incentive or
retention pay (except as expressly provided in this Agreement), attorney's fees,
or costs, relating to the above waived claims.

     You agree that you will not hereafter pursue any Claim against any Releasee
by filing a lawsuit in any local, state or federal court for or on account of
anything which has occurred up to the present time as a result of your
employment, and you shall not seek reinstatement with, or damages of any nature,
severance, incentive or retention pay, attorney's fees, or costs from the
Companies or any of the other Releasees; provided, however, that nothing in this
general release shall be construed to bar or limit your rights, if any, to
indemnification subject to and in accordance with the terms of the By-Laws of
WII and the Indemnification Agreement, dated as of May 23, 1998, by and among
you, WII and PAHI (the "Indemnification Agreement"), or to enforce your rights
under this Agreement.
<PAGE>

Mr. Lawrence S. Jones
July 12, 1999
Page 4



          (b) Release by the Companies. The Companies, on behalf of themselves
and their respective predecessors, successors, assigns, directors (but only in
their capacities as directors of the Companies) and officers (but only in their
capacities as officers of the Companies) voluntarily and irrevocably release and
discharge you and your successors, assigns, heirs and survivors from any and all
charges, complaints, claims, promises, agreements, causes of action, damages and
debts, (including attorney's fees and costs actually incurred) which any of them
have, claim to have, ever had or ever claimed to have had against you through
the date hereof, known or unknown, which relate to good faith acts or omissions
by you during the course of your employment undertaken or not undertaken in the
reasonable belief that such acts or omissions were in the best interests of the
Companies.

     The Companies further represent that they do not have any knowledge at this
time of any acts or omissions by you that would give rise claims not otherwise
released in the previous paragraph.

     5. Employment Agreement

     This Agreement supersedes all provisions of the Employment Agreement other
than Paragraphs 4, 5, 8(c), 13 and 15 thereof. Paragraphs 4, 5, 8(c), 13 and 15
of the Employment Agreement are incorporated herein by reference and shall
continue to bind you in accordance with their respective terms. The Employment
Agreement, except for Paragraphs 4, 5, 8(c) 13 and 15 thereof, shall terminate
on the Resignation Date.

     6.   Return of Property

     All documents, records, material and all copies of any of the foregoing
pertaining to Confidential Information (as defined in Paragraph 4 of the
Employment Agreement), and all software, equipment, and other supplies, whether
or not pertaining to Confidential Information, that have come into your
possession or been produced by you in connection with your employment
("Property") have been and remain the sole property of the Companies. You shall
return all Property to the Companies on or before the Resignation Date. In no
event should this provision be construed to require you to return to the Company
any document or other materials concerning your remuneration and benefits during
your employment with the Companies.
<PAGE>

Mr. Lawrence S. Jones
July 12, 1999
Page 5



     7. Nondisparagement

     You agree not to take any action or make any statement, written or oral,
which disparages or criticizes the Companies or their respective officers,
directors, agents, or management and business practices, or which disrupts or
impairs the Companies' normal operations. The Companies, on behalf of
themselves, agree (a) not to take any action or make any statement, written or
oral, which disparages or criticizes you or your management and business
practices, and (b) to instruct their respective directors and officers not to
take any action or make any statement, written or oral, which disparages or
criticizes you or your management and business practices. The provisions of this
Section 7 shall not apply to any truthful statement required to be made by you
or the Companies, as the case may be, in any legal proceeding or governmental or
regulatory investigation.

     8.   Additional Representations, Warranties and Covenants

          (a)  As a material inducement to the Companies to enter into this
Agreement, you represent, warrant and covenant as follows:

          (i)  You have not assigned to any third party any Claim released by
     this Agreement.

          (ii) You have not heretofore filed with any agency or court any Claim
     released by this Agreement.

          (b)  As a material inducement to you to enter into this Agreement, the
Companies represent, warrant and covenant as follows:

          (i)  The Companies have not assigned to any third party any claim
     against you released by this Agreement; and

          (ii) The Companies have not heretofore filed with any agency or court
     any claim against you released by this Agreement.

     9. Further Assurances

     Upon the terms and subject to the conditions herein provided, each of the
parties hereto agrees to use its reasonable efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to
<PAGE>

Mr. Lawrence S. Jones
July 12, 1999
Page 6



consummate and make effective the transactions contemplated by this Agreement,
subject, in the case of the Companies, to the provisions of any credit agreement
or financing agreement or other contract or agreement by which any of the
Companies may be bound.

     10. Exclusivity

     This Agreement sets forth all the consideration to which you are entitled
from the Companies by reason of your resignation and your duties for the
Companies while employed, and you agree that you shall not be entitled to or
eligible for any payments or benefits under any other Company severance, bonus,
retention or incentive policy, arrangement or plan.

     11. Tax Matters

     All payments and other consideration provided to you pursuant to this
Agreement shall be subject to any deductions, withholding or tax reporting that
the Companies reasonably determine to be required for tax purposes. In
accordance with Section 8(c) of the Employment Agreement, the Companies shall
make a Gross Up Payment on your behalf of Four Hundred Seven Thousand, Five
Hundred Twenty-eight Dollars ($407,528) in connection with your payments
hereunder.

     12.  Arbitration of Disputes

     Any controversy or claim arising out of or relating to this Agreement or
the breach thereof shall, to the fullest extent permitted by law, be settled by
arbitration in accordance with Paragraph 15 of the Employment Agreement. This
Section 12 shall be specifically enforceable. Notwithstanding the foregoing,
this Section 12 shall not preclude either party from pursuing a court action for
the sole purpose of obtaining a temporary restraining order or a preliminary
injunction in circumstances in which such relief is appropriate; provided that
any other relief shall be pursued through an arbitration proceeding pursuant to
this Section 12.

     13.  Consent to Jurisdiction

     To the extent that any court action is permitted consistent with or to
enforce Section 12 of this Agreement, the parties hereby consent to the
jurisdiction of the state and federal courts in or for Dallas, Texas.
Accordingly, with respect to any such court action, you and the Companies (a)
submit to the personal jurisdiction of such courts; (b) consent to service of
process; and (c) waive any other requirement (whether imposed by statute, rule
of court, or otherwise) with respect to personal jurisdiction or service of
process.
<PAGE>

Mr. Lawrence S. Jones
July 12, 1999
Page 7



     14.  Notices, Acknowledgments and Other Terms

          (a) You are advised to consult with an attorney before signing this
Agreement.

          (b) You acknowledge and agree that the Companies' promises in this
Agreement constitute consideration in addition to anything of value to which you
are otherwise entitled by reason of the termination of your employment.

          (c) By signing this Agreement, you acknowledge that you are doing so
voluntarily and knowingly, fully intending to be bound by this Agreement. You
also acknowledge that you are not relying on any representations by us or any
other representative of the Companies concerning the meaning of any aspect of
this Agreement. You understand that this Agreement shall not in any way be
construed as an admission by the Companies of any liability or any act of
wrongdoing whatsoever by the Companies against you and that the Companies
specifically disclaim any liability or wrongdoing whatsoever against you on the
part of themselves and their respective officers, directors, shareholders,
employees and agents. You understand that if you do not to enter into this
Agreement and bring any claims against the Companies, the Companies will dispute
the merits of those claims and contend that they acted lawfully and for good
business reasons with respect to you.

          (d) You acknowledge that you have been given the opportunity, if you
so desired, to consider this Agreement for twenty-one (21) days before executing
it. If not signed by you and returned to the General Counsel of WII so that it
is received by close of business on the twenty-second (22nd) day after your
receipt of the Agreement, this Agreement will not be valid. In addition, if you
breach any of the conditions of the Agreement within the twenty-one (21) day
period, the offer of this Agreement will be withdrawn and your execution of the
Agreement will not be valid. In the event that you execute and return this
Agreement within twenty-one (21) days or less of the date of its delivery to
you, you acknowledge that such decision was entirely voluntary and that you had
the opportunity to consider this letter agreement for the entire twenty-one (21)
day period. The Companies acknowledge that for a period of seven (7) days from
the date of the execution of this Agreement, you shall retain the right to
revoke this Agreement by written notice delivered to the General Counsel of WII
before the end of such period, and that this Agreement shall not become
effective or enforceable until the expiration of such revocation period (the
"Effective Date").
<PAGE>

Mr. Lawrence S. Jones
July 12, 1999
Page 8



          (e) In the event of any dispute, this Agreement will be construed as a
whole, will be interpreted in accordance with its fair meaning, and will not be
construed strictly for or against either you or the Companies.

          (f) The law of the State of Texas will govern any dispute about this
Agreement, including any interpretation or enforcement of this Agreement.

          (g) In the event that any provision or portion of a provision of this
Agreement shall be determined to be illegal, invalid or unenforceable, the
remainder of this Agreement shall be enforced to the fullest extent possible and
the illegal, invalid or unenforceable provision or portion of a provision will
be amended by a court of competent jurisdiction to reflect the parties' intent
if possible. If such amendment is not possible, the illegal, invalid or
unenforceable provision or portion of a provision will be severed from the
remainder of this Agreement and the remainder of this Agreement shall be
enforced to the fullest extent possible as if such illegal, invalid or
unenforceable provision or portion of a provision was not included.

          (h) This Agreement may be modified only by a written agreement signed
by you and authorized representatives of the Companies.

          (i) This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties with respect to any related subject matter;
provided that the Indemnification Agreement shall remain in full force and
effect in accordance with its terms.

          (j) This Agreement shall be binding upon each of the parties and upon
their respective heirs, administrators, representatives, executors, successors
and assigns, and shall inure to the benefit of each party and to their heirs,
administrators, representatives, executors, successors, and assigns.
<PAGE>

Mr. Lawrence S. Jones
July 12, 1999
Page 9



        If you agree to these terms, please sign and date below and return this
Agreement to the General Counsel of WII.

                                      Sincerely,


                                      WYNDHAM INTERNATIONAL, INC.



                                      By: /s/ James D. Carreker
                                          -------------------------------------
                                          James D. Carreker
                                          Chairman and Chief Executive Officer

                                      PATRIOT AMERICAN HOSPITALITY, INC.



                                      By: /s/ James D. Carreker
                                          -------------------------------------
                                          James D. Carreker
                                          Chairman


Accepted and agreed to:


/s/ Lawrence S. Jones                   7/20/99
-----------------------------        -------------------------------
Lawrence S. Jones                    Date