<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Wyndham Hotel Corporation
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
983100 10 8
-----------------------------------
(CUSIP Number)
James D. Carreker
2001 Bryan Street, Suite 2300
2001 Ross Avenue
Dallas, Texas 75201
(214) 863-1000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
April 14, 1997
-----------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on the following page(s))
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 983100 10 8 PAGE 2
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CF Securities, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(See Item 4 under the caption Proxy Agreement.) (b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (See Item 3.)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
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7 SOLE VOTING POWER
NUMBER OF 9,447,745
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 9,447,745
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,447,745
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
47.2%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTION BEFORE FILLING OUT!
Page 2 of 26 pages
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 983100 10 8 PAGE 3
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Mill Spring Holdings, Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(See Item 4 under the caption Proxy Agreement.) (b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (See Item 3.)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
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7 SOLE VOTING POWER
NUMBER OF 9,447,745
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 9,447,745
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,447,745
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
47.2%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
Page 3 of 26 pages
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 983100 10 8 PAGE 4
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Harlan R. Crow
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(See Item 4 under the captions and Revocable Proxy (b) [ ]
and Proxy Agreement.)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (See Item 3.)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 9,447,845
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 9,447,845
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,447,845
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
47.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
Page 4 of 26 pages
<PAGE> 5
SCHEDULE 13D
CUSIP NO. 983100 10 8 PAGE 5
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James D. Carreker
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(See Item 4 under the caption Proxy Agreement.) (b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (See Item 3.)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 1,251,087
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
120,690
OWNED BY
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,251,087
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
120,690
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,371,777
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.9%
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14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
Page 5 of 26 pages
<PAGE> 6
SCHEDULE 13D
CUSIP NO. 983100 10 8 PAGE 6
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Leslie V. Bentley
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(See Item 4 under the caption Proxy Agreement.) (b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (See Item 3.)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 392,057
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 392,057
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
392,057
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
Page 6 of 26 pages
<PAGE> 7
SCHEDULE 13D
CUSIP NO. 983100 10 8 PAGE 7
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Anne L. Raymond
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(See Item 4 under the caption Proxy Agreement.) (b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO (See Item 3.)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 380,151
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 380,151
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
380,151
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.9%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
Page 7 of 26 pages
<PAGE> 8
SCHEDULE 13D
CUSIP NO. 983100 10 8 PAGE 8
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stanley M. Koonce, Jr.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(See Item 4 under the caption Proxy Agreement.) (b) [ ]
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (See Item 3.)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 388,001
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 388,001
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
388,001
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.9%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
Page 8 of 26 pages
<PAGE> 9
Item 1. Security and Issuer.
This statement relates to shares of the common stock, par value $.01
per share (the "Common Stock"), of Wyndham Hotel Corporation, a Delaware
corporation (the "Company"). The principal executive offices of the Company
are located at 2001 Bryan Street, Suite 2300, Dallas, Texas 75201, and its
telephone number at such address is (214) 863-1000.
Item 2. Identity and Background.
(a)-(c), (f) This statement is filed by CF Securities, L.P. ("CFS"),
Mill Spring Holdings, Inc. ("Holdings"), Harlan R. Crow, James D. Carreker,
Leslie V. Bentley, Anne L. Raymond and Stanley M. Koonce, Jr. (each, a "Filing
Person" and collectively, the "Filing Persons").
CFS is a Texas limited partnership principally engaged in investments
in securities. Its principal place of business is located at 2001 Ross Avenue,
Dallas, Texas 75201. Holdings is the general partner of CFS.
Holdings is a Texas corporation established as a holding company for
various investments. Mr. Crow is the sole director, President and principal
stockholder of Holdings. Holdings' principal place of business is located at
2001 Ross Avenue, Dallas, Texas 75201.
The name; business address; present principal occupation or
employment; and the name, principal business and address of each corporation or
other organization in which such occupation of employment is conducted for each
executive officer or director, each controlling person, and each executive
officer or director of such controlling person of CFS and Holdings are set
forth on Schedule I hereto (or in this Item 2), which Schedule I is
incorporated herein by reference.
Mr. Crow is a director of the Company and principally employed as an
investor. His principal place of business is located at 2001 Ross Avenue,
Dallas, Texas 75201.
Mr. Carreker is the President, Chief Executive Officer and a director
of the Company. Mr. Bentley is an Executive Vice President and Wyndham Garden
Division President and a director of the Company. Ms. Raymond is an Executive
Vice President, the Chief Financial Officer and a director of the Company. Mr.
Koonce is the Executive Vice President -- Marketing, Planning and Technical
Services and a director of the Company. The Company is a national hotel
company that operates upscale hotels. The business address of each of the
foregoing persons and of the Company is 2001 Bryan Street, Suite 2300, Dallas,
Texas 75201. Messrs. Crow, Carreker, Bentley and Koonce, as well as Ms.
Raymond, are citizens of the United States of America.
Page 9 of 26 pages
<PAGE> 10
(d)-(e) None of CFS, Holdings, Mr. Crow, Mr. Carreker, Mr. Bentley,
Ms. Raymond or Mr. Koonce nor, to the best knowledge of CFS, Holdings and Mr.
Crow, any of the persons listed on Schedule I attached hereto, has during the
past five years, (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction that resulted in
a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
(a) CFS acquired 9,478,995 shares of Common Stock on May 24,
1996. Such shares were acquired in exchange for various contributions of
partnership interests in various partnerships in which CFS was a limited
partner. These partnerships were involved in the ownership or management of
hotels. CFS acquired such shares pursuant to the terms of that certain
Formation Agreement among the Company, CFS, Mr. Crow and the other parties
listed on the signature pages thereto (the "Formation Agreement"). Immediately
after the CFS shares were delivered to CFS pursuant to the Formation Agreement,
31,250 of such shares were transferred to Ms. Susan T. Groenteman, a director
of the Company, a Vice President of Holdings and an employee of an affiliate of
CFS and Holdings. The 9,447,745 shares of Common Stock currently held by CFS
are referred to herein as the "CFS Shares." Holdings may be deemed to
beneficially own the CFS Shares by virtue of its status as general partner of
CFS.
(b) Mr. Crow may be deemed to beneficially own the CFS Shares by
virtue of his status as the sole director and President, and as a principal
shareholder of Holdings. Mr. Crow disclaims beneficial ownership of all shares
of Common Stock held by CFS. Mr. Crow directly purchased 100 shares of Common
Stock in May 1996 with personal funds.
(c) Mr. Carreker directly acquired 1,173,316 shares of Common
Stock on May 24, 1996. Such shares were acquired pursuant to the Formation
Agreement in exchange for contributions of partnership interests in various
partnerships in which Mr. Carreker was a limited partner. These partnerships
were involved in the ownership or management of hotels.
Mr. Carreker indirectly acquired 114,222 shares of Common Stock on May
24, 1996 through his stock ownership of Wyndham Hotel Management Corporation
("WHMC"). WHMC acquired such shares in exchange for the contribution of a
partnership interest in a partnership in which WHMC was the general partner.
The partnership was involved in the management of hotels. Mr. Carreker
indirectly acquired an additional 6,468 shares of Common Stock on February 11,
1997 through his stock ownership of WHMC, which directly acquired such shares
as a result of the distribution of the holdings of Common Stock to the
participants of Wyndham Employees, Ltd. ("WEL"). WEL, an employee equity
participation
Page 10 of 26 pages
<PAGE> 11
plan of the Company, acquired the shares of Common Stock held by it in exchange
for various contributions of partnership interests in various partnerships in
which WEL was a limited partner. All of the foregoing described shares were
acquired pursuant to the Formation Agreement. Mr. Carreker disclaims
beneficial ownership of all shares of Common Stock held by WHMC beyond his 49%
ownership interest therein.
The Carreker Descendants Trust, a trust of which Mr. Carreker is the
special trustee and has full voting rights, directly acquired 77,671 shares of
Common Stock on May 24, 1996. Such shares were acquired in exchange for the
contribution of a partnership interest in a partnership in which the trust was
a limited partner. The partnership was involved in the management of hotels.
The trust acquired such shares pursuant to the Formation Agreement. Mr.
Carreker disclaims beneficial ownership of all shares of Common Stock held in
the trust.
See Item 3(e) below with respect to the source of funds to purchase
interests in the partnerships referred to above.
(d) Mr. Bentley, Ms. Raymond and Mr. Koonce directly acquired
330,337, 380,151 and 388,001, shares of Common Stock on May 24, 1996,
respectively. Such shares were acquired in exchange for various contributions
of partnership interests in various partnerships in which such persons were
limited partners. These partnerships were involved in the ownership or
management of hotels. Mr. Bentley, Ms. Raymond and Mr. Koonce acquired such
shares pursuant to the Formation Agreement.
Various trusts for which Mr. Bentley is the special trustee and has
full voting rights directly acquired 61,680 shares of Common Stock on May 24,
1996. Such shares were acquired in exchange for the contribution of
partnership interests in a partnership in which the trusts were limited
partners. The partnership was involved in the management of hotels. The
trusts acquired such shares pursuant to the Formation Agreement. Mr. Bentley
disclaims beneficial ownership of all shares of Common Stock held in the
trusts.
See Item 3(e) below with respect to the source of funds to purchase
interests in the partnerships referred to above.
(e) During 1993, 1994 and 1995, Mr. Carreker, Mr. Bentley, Ms.
Raymond, Mr. Koonce and WEL incurred indebtedness to Wyndham Finance Limited
Partnership ("WFLP"), a partnership owned by certain members of the Trammell
Crow family or their lineal descendants. The purpose of the loans was to
finance such persons' capital contributions to various partnerships in which
they were acquiring an ownership interest. In the Formation Agreement, the
Company purchased promissory notes representing such loans for cash payments to
WFLP in the amounts of $4,904,573, $1,805,133, $4,417,588, $1,839,006 and
$2,907,161 which were equivalent to the aggregate outstanding principal and
accrued interest that was owing by Mr. Carreker, Mr. Bentley, Ms. Raymond, Mr.
Koonce
Page 11 of 26 pages
<PAGE> 12
and WEL, respectively, to WFLP as of December 31, 1995. Such promissory notes
accrue interest at 6% per annum and are fully secured by the pledge of shares
of Common Stock held by such persons; the outstanding principal and accrued
interest (compounded quarterly) will be payable in a single lump sum in May
2001.
Messrs. Carreker and Bentley contributed the initial corpus of the
trusts created by them. These contributions were the partnership interests
referred to above that were subsequently exchanged for shares of Common Stock.
Item 4. Purpose of Transaction.
Each of the Filing Persons acquired the shares of Common Stock held by
him, her or it for investment purposes.
On April 14, 1997, the Company entered into that certain Agreement and
Plan of Merger ("Patriot Merger Agreement") with Patriot American Hospitality,
Inc. ("Patriot"), and Patriot and CFS also entered into that certain Stock
Purchase Agreement (herein so called). Pursuant to the Stock Purchase
Agreement, Patriot will acquire all of the shares of Common Stock of the
Company held by CFS, and pursuant to the Patriot Merger Agreement, the Company
will merge with and into the successor to Patriot ("New Patriot REIT")
following Patriot's Merger with and into California Jockey Club (the
"Cal-Jockey Merger"), with New Patriot REIT being the surviving company (the
"Patriot Merger").
Proxy Agreement
In connection with the Patriot Merger, on April 14, 1997, Patriot,
CFS, Mr. Carreker, Mr. Bentley, Ms. Raymond, Mr. Koonce and the Company entered
into that certain Proxy Agreement (the "Proxy Agreement"). Pursuant to the
terms of the Proxy Agreement, each Wyndham stockholder that is a party thereto
(a "Wyndham Stockholder"), in order to induce Patriot to enter into the Patriot
Merger Agreement, makes certain agreements with Patriot, including those
described below.
Each Wyndham Stockholder agrees that during the Proxy Term (as defined
in the Proxy Agreement) it will not (a) sell, tender, transfer, pledge,
encumber, assign or otherwise dispose of any shares of Common Stock directly
held by such Wyndham Stockholder, or other shares held in a trust over which
such Wyndham Stockholder has the right to vote (the "Proxy Shares"), (b)
deposit such Proxy Shares into a voting trust or enter into a voting agreement
or arrangement with respect to such Proxy Shares or grant any proxy or power of
attorney with respect thereto, (c) enter into any contract, option or other
arrangement or undertaking with respect to the direct or indirect sale,
transfer, pledge, encumbrance, assignment or other disposition of any Common
Stock of the Company or (d) take any action that would make any representation
or warranty of such Wyndham Stockholder contained in the Proxy Agreement untrue
or incorrect or have the effect of preventing or
Page 12 of 26 pages
<PAGE> 13
disabling such Wyndham Stockholder from performing such Wyndham Stockholder's
obligations under the Proxy Agreement. The Proxy Agreement further provides
that a Wyndham Stockholder may transfer or pledge any Proxy Shares to a person
or entity with Patriot's prior written consent, which consent shall not be
unreasonably withheld; it being understood that withholding consent will not be
unreasonable if Patriot determines the transfer or pledge may eliminate or
reduce the certainty or likelihood of the Proxy Shares being voted as
contemplated by the Proxy Agreement. No transfer or pledge may be made unless
the transferee or pledgee enters into a written agreement under which it agrees
to be bound by all the terms of the Proxy Agreement.
The Proxy Agreement further provides that each Wyndham Stockholder
that is a party thereto irrevocably constitutes and appoints Patriot, or any
nominee of Patriot, with full power of substitution, during and for the Proxy
Term, as such Wyndham Stockholder's true and lawful attorney and proxy to vote
each of the Proxy Shares (a) in favor of the adoption of the Patriot Merger
Agreement and approval of the Patriot Merger and the other transactions
contemplated by the Patriot Merger Agreement, (b) against any "Acquisition
Proposal" (as that term is defined in the Patriot Merger Agreement), any change
in the directors of the Company or other material changes in the Company's
corporate structure or business and (c) in favor of any other matter necessary
for consummation of the transactions contemplated by the Patriot Merger
Agreement.
Under the terms of the Proxy Agreement, each Wyndham Stockholder
agrees that during the Proxy Term it will not, nor permit any of its affiliates
(other than the Company, to the extent permitted by the Merger Agreement), to
(a) solicit, initiate or knowingly encourage the submission of, any inquiries,
proposals or other offers from any person relating to an "Acquisition
Proposal," (b) enter into any agreement with respect to any Acquisition
Proposal or (c) enter into or participate in any discussions or negotiations
regarding, or furnish information with respect to any inquiries or the making
of any proposals that constitute, or would reasonably expected to lead to, an
Acquisition Proposal. The Proxy Agreement also provides that nothing therein
shall prevent any Wyndham Stockholder or its representatives or designees who
are serving on the Board of Directors of the Company, or who are officers of
the Company, from taking any action, subject to the applicable provisions of
the Patriot Merger Agreement, while acting in such capacity as a director or
officer of the Company.
Revocable Proxy
Simultaneous with the execution of the Proxy Agreement, Mr. Crow
executed a Revocable Proxy with respect to the 100 shares of Common Stock of
the Company directly held by him, pursuant to which he granted to Patriot a
proxy with full power of substitution to vote such shares of stock on terms
similar to those in the proxy granted by the Wyndham Stockholders to Patriot in
the Proxy Agreement.
Page 13 of 26 pages
<PAGE> 14
The foregoing descriptions of the Proxy Agreement and Revocable Proxy
are qualified in their entirety by reference to the forms of such documents
that are attached hereto as exhibits and incorporated herein by reference.
Patriot Merger
As a result of the Patriot Merger, New Patriot REIT will acquire all
of the assets of the Company, including the Company's portfolio of 23 owned and
leased hotels, with an aggregate of 4,877 rooms, as well as management and/or
franchise agreements associated with the Company's 79 managed and franchised
properties throughout North America, and the Wyndham, Wyndham Garden and
Wyndham Hotels & Resorts proprietary brand names. Pursuant to the "Patriot
Merger Agreement" (as hereinafter used, this term shall be deemed to
collectively refer to the Agreement and Plan of Merger and the Stock Purchase
Agreement), each outstanding share of Common Stock of the Company will be
converted into the right to receive 0.712 shares (the "Patriot Exchange Ratio")
of common stock of each of New Patriot REIT and Patriot American Hospitality
Operating Company ("New Patriot Operating Company," known as Bay Meadows
Operating Company prior to the Cal-Jockey Merger), which shares will be paired
and transferable and trade together as a single unit following the Cal-Jockey
Merger (the "Paired Shares"). The Patriot Exchange Ratio is subject to
adjustment in the event that the average of the closing prices of the Paired
Shares on the twenty trading days preceding the fifth trading day prior to the
Wyndham stockholders' meeting called to approve the Patriot Merger (the
"Average Trading Price") is less than $42.13 per Paired Share. If the Average
Trading Price is between $40.21 and $42.13 per Paired Share, the Patriot
Exchange Ratio will be adjusted so that each outstanding share of Common Stock
of the Company will be converted into the right to receive a number of Paired
Shares equal to $30.00 divided by the Average Trading Price. If the Average
Trading Price is less than $40.21 per Paired Share, there will be no further
adjustments to the Patriot Exchange Ratio, which at that point would equate to
0.746 Paired Shares per share of Common Stock of the Company; however, in such
circumstances, the Company has the right, waivable by it, to terminate the
Patriot Merger Agreement without liability. In lieu of receiving Paired
Shares, stockholders of the Company (including CFS) have the right to elect to
receive cash in an amount per share equal to the Patriot Exchange Ratio (as it
may be adjusted) multiplied by the average of the closing prices of the Paired
Shares on the five trading days immediately preceding the closing of the
Patriot Merger, up to a maximum aggregate amount of $100 million. If
stockholders holding shares of Common Stock of the Company with a value in
excess of this amount elect to receive cash, such cash will be allocated on a
pro rata basis among such stockholders. In connection with the Patriot Merger,
New Patriot REIT will assume the Company's existing indebtedness, which is
approximately $138 million as of April 14, 1997.
In connection with the execution of the Patriot Merger Agreement,
Patriot also entered into agreements with partnerships affiliated with members
of the Trammell Crow family providing for the acquisition by New Patriot REIT
of 11 full-service
Page 14 of 26 pages
<PAGE> 15
Wyndham-branded hotels with 3,072 rooms, located throughout the United States,
for approximately $331.7 million in cash, plus approximately $14 million in
additional consideration if two hotels meet certain operational targets (the
"Crow Acquisition" and, collectively with the Patriot Merger, the "Proposed
Patriot Transactions"). The Patriot Merger and the Crow Acquisition, which
will be consummated concurrently, are subject to various conditions including,
without limitation, the consummation of the Cal-Jockey Merger and the
transactions related thereto and the approval of the Patriot Merger and certain
of the related transactions by the stockholders of New Patriot REIT, New
Patriot Operating Company and the Company. It is currently anticipated that
the stockholder meetings to approve the Proposed Patriot Transactions will
occur in the fourth quarter of 1997.
In connection with the consummation of the Proposed Patriot
Transactions, certain changes will be made with respect to the officers and
members of the Boards of Directors of New Patriot REIT and New Patriot
Operating Company. James D. Carreker, the Company's Chairman and Chief
Executive Officer, will serve as Chairman and Chief Executive Officer of New
Patriot Operating Company. Paul A. Nussbaum will remain Chairman and Chief
Executive Officer of New Patriot REIT and William W. Evans III, who currently
serves in Patriot's Office of the Chairman, will become President of New
Patriot REIT replacing Tom Lattin, who will become Executive Vice President --
Property Management for New Patriot Operating Company. Rex E. Stewart, who
currently serves as Patriot's Chief Financial Officer, will serve as Chief
Financial Officer of New Patriot Operating Company and Anne L. Raymond,
currently the Chief Financial Officer of the Company, will serve as Chief
Financial Officer of New Patriot REIT. It is also anticipated that the Board
of Directors of New Patriot REIT and New Patriot Operating Company will be
reconstituted in connection with the consummation of the Proposed Patriot
Transactions so that each Board of Directors will consist of 11 members,
including (i) two designees of the Company and one designee of the Trammell
Crow family to the New Patriot REIT Board of Directors and (ii) three designees
of the Company and one designee of the Trammell Crow family to the New Patriot
Operating Company. It is currently anticipated that Harlan Crow will serve as
the Trammell Crow family's representative on the New Patriot REIT Board of
Directors. The remaining members for each Board of Directors will be selected
by New Patriot REIT and will include members of Patriot's existing Board of
Directors, as well as additional persons to be selected prior to the Patriot
Merger. Paul A. Nussbaum and James D. Carreker (who will be one of the Wyndham
designees) will serve as directors of both New Patriot REIT and New Patriot
Operating Company.
The descriptions herein of the Patriot Merger Agreement and the Stock
Purchase Agreement are qualified in their entirety to the forms of such
agreements that are attached hereto as exhibits and are incorporated herein by
reference.
The Joint Press Release of Patriot and the Company dated April 14,
1997 describing in greater detail the terms of the Patriot Merger is attached
hereto and incorporated herein by reference.
Page 15 of 26 pages
<PAGE> 16
Item 5. Interest in Securities of the Issuer.
(a) The aggregate number and percentage of the shares of Common
Stock beneficially owned by each of the Filing Persons, and for all of the
Filing Persons collectively as a "Group" (within the meaning of Section
13(d)(3) of the Securities Act of 1933, as amended), is set forth on Schedule
II attached hereto and incorporated herein by reference.
(b) Schedule II attached hereto shows the number of shares of
Common Stock as to which there is sole power to vote or to direct the vote,
shared power to vote or to direct the vote, sole power to dispose or to direct
the disposition and shared power to dispose or to direct the disposition, for
each of the Filing Persons. Mr. Trammell S. Crow shares with Mr. Carreker
voting and dispositive power with respect to the 120,690 shares of Common Stock
held by WHMC. His business address is 3200 Trammell Crow Center, 2001 Ross
Avenue, Dallas, Texas 75201, he is principally employed as an investor and he
is a citizen of the United States of America. Mr. Trammell S. Crow is not the
subject of any proceeding required to be disclosed under Item 2 hereof.
(c) Not applicable.
(d) Pursuant to the pledge described in Item 3(e), the Company
has the right to require the application of proceeds of sales of pledged shares
of Common Stock to the balance of the promissory note described therein.
In September 1996, Messrs. Carreker, Bentley and Koonce entered into
certain margin loan transactions ("Margin Loans") with Smith Barney, Inc. (the
"Lender") for personal loans in which shares of Common Stock (the "Pledged
Shares") held by such persons were pledged as collateral for the Margin Loans.
In the event of a default under a Margin Loan and a subsequent foreclosure sale
of the Pledged Shares, the Lender would be entitled to receive proceeds from
such sale to the extent required to satisfy the obligations owed to it under
the related Margin Loan. As a condition to the Margin Loans, the Company
entered into a Registration Rights Agreement with the Lender, which provides
that the Lender and its affiliates may require the Company upon written notice
to register the Pledged Shares for sale at any time following (i) the date on
which the closing price of the Company's Common Stock, as reported on the New
York Stock Exchange or other exchange or public market on which the Common
Stock is traded, is less than $14.00 per share; or (ii) the borrowers' failure
to promptly meet a margin call.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relations with Respect to
Securities of the Issuer.
Proxy Agreement - See Item 4 above.
Page 16 of 26 pages
<PAGE> 17
Revocable Proxy - See Item 4 above.
Stock Purchase Agreement- See Item 4 above.
Stockholders' Agreement
On May 24, 1996, a stockholders' agreement (the "Stockholders'
Agreement") was executed by the Company, various affiliates of The Hampstead
Group L.L.C. (the "Bedrock Stockholders"), and CFS, Mr. Crow, Ms. Susan T.
Groenteman, Mr. Carreker, Mr. Bentley, Ms. Raymond, Mr. Koonce, Mr. Eric A.
Danziger (formerly a senior executive officer of the Company) and WEL
(collectively, the "Crow/Wyndham Stockholders"), which imposes certain
restrictions on the transfer of Common Stock held by such stockholders (the
"Stockholders") and entitles the Stockholders to certain rights regarding
corporate governance.
Pursuant to the Stockholders' Agreement, each of the Stockholders
agrees not to sell, transfer, pledge or otherwise dispose of ("Transfer") its
Common Stock otherwise than as permitted by the provisions of the Stockholders'
Agreement. The Stockholders' Agreement permits the following transfers: (i)
open-market sales not exceeding the volume limitations imposed by Rule 144
under the Securities Act of 1933, as amended, (ii) sales in the Company's
initial public offering and (iii) Transfers of Common Stock by WEL to the
direct or indirect owners of equity interests in WEL. The Stockholders'
Agreement also provides that any Stockholders may Transfer any Common Stock,
provided that the transferee agrees to be bound by the Stockholders' Agreement
(a) to any wholly-owned affiliate of the transferring Stockholder, (b) to
certain transferring Stockholder family members, trusts or, if the transferring
stockholder is a corporation, partnership or other entity, its equity owners,
(c) to certain members of the Trammell Crow family or their lineal descendants
(together with any entity not less than 75% of the beneficial interests of
which are owned by such members of the Trammell Crow family, the "Crow
Interests"), (d) to the Company or to any then-existing Crow/Wyndham
Stockholder or to any full time senior executive officer of the Company, (e) as
a pledge to secure indebtedness, provided that the pledgee agrees to offer a
right of purchase, in the event of any foreclosure of the pledge, to the other
Stockholders in accordance with the Stockholders' Agreement, and (f) to the
owners of equity interests in a Stockholder upon a partial or complete
liquidation or dissolution of such Stockholder.
The Stockholders' Agreement further provides that except with respect
to a permitted Transfer described above, the proposed Transfer by a Stockholder
to a third party of Common Stock shall be subject to a first right of purchase
in favor of the Stockholders in the other Stockholder Group (as defined below)
at the price and on the other terms of the proposed third-party sale. The
Company has a prior right to purchase Common Stock subject to a proposed
Transfer if the offered Common Stock represents all of the Common Stock held by
the Crow Interests, but only to the extent the purchase by the Bedrock
Stockholders of the Common Stock would cause the Bedrock Stockholders to own
more
Page 17 of 26 pages
<PAGE> 18
than 40% of the outstanding Common Stock. The Company has waived such right in
connection with the Transfer contemplated by the Stock Purchase Agreement. A
similar first right of purchase requirement applies in the event of third-party
sales in connection with a shelf registration or an underwritten public
offering in which Stockholders propose to sell Common Stock.
Under the Stockholders' Agreement, the Bedrock Stockholders and the
Crow/Wyndham Stockholders (each a "Stockholder Group") are each entitled to
nominate a portion of the Company's Board of Directors, such portion to be
based upon the proportionate number of shares of Common Stock held by each
Stockholder Group and to be allocated as proportionately as practicable between
independent directors and other directors. Each Stockholder Group is also
entitled to nominate directors to serve on each of the Board's Committees on a
similar proportionate basis. Subject to certain conditions set forth in the
Stockholders' Agreement, each Stockholder Group agrees to use its best efforts
to elect the director nominated in accordance with the Stockholders' Agreement
and to remove directors under certain circumstances. The Stockholders'
Agreement further provides that as long as the Crow Interests own at least 30%
of the outstanding Common Stock (excluding any shares acquired from a third
party after the date of the Stockholders' Agreement), the Chairman of the Board
of the Company shall be a person designated by the Crow Interests. In the
event the Bedrock Stockholders own at least 30% of the outstanding Common Stock
(excluding any shares acquired from a third party after the date of the
Stockholders' Agreement) and the Crow Interests no longer own at least such
percentage, the Chairman of the Board of the Company shall be a person
designated by the Bedrock Stockholders.
The Stockholders' Agreement terminates upon the earliest to occur of
(a) the sixth anniversary of the date of the Stockholders' Agreement, (b) the
Bedrock Stockholders and the Crow/Wyndham Stockholders collectively owning less
than 37.5% of the outstanding Common Stock, (c) the termination of management
contracts in connection with the development fund organized by the Bedrock
Stockholders and certain lenders, below a specified level, (d) certain changes
in control of the Bedrock Stockholders, (e) the Bedrock Stockholders owning
less than 50% of the number of shares of Common Stock held by them immediately
following the Company's initial public offering and (f) any distribution of
Common Stock by the Bedrock Stockholders to direct or indirect owners of equity
interest in the Bedrock Stockholders that result in such Common Stock being
held by anyone other than a Bedrock principal or an entity controlled by such a
principal.
The parties to the Proxy Agreement have agreed that to the extent of
any conflict between the Proxy Agreement and the Stockholders' Agreement, the
Proxy Statement shall control.
Page 18 of 26 pages
<PAGE> 19
Registration Rights Agreement
On May 24, 1996, the Company entered into a registration rights
agreement with CFS, Mr. Crow, Ms. Susan T. Groenteman, Mr. Carreker, Mr.
Bentley, Ms. Raymond, Mr. Koonce, Mr. Eric A. Danziger, WEL and the Bedrock
Stockholders (the "Registration Rights Agreement") pursuant to which the
Company agreed, subject to certain limitations and under certain circumstances,
to register for sale any shares of Common Stock (and other securities of the
Company that are exercisable to purchase, convertible into or exchangeable for
shares of capital stock of the Company) that are held by the parties thereto
(collectively, the "Registrable Securities"). All of the shares of Common
Stock held by Filing Persons are Registrable Securities. The Registration
Rights Agreement provides that any holder of Registrable Securities may require
the Company upon written notice to register for sale such Registrable
Securities (a "Demand Registration"), provided that the total amount of
Registrable Securities to be included in the Demand Registration has a market
value of at least $20 million and provided that notice is not given prior to
six months after the effective date of the previous Demand Registration.
Subject to the foregoing, the holders of Registrable Securities may request an
unlimited number of Demand Registrations.
The Registration Rights Agreement also provides that, subject to
certain exceptions, in the event the Company proposes to file a registration
statement with respect to an offering of any class of equity securities, other
than certain types of registrations, the Company will offer the holders of
Registrable Securities the opportunity to register the number of Registrable
Securities they request to include (the "Piggyback Registration").
The Company is generally required to pay all of the expenses of Demand
Registrations and Piggyback Registrations, other than underwriting discounts
and commissions. In the event of a Demand Registration within one year of the
date of the Registration Rights Agreement, the holders of the Registrable
Securities being registered must pay up to $250,000 ($125,000 in the case of a
shelf registration) of such expenses.
Promissory Notes - See Item 3(e) above.
Margin Loans- See Item 5(d) above.
Attached hereto as Exhibit 99.2 and incorporated herein by reference
is a copy of the Agreement Among Filing Parties dated as of April 24, 1997.
Page 19 of 26 pages
<PAGE> 20
Item 7. Material to be Filed as Exhibits.
<TABLE>
<CAPTION>
Exhibit No.
-----------
<S> <C>
2.1 Formation Agreement, dated as of March 10, 1996 (incorporated herein by reference to Exhibit
2.1 to the Company's Registration Statement on Form S-1 (Registration No. 333-2214)).
2.2 Agreement and Plan of Merger, dated as of April 14, 1997, by and between Patriot American
Hospitality, Inc. and the Company (filed herewith). The "Disclosure Letters" referred to in
the Agreement and Plan of Merger are omitted, as they constitute "schedules" within the meaning
of Item 601 of Regulation S-K. The Company undertakes to furnish supplementally such
Disclosure Letters to the Commission upon request.
2.3 Stock Purchase Agreement, dated as of April 14, 1997, by and between Patriot American
Hospitality, Inc. and CF Securities, L.P. (filed herewith).
10.1 Proxy Agreement dated as of April 14, 1997, by and between Patriot American Hospitality, Inc.
and CF Securities, L.P., James D. Carreker, Leslie V. Bentley, Anne L. Raymond, Stanley M.
Koonce, Jr. and the Company (filed herewith).
10.2 Revocable Proxy, dated as of April 14, 1997, of Harlan R. Crow (filed herewith).
10.3 Stockholders' Agreement, dated as of May 24, 1996 (incorporated herein by reference to Exhibit
10.13 to the Company's Registration Statement on Form S-1 (Registration No. 333-2214)).
10.4 Registration Rights Agreement, dated as of May 24, 1996 (incorporated herein by reference to
Exhibit 10.14 to the Company's Registration Statement on Form S-1 (Registration No. 333-2214)).
99.1 Joint Press Release of Patriot American Hospitality, Inc. and Wyndham Hotel Corporation dated
April 14, 1997 (filed herewith).
99.2 Agreement Among Filing Parties, dated as of April 24, 1997 (filed herewith).
</TABLE>
Page 20 of 26 pages
<PAGE> 21
SCHEDULE I
CERTAIN INFORMATION REGARDING DIRECTORS, EXECUTIVE OFFICERS
AND CONTROLLING PERSONS OF CF SECURITIES, L.P. AND
MILL SPRING HOLDINGS, INC.
1. CF SECURITIES, L.P.
<TABLE>
<CAPTION>
Name and Position Business Address
----------------- ----------------
<S> <C>
Mill Spring Holdings, Inc. 3200 Trammell Crow Center
General Partner 2001 Ross Avenue
Dallas, Texas 75201
</TABLE>
2. MILL SPRING HOLDINGS, INC.
<TABLE>
<CAPTION>
Name and Position Business Address
----------------- ----------------
<S> <C>
Harlan R. Crow 3200 Trammell Crow Center
President and Director 2001 Ross Avenue
Dallas, Texas 75201
Susan T. Groenteman 3200 Trammell Crow Center
Executive Vice President 2001 Ross Avenue
Dallas, Texas 75201
Anthony W. Dona 3200 Trammell Crow Center
Executive Vice President 2001 Ross Avenue
Dallas, Texas 75201
Ronald S. Brown 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
James C. Hendricks 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
Philip J. Wise 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
</TABLE>
Page 21 of 26 pages
<PAGE> 22
<TABLE>
<S> <C>
Sarah Puckett 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
John Thomas 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
Timothy J. Hogan 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
Thomas Burleson 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
Susan L. Fish 3200 Trammell Crow Center
Vice President and Treasurer 2001 Ross Avenue
Dallas, Texas 75201
M. Kevin Bryant 3200 Trammell Crow Center
Vice President and Secretary 2001 Ross Avenue
Dallas, Texas 75201
Ann Murray 3200 Trammell Crow Center
Vice President and Assistant 2001 Ross Avenue
Secretary Dallas, Texas 75201
William P. Starnes 3200 Trammell Crow Center
Vice President and Assistant 2001 Ross Avenue
Secretary Dallas, Texas 75201
Robert E. Rothenmund 3200 Trammell Crow Center
Vice President and Assistant 2001 Ross Avenue
Secretary Dallas, Texas 75201
Jeanna Camp 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
</TABLE>
Page 22 of 26 pages
<PAGE> 23
<TABLE>
<S> <C>
Vincent L. George 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
Mary M. Hager 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
Carol Kreditor 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
Robert A. McClain 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
William S. Robinson 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
Charles R. Brindell, Jr. 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
Jeffrey C. Chavez 3200 Trammell Crow Center
Vice President 2001 Ross Avenue
Dallas, Texas 75201
Ben R. Phillips 3200 Trammell Crow Center
Assistant Secretary 2001 Ross Avenue
Dallas, Texas 75201
Jackie Close 3200 Trammell Crow Center
Assistant Secretary 2001 Ross Avenue
Dallas, Texas 75201
</TABLE>
Page 23 of 26 pages
<PAGE> 24
SCHEDULE II
CERTAIN INFORMATION REGARDING INTERESTS
OF FILING PERSONS IN WYNDHAM HOTEL CORPORATION
<TABLE>
<CAPTION>
Shares Percent
Name of Each Beneficially of
Beneficial Owner Owned Class
- ---------------- ----- -----
<S> <C> <C>
CF Securities, L.P. . . . . . . . . . . . . . . . . . . . . . . . . . 9,447,745 47.20%
Mill Spring Holdings, Inc.(1) . . . . . . . . . . . . . . . . . 9,447,745 47.20%
Harlan R. Crow(2) . . . . . . . . . . . . . . . . . . . . . . . 100 *
James D. Carreker(3) . . . . . . . . . . . . . . . . . . . . . . . . 1,371,777 6.85%
Leslie V. Bentley(4) . . . . . . . . . . . . . . . . . . . . . . . . 392,057 1.96%
Anne L. Raymond . . . . . . . . . . . . . . . . . . . . . . . . . . . 380,151 1.90%
Stanley M. Koonce, Jr. . . . . . . . . . . . . . . . . . . . . . . . 388,001 1.92%
---------- ------
TOTAL OF GROUP(5) . . . . . . . . . . . . . . . . . . . . . . . . . . 11,859,141 59.24%
</TABLE>
_________________
* Less than 1%.
(1) Includes 9,447,745 shares of Common Stock held of record by CF
Securities, L.P., of which Mill Spring Holdings, Inc. is the general
partner.
(2) Harlan R. Crow directly holds 100 shares of Common Stock. As Mr. Crow
is the sole director and President, and a principal stockholder of
Mill Spring Holdings, Inc., beneficial ownership of the shares of
Common Stock held by CF Securities, L.P. could be indirectly
attributed to Mr. Crow. Mr. Crow disclaims beneficial ownership of
all shares of Common Stock held by CF Securities, L.P.
(3) James D. Carreker directly holds 1,173,416 shares of Common Stock.
Shares listed in the table include 77,671 shares held in a trust for
which Mr. Carreker is the special trustee and has full voting rights.
Mr. Carreker disclaims beneficial ownership of all Common Stock held
in the trust. On February 11, 1997, Wyndham Employees, Ltd. ("WEL"),
an employee equity participation plan of the Company, distributed (the
"WEL Distribution") its holdings of Common Stock to the participants
in WEL. Mr. Carreker is a director and principal stockholder of
Wyndham Hotel Management Corporation ("WHMC"), which is the corporate
general partner of WEL. Shares listed in the table include 120,690
shares held by WHMC, including 6,468 shares received by WHMC in the
WEL Distribution. Mr. Carreker disclaims beneficial
Page 24 of 26 pages
<PAGE> 25
ownership of all Common Stock held by WHMC beyond his 49% ownership
interest therein.
(4) Includes 61,680 shares held in trusts for which Mr. Bentley is the
special trustee and has full voting rights. Mr. Bentley disclaims
beneficial ownership of all Common Stock held in the trusts.
(5) Excludes the 120,690 shares of Common Stock of WHMC that may be
attributable to Mr. Carreker, as such shares are not subject to the
terms of the Proxy Agreement.
Page 25 of 26 pages
<PAGE> 26
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
DATED: April 24, 1997 CF SECURITIES, L.P., a Texas limited
partnership
By: MILL SPRING HOLDINGS, INC., a Texas
corporation and its General Partner
By: /s/ Harlan R. Crow
---------------------------------------
Name: Harlan R. Crow
Title: President
DATED: April 24, 1997 MILL SPRING HOLDINGS, INC., a Texas
corporation
By: /s/ Harlan R. Crow
------------------------------------------
Name: Harlan R. Crow
Title: President
DATED: April 24, 1997 /s/ Harlan R. Crow
------------------------------------------
Name: Harlan R. Crow
DATED: April 24, 1997 /s/ James D. Carreker
------------------------------------------
James D. Carreker
DATED: April 24, 1997 /s/ Leslie V. Bentley
------------------------------------------
Leslie V. Bentley
DATED: April 24, 1997 /s/ Anne L. Raymond
------------------------------------------
Anne L. Raymond
DATED: April 24, 1997 /s/ Stanley M. Koonce, Jr.
------------------------------------------
Stanley M. Koonce, Jr.
Page 26 of 26 pages
<PAGE> 27
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
2.1 Formation Agreement, dated as of March 10, 1996 (incorporated herein by reference to Exhibit
2.1 to the Company's Registration Statement on Form S-1 (Registration No. 333-2214)).
2.2 Agreement and Plan of Merger, dated as of April 14, 1997, by and between Patriot American
Hospitality, Inc. and the Company (filed herewith). The "Disclosure Letters" referred to in
the Agreement and Plan of Merger are omitted, as they constitute "schedules" within the meaning
of Item 601 of Regulation S-K. The Company undertakes to furnish supplementally such
Disclosure Letters to the Commission upon request.
2.3 Stock Purchase Agreement, dated as of April 14, 1997, by and between Patriot American
Hospitality, Inc. and CF Securities, L.P. (filed herewith).
10.1 Proxy Agreement dated as of April 14, 1997, by and between Patriot American Hospitality, Inc.
and CF Securities, L.P., James D. Carreker, Leslie V. Bentley, Anne L. Raymond, Stanley M.
Koonce, Jr. and the Company (filed herewith).
10.2 Revocable Proxy, dated as of April 14, 1997, of Harlan R. Crow (filed herewith).
10.3 Stockholders' Agreement, dated as of May 24, 1996 (incorporated herein by reference to Exhibit
10.13 to the Company's Registration Statement on Form S-1 (Registration No. 333-2214)).
10.4 Registration Rights Agreement, dated as of May 24, 1996 (incorporated herein by reference to
Exhibit 10.14 to the Company's Registration Statement on Form S-1 (Registration No. 333-2214)).
99.1 Joint Press Release of Patriot American Hospitality, Inc. and Wyndham Hotel Corporation dated
April 14, 1997 (filed herewith).
99.2 Agreement Among Filing Parties, dated as of April 24, 1997 (filed herewith).
</TABLE>
<PAGE> 1
================================================================================
AGREEMENT AND PLAN OF MERGER
between
PATRIOT AMERICAN HOSPITALITY, INC.
and
WYNDHAM HOTEL CORPORATION
Dated as of April 14, 1997
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE 1. THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 The Closing . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2. THE WYNDHAM/BMOC SUBSCRIPTION . . . . . . . . . . . . . . . . 5
2.1 Wyndham/BMOC Subscription Agreement . . . . . . . . . . . . . 5
2.2 Subscribed Shares . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 3. CERTIFICATE OF INCORPORATION AND BYLAWS OF THE SURVIVING
CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 4. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION . . . . . 6
4.1 Directors of the Surviving Corporation . . . . . . . . . . . . 6
4.2 Officers of the Surviving Corporation . . . . . . . . . . . . 7
4.3 Directors of BMOC . . . . . . . . . . . . . . . . . . . . . . 7
4.4 Officers of BMOC . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 5. EXCHANGE OF STOCK . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Outstanding Paired Shares of Patriot Stock and BMOC Stock . . 10
5.2 Conversion of Wyndham Common Stock . . . . . . . . . . . . . . 10
5.3 Cash Election . . . . . . . . . . . . . . . . . . . . . . . . 12
5.4 Exchange of Certificates Representing Wyndham Common Stock . . 14
5.5 Return of Exchange Fund . . . . . . . . . . . . . . . . . . . 16
5.6 Lost or Stolen Certificates . . . . . . . . . . . . . . . . . 17
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF WYNDHAM . . . . . . . . . . 17
6.1 Existence; Good Standing; Authority; Compliance With Law . . . 17
6.2 Authorization, Validity and Effect of Agreements . . . . . . . 18
6.3 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.5 Other Interests . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . 21
6.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.9 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 22
6.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.11 Books and Records . . . . . . . . . . . . . . . . . . . . . . 23
6.12 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.13 Environmental Matters . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
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----
<S> <C> <C>
6.14 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 26
6.15 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . 27
6.16 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.17 Opinion of Financial Advisors . . . . . . . . . . . . . . . . 28
6.18 Related Party Transactions . . . . . . . . . . . . . . . . . . 28
6.19 Contracts and Commitments . . . . . . . . . . . . . . . . . . 28
6.20 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.21 Definition of Wyndham's Knowledge . . . . . . . . . . . . . . 29
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF PATRIOT . . . . . . . . . . 30
7.1 Existence; Good Standing; Authority; Compliance With Law . . . 30
7.2 Authorization, Validity and Effect of Agreements . . . . . . . 31
7.3 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 31
7.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.5 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.6 SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . 33
7.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.8 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 33
7.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.10 Books and Records . . . . . . . . . . . . . . . . . . . . . . 35
7.11 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . 37
7.13 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 38
7.14 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . 38
7.15 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.16 Opinion of Financial Advisor . . . . . . . . . . . . . . . . . 39
7.17 Wyndham Stock Ownership . . . . . . . . . . . . . . . . . . . 39
7.18 Related Party Transactions . . . . . . . . . . . . . . . . . . 39
7.19 Contracts and Commitments . . . . . . . . . . . . . . . . . . 39
7.20 Patriot Stock . . . . . . . . . . . . . . . . . . . . . . . . 40
7.21 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.22 Definition of Patriot's Knowledge . . . . . . . . . . . . . . 40
ARTICLE 8. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.1 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . 40
8.2 Conduct of Businesses . . . . . . . . . . . . . . . . . . . . 41
8.3 Meetings of Stockholders . . . . . . . . . . . . . . . . . . . 48
8.4 Filings; Other . . . . . . . . . . . . . . . . . . . . . . . 49
8.5 Access to Information . . . . . . . . . . . . . . . . . . . . 50
8.6 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.7 Proxy Statement; Registration Statement . . . . . . . . . . . 50
8.8 Listing Application . . . . . . . . . . . . . . . . . . . . . 52
8.9 Further Action . . . . . . . . . . . . . . . . . . . . . . . . 53
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
8.10 Affiliates of Wyndham . . . . . . . . . . . . . . . . . . . . 53
8.11 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.12 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 54
8.13 Reorganization . . . . . . . . . . . . . . . . . . . . . . . . 55
8.14 Stop Transfer . . . . . . . . . . . . . . . . . . . . . . . . 56
8.15 Brand Conversions . . . . . . . . . . . . . . . . . . . . . . 56
8.16 Ratification by New Patriot . . . . . . . . . . . . . . . . . 56
8.17 Wyndham's Accumulated and Current Earnings and Profits . . . . 56
8.18 Private Letter Ruling . . . . . . . . . . . . . . . . . . . . 56
8.19 Employee Benefit Matters . . . . . . . . . . . . . . . . . . . 57
8.20 Stock Purchase Agreement; Purchase and Sale Agreement . . . . 57
ARTICLE 9. CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.1 Conditions to Each Party's Obligation to Effect the Merger . . 57
9.2 Conditions to Obligations of Wyndham to Effect the Merger . . 59
9.3 Conditions to Obligation of Patriot to Effect the Merger . . . 61
ARTICLE 10. TERMINATION; AMENDMENT; WAIVER . . . . . . . . . . . . . . . . 63
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 63
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . 65
10.3 Termination Fees and Expenses . . . . . . . . . . . . . . . . 65
10.4 Payment of Termination Amount or Expenses . . . . . . . 66
10.5 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE 11. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 67
11.1 Nonsurvival of Representations, Warranties and Agreements . . 67
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.3 Assignment; Binding Effect; Benefit . . . . . . . . . . . . . 68
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 69
11.5 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 69
11.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.9 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 70
11.10 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
11.11 Incorporation . . . . . . . . . . . . . . . . . . . . . . . . 70
11.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 70
11.13 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . 70
11.14 Certain Definitions . . . . . . . . . . . . . . . . . . . . . 70
11.15 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . 71
</TABLE>
(iii)
<PAGE> 5
EXHIBIT A - Registration Rights Agreement
EXHIBIT B - Patriot Ratification Agreement
EXHIBIT C - BMOC Ratification Agreement
EXHIBIT D - Master Leasehold Agreement
EXHIBIT E - Cooperation Agreement
EXHIBIT F - Wyndham/BMOC Subscription Agreement
EXHIBIT G - Form of Affiliate Letter
(iv)
<PAGE> 6
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), is made and
entered into as of April 14, 1997, between Patriot American Hospitality, Inc.,
a Virginia corporation which operates as a real estate investment trust
("Patriot"), and Wyndham Hotel Corporation, a Delaware corporation ("Wyndham").
RECITALS
WHEREAS, Patriot, California Jockey Club ("CJC") and Bay Meadows
Operating Company ("BMOC") have entered into an Agreement and Plan of Merger
dated as of February 24, 1997 (the "Business Combination Agreement"), pursuant
to which Patriot, CJC and BMOC agreed to engage in a business combination among
Patriot, CJC and BMOC, upon the terms and subject to the conditions set forth
in the Business Combination Agreement (the "Business Combination");
WHEREAS, the shares of common stock, par value $.01 per share, of CJC
(the "CJC Stock") and the shares of common stock, par value $.01 per share, of
BMOC (the "BMOC Stock") are paired and transferable and traded only in
combination as a single unit (the "Paired Shares") on the American Stock
Exchange;
WHEREAS, upon consummation of the Business Combination, Patriot will
have merged with and into CJC with CJC being the surviving company ("New
Patriot"), New Patriot will change its name to "Patriot American Hospitality,
Inc." and BMOC will change its name to "Patriot American Hospitality Operating
Company";
WHEREAS, contemporaneously with the execution of this Agreement, Patriot
and certain entities owned or controlled, directly or indirectly, by the Crow
family and/or various related parties (collectively, the "Crow Family
Entities") have entered into an Omnibus Purchase and Sale Agreement (the
"Purchase and Sale Agreement") pursuant to which certain real estate and
related assets (the "Crow Family Assets") will be sold to Patriot American
Hospitality Partnership, L.P., a Virginia limited partnership ("Patriot OP"),
and an operating partnership to be formed by BMOC in connection with the
Business Combination ("BMOC OP"), for cash, upon the terms and subject to the
conditions set forth in the Purchase and Sale Agreement (the "Purchase and
Sale");
WHEREAS, contemporaneously with the execution of this Agreement, CF
Securities, L.P. (the "Principal Stockholder") and Patriot have entered into a
stock purchase agreement (the "Stock Purchase Agreement") pursuant to which
Patriot shall purchase from the Principal Stockholder, and the Principal
Stockholder shall sell to Patriot and BMOC, all 9,447,745 shares of common
stock, par value $.01 per share, of Wyndham (the "Wyndham Common Stock")
currently owned by the Principal Stockholder (the "Stock Purchase"), and as
consideration therefor, Patriot shall pay cash to the Principal Stockholder,
and/or issue to the Principal Stockholder shares of unpaired Class A preferred
stock, par value $.01 per share, of Patriot (the "Unpaired Patriot Stock") and
issue to the Principal Stockholder Paired Shares of
<PAGE> 7
Patriot Stock and BMOC Stock, upon the terms and subject to the conditions set
forth in the Stock Purchase Agreement;
WHEREAS, contemporaneously with the execution of this Agreement, Patriot
and the Principal Stockholder have entered into a standstill agreement (the
"Standstill Agreement") pursuant to which the Principal Stockholder has agreed
to refrain from taking certain actions and to perform certain other obligations
with respect to Patriot and BMOC and the securities of Patriot and BMOC to be
issued to the Principal Stockholder pursuant to the Stock Purchase Agreement,
upon the terms and subject to the conditions set forth in the Standstill
Agreement;
WHEREAS, as a condition to the willingness of Patriot to enter into this
Agreement, (i) certain management stockholders of Wyndham (the "Management
Stockholders") and the Principal Stockholder have entered into a Proxy
Agreement, dated as of the date hereof, with Patriot (the "Proxy Agreement"),
pursuant to which each of the Management Stockholders and the Principal
Stockholder has, among other things, granted to Patriot an irrevocable proxy to
vote his, her or its shares of Wyndham Common Stock in favor of the approval of
the Merger (as hereinafter defined), this Agreement and the other transactions
contemplated hereby and the approval of any other matter relating to
consummation of the transactions contemplated by this Agreement, upon the terms
and subject to the conditions set forth in the Proxy Agreement, and (ii) the
Management Stockholders, the Principal Stockholder and certain members of
Patriot's management have entered into Voting Agreements, dated as of the date
hereof, with Patriot (collectively, the "Voting Agreements"), pursuant to which
such stockholders have agreed to certain matters with respect to the voting
securities of Patriot and BMOC held by such stockholders after the Merger;
WHEREAS, contemporaneously with the execution of this Agreement, certain
officers of Patriot and certain officers of Wyndham have entered into
employment agreements with Patriot (the "Employment Agreements"), upon the
terms and subject to the conditions set forth therein, including, without
limitation, conditions that the Employment Agreements shall not become
effective unless the Merger is consummated;
WHEREAS, the Board of Directors of Patriot and the Board of Directors of
Wyndham each have determined that a business combination between Patriot and
Wyndham with related agreements with BMOC is in the best interests of their
respective companies and stockholders and presents an opportunity for their
respective companies to achieve long-term strategic and financial benefits, and
accordingly have agreed to effect the transactions provided for herein upon the
terms and subject to the conditions set forth herein;
WHEREAS, immediately following consummation of the transactions
contemplated by this Agreement, the shares of BMOC Stock and the shares of
common stock, par value $.01 per share, of New Patriot will be paired and
transferable and traded only in combination as a single unit on the New York
Stock Exchange;
WHEREAS, it is intended that the Stock Purchase by Patriot and the
Merger provided for herein be treated as an integrated transaction that, for
federal income tax purposes, qualifies as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and pursuant to which the consideration received by
2
<PAGE> 8
all of the stockholders of Wyndham shall be tax-free to such stockholders to
the extent such consideration consists of Patriot Unpaired Stock and, to the
extent consisting of Patriot Stock, Paired Shares of Patriot Stock and BMOC
Stock, and for financial accounting purposes shall be accounted for as a
"purchase";
WHEREAS, Patriot and Wyndham have each received a fairness opinion from
their respective financial advisors, and the special committee of the Board of
Directors of Wyndham (the "Wyndham Special Committee") has received a fairness
opinion from its financial advisor, relating to the transactions contemplated
hereby as more fully described herein; and
WHEREAS, Patriot and Wyndham desire to make certain representations,
warranties and agreements in connection with the Merger.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1. THE MERGER
1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as hereinafter defined), Wyndham shall be
merged with and into New Patriot in accordance with this Agreement, and the
separate corporate existence of Wyndham shall thereupon cease (the "Merger").
New Patriot shall be the surviving corporation in the Merger (sometimes
hereinafter referred to as the "Surviving Corporation"). The Merger shall have
the effects specified in Section 259 of the Delaware General Corporation Law
(the "DGCL"). As used in this Agreement, (i) any reference to "Patriot" means
Patriot prior to consummation of the Business Combination and New Patriot
following consummation of the Business Combination, (ii) any reference to a
"Patriot Subsidiary" means a Subsidiary of Patriot prior to consummation of the
Business Combination and a Subsidiary of New Patriot following consummation of
the Business Combination, and (iii) any reference to "Patriot Stock" means the
shares of common stock, no par value, of Patriot prior to consummation of the
Business Combination and the shares of common stock, par value $.01 per share,
of New Patriot following consummation of the Business Combination.
1.2 The Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place at the
offices of Goodwin, Procter & Hoar LLP, Exchange Place, Boston, Massachusetts,
at 10:00 a.m., local time, on the date which is the later of (a) October 1,
1997 or (b) the first business day immediately following the day on which the
last of the conditions set forth in Article 9 shall be fulfilled or waived in
accordance herewith, or at such other time, date or place as the parties hereto
may agree; provided, however, that, subject to the provisions of Section
10.1(c), Patriot may, by notice in writing to Wyndham not less than ten (10)
days prior to the then scheduled date of the meeting of Wyndham stockholders
pursuant to Section 8.3, extend the date which is the later of the dates
specified in the foregoing clauses (a) and (b) if Patriot determines in its
reasonable judgment, after consultation with Wyndham, that such action is
necessary to allow Patriot to receive the Ruling (as hereinafter defined) prior
to Closing. Unless the parties shall otherwise agree, the
3
<PAGE> 9
parties shall use their reasonable best efforts to cause the Closing to occur
as soon as possible after the meetings of stockholders held pursuant to Section
8.3, and, if Patriot shall provide the foregoing notice to Wyndham extending
the date which is the later of the dates specified in the foregoing clauses (a)
and (b), then Wyndham may adjourn its stockholders' meeting so as to cause it
to occur as close as reasonably possible to the anticipated Closing Date. The
date on which the Closing occurs is hereinafter referred to as the "Closing
Date."
1.3 Effective Time. If all of the conditions to the Merger set forth
in Article 9 shall have been fulfilled or waived in accordance herewith and
this Agreement shall not have been terminated as provided in Article 10, the
parties hereto shall promptly cause a Certificate of Merger satisfying the
requirements of the DGCL (the "Certificate of Merger") to be properly executed,
verified and delivered for filing in accordance with the DGCL on the Closing
Date. The Merger shall become effective upon the acceptance for record of the
Certificate of Merger by the Secretary of State of Delaware in accordance with
the DGCL or at such later time which the parties hereto shall have agreed upon
and designated in such filing in accordance with applicable law as the
effective time of the Merger (the "Effective Time").
1.4 Ancillary Agreements. At the Closing and prior to the Effective
Time, (i) Patriot and the Principal Stockholder shall consummate the Stock
Purchase, subject to the terms of the Stock Purchase Agreement,(ii) Wyndham and
BMOC shall consummate the BMOC Stock Issuance (as hereinafter defined), subject
to the terms of the Wyndham/BMOC Subscription Agreement (as hereinafter
defined), and (iii) Wyndham and BMOC OP shall consummate the Asset Sale (as
hereinafter defined) in the event that the Ruling is not obtained prior to the
Effective Time. At the Closing, (i) the Crow Family Entities shall consummate
the Purchase and Sale of the Crow Family Assets to Patriot OP and BMOC OP,
subject to the terms of the Purchase and Sale Agreement, and (ii) Patriot,
BMOC, the Principal Stockholder, certain of the Management Stockholders and
certain other stockholders of Wyndham shall enter into a registration rights
agreement in substantially the form of Exhibit A attached hereto (the
"Registration Rights Agreement"). Following consummation of the Business
Combination and subject to the terms and conditions of this Agreement, (x)
Patriot and Wyndham shall enter into an agreement substantially in the form set
forth on Exhibit B attached hereto pursuant to which, among other things,
Patriot shall make certain representations and warranties to Wyndham in
connection with the transactions contemplated by this Agreement (the "Patriot
Ratification Agreement"), and (y) BMOC and Wyndham shall enter into an
agreement substantially in the form set forth on Exhibit C attached hereto
pursuant to which, among other things, BMOC will make certain representations
and warranties to Wyndham in connection with the transactions contemplated by
this Agreement (the "BMOC Ratification Agreement"). At or prior to the
Closing, Patriot and BMOC shall enter into a Master Leasehold Agreement having
such terms as to which Patriot and BMOC shall hereafter agree, in addition to
the terms set forth on Exhibit D attached hereto (the "Master Leasehold
Agreement"), provided that Wyndham shall first be given a reasonable
opportunity to review and comment upon the terms of such agreement. No later
than eleven (11) business days prior to the Closing, Patriot and BMOC shall
enter into a Cooperation Agreement in substantially the form of Exhibit E
attached hereto (the "Cooperation Agreement"). The Stock Purchase Agreement,
Purchase and Sale Agreement, Cooperation Agreement, Standstill Agreement, Proxy
Agreement, Registration Rights Agreement, Patriot Ratification Agreement, BMOC
Ratification Agreement, Voting Agreements, Employment
4
<PAGE> 10
Agreements, Wyndham/BMOC Subscription Agreement, the Option Agreement of even
date herewith between Patriot and the grantors named therein (the "ISIS
Owners") pursuant to which the ISIS Owners have granted to Patriot an option to
acquire the equity interests owned by the ISIS Owners in ISIS 2000 L.P., and
the Option Agreement of even date herewith between Patriot and the grantors
named therein (the "MIS Owners") pursuant to which the MIS Owners have granted
to Patriot an option to acquire the equity interests owned by the MIS Owners in
Kinetic Group Limited Partnership (formerly known as CW Synergistech, LP), are
referred to collectively herein as the "Ancillary Agreements."
ARTICLE 2. THE WYNDHAM/BMOC SUBSCRIPTION
2.1 Wyndham/BMOC Subscription Agreement. Immediately prior to the
Closing, Wyndham and BMOC shall enter into a contract in substantially the form
of Exhibit F attached hereto (the "Wyndham/BMOC Subscription Agreement")
pursuant to which Wyndham will agree to pay for, and BMOC will issue directly
to the stockholders of Wyndham as part of the consideration to be paid to such
stockholders in the Merger (the "BMOC Stock Issuance"), a number of shares (the
"Subscribed Shares") of BMOC Stock equal to the number of shares of Patriot
Stock to be issued to stockholders of Wyndham pursuant to the Merger.
2.2 Subscribed Shares. The parties hereto acknowledge and agree that
the Subscribed Shares will be issued in accordance with Section 5.2(a) hereof
to the stockholders of Wyndham in connection with the Merger and will be paired
with the Patriot Stock issued in the Merger in accordance with that certain
Pairing Agreement, dated as of February 17, 1983 and amended from time to time
thereafter, by and between CJC and BMOC (the "Pairing Agreement"), and Wyndham
shall not at any time become a stockholder of BMOC. The provisions of this
Article 2, the BMOC Stock Issuance and the Wyndham/BMOC Subscription Agreement
are intended to comply and shall be interpreted in a manner consistent with
Sections 2(a) and 2(b) of the Pairing Agreement.
ARTICLE 3. CERTIFICATE OF INCORPORATION AND BYLAWS OF THE SURVIVING
CORPORATION
3.1 Charter. The Amended and Restated Certificate of Incorporation
of Patriot in effect immediately prior to the Effective Time (the "Patriot
Certificate") shall be the Certificate of Incorporation of the Surviving
Corporation, until duly amended in accordance with applicable law, and shall
contain terms required by and consistent with this Agreement, the Stock
Purchase Agreement and the Cooperation Agreement and terms not otherwise
prohibited from being contained in such certificate by any of such agreements
(the "Surviving Corporation Certificate").
3.2 Bylaws. The Amended and Restated Bylaws of Patriot in effect
immediately prior to the Effective Time (the "Patriot Bylaws") shall be the
Bylaws of the Surviving Corporation, until duly amended in accordance with
applicable law, and shall contain terms required by and consistent with this
Agreement, the Stock Purchase Agreement and the
5
<PAGE> 11
Cooperation Agreement and terms not otherwise prohibited from being contained
in such bylaws by any of such agreements (the "Surviving Corporation Bylaws").
ARTICLE 4. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION AND
BMOC
4.1 Directors of the Surviving Corporation.
(a) At the Effective Time, the number of directors of the
Surviving Corporation shall be fixed at eleven. At the Effective Time, eight
of the directors of the Surviving Corporation shall be Paul Nussbaum, William
W. Evans III, Arch Jacobson, John Daniels and John Deterding, and three
individuals designated by Patriot prior to the Effective Time who shall be
reasonably acceptable to Wyndham (the foregoing eight individuals being
referred to herein collectively as the "Patriot Designees"); provided, however,
that for purposes of the foregoing, Wyndham acknowledges that the individuals
listed on Section 4.1 of the Patriot Disclosure Letter (as hereinafter defined)
are reasonably acceptable Patriot Designees. At the Effective Time, two of the
directors of the Surviving Corporation shall be James Carreker and an
individual designated by Wyndham prior to the Effective Time who shall be
reasonably acceptable to Patriot (the foregoing two individuals being referred
to herein collectively as the "Wyndham Designees"). The remaining director
shall be designated by the Crow Family Entities prior to the Effective Time and
shall be reasonably acceptable to Patriot (the "Family Designee"); provided,
however, that for purposes of the foregoing, Patriot acknowledges that Harlan
Crow is a reasonably acceptable Family Designee and that the term of the Family
Designee on the Board of Directors of Patriot shall commence on the third day
immediately following the Effective Time (the "Family-Designee Date").
(b) In the event that immediately following consummation of
the Business Combination the Board of Directors of Patriot is divided into
classes, then, at the Effective Time, the directors of each of the classes of
the Board of Directors of the Surviving Corporation shall be as follows
(subject to the provisions of this Section 4.1):
<TABLE>
<CAPTION>
Class Designee Term Expires
----- -------- ------------
<S> <C> <C>
I Paul Nussbaum 1998
I Family Designee 1998
I John Deterding 1998
I Patriot Designee 1998
II John Daniels 1999
II Patriot Designee 1999
II Patriot Designee 1999
II Wyndham Designee 1999
III James Carreker 2000
III Arch Jacobson 2000
III William W. Evans III 2000
</TABLE>
6
<PAGE> 12
(c) Patriot and Wyndham agree that in the event that any
Patriot Designee is unable or otherwise fails to serve, for any reason, as a
director of Patriot at the Effective Time, Patriot shall have the right to
designate another individual to serve as a director of Patriot at the Effective
Time in place of such Patriot Designee (or if a vacancy shall be deemed to have
occurred in respect thereof, Patriot shall have the right to fill such vacancy,
notwithstanding any other provision to the contrary contained herein);
provided, however, that such individual shall be reasonably satisfactory to
Wyndham. Patriot and Wyndham shall each cause such designee of Patriot to be
elected to the Board of Directors of Patriot at the Effective Time in place of
such Patriot Designee.
(d) Patriot and Wyndham agree that in the event that any
Wyndham Designee is unable or otherwise fails to serve, for any reason, as a
director of Patriot at the Effective Time, Wyndham shall have the right to
designate another individual to serve as a director of Patriot at the Effective
Time in place of such Wyndham Designee (or if a vacancy shall be deemed to have
occurred in respect thereof, Wyndham shall have the right to fill such vacancy,
notwithstanding any other provision to the contrary contained herein);
provided, however, that such individual shall be reasonably satisfactory to
Patriot. Patriot and Wyndham shall each cause such designee of Wyndham to be
elected to the Board of Directors of Patriot at the Effective Time in place of
such Wyndham Designee.
(e) Patriot and Wyndham agree that in the event that the
Family Designee is unable or otherwise fails to serve, for any reason, as a
director of Patriot on the Family-Designee Date, the Crow Family Entities shall
have the right to designate another individual to serve as a director of
Patriot on the Family-Designee Date in place of such Family Designee (or if a
vacancy shall be deemed to have occurred in respect thereof, the Crow Family
Entities shall have the right to fill such vacancy, notwithstanding any other
provision to the contrary contained herein); provided, however, that such
individual shall be reasonably satisfactory to Patriot. Patriot and Wyndham
shall each cause such designee of the Crow Family Entities to be elected to the
Board of Directors of Patriot on the Family-Designee Date in place of such
Family Designee.
(f) Notwithstanding any of the foregoing provisions of this
Section 4.1 or any other provision of this Agreement to the contrary, the
parties agree that in no event shall a majority of the directors of the
Surviving Corporation immediately following the Effective Time be executive
officers or directors of BMOC.
4.2 Officers of the Surviving Corporation. At the Effective Time,
the officers of the Surviving Corporation shall include, but not be limited to,
Paul Nussbaum, who shall be Chairman of the Board of Directors and Chief
Executive Officer, William Evans, who shall be President, and Anne Raymond, who
shall be Chief Financial Officer and an Executive Vice President.
4.3 Directors of BMOC.
(a) At or prior to the Effective Time, the number of directors
of BMOC shall be fixed at eleven. At the Effective Time, seven of the
directors of BMOC shall be Paul Nussbaum, Leonard Boxer, Arch Jacobson and
Rusty Lyons, and three individuals designated
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<PAGE> 13
by Patriot prior to the Effective Time who shall be reasonably acceptable to
Wyndham (the foregoing seven individuals being referred to herein collectively
as the "Patriot-BMOC Designees"); provided, however, that for purposes of the
foregoing, Wyndham acknowledges that the individuals listed on Section 4.3 of
the Patriot Disclosure Letter are reasonably acceptable Patriot-BMOC Designees.
At the Effective Time, three of the directors of BMOC shall be James Carreker
and two individuals designated by Wyndham prior to the Effective Time who shall
be reasonably acceptable to Patriot (the foregoing three individuals being
referred to herein collectively as the "Wyndham-BMOC Designees"); provided,
however, that for purposes of the foregoing, Patriot acknowledges that the
individual listed on Section 4.3 of the Wyndham Disclosure Letter (as
hereinafter defined) is a reasonably acceptable Wyndham-BMOC Designee. The
remaining director shall be designated by the Crow Family Entities prior to the
Effective Time and shall be reasonably acceptable to Patriot (the "Family-BMOC
Designee"); provided, however, that for purposes of the foregoing, Patriot
acknowledges that Harlan Crow is a reasonably acceptable Family-BMOC Designee
and that the term of the Family-BMOC Designee on the Board of Directors of BMOC
shall commence on the third day immediately following the Effective Time (the
"Family-BMOC-Designee Date").
(b) In the event that immediately following consummation of
the Business Combination the Board of Directors of BMOC is divided into
classes, then, at the Effective Time, the directors of each class of the Board
of Directors of BMOC shall be as follows (subject to the provisions of this
Section 4.3):
<TABLE>
<CAPTION>
Class Designee Term Expires
----- -------- ------------
<S> <C> <C>
I James Carreker 1998
I Rusty Lyons 1998
I Wyndham-BMOC Designee 1998
I Patriot-BMOC Designee 1998
II Arch Jacobson 1999
II Leonard Boxer 1999
II Family-BMOC Designee 1999
II Patriot-BMOC Designee 1999
III Paul Nussbaum 2000
III Patriot-BMOC Designee 2000
III Wyndham-BMOC Designee 2000
</TABLE>
(c) Patriot, Wyndham and BMOC agree that in the event that any
Patriot-BMOC Designee is unable or otherwise fails to serve, for any reason, as
a director of BMOC at the Effective Time, Patriot shall have the right to
designate another individual to serve as a director of BMOC at the Effective
Time in place of such Patriot-BMOC Designee (or if a vacancy shall be deemed to
have occurred in respect thereof, Patriot shall have the right to fill such
vacancy, notwithstanding any other provision to the contrary contained herein);
provided, however, that such individual shall be reasonably satisfactory to
Wyndham. BMOC and Wyndham shall each cause such designee of Patriot to be
elected to the Board of Directors of BMOC at the Effective Time in place of
such Patriot-BMOC Designee.
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<PAGE> 14
(d) Patriot, Wyndham and BMOC agree that in the event that any
Wyndham-BMOC Designee is unable or otherwise fails to serve, for any reason, as
a director of BMOC at the Effective Time, Wyndham shall have the right to
designate another individual to serve as a director of BMOC at the Effective
Time in place of such Wyndham-BMOC Designee (or if a vacancy shall be deemed to
have occurred in respect thereof, Wyndham shall have the right to fill such
vacancy, notwithstanding any other provision to the contrary contained herein);
provided, however, that such individual shall be reasonably satisfactory to
Patriot. BMOC and Wyndham shall each cause such designee of Wyndham to be
elected to the Board of Directors of BMOC at the Effective Time in place of
such Wyndham-BMOC Designee.
(e) Patriot, Wyndham and BMOC agree that in the event that the
Family-BMOC Designee is unable or otherwise fails to serve, for any reason, as
a director of BMOC on the Family-BMOC-Designee Date, the Crow Family Entities
shall have the right to designate another individual to serve as a director of
BMOC on the Family-BMOC-Designee Date in place of such Family-BMOC Designee (or
if a vacancy shall be deemed to have occurred in respect thereof, the Crow
Family Entities shall have the right to fill such vacancy, notwithstanding any
other provision to the contrary contained herein); provided, however, that such
individual shall be reasonably satisfactory to Patriot. BMOC and Wyndham shall
each cause such designee of the Crow Family Entities to be elected to the Board
of Directors of BMOC on the Family-BMOC-Designee Date in place of such
Family-BMOC Designee.
(f) Notwithstanding any of the foregoing provisions of this
Section 4.3 or any other provision of this Agreement to the contrary, Patriot,
Wyndham and BMOC agree that in no event shall a majority of the directors of
BMOC immediately following the Effective Time be executive officers or
directors of the Surviving Corporation.
4.4 Officers of BMOC. At the Effective Time, the officers of BMOC
shall include, but not be limited to, James Carreker, who shall be Chairman of
the Board of Directors and Chief Executive Officer, Rex Stewart, who shall be
Chief Financial Officer and an Executive Vice President, and Thomas Lattin, who
shall be an Executive Vice President.
4.5 Change of Name. At the Effective Time, (i) BMOC and Patriot or a
Subsidiary of Patriot shall enter into a license agreement pursuant to which
Patriot or such Subsidiary of Patriot shall license to BMOC use of the
"Wyndham" brand, and (ii) the Certificate of Incorporation of BMOC shall be
amended (the "BMOC Charter Amendment") to change the name of BMOC to "Wyndham
International" and shall contain terms required by and consistent with this
Agreement, the Stock Purchase Agreement and the Cooperation Agreement and terms
not otherwise prohibited from being contained in such certificate by any of
such agreements.
9
<PAGE> 15
ARTICLE 5. EXCHANGE OF STOCK
5.1 Outstanding Paired Shares of Patriot Stock and BMOC Stock.
(a) At and after the Effective Time, each Paired Share of
Patriot Stock and BMOC Stock outstanding immediately prior to the Effective
Time shall remain outstanding and shall continue to represent one Paired Share
of Patriot Stock and BMOC Stock.
(b) At and after the Effective Time, each option exercisable
for a Paired Share of Patriot Stock and BMOC Stock outstanding immediately
prior to the Effective Time shall remain outstanding and shall continue to
represent an option to purchase a Paired Share of Patriot Stock and BMOC Stock.
5.2 Conversion of Wyndham Common Stock.
(a) Except as otherwise provided in Section 5.3(a) with
respect to holders of Wyndham Common Stock who make a Cash Election (as defined
therein) and except as otherwise provided herein, at the Effective Time, each
share of Wyndham Common Stock issued and outstanding immediately prior to the
Effective Time (other than those shares of Wyndham Common Stock to be canceled
pursuant to Section 5.2(c)) shall, by virtue of the Merger and without any
action on the part of Wyndham, Patriot, BMOC or the holders of any of the
securities of any of these corporations, be converted into the right to receive
0.712 Paired Shares of Patriot Stock and BMOC Stock; provided, however, that in
the event that the Average Closing Price (as hereinafter defined) of a Paired
Share of Patriot Stock and BMOC Stock is less than $42.13 per share (subject to
adjustment as provided below) but greater than or equal to $40.21 per share
(subject to adjustment as provided below), then each share of Wyndham Common
Stock issued and outstanding immediately prior to the Effective Time (other
than those shares of Wyndham Common Stock to be canceled pursuant to Section
5.2(c)) shall be converted into the right to receive a number of Paired Shares
of Patriot Stock and BMOC Stock equal to $30.00 divided by the Average Closing
Price; provided, further, that in the event that the Average Closing Price of a
Paired Share of Patriot Stock and BMOC Stock is less than $40.21 per share
(subject to adjustment as provided below), (A) each share of Wyndham Common
Stock issued and outstanding immediately prior to the Effective Time (other
than those shares of Wyndham Common Stock to be canceled pursuant to Section
5.2(c)) shall be converted into the right to receive a number of Paired Shares
of Patriot Stock and BMOC Stock equal to 0.746 (the applicable percentage of a
share of Patriot Stock to be issued upon such conversion herein being the
"Exchange Ratio"), and (B) Wyndham shall have the right, waivable by it, to
terminate this Agreement pursuant to Section 10.1(l) without any liability on
its part by giving written notice of its election to do so to Patriot prior to
11:59 p.m., Dallas, Texas time on the first business day after the expiration
of the Measurement Period (as hereinafter defined). The Paired Shares of
Patriot Stock and BMOC Stock to be issued to holders of Wyndham Common Stock in
the Merger are referred to herein as the "Stock Consideration." For purposes
of this Agreement, the term "Average Closing Price" shall mean the average per
share closing price of a Paired Share of a Patriot Stock and BMOC Stock as
reported on the NYSE over the twenty (20) trading days immediately preceding
the fifth business day prior to the date on which the meeting of Wyndham's
stockholders is to be convened pursuant to Section 8.3 hereof such twenty (20)
trading day period being referred to
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<PAGE> 16
herein as the "Measurement Period"). Notwithstanding the foregoing, if between
the date of this Agreement and the Effective Time the outstanding Paired Shares
of CJC Stock and BMOC Stock, the outstanding Paired Shares of Patriot Stock and
BMOC Stock or the outstanding shares of Wyndham Common Stock shall have been
changed, other than pursuant to this Agreement or the Business Combination
Agreement, into a different number of shares or a different class or series, by
reason of any stock dividend, subdivision, reclassification, recapitalization,
split, combination or exchange of shares (or if between the date of this
Agreement and the effective date of the Business Combination the outstanding
shares of Patriot Stock shall have been so changed and no adjustment shall have
been made on account thereof pursuant to Section 5.2(a) of the Business
Combination Agreement), the Exchange Ratio and the per share reference prices
of Paired Shares referred to above shall be correspondingly adjusted to reflect
such stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares; provided that none of Patriot, BMOC or
Wyndham shall effect any such change during or, until the Effective Time,
following the Measurement Period.
(b) As a result of the Merger and without any action on the
part of the holders thereof, all shares of Wyndham Common Stock shall cease to
be outstanding, shall be canceled and retired and shall cease to exist and each
holder of a certificate (a "Certificate" and, collectively, the "Certificates")
representing any shares of Wyndham Common Stock (other than those shares of
Wyndham Common Stock to be canceled pursuant to Section 5.2(c)) shall
thereafter cease to have any rights with respect to such shares of Wyndham
Common Stock, except the right to receive, without interest, Stock
Consideration in accordance with Section 5.2(a) and/or cash consideration in
accordance with Section 5.3(a), dividend(s) payable in accordance with Section
5.4(c) and cash in lieu of Excess Paired Shares (if any) and fractional Paired
Shares of Patriot Stock and BMOC Stock in accordance with Sections 5.2(b) and
5.4(e), respectively, upon the surrender of such Certificate.
(c) Each share of Wyndham Common Stock issued and held in
Wyndham's treasury and each share of Wyndham Common Stock held by Patriot, BMOC
or any of the Patriot Subsidiaries or BMOC Subsidiaries immediately prior to
the Effective Time, if any, by virtue of the Merger shall cease to be
outstanding, shall be canceled and retired and shall cease to exist and no
payment of any consideration shall be made with respect thereto.
(d) At the Effective Time, Wyndham's obligations with respect
to each stock option (collectively, the "Existing Wyndham Options") set forth
in Section 6.3 of the Wyndham Disclosure Letter (as defined in Article 6
hereof) shall be assumed by Patriot (the "Assumed Options"), subject to the
provisions described in this Section. The Assumed Options shall not terminate
in connection with the Merger and shall continue to have, and be subject to,
the same terms and conditions as set forth in the stock option plans and
agreements (as in effect immediately prior to the Effective Time) pursuant to
which the Existing Wyndham Options were issued, provided that (i) all
references to Wyndham shall be deemed to be references to Patriot or BMOC, as
the case may be, and all references to Wyndham Common Stock shall be deemed to
be references to Paired Shares of Patriot Stock and BMOC Stock, (ii) each
option shall fully vest and become exercisable in accordance with its terms,
and (iii) each option shall be exercisable for that number of whole Paired
Shares of Patriot Stock and BMOC Stock equal to the product of the number of
shares of Wyndham Common Stock covered by such option immediately prior to the
Effective Time multiplied by the Exchange Ratio and
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<PAGE> 17
rounded to the nearest whole number of Paired Shares of Patriot Stock and BMOC
Stock and (v) the exercise price per share of Paired Patriot Stock and BMOC
Stock under such option shall be equal to the exercise price per share of
Wyndham Common Stock under the Existing Wyndham Option divided by the Exchange
Ratio and rounded to the nearest cent. Patriot shall (A) reserve for issuance
the number of shares of Patriot Stock that will become issuable upon the
exercise of such Assumed Options pursuant to this Section 5.2(e) and (B)
promptly after the Effective Time issue to each holder of an outstanding
Existing Wyndham Option a document evidencing the assumption by Patriot of
Wyndham's obligations with respect thereto under this Section. BMOC shall (A)
reserve for issuance the number of shares of BMOC Stock that will become
issuable upon the exercise of such Assumed Options pursuant to this Section
5.2(d) and (B) promptly after the Effective Time issue to each holder of an
outstanding Existing Wyndham Option a document evidencing the assumption by
BMOC of Wyndham's obligations with respect thereto under this Section.
Patriot, BMOC and Wyndham shall consider in good faith whether any of the
Assumed Options will provide that Patriot or BMOC, as the case may be, shall
have the discretion to settle any option exercise with a cash amount equal to
the difference between the option exercise price and the fair market value of
the Paired Shares of Patriot Stock and BMOC Stock, less any applicable tax
withholding.
5.3 Cash Election.
(a) (i) Notwithstanding the provisions of Section 5.2(a),
each person who, on the Election Date (as hereinafter defined), is a record
holder of shares of Wyndham Common Stock (other than those shares of Wyndham
Common Stock to be canceled pursuant to Section 5.2(c)) will be entitled, with
respect to that number of such holder's shares of Wyndham Common Stock
specified in such holder's Form of Election (as defined in Section 5.3(b)) but
not in excess of the total number of shares of Wyndham Common Stock held by
such holder (each such share of Wyndham Common Stock being referred to herein
as a "Cash Electing Share," and the aggregate number of shares of Wyndham
Common Stock with respect to which such holder has made a Cash Election being
referred to herein as such holder's "Cash Electing Shares"), to make an
election (a "Cash Election") on or prior to such Election Date to receive from
Patriot following the Effective Time an amount in cash and Stock Consideration
determined as follows:
(A) If the Aggregate Cash Electing Shares (as
hereinafter defined) is less than or equal to the Cash Conversion
Number (as hereinafter defined), then such holder shall be
entitled to receive for each such Cash Electing Share an amount
of cash equal to the Per Share Cash Amount (as hereinafter
defined); or
(B) If the Aggregate Cash Electing Shares is
greater than the Cash Conversion Number, then such holder shall
be entitled to receive (x) with respect to that number of such
holder's Cash Electing Shares equal to such holder's total Cash
Electing Shares multiplied by the Cash Proration Factor (as
hereinafter defined), with the result rounded to the next lower
whole share (the "Prorated Cash Electing Shares"), an amount of
cash equal to the product of such holder's Prorated Cash Electing
Shares and the Per Share Cash Amount, and (y) Stock Consideration
in accordance with Section 5.2 with respect to that
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<PAGE> 18
number of such holder's Cash Electing Shares equal to the
difference between such holder's total Cash Electing Shares and
such holder's Prorated Cash Electing Shares.
(ii) For purposes of this Agreement:
"Aggregate Cash Electing Shares" shall mean the
total number of Cash Electing Shares for all holders of Wyndham
Common Stock.
"Cash Election Price" shall mean the product of the
Exchange Ratio and the Fair Market Value.
"Cash Conversion Number" shall mean $100,000,000
divided by the Cash Election Price.
"Cash Proration Factor" shall mean the Cash
Conversion Number divided by the Aggregate Cash Electing Shares,
with the result rounded to four decimal points.
"Fair Market Value" shall mean the average closing
price of the Paired Shares of Patriot Stock and BMOC Stock on the
NYSE on the five (5) trading days immediately preceding the
Closing Date.
"Per Share Cash Amount" shall mean the product of
the Fair Market Value multiplied by the Exchange Ratio.
For purposes of the foregoing definitions in this
clause (ii), the number of shares of Wyndham Common Stock held of
record by the Principal Stockholder and its permitted assignees,
if any, as to which the Principal Stockholder and its permitted
assignees have made an election to receive cash pursuant to
Section 1.1(b) of the Stock Purchase Agreement shall be treated
as "Cash Electing Shares," but all consideration to be paid for
such shares shall be paid or delivered by Patriot and BMOC
pursuant to the Stock Purchase Agreement and not pursuant to this
Agreement.
(iii) The aggregate consideration to be received by
holders of Wyndham Common Stock pursuant to Section 5.2(a) and this
Section 5.3(a), any dividends and cash in lieu of Excess Paired Shares,
if any, to be received by holders of Wyndham Common Stock in accordance
with Section 5.2(b), and fractional Paired Shares, if any, to be
received by the holders of Wyndham Common Stock in accordance with
Section 5.4, are referred to herein collectively as the "Merger
Consideration."
(b) Patriot shall prepare a form of election, which form shall
be subject to the reasonable approval of Wyndham (the "Form of Election"), and
Wyndham shall mail such Form of Election with the Proxy Statement (as
hereinafter defined) to the record holders of Wyndham Common Stock as of the
record date for the Wyndham stockholders' meeting which
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<PAGE> 19
will be held in accordance with the provisions of Section 8.3 hereof, which
Form of Election shall be used by each record holder of shares of Wyndham
Common Stock who wishes to make a Cash Election with respect to any or all
shares of Wyndham Common Stock held by such holder. Patriot will use its best
efforts to make the Form of Election and the Proxy Statement available to all
persons who become holders of Wyndham Common Stock during the period between
such record date and the Election Date referred to below. Any such holder's
Cash Election shall have been properly made only if the Exchange Agent (as
hereinafter defined) shall have received at its designated office, by 5:00
p.m., New York City time, on the Election Date, a Form of Election properly
completed and signed and accompanied by certificates for the shares of Wyndham
Common Stock to which such Form of Election relates, duly endorsed in blank or
otherwise in form acceptable for transfer on the books of Patriot (or by an
appropriate guarantee of delivery of such certificates as set forth in such
Form of Election from a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or a commercial bank or trust company having an office or correspondent in the
United States, provided such certificates are in fact delivered to the Exchange
Agent within three NYSE trading days after the date of execution of such
guarantee of delivery). As used herein, the "Election Date" means two (2)
business days prior to the Closing Date or such other date, agreed upon by
Patriot and Wyndham, which date shall be announced by Patriot, in a news
release delivered to Dow Jones News Service, as the last day on which Forms of
Election will be accepted, which date shall be at least five business days
following the date of such news release.
(c) Any Form of Election may be revoked by the stockholder
submitting it to the Exchange Agent only by written notice received by the
Exchange Agent prior to 5:00 p.m., New York City time, on the Election Date.
In addition, all Forms of Election shall automatically be revoked if the
Exchange Agent is notified in writing by Patriot and Wyndham that the Merger
has been abandoned. If a Form of Election is revoked, the certificate or
certificates (or guarantees of delivery, as appropriate) for the shares of
Wyndham Common Stock to which such Form of Election relates shall be promptly
returned to the stockholder submitting the same to the Exchange Agent.
(d) The determination of the Exchange Agent shall be binding
as to whether or not a Cash Election has been properly made or revoked pursuant
to this Section 5.3 with respect to shares of Wyndham Common Stock. If the
Exchange Agent determines that any Cash Election was not properly made with
respect to shares of Wyndham Common Stock, such shares shall be treated by the
Exchange Agent as shares that were not Cash Electing Shares at the Effective
Time, and such shares shall be exchanged in the Merger pursuant to Section
5.2(a). The Exchange Agent may, with the mutual agreement of Patriot and
Wyndham, make such rules as are consistent with this Section 5.3 for the
implementation of the election provided for herein as shall be necessary or
desirable fully to effect such election.
5.4 Exchange of Certificates Representing Wyndham Common Stock.
(a) As of the Effective Time, (i) Patriot shall deposit, or
shall cause to be deposited, with an exchange agent selected by Patriot on or
prior to the Effective Time (the "Exchange Agent"), for the benefit of the
holders of shares of Wyndham Common Stock, for exchange in accordance with this
Article 5, a certificate representing the shares of Patriot
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<PAGE> 20
Stock to be issued pursuant to Section 5.2(a), cash in an aggregate amount
sufficient to pay the aggregate cash consideration payable to holders of
Wyndham Common Stock who have made a Cash Election pursuant to Section 5.3(a),
if any, the cash in lieu of Excess Paired Shares, if any, to be paid pursuant
to Section 5.2(b) and fractional Paired Shares to be paid pursuant to this
Section 5.4, in exchange for outstanding shares of Wyndham Common Stock and
simultaneously (ii) BMOC shall deposit, or shall cause to be deposited, with
the Exchange Agent, for the benefit of the holders of shares of Wyndham Common
Stock, for distribution in accordance with Section 5.2(a), a certificate
representing the Subscribed Shares, to be paired with the shares of Patriot
Stock described in clause (i) above (such certificates for shares of Patriot
Stock, cash, the certificates for Subscribed Shares and cash in lieu of Excess
Paired Shares and fractional Paired Shares shall hereinafter be referred to as
the "Exchange Fund"). The provisions of this Section 5.4 are intended to
comply and shall be interpreted in a manner consistent with Sections 2(a) and
2(b) of the Pairing Agreement.
(b) Promptly after the Effective Time, the parties hereto
shall cause the Exchange Agent to mail to each holder of record of a
Certificate or Certificates (i) a letter of transmittal which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as Patriot and BMOC may
reasonably specify and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for certificates printed "back-to-back" evidencing
Paired Shares of Patriot Stock and BMOC Stock and cash in lieu of Excess Paired
Shares, if any, and fractional Paired Shares, if any. Upon surrender of a
Certificate for cancellation to the Exchange Agent and delivery of such letter
of transmittal, duly executed and completed in accordance with the instructions
thereto to the Exchange Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor (x) a certificate representing the number of
whole Paired Shares of Patriot Stock and BMOC Stock to which such holder shall
be entitled, and (y) a check representing the amount payable to holders of
Wyndham Common Stock who have made a Cash Election pursuant to Section 5.3(a),
if any, plus amount of cash in lieu of Excess Paired Shares, if any, and
fractional Paired Shares, if any, due such holder plus the amount of any
dividends or distributions, if any, pursuant to Section 5.4(c), after giving
effect to any required withholding tax, and the Certificate so surrendered
shall forthwith be canceled. No interest will be paid or accrued on the amount
payable to holders of Wyndham Common Stock who have made a Cash Election
pursuant to Section 5.3(a), if any, the cash in lieu of Excess Paired Shares,
if any, and fractional Paired Shares, if any, or on the dividends or
distributions, if any, due and payable to holders of Certificates pursuant to
this Section 5.4. In the event of a transfer of ownership of Wyndham Common
Stock which is not registered in the stock transfer records of Wyndham, a
certificate representing the proper number of Paired Shares of Patriot Stock
and BMOC Stock, together with a check for the cash to be paid to holders of
Wyndham Common Stock who have made a Cash Election pursuant to Section 5.3(a)
plus cash to be paid in lieu of Excess Paired Shares, if any, and fractional
Paired Shares, if any, plus, to the extent applicable, the amount of any
dividends or distributions, if any, due and payable pursuant to Section 5.4(c),
may be issued to such a transferee if the Certificate representing shares of
such Wyndham Common Stock is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer and to evidence
that any applicable stock transfer taxes have been paid.
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<PAGE> 21
(c) Notwithstanding any other provisions of this Agreement,
dividends or other distributions on Paired Shares of Patriot Stock and BMOC
Stock with respect to any shares of Wyndham Common Stock represented by a
Certificate that has not been surrendered for exchange shall be paid only as
provided herein. Any such dividend or distribution amounts with a record date
after the Effective Time and a payment date prior to both the first anniversary
of the Effective Time and the surrender of such Certificate shall be deposited
(less the amount of any withholding taxes which may be required thereon) with
the Exchange Agent on the applicable payment date, to be held by the Exchange
Agent in a non-interest bearing account until the surrender of such
Certificate. Following surrender of any such Certificate, the holder thereof
shall be entitled to receive for the whole Paired Shares of Patriot Stock and
BMOC Stock issued in exchange therefor, without interest, (i) at the time of
such surrender, the amount of dividends or other distributions with a record
date after the Effective Time theretofore payable with respect to such whole
Paired Shares and not paid, less the amount of any withholding taxes which may
be required thereon, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time
but prior to surrender and a payment date subsequent to surrender payable with
respect to such Paired Shares, less the amount of any withholding taxes which
may be required thereon.
(d) At and after the Effective Time, there shall be no
transfers on the stock transfer books of Wyndham of the shares of Wyndham
Common Stock which were outstanding immediately prior to the Effective Time and
if, after the Effective Time, Certificates are presented for transfer, they
shall be canceled against delivery of the Merger Consideration as hereinabove
provided. Certificates surrendered for exchange by any person constituting an
"affiliate" of Wyndham for purposes of Rule 145, as such rule may be amended
from time to time ("Rule 145"), of the rules and regulations promulgated under
the Securities Act of 1933, as amended (the "Securities Act"), shall not be
exchanged until Patriot has received an affiliate letter (the "Affiliate
Letter") from such person as provided in Section 8.10.
(e) No fractional Paired Shares of Patriot Stock and BMOC
Stock shall be issued pursuant hereto. In lieu of the issuance of any
fractional Paired Shares pursuant to this Agreement, each holder of Wyndham
Common Stock upon surrender of a Certificate for exchange shall be paid an
amount in cash (without interest), rounded to the nearest cent, determined by
multiplying (i) the Fair Market Value by (ii) the fractional amount of the
Paired Shares of Patriot Stock and BMOC Stock which such holder would otherwise
be entitled to receive under this Article 5.
(f) All cash paid upon the surrender for exchange of
certificates representing shares of Wyndham Common Stock in accordance with the
terms of this Article 5 (including any cash for Excess Paired Shares and
fractional Paired Shares) shall be deemed to have been issued (and paid) in
full satisfaction of all rights pertaining to the shares of Wyndham Common
Stock exchanged for cash theretofore represented by such certificates.
5.5 Return of Exchange Fund. Any portion of the Exchange Fund
(including any cash payable to holders of Wyndham Common Stock who have made a
Cash Election pursuant to Section 5.3(a), any cash for Excess Paired Shares and
fractional Paired Shares, any dividends or distributions of Patriot or BMOC and
any shares of Patriot Stock or any Subscribed Shares) that remains unclaimed by
the former stockholders of Wyndham one year
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<PAGE> 22
after the Effective Time shall be distributed as follows: any cash payable to
holders of Wyndham Common Stock who have made a Cash Election pursuant to
Section 5.3(a), any cash for Excess Paired Shares and fractional Paired Shares,
any dividends or distributions of Patriot and any shares of Patriot Stock shall
be returned to Patriot and any dividends or distributions of BMOC and any
Subscribed Shares shall be returned to BMOC (provided that Patriot and BMOC
shall issue said cash or shares in accordance with this Article 5 to former
stockholders of Wyndham who thereafter surrender their Certificates), subject
to the provisions and effect of applicable abandoned property, escheat or
similar laws. Any former stockholders of Wyndham who have not theretofore
complied with this Article 5 shall thereafter look only to Patriot for payment
of any cash consideration payable as a result of the Merger or for issuance or
payment of that portion of their Paired Shares representing Patriot Stock and
cash in lieu of Excess Paired Shares, if any, and fractional Paired Shares, if
any, and to BMOC for issuance or payment of that portion of their Paired Shares
representing BMOC Stock (plus, in each case, dividends and distributions to the
extent set forth in Section 5.4(c), if any), as determined pursuant to this
Agreement, without any interest thereon. None of Patriot, BMOC, Wyndham, the
Exchange Agent or any other person shall be liable to any former holder of
shares of Wyndham Common Stock for any shares of stock or cash properly
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
5.6 Lost or Stolen Certificates. In the event any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming such Certificate to be lost, stolen or destroyed
and, if required by Patriot and BMOC, the posting by such person of a bond in
such reasonable amount as Patriot and BMOC may direct as indemnity against any
claim that may be made against it with respect to such Certificate, the
Exchange Agent or Patriot and BMOC will issue in exchange for such lost, stolen
or destroyed Certificate the Paired Shares of Patriot Stock and BMOC Stock and
cash in lieu of Excess Paired Shares, if any, and fractional Paired Shares, if
any, to which such person is entitled under Section 5.4(b) (and to the extent
applicable, dividends and distributions payable pursuant to Section 5.4(c)).
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF WYNDHAM
Except as set forth in the disclosure letter delivered at or prior to
the execution hereof to Patriot, which shall refer to the relevant Sections of
this Agreement (the "Wyndham Disclosure Letter"), Wyndham represents and
warrants to Patriot as follows:
6.1 Existence; Good Standing; Authority; Compliance With Law.
(a) Wyndham is a corporation duly organized, validly existing
and in good standing under the laws of Delaware. Wyndham is duly licensed or
qualified to do business as a foreign corporation and is in good standing under
the laws of any other state of the United States in which the character of the
properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary, except where the failure to be so
licensed or qualified could not reasonably be expected to have a material
adverse effect on the business, results of operations or financial condition of
Wyndham and the Wyndham
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Subsidiaries taken as a whole (a "Wyndham Material Adverse Effect"). Wyndham
has all requisite corporate power and authority to own, operate, lease and
encumber its properties and carry on its business as now conducted.
(b) Each of the Wyndham Subsidiaries is a corporation or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
has the corporate or partnership power and authority to own its properties and
to carry on its business as it is now being conducted, and is duly qualified to
do business and is in good standing in each jurisdiction in which the ownership
of its property or the conduct of its business requires such qualification,
except for jurisdictions in which such failure to be so qualified or to be in
good standing could not reasonably be expected to have a Wyndham Material
Adverse Effect.
(c) Neither Wyndham nor any of the Wyndham Subsidiaries is in
violation of any order of any court, governmental authority or arbitration
board or tribunal, or any law, ordinance, governmental rule or regulation to
which Wyndham or any Wyndham Subsidiary or any of their respective properties
or assets is subject, where such violation could have a Wyndham Material
Adverse Effect. Wyndham and the Wyndham Subsidiaries have obtained all
licenses, permits and other authorizations and have taken all actions required
by applicable law or governmental regulations in connection with their business
as now conducted, where the failure to obtain any such license, permit or
authorization or to take any such action could reasonably be expected to have a
Wyndham Material Adverse Effect.
(d) Copies of the Amended and Restated Certificate of
Incorporation of Wyndham (the "Wyndham Certificate") and Bylaws of Wyndham (the
"Wyndham Bylaws") and the other charter documents, bylaws, organizational
documents and partnership and joint venture agreements (and in each such case,
all amendments thereto) of each of the Wyndham Subsidiaries are listed in
Section 6.1 of the Wyndham Disclosure Letter, and the copies of such documents,
which have previously been delivered or made available to Patriot and its
counsel, are true and correct. For the purposes of this Agreement, the term
"Wyndham Subsidiary" shall include any of the entities listed under such
heading in Section 6.4 of the Wyndham Disclosure Letter.
6.2 Authorization, Validity and Effect of Agreements. Each of
Wyndham and the Wyndham Subsidiaries has the requisite power and authority to
enter into the transactions contemplated hereby and to execute and deliver this
Agreement and the Ancillary Agreements to which it is a party. The Board of
Directors of Wyndham has approved this Agreement, the Merger, and the Ancillary
Agreements to which it is a party and the other transactions contemplated by
this Agreement and has resolved to recommend that the holders of Wyndham Common
Stock adopt and approve this Agreement, as ratified by New Patriot pursuant to
the Patriot Ratification Agreement, at the Wyndham stockholders' meeting which
will be held in accordance with the provisions of Section 8.3 hereof. In
connection with the foregoing, the Board of Directors of Wyndham has taken such
actions and votes as are necessary on its part to render the provisions of
Section 203 of the DGCL and all other applicable takeover statutes inapplicable
to this Agreement, the Merger, the Stock Purchase Agreement, the Stock Purchase
and the transactions contemplated by this Agreement and the other Ancillary
Agreements. As of the date hereof, all of the directors and executive officers
of Wyndham
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have indicated that they presently intend to vote all shares of Wyndham Common
Stock which they own to approve this Agreement, as ratified by New Patriot
pursuant to the Patriot Ratification Agreement, at the Wyndham stockholders'
meeting which will be held in accordance with the provisions of Section 8.3.
Subject only to the approval of this Agreement, as ratified by New Patriot
pursuant to the Patriot Ratification Agreement, by the holders of two-thirds of
the outstanding shares of Wyndham Common Stock, the execution by Wyndham of
this Agreement, the Ancillary Agreements to which it is a party and
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements have been duly authorized by all requisite corporate
action on the part of Wyndham. This Agreement constitutes, and the Ancillary
Agreements to which it is a party (when executed and delivered pursuant hereto)
will constitute, the valid and legally binding obligations of Wyndham,
enforceable against Wyndham in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, moratorium or other similar laws relating
to creditors' rights and general principles of equity.
6.3 Capitalization.
(a) The authorized capital stock of Wyndham consists of
45,000,000 shares of Wyndham Common Stock and 5,000,000 shares of preferred
stock, par value $.01 per share (the "Wyndham Preferred Stock"). As of the
date of this Agreement, (i) 20,018,299 shares of Wyndham Common Stock are
issued and outstanding, (ii) 2,133,811 and 50,000 shares of Wyndham Common
Stock are reserved for issuance pursuant to the Wyndham's 1996 Long Term
Incentive Plan and rights under the Wyndham's Non-Employee Directors' Retainer
Stock Plan (collectively, the "Wyndham Stock Plans"), respectively, subject to
adjustment on the terms set forth in the Wyndham Stock Plans, (iii) no shares
of Wyndham Preferred Stock were issued and outstanding, and (iv) no shares of
Wyndham Common Stock or Wyndham Preferred Stock were held in the treasury of
Wyndham. As of the date of this Agreement, Wyndham had no shares of Wyndham
Common Stock reserved for issuance other than as described above. All such
issued and outstanding shares of capital stock of Wyndham are duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights.
Except as set forth in Section 6.3 of the Wyndham Disclosure Letter, Wyndham
has no outstanding bonds, debentures, notes or other obligations the holders of
which have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of Wyndham on any
matter. Except for the Existing Wyndham Options (all of which have been issued
under the Wyndham Stock Plans), there are not at the date of this Agreement any
existing options, warrants, calls, subscriptions, convertible securities, or
other rights, agreements or commitments which obligate Wyndham to issue,
transfer or sell any shares of capital stock of Wyndham. Section 6.3 of the
Wyndham Disclosure Letter sets forth a full list of the Existing Wyndham
Options, including the name of the person to whom such stock options have been
granted, the number of shares subject to each option, the per share exercise
price for each option and the vesting schedule for each option. Pursuant to
the terms of the Wyndham Stock Plans, at the Effective Time, all Existing
Wyndham Options will be assumed by Patriot or BMOC in accordance with the
provisions of Section 5.2(d). Except as set forth in Section 6.3 of the
Wyndham Disclosure Letter, there are no agreements or understandings to which
Wyndham or any Wyndham Subsidiary is a party with respect to the voting of any
shares of capital stock of Wyndham or which restrict the transfer of any such
shares, nor does Wyndham have knowledge of any such agreements or
understandings with
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respect to the voting of any such shares or which restrict the transfer of any
such shares. Except as set forth in Section 6.3 of the Wyndham Disclosure
Letter, there are no outstanding contractual obligations of Wyndham or any
Wyndham Subsidiary to repurchase, redeem or otherwise acquire any shares of
capital stock, partnership interests or any other securities of Wyndham or any
Wyndham Subsidiary. Except as set forth in Section 6.3 of the Wyndham
Disclosure Letter, neither Wyndham nor any Wyndham Subsidiary is under any
obligation, contingent or otherwise, by reason of any agreement to register the
offer and sale or resale of any of their securities under the Securities Act.
After the Effective Time, except to the extent set forth in Section 5.2(d), the
Surviving Corporation will have no obligation to issue, transfer or sell any
shares of capital stock or other equity interest of Wyndham or the Surviving
Corporation pursuant to any Wyndham Stock Plan or any other Wyndham Benefit
Plan (as defined in Section 6.14 hereof).
6.4 Subsidiaries. Except as set forth in Section 6.4 of the Wyndham
Disclosure Letter, Wyndham owns directly or indirectly each of the outstanding
shares of capital stock or all of the partnership or other equity interests of
each of the Wyndham Subsidiaries. Each of the outstanding shares of capital
stock in each of the Wyndham Subsidiaries having corporate form is duly
authorized, validly issued, fully paid and nonassessable. Except as set forth
in Section 6.4 of the Wyndham Disclosure Letter, each of the outstanding shares
of capital stock of, or partnership or other equity interests in, each of the
Wyndham Subsidiaries is owned, directly or indirectly, by Wyndham free and
clear of all liens, pledges, security interests, claims or other encumbrances.
The following information for each Wyndham Subsidiary as of the date hereof is
set forth in Section 6.4 of the Wyndham Disclosure Letter: (i) its name and
jurisdiction of incorporation or organization; (ii) its authorized capital
stock or share capital or partnership or other interests; (iii) the name of
each stockholder or owner of a partnership or other equity interest and the
number of issued and outstanding shares of capital stock or share capital or
percentage ownership for non-corporate entities held by it; and (iv) the name
of the general partners, if applicable.
6.5 Other Interests. Except as set forth in Sections 6.4 and 6.5 of
the Wyndham Disclosure Letter and except for such Other Interests (as
hereinafter defined) of Wyndham or any of the Wyndham Subsidiaries that would
not, in the aggregate, be material to Wyndham and the Wyndham Subsidiaries,
taken as a whole, neither Wyndham nor any Wyndham Subsidiary owns directly or
indirectly any interest or investment (whether equity or debt) in any
corporation, partnership, joint venture, business, trust or other entity (other
than investments in short-term investment securities) (collectively "Other
Interests").
6.6 No Violation. Except as set forth in Section 6.6 of the Wyndham
Disclosure Letter (copies of which documents, except as set forth in Annex
6.6A, have been reviewed by Patriot), neither the execution and delivery by
Wyndham of this Agreement or the Ancillary Agreements nor consummation by
Wyndham of the transactions contemplated by this Agreement or the Ancillary
Agreements in accordance with their terms hereof, will: (i) conflict with or
result in a breach of any provisions of the Wyndham Certificate, the Wyndham
Bylaws, or the organizational documents, partnership agreements or joint
venture agreements of Wyndham or any Wyndham Subsidiary; (ii) violate, or
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or in a right of
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termination or cancellation of, or accelerate the performance required by, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties of Wyndham or the Wyndham Subsidiaries under, or
result in being declared void, voidable or without further binding effect, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
deed of trust or any license, franchise, permit, lease, contract, agreement
(including, without limitation, any management or franchise agreement) or other
instrument, commitment or obligation to which Wyndham or any of the Wyndham
Subsidiaries is a party, or by which Wyndham or any of the Wyndham Subsidiaries
or any of their properties is bound or affected, except for any of the
foregoing matters which, individually or in the aggregate, could not reasonably
be expected to have a Wyndham Material Adverse Effect; or (iii) other than the
filings provided for in Article 1 of this Agreement, the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act"), the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), the Securities Act or applicable
state securities and "Blue Sky" laws (collectively, the "Regulatory Filings"),
require any consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority, except where the
failure to obtain any such consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority could not reasonably be expected to have a Wyndham Material Adverse
Effect.
6.7 SEC Documents. Wyndham has filed all required forms, reports and
documents with the Securities and Exchange Commission ("SEC") since the
earliest date on which Wyndham became subject to the reporting obligations of
Section 13 or 15(d) of the Exchange Act (collectively, the "Wyndham SEC
Reports"), all of which were prepared in accordance with the applicable
requirements of the Exchange Act, the Securities Act and the rules and
regulations promulgated thereunder (the "Securities Laws"). The Wyndham SEC
Reports were filed with the SEC in a timely manner and constitute all forms,
reports and documents required to be filed by Wyndham under the Securities Laws
since the earliest date on which Wyndham became subject to the reporting
obligations of Section 13 or 15(d) of the Exchange Act. As of their respective
dates, the Wyndham SEC Reports (i) complied as to form in all material respects
with the applicable requirements of the Securities Laws and (ii) did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. Each of the consolidated balance sheets of Wyndham included in or
incorporated by reference into the Wyndham SEC Reports (including the related
notes and schedules) fairly presents the consolidated financial position of
Wyndham and the Wyndham Subsidiaries as of its date and each of the
consolidated statements of income, retained earnings and cash flows of Wyndham
included in or incorporated by reference into the Wyndham SEC Reports
(including any related notes and schedules) fairly presents the results of
operations, retained earnings or cash flows, as the case may be, of Wyndham and
the Wyndham Subsidiaries for the periods set forth therein (subject, in the
case of unaudited statements, to normal year-end audit adjustments which would
not be material in amount or effect), in each case in accordance with generally
accepted accounting principles consistently applied during the periods
involved, except as may be noted therein and except, in the case of the
unaudited statements, as permitted by Form 10-Q pursuant to Section 13 or 15(d)
of the Exchange Act.
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6.8 Litigation. Except as set forth in Section 6.8 of the Wyndham
Disclosure Letter, there are (i) no continuing orders, injunctions or decrees
of any court, arbitrator or governmental authority to which Wyndham or any
Wyndham Subsidiary is a party or by which any of its properties or assets are
bound or, to the reasonable best knowledge of Wyndham, to which any of its
directors, officers, employees or, agents, in such capacities, is a party or by
which any of their properties or assets are bound, and (ii) no actions, suits
or proceedings pending against Wyndham or any Wyndham Subsidiary or, to the
reasonable best knowledge of Wyndham, against any of its directors, officers,
employees or agents, in such capacities, or, to the reasonable best knowledge
of Wyndham, threatened against Wyndham or any Wyndham Subsidiary or against any
of its directors, officers, employees or agents, at law or in equity, or before
or by any federal or state commission, board, bureau, agency or
instrumentality, that are reasonably likely, individually or in the aggregate,
to have a Wyndham Material Adverse Effect.
6.9 Absence of Certain Changes. Except as disclosed in the Wyndham
SEC Reports filed with the SEC prior to the date hereof or as set forth in
Section 6.9 of the Wyndham Disclosure Letter or as permitted by Section 8.2,
since December 31, 1996, Wyndham and the Wyndham Subsidiaries have conducted
their business only in the ordinary course of such business and there has not
been: (i) any Wyndham Material Adverse Effect; (ii) as of the date hereof, any
declaration, setting aside or payment of any dividend or other distribution
with respect to the Wyndham Common Stock; (iii) any material commitment,
contractual obligation (including, without limitation, any management or
franchise agreement, any lease (capital or otherwise) or any letter of intent),
borrowing, guaranty, capital expenditure or transaction (each, a "Commitment")
entered into by Wyndham or any of the Wyndham Subsidiaries outside the ordinary
course of business except for Commitments for expenses of attorneys,
accountants and investment bankers incurred in connection with the Merger and
the transactions contemplated hereby and thereby; or (iv) any material change
in Wyndham's accounting principles, practices or methods.
6.10 Taxes. Except as set forth in Section 6.10 of the Wyndham
Disclosure Letter and except as would otherwise not be reasonably expected to
have a Wyndham Material Adverse Effect (other than with respect to subsection
(f) below):
(a) Wyndham and each of the Wyndham Subsidiaries has paid or
caused to be paid all federal, state, local, foreign, and other taxes,
including without limitation, income taxes, estimated taxes, alternative
minimum taxes, excise taxes, sales taxes, use taxes, value-added taxes, gross
receipts taxes, franchise taxes, capital stock taxes, employment and
payroll-related taxes, withholding taxes, stamp taxes, transfer taxes, windfall
profit taxes, environmental taxes and real and personal property taxes, whether
or not measured in whole or in part by net income, and all deficiencies, or
other additions to tax, interest, fines and penalties (collectively, "Taxes"),
owed or accrued by it through the date hereof.
(b) Wyndham and each of the Wyndham Subsidiaries has timely
filed all federal, state, local and foreign tax returns required to be filed by
any of them through the date hereof, and all such returns completely and
accurately set forth the amount of any Taxes relating to the applicable period.
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(c) Neither the Internal Revenue Service ("IRS") nor any other
governmental authority is now asserting by written notice to Wyndham or any
Wyndham Subsidiary or, to the knowledge of Wyndham or the Wyndham Subsidiaries,
threatening to assert against Wyndham or any Wyndham Subsidiary any deficiency
or claim for additional Taxes. There is no dispute or claim concerning any tax
liability of Wyndham or any Wyndham Subsidiary, either claimed or raised by any
governmental authority, or as to which any director or officer of Wyndham or
any Wyndham Subsidiary has reason to believe may be claimed or raised by any
federal or state governmental authority. No claim has ever been made by a
taxing authority in a jurisdiction where Wyndham does not file reports and
returns that Wyndham is or may be subject to taxation by that jurisdiction.
There are no security interests on any of the assets of Wyndham or any Wyndham
Subsidiary that arose in connection with any failure (or alleged failure) to
pay any Taxes. Wyndham has never entered into a closing agreement pursuant to
Section 7121 of the Code.
(d) Wyndham has not received written notice of any audit of
any tax return filed by Wyndham, and Wyndham has not been notified by any tax
authority that any such audit is contemplated or pending. Neither Wyndham nor
any of the Wyndham Subsidiaries has executed or filed with the IRS or any other
taxing authority any agreement now in effect extending the period for
assessment or collection of any income or other Taxes, and no extension of time
with respect to any date on which a tax return was or is to be filed by Wyndham
is in force. True, correct and complete copies of all federal, state and local
income or franchise tax returns filed by Wyndham and each of the Wyndham
Subsidiaries and all communications relating thereto have been delivered to
Patriot or made available to representatives of Patriot.
(e) Wyndham and each Wyndham Subsidiary has withheld and paid
all taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
other party.
(f) Wyndham estimates that as of December 31, 1996, the
accumulated and current earnings and profits ("E&P") of Wyndham (as determined
for federal income tax purposes) was not in excess of $15 million.
6.11 Books and Records.
(a) The books of account and other financial records of
Wyndham and each of the Wyndham Subsidiaries are true, complete and correct in
all material respects, have been maintained in accordance with good business
practices, and are accurately reflected in all material respects in the
financial statements included in the Wyndham SEC Reports.
(b) The minute books and other records of Wyndham and each of
the Wyndham Subsidiaries have been made available to Patriot, contain in all
material respects accurate records of all meetings and accurately reflect in
all material respects all other corporate action of the stockholders and
directors and any committees of the Board of Directors of Wyndham and each of
the Wyndham Subsidiaries and all actions of the partners of each of the Wyndham
Subsidiaries.
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6.12 Properties. All of the real estate properties owned or leased by
Wyndham and each of the Wyndham Subsidiaries are set forth in Section 6.12 of
the Wyndham Disclosure Letter. Wyndham has no direct or indirect ownership
interest in any real property other than the properties owned by Wyndham and
the Wyndham Subsidiaries and set forth in Sections 6.5 and 6.12 of the Wyndham
Disclosure Letter. Except as set forth in Section 6.12 of the Wyndham
Disclosure Letter, Wyndham and each Wyndham Subsidiary own fee simple or
leasehold title (each as indicated in Section 6.12 of the Wyndham Disclosure
Letter) to each of the real properties identified in Section 6.12 of the
Wyndham Disclosure Letter (the "Wyndham Properties"), free and clear of liens,
mortgages or deeds of trust, claims against title, charges which are liens,
security interests or other encumbrances on title (collectively,
"Encumbrances"). The Wyndham Properties are not subject to any easements,
rights of way, covenants, conditions, restrictions or other written agreements,
laws, ordinances and regulations affecting building use or occupancy, or
reservations of an interest in title (collectively, "Property Restrictions"),
except for (i) Encumbrances, Property Restrictions and other matters set forth
in Section 6.12 of the Wyndham Disclosure Letter, (ii) Property Restrictions
imposed or promulgated by law or any governmental body or authority with
respect to real property, including zoning regulations, that do not adversely
affect the current use of the property, materially detract from the value of or
materially interfere with the present use of the property, (iii) Encumbrances
and Property Restrictions disclosed on existing title policies, commitments
(and the documents listed as exceptions therein), reports, certificates of
title, title opinions or current surveys (in each case copies of which title
policies, commitments (and the documents listed as exceptions therein), reports
and surveys have been delivered or made available to Patriot and are listed in
Section 6.12 of the Wyndham Disclosure Letter), and (iv) mechanics', carriers',
supplier's workmen's or repairmen's liens and other Encumbrances, Property
Restrictions and other limitations of any kind, if any, which, individually or
in the aggregate, are not material in amount, do not materially detract from
the value of or materially interfere with the present use of any of the Wyndham
Properties subject thereto or affected thereby, and do not otherwise materially
impair business operations conducted by Wyndham and the Wyndham Subsidiaries
and which have arisen or been incurred only in the ordinary course of business.
Except as set forth in Section 6.12 of the Wyndham Disclosure Letter, valid
policies of title insurance have been issued insuring Wyndham's or the
applicable Wyndham Subsidiary's fee simple (or leasehold to the extent
disclosed in Section 6.12 of the Wyndham Disclosure Letter) title to each of
the Wyndham Properties in amounts at least equal to the purchase price thereof
or, if acquired through merger, the stipulated value thereof, and such policies
are, at the date hereof, in full force and effect and no claim has been made
against any such policy and Wyndham has no knowledge of any facts or
circumstances which would constitute the basis for such a claim. To the best
knowledge of Wyndham, except as set forth in Section 6.12 of the Wyndham
Disclosure Letter, (A) no certificate, permit or license from any governmental
authority having jurisdiction over any of the Wyndham Properties or any
agreement, easement or other right which is necessary to permit the lawful use
and operation of the buildings and improvements on any of the Wyndham
Properties as currently operated or which is necessary to permit the lawful use
and operation of all driveways, roads and other means of egress and ingress to
and from any of the Wyndham Properties (a "REA Agreement") has not been
obtained and is not in full force and effect, and there is no pending threat of
modification or cancellation of any of same nor is Wyndham nor any Wyndham
Subsidiary currently in default under any REA Agreement and the Wyndham
Properties are in full compliance with all governmental permits,
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licenses and certificates, except for such defaults which or where such
noncompliance could not reasonably be expected to have a Patriot Material
Adverse Effect; (B) no written notice of any violation of any federal, state or
municipal law, ordinance, order, regulation or requirement affecting any
portion of any of the Wyndham Properties has been issued by any governmental
authority; (C) there are no material structural defects relating to any of the
Wyndham Properties; (D) there is no Wyndham Property whose building systems are
not in working order in any material respect; (E) there is no physical damage
to any Wyndham Property in excess of $20,000 for which there is no insurance in
effect (other than reasonable and customary deductibles) covering the full cost
of the restoration; and (F) there is no current renovation or restoration or
tenant improvements to any Wyndham Property or any portion thereof in process
or committed to be performed, the cost of which exceeds $50,000, except in each
instance as set forth in Section 6.12 of the Wyndham Disclosure Letter. Except
as noted in Section 6.12 of the Wyndham Disclosure Letter, the use and
occupancy of each of the Wyndham Properties complies in all material respects
with all applicable codes and zoning laws and regulations, and Wyndham has no
knowledge of any pending or threatened proceeding or action that will in any
manner affect the size of, use of, improvements on, construction on, or access
to any of the Wyndham Properties, with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such Wyndham
Properties. Neither Wyndham nor any of the Wyndham Subsidiaries has received
any written notice to the effect that (x) any betterment assessments have been
levied against, or any condemnation or rezoning proceedings are pending or
threatened with respect to any of the Wyndham Properties or (y) any zoning,
building or similar law, code, ordinance, order or regulation is or will be
violated by the continued maintenance, operation or use of any buildings or
other improvements on any of the Wyndham Properties or by the continued
maintenance, operation or use of the parking areas. Except as set forth on
Schedule 6.12 of the Wyndham Disclosure Letter and except as could otherwise
not have a Wyndham Material Adverse Effect, following a casualty, each of the
Wyndham Properties could be reconstructed and used for hotel purposes under
applicable zoning laws and regulations, except that in certain circumstances
such reconstruction would have to comply with the dimensional requirements of
applicable zoning laws and regulations in effect at the time of reconstruction.
Except as set forth in Sections 6.10 and 6.12 of the Wyndham Disclosure Letter
and except as could otherwise not have a Wyndham Material Adverse Effect, there
are no outstanding abatement proceedings or appeals with respect to the
assessment of any Wyndham Property for the purpose of real property taxes, and
there are no agreements with any governmental authority with respect to such
assessments or tax rates on any Wyndham Property.
6.13 Environmental Matters. Wyndham and the Wyndham Subsidiaries are
in compliance with all Environmental Laws (as defined below), except for any
noncompliance that, either singly or in the aggregate, could not have a Wyndham
Material Adverse Effect. As used in this Agreement, "Environmental Laws" shall
mean all federal, state and local laws, rules, regulations, ordinances and
orders that purport to regulate the release of hazardous substances or other
materials into the environment, or impose requirements relating to
environmental protection. Wyndham has previously made available to Patriot
copies of all documents concerning any environmental or health and safety
matter adversely affecting Wyndham and copies of environmental audits or risk
assessments, site assessments, documentation regarding off-site disposal of
Hazardous Materials (as defined below), spill control plans and material
correspondence with any federal, state or local government, court,
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administrative agency, commission, or other governmental authority, domestic or
foreign, regarding the foregoing. As used in this Agreement, "Hazardous
Materials" means any "hazardous waste" as defined in either the United States
Resource Conservation and Recovery Act or regulations adopted pursuant to said
act, any "hazardous substances" or "hazardous materials" as defined in the
United States Comprehensive Environmental Response, Compensation and Liability
Act and, to the extent not included in the foregoing, any medical waste, oil or
fractions thereof, pollutants or contaminants. Except as set forth in Section
6.13 of the Wyndham Disclosure Letter or disclosed in the Wyndham SEC Reports
and except for any matter, which if the outcome were adverse, would not
reasonably be expected to have a Wyndham Material Adverse Effect, there is no
administrative or judicial enforcement proceeding pending or to the best
knowledge of Wyndham, threatened against Wyndham or any Wyndham Subsidiary
under any Environmental Law. Except as set forth in Section 6.13 of the
Wyndham Disclosure Letter or disclosed in the Wyndham SEC Reports and except
for any matter, which if the outcome were adverse, would not reasonably be
expected to have a Wyndham Material Adverse Effect, neither Wyndham nor any
Wyndham Subsidiary or, to the best knowledge of Wyndham, any legal predecessor
of Wyndham or any Wyndham Subsidiary, has received any written notice that it
is potentially responsible under any Environmental Law for response costs or
natural resource damages, as those terms are defined under the Environmental
Laws, at any location and, to the best knowledge of Wyndham, neither Wyndham
nor any Wyndham Subsidiary has transported or disposed of, or allowed or
arranged for any third party to transport or dispose of, any waste containing
Hazardous Materials at any location included on the National Priorities List,
as defined under the Comprehensive Environmental Response, Compensation, and
Liability Act, or any location proposed for inclusion on that list or at any
location on any analogous state list. Except as set forth in Section 6.13 of
the Wyndham Disclosure Letter, and except for any matter, which if the outcome
were adverse, would not reasonably be expected to have a Wyndham Material
Adverse Effect, Wyndham has no knowledge of any release on the real property
owned or leased by Wyndham or any Wyndham Subsidiary or predecessor entity of
Hazardous Materials in a manner that could reasonably be expected to result in
an order to perform a response action or in material liability under the
Environmental Laws and, to the best knowledge of Wyndham, there is no hazardous
waste treatment, storage or disposal facility, and except for the following
which, to the best knowledge of Wyndham, would not reasonably be expected to
have a Wyndham Material Adverse Effect based on its current condition,
underground storage tank, landfill, surface impoundment, underground injection
well, friable asbestos or PCB's, as those terms are defined under the
Environmental Laws, located at any of the real property owned or leased by
Wyndham or any Wyndham Subsidiary or predecessor entity or facilities utilized
by Wyndham or the Wyndham Subsidiaries.
6.14 Employee Benefit Plans. With respect to all the employee benefit
plans, programs and arrangements maintained for the benefit of any current or
former employee, officer or director of Wyndham or any of the Wyndham
Subsidiaries (the "Wyndham Benefit Plans"), except as set forth in Section 6.14
of the Wyndham Disclosure Letter or in the Wyndham SEC Reports, (a) each
Wyndham Benefit Plan and any related trust intended to be qualified under
Sections 401(a) and 501(a) of the Code has received a favorable determination
letter from the IRS that it is so qualified and nothing has occurred since the
date of such letter that could reasonably be expected to materially adversely
affect the qualified status of such Wyndham Benefit Plan or related trust, (b)
each Wyndham Benefit Plan has been operated in
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all material respects in accordance with the terms and requirements of
applicable law and all required returns and filings for each Wyndham Benefit
Plan have been timely made, (c) neither Wyndham nor any of the Wyndham
Subsidiaries has incurred any direct or indirect material liability under,
arising out of or by operation of Title I or Title IV of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), in connection
with any Wyndham Benefit Plan or other retirement plan or arrangement, and no
fact or event exists that could reasonably be expected to give rise to any such
material liability, (d) all material contributions due and payable on or before
the date hereof in respect of each Wyndham Benefit Plan have been made in full
and in proper form, (e) neither Wyndham nor any of the Wyndham Subsidiaries
have ever sponsored or been obligated to contribute to any "multiemployer plan"
(as defined in Section 3(37) of ERISA), "multiple employer plan" (as defined in
Section 413 of the Code) or "defined benefit plan" (as defined in Section 3(35)
of ERISA), (f) except as otherwise required under ERISA, the Code and
applicable state laws, no Wyndham Benefit Plan currently or previously
maintained by Wyndham or any of its subsidiaries provides any post-retirement
health or life insurance benefits, and neither Wyndham nor any of its
subsidiaries maintains any obligations to provide post-retirement health or
life insurance benefits in the future, (g) all material reporting and
disclosure obligations imposed under ERISA and the Code have been satisfied
with respect to each Wyndham Benefit Plan and (h) no benefit or amount payable
or which may become payable by Wyndham or any of the Wyndham Subsidiaries
pursuant to any Wyndham Benefit Plan, agreement or contract with any employee,
shall constitute an "excess parachute payment," within the meaning of Section
280G of the Code, which is or may be subject to the imposition of any excise
tax under Section 4999 of the Code or which would not be deductible by reason
of Section 280G of the Code.
6.15 Labor Matters. Except as set forth in Section 6.15 of the
Wyndham Disclosure Letter, neither Wyndham nor any Wyndham Subsidiary is a
party to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor union organization.
There is no unfair labor practice or labor arbitration proceeding pending or,
to the knowledge of Wyndham, threatened against Wyndham or any of the Wyndham
Subsidiaries relating to their business, except for any such proceeding which
could not reasonably be expected to have a Wyndham Material Adverse Effect. To
the knowledge of Wyndham, there are no organizational efforts with respect to
the formation of a collective bargaining unit presently being made or
threatened involving employees of Wyndham or any of the Wyndham Subsidiaries.
6.16 No Brokers. Neither Wyndham nor any of the Wyndham Subsidiaries
has entered into any contract, arrangement or understanding with any person or
firm which may result in the obligation of such entity or Patriot to pay any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or consummation of
the transactions contemplated hereby, except that Wyndham has retained Smith
Barney Inc. ("Smith Barney") as its financial advisor in connection with the
transactions contemplated by this Agreement and the Special Committee has
retained Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
as its financial advisor in connection with the transactions contemplated by
this Agreement. Other than the foregoing arrangements, Patriot's arrangements
with PaineWebber Incorporated ("PaineWebber") and Salomon Brothers Inc.
("Salomon Brothers"), and the Crow Family Entities' arrangements
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with Montgomery Securities, Wyndham is not aware of any claim for payment of
any finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or consummation of
the transactions contemplated hereby.
6.17 Opinion of Financial Advisors. Wyndham has received the oral
opinion of Smith Barney to the effect that, as of the date hereof, the Merger
Consideration is fair, from a financial point of view, to the holders of
Wyndham Common Stock. The Special Committee of the Board of Directors of
Wyndham has received the oral opinion of Merrill Lynch to the effect that, as
of the date hereof, the consideration to be received by the holders of Wyndham
Common Stock (other than the Principal Stockholder) is fair to the holders of
Wyndham Common Stock from a financial point of view.
6.18 Related Party Transactions. Set forth in the Wyndham SEC Reports
and/or Section 6.18 of the Wyndham Disclosure Letter is a list of all
arrangements, agreements and contracts entered into by Wyndham or any of the
Wyndham Subsidiaries (which are or will be in effect as of or after the date of
this Agreement) involving payments in excess of $60,000 with (i) any consultant
(excluding legal counsel, accountants and financial advisors), or (ii) any
person who is an officer, director or affiliate of Wyndham or any of the
Wyndham Subsidiaries, any relative of any of the foregoing or any entity of
which any of the foregoing is an affiliate or (iii) any person who acquired
Wyndham Stock in a private placement. All such documents are listed in
Schedule A of Section 6.18 of the Wyndham Disclosure Letter, and the copies of
such documents, which, other than as set forth in Annex 6.18 to Section 6.18 of
the Wyndham Disclosure Letter, have previously been provided or made available
to Patriot and its counsel, are true and correct copies.
6.19 Contracts and Commitments.
(a) Sections 6.5, 6.6, 6.12 and 6.19 of the Wyndham Disclosure
Letter sets forth (i) all notes, debentures, bonds and other evidence of
indebtedness which are secured or collateralized by (A) mortgages, deeds of
trust or other security interests in the Wyndham Properties or personal
property of Wyndham or any of the Wyndham Subsidiaries, or (B) any direct or
indirect ownership interest in Wyndham or any of the Wyndham Subsidiaries, (ii)
each Commitment entered into by Wyndham or any of the Wyndham Subsidiaries
other than Commitments entered into with unaffiliated third parties in the
ordinary course of operations at Wyndham's individual hotels which may result
in total payments by or liability of Wyndham or any Wyndham Subsidiary in
excess of $50,000 and (iii) all material leases and subleases entered into by
Wyndham or any of the Wyndham Subsidiaries as lessee or sublessee which may
result in total payments or liability in excess of $50,000. Descriptions of
the foregoing are listed in Sections 6.5, 6.6, 6.12 and 6.19 of the Wyndham
Disclosure Letter, and the copies of such documents, which, other than as set
forth in Annex 6.6 to Section 6.6 of the Wyndham Disclosure Letter and Annex
6.19 to Section 6.19 of the Wyndham Disclosure Letter, have previously been
provided or made available to Patriot and its counsel, are true and correct.
None of Wyndham or any of the Wyndham Subsidiaries has received any written
notice of a default that has not been cured under any of the documents
described or is in default respecting any payment obligations thereunder beyond
any applicable grace periods
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except where such default could not reasonably be expected to have a Wyndham
Material Adverse Effect.
(b) All joint venture agreements to which Wyndham or any of
the Wyndham Subsidiaries is a party are set forth in Sections 6.5, 6.6 and 6.19
of the Wyndham Disclosure Letter and neither Wyndham nor any of the Wyndham
Subsidiaries is in default with respect to any obligations, which individually
or in the aggregate are material, thereunder.
(c) Section 6.19 of the Wyndham Disclosure Letter sets forth
all of the franchise, management, marketing, affiliation or other agreements or
contracts pursuant to which Wyndham or any of the Wyndham Subsidiaries provide
franchise, license, sales, marketing, reservation, management or operation
services to or for any hotels (collectively, the "Operating Agreements").
Except as expressly set forth in Section 6.19 of the Wyndham Disclosure Letter,
(i) other than as set forth in Annex 6.19 to Section 6.19 of the Wyndham
Disclosure Letter, Wyndham has delivered or made available to Patriot and its
counsel true, correct and complete copies of all of the Operating Agreements;
(ii) each of the Operating Agreements is legal, valid, binding, enforceable and
in full force and effect as to Wyndham and/or the applicable Wyndham
Subsidiaries, and, except as could not reasonably be expected to have a Wyndham
Material Adverse Effect, will continue to be legal, valid, binding, enforceable
and in full force and effect on identical terms after the Closing; (iii)
neither Wyndham nor any of the Wyndham Subsidiaries is in breach or default
thereof in any material respect; (iv) none of the Operating Agreements have
been modified in any material respect, except to the extent disclosed in the
documents delivered or made available to Patriot and its counsel; (v) except as
set forth in Section 6.4 of the Wyndham Disclosure Letter, neither Wyndham nor
any of the Wyndham Subsidiaries have assigned, transferred, conveyed, mortgaged
or encumbered any interest in any of the Operating Agreements; (vii) except as
could not reasonably be expected to have a Wyndham Material Adverse Effect,
neither Wyndham nor any of the Wyndham Subsidiaries have in the past been
required, are currently required or anticipate being required to make any
payments or loans to any party under any of the Operating Agreements as a
result of the failure of a hotel to meet or exceed any performance thresholds
or to prevent any other party from exercising a right to terminate any of the
Operating Agreements.
6.20 Disclosure. The representations, warranties and statements made
by Wyndham in this Agreement, the Ancillary Agreements and in the Wyndham
Disclosure Letter and in the certificates and other documents expressly
identified in this Agreement as having been delivered pursuant hereto do not
contain any untrue statement of a material fact, and, when taken together with
each other and the Wyndham SEC Reports, do not omit to state any material fact
necessary to make such representations, warranties and statements, in light of
the circumstances under which they are made, not misleading.
6.21 Definition of Wyndham's Knowledge. As used in this Agreement,
the phrase "to the knowledge of Wyndham" or "to the best knowledge of Wyndham"
or any similar phrase means the actual, not the constructive or imputed,
knowledge of those individuals identified in Section 6.21 of the Wyndham
Disclosure Letter.
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ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF PATRIOT
Except as set forth in the disclosure letter delivered at or prior to
the execution hereof to Wyndham, which shall refer to the relevant Sections of
this Agreement (the "Patriot Disclosure Letter"), Patriot represents and
warrants to Wyndham as follows:
7.1 Existence; Good Standing; Authority; Compliance With Law.
(a) Patriot is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of its incorporation.
Patriot is duly licensed or qualified to do business as a foreign corporation
and is in good standing under the laws of any other state of the United States
in which the character of the properties owned or leased by it therein or in
which the transaction of its business makes such qualification necessary,
except where the failure to be so licensed or qualified could not reasonably be
expected to have a material adverse effect on the business, results of
operations or financial condition of Patriot and the Patriot Subsidiaries taken
as a whole (a "Patriot Material Adverse Effect"). Patriot has all requisite
corporate power and authority to own, operate, lease and encumber its
properties and carry on its business as now conducted.
(b) Each of the Patriot Subsidiaries is a corporation or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
has the corporate or partnership power and authority to own its properties and
to carry on its business as it is now being conducted, and is duly qualified to
do business and is in good standing in each jurisdiction in which the ownership
of its property or the conduct of its business requires such qualification,
except for jurisdictions in which such failure to be so qualified or to be in
good standing could not reasonably be expected to have a Patriot Material
Adverse Effect.
(c) Neither Patriot nor any Patriot Subsidiary is in violation
of any order of any court, governmental authority or arbitration board or
tribunal, or any law, ordinance, governmental rule or regulation to which
Patriot or any Patriot Subsidiary or any of their respective properties or
assets is subject, where such violation could have a Patriot Material Adverse
Effect. Patriot and the Patriot Subsidiaries have obtained all licenses,
permits and other authorizations and have taken all actions required by
applicable law or governmental regulations in connection with their business as
now conducted, where the failure to obtain any such license, permit or
authorization or to take any such action could have a Patriot Material Adverse
Effect.
(d) Copies of the Patriot Certificate, the Patriot Bylaws and
the charter documents, bylaws, organizational documents and partnership and
joint venture agreements (and in each such case, all amendments thereto) of
each of the Patriot Subsidiaries are listed in Section 7.1 of the Patriot
Disclosure Letter, and the copies of such documents, which have previously been
delivered or made available to Wyndham or its counsel, are true and correct
copies. For purposes of this Agreement, the term "Patriot Subsidiary" shall
include any of the entities set forth under such heading in Section 7.4 of the
Patriot Disclosure Letter.
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7.2 Authorization, Validity and Effect of Agreements. Each of
Patriot and the Patriot Subsidiaries has the requisite power and authority to
enter into the transactions contemplated hereby and to execute and deliver this
Agreement and the Ancillary Agreements to which it is a party. The Board of
Directors of Patriot has approved this Agreement, the Merger, the Stock
Purchase Agreement, the Pairing Agreement Amendment (as hereinafter defined)
and the other Ancillary Agreements to which it is a party and the other
transactions contemplated by this Agreement and has resolved to recommend that
the holders of Patriot Stock adopt and approve this Agreement, as ratified by
New Patriot pursuant to the Patriot Ratification Agreement, the Pairing
Agreement Amendment and, if stockholder approval of the Stock Purchase
Agreement is required by applicable law or the rules of the NYSE, the Stock
Purchase Agreement, at the stockholders' meeting of Patriot which will be held
in accordance with the provisions of Section 8.3 hereof. As of the date
hereof, all of the directors and executive officers of Patriot have indicated
that they presently intend to vote all shares of Patriot Stock which they will
own following consummation of the Business Combination to approve this
Agreement, as ratified by New Patriot pursuant to the Patriot Ratification
Agreement, the Pairing Agreement Amendment and, if stockholder approval of the
Stock Purchase Agreement is required by applicable law or the rules of the
NYSE, the Stock Purchase Agreement, at the Patriot stockholders' meeting which
will be held in accordance with the provisions of Section 8.3. Except as set
forth in Section 7.2 of the Patriot Disclosure Letter, the execution by Patriot
of this Agreement, the Ancillary Agreements and consummation of the
transactions contemplated by this Agreement and the Ancillary Agreements have
been duly authorized by all requisite corporate action on the part of Patriot.
This Agreement constitutes, and the Ancillary Agreements to which it will
become a party (when executed and delivered pursuant hereto) will constitute,
the valid and legally binding obligations of Patriot, enforceable against
Patriot in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights and general principles of equity.
7.3 Capitalization. The authorized capital stock of Patriot consists
of 200,000,000 shares of Patriot Stock, and 20,000,000 shares of preferred
stock, no par value ("Patriot Preferred Stock"). As of the date hereof,
Patriot has 43,613,496 shares of Patriot Stock and no shares of Patriot
Preferred Stock issued and outstanding. Patriot has reserved for issuance only
the following shares of Patriot Stock: (i) 8,962,418 shares of Patriot Stock to
be issued upon the conversion of units of limited partnership interests in
Patriot OP, and (ii) 5,000,000 shares, 300,000 shares and 860,000 shares of
Patriot Stock to be issued pursuant to Patriot's 1995 Incentive Plan, Patriot's
Non-Employee Directors' Incentive Plan (collectively, the "Patriot Stock
Plans"), and grants made outside of such plans, respectively (collectively, the
"Existing Patriot Options"). All such issued and outstanding shares of Patriot
Stock are duly authorized, validly issued, fully paid, nonassessable and free
of preemptive rights. Patriot has no outstanding bonds, debentures, notes or
other obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the stockholders of Patriot on any matter. Except as set forth in Section 7.3
of the Patriot Disclosure Letter and except for the Existing Patriot Options,
there are not at the date of this Agreement any existing options, warrants,
calls, subscriptions, convertible securities, or other rights, agreements or
commitments which obligate Patriot to issue, transfer or sell any shares of
Patriot Stock. Except as set forth in Section 7.3 of the Patriot Disclosure
Letter, there are no agreements or understandings to which Patriot or any
Patriot Subsidiary is a party
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with respect to the voting of any shares of Patriot Stock or which restrict the
transfer of any such shares, nor does Patriot have knowledge of any such
agreements or understandings with respect to the voting of any such shares or
which restrict the transfer of such shares. Except as set forth in Section 7.3
of the Patriot Disclosure Letter, there are no outstanding material contractual
obligations of Patriot or any Patriot Subsidiary to repurchase, redeem or
otherwise acquire any shares of capital stock, partnership interests or any
other securities of Patriot or any Patriot Subsidiary. Except as set forth in
Section 7.3 of the Patriot Disclosure Letter, neither Patriot nor any Patriot
Subsidiary is under any obligation, contingent or otherwise, by reason of any
agreement to register the offer and sale or resale of any of their securities
under the Securities Act.
7.4 Subsidiaries. Except as set forth in Section 7.4 of the Patriot
Disclosure Letter, Patriot owns all of the outstanding shares of capital stock
or all of the partnership or other equity interests of each of the Patriot
Subsidiaries. All of the outstanding shares of capital stock of each of the
Patriot Subsidiaries having corporate form are duly authorized, validly issued,
fully paid and nonassessable. Except as set forth in Section 7.4 of the
Patriot Disclosure Letter, each of the outstanding shares of capital stock of,
or partnership or other equity interests in, each of the Patriot Subsidiaries
is owned, directly or indirectly, by Patriot free and clear of all liens,
pledges, security interests, claims or other encumbrances. The following
information as of the date hereof is set forth in Section 7.4 of the Patriot
Disclosure Letter for each Patriot Subsidiary: (i) its name and jurisdiction
of incorporation or organization; (ii) its authorized capital stock or share
capital or partnership or other interests; (iii) the name of each stockholder
or owner of a partnership or other equity interest and the number of issued and
outstanding shares of capital stock or share capital or percentage ownership
for non-corporate entities held by it; and (iv) the name of the general
partners, if applicable. Except as set forth in Section 7.4 of the Patriot
Disclosure Letter, neither Patriot nor any Patriot Subsidiary owns directly or
indirectly any interest or investment (whether equity or debt) in any
corporation, partnership, joint venture, business, trust or other entity (other
than investments in short-term investment securities).
7.5 No Violation. Except as set forth in Section 7.5 of the Patriot
Disclosure Letter, neither the execution and delivery by Patriot of this
Agreement or the Ancillary Agreements nor consummation by Patriot of the
transactions contemplated by this Agreement or the Ancillary Agreements in
accordance with their terms, will: (i) conflict with or result in a breach of
any provisions of the Patriot Certificate, the Surviving Corporation
Certificate, the Patriot Bylaws, or the Surviving Corporation Bylaws, or the
organizational documents, partnership agreements or joint venture agreements of
Patriot or any Patriot Subsidiary; (ii) result in a breach or violation of, a
default under, or the triggering of any payment or other material obligations
pursuant to, or accelerate vesting under, any of the Patriot Stock Plans, or
any grant or award under any of the foregoing; (iii) violate, or conflict with,
or result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination or in a right of termination or cancellation of,
or accelerate the performance required by, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties of
Patriot or any of the Patriot Subsidiaries under, or result in being declared
void, voidable, or without further binding effect, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust or any
license, franchise, permit, lease, contract, agreement
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or other instrument, commitment or obligation to which Patriot or any of the
Patriot Subsidiaries is a party, or by which Patriot or any of the Patriot
Subsidiaries or any of their properties is bound or affected, except for any of
the foregoing matters which, individually or in the aggregate, could not
reasonably be expected to have a Patriot Material Adverse Effect; or (iv) other
than the Regulatory Filings, require any consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority except where the failure to obtain any such consent, approval or
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority could not reasonably be expected to have a Patriot
Material Adverse Effect.
7.6 SEC Documents. Patriot has filed all required forms, reports and
documents with the SEC since December 31, 1995 (collectively, the "Patriot SEC
Reports") all of which were prepared in accordance with the applicable
requirements of the Securities Laws. The Patriot SEC Reports were filed with
the SEC in a timely manner and constitute all forms, reports and documents
required to be filed by Patriot since December 31, 1995 under the Securities
Laws. As of their respective dates, the Patriot SEC Reports (i) complied as to
form in all material respects with the applicable requirements of the
Securities Laws and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Each of the consolidated balance
sheets of Patriot included in or incorporated by reference into the Patriot SEC
Reports (including the related notes and schedules) fairly presents the
consolidated financial position of Patriot and the Patriot Subsidiaries as of
its date and each of the consolidated statements of income, retained earnings
and cash flows of Patriot included in or incorporated by reference into the
Patriot SEC Reports (including any related notes and schedules) fairly presents
the results of operations, retained earnings or cash flows, as the case may be,
of Patriot and the Patriot Subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to normal year-end audit
adjustments which would not be material in amount or effect), in each case in
accordance with generally accepted accounting principles consistently applied
during the periods involved, except as may be noted therein and except, in the
case of the unaudited statements, as permitted by Form 10-Q pursuant to Section
13 or 15(d) of the Exchange Act.
7.7 Litigation. There are (i) no continuing orders, injunctions or
decrees of any court, arbitrator or governmental authority to which Patriot or
any Patriot Subsidiary is a party or by which any of its properties or assets
are bound or, to the reasonable best knowledge of Patriot, to which any of its
directors, officers, employees or agents, in such capacities, is a party or by
which any of their properties or assets are bound, and (ii) no actions, suits
or proceedings pending against Patriot or any Patriot Subsidiary or, to the
reasonable best knowledge of Patriot, against any of its directors, officers,
employees or agents or, to the reasonable best knowledge of Patriot, threatened
against Patriot or any Patriot Subsidiary or against any of its directors,
officers, employees or agents, in such capacities, at law or in equity, or
before or by any federal or state commission, board, bureau, agency or
instrumentality, that are reasonably likely, individually or in the aggregate,
to have a Patriot Material Adverse Effect.
7.8 Absence of Certain Changes. Except as disclosed in the Patriot
SEC Reports filed with the SEC prior to the date hereof, since December 31,
1996 and except as set forth in
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Section 7.8 of the Patriot Disclosure Letter or as permitted by Section 8.2,
Patriot and the Patriot Subsidiaries have conducted their business only in the
ordinary course of such business and there has not been (i) any Patriot
Material Adverse Effect; (ii) as of the date hereof, any declaration, setting
aside or payment of any dividend or other distribution with respect to the
Patriot Stock, except dividends of $0.2625 per share to be paid on April 30,
1997; or (iii) any material change in Patriot's accounting principles,
practices or methods.
7.9 Taxes. Except as set forth in Section 7.9 of the Patriot
Disclosure Letter and except as would otherwise not be reasonably expected to
have a Patriot Material Adverse Effect:
(a) Patriot and each of the Patriot Subsidiaries has paid or
caused to be paid Taxes, owed or accrued by it through the date hereof.
(b) Patriot and each of the Patriot Subsidiaries has timely
filed all federal, state, local and foreign tax returns required to be filed by
any of them through the date hereof, and all such returns completely and
accurately set forth the amount of any Taxes relating to the applicable period.
(c) Neither the IRS nor any other governmental authority is
now asserting by written notice to Patriot or any Patriot Subsidiary or, to the
knowledge of Patriot or the Patriot Subsidiaries, threatening to assert against
Patriot any deficiency or claim for additional Taxes. There is no dispute or
claim concerning any tax liability of Patriot, either claimed or raised by any
governmental authority, or as to which any director or officer of Patriot has
reason to believe may be claimed or raised by any governmental authority. No
claim has ever been made by a taxing authority in a jurisdiction where Patriot
does not file reports and returns that Patriot is or may be subject to taxation
by that jurisdiction. There are no security interests on any of the assets of
Patriot or any Patriot Subsidiary that arose in connection with any failure (or
alleged failure) to pay any Taxes. Patriot has never entered into a closing
agreement pursuant to Section 7121 of the Code.
(d) Patriot has not received written notice of any audit of
any tax return filed by Patriot, no such audit is in progress, and Patriot has
not been notified by any tax authority that any such audit is contemplated or
pending. Neither Patriot nor any of the Patriot Subsidiaries has executed or
filed with the IRS or any other taxing authority any agreement now in effect
extending the period for assessment or collection of any income or other Taxes,
and no extension of time with respect to any date on which a tax return was or
is to be filed by Patriot is in force. True, correct and complete copies of
all federal, state and local income or franchise tax returns filed by Patriot
and each of the Patriot Subsidiaries and all communications relating thereto
have been delivered to Wyndham or made available to representatives of Wyndham.
(e) Patriot and each Patriot Subsidiary has withheld and paid
all taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
other party.
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(f) Each of the corporate Patriot Subsidiaries of which all
the outstanding capital stock is owned solely by Patriot is a Qualified REIT
Subsidiary as defined in Section 856(i) of the Code.
(g) Patriot has qualified, and shall be qualified through the
date of consummation of the Business Combination, to be treated as a REIT
within the meaning of Sections 856-860 of the Code, including, without
limitation, the requirements of Sections 856 and 857 of the Code, for all
applicable tax years to which Patriot's federal income tax returns are subject
to audit and Patriot is subject to assessment for taxes reportable therein.
(h) Assuming the accuracy of the representations made by CJC
in Sections 9.10 and 9.11 of the Business Combination Agreement and the
representations made by BMOC in Section 8.8 of the Business Combination
Agreement, the consummation of the Business Combination and the Merger would
not, if consummated as of the date of this Agreement, with the Merger
immediately following the Business Combination, cause CJC to lose its exemption
from the application of Section 269B(a)(3) of the Code pursuant to Section
136(c)(3) of the Deficit Reduction Act of 1984 (the "Deficit Act"). As of the
date hereof, Patriot has no knowledge, without independent inquiry, of any
facts indicating that the foregoing representations made by CJC and BMOC are
inaccurate.
7.10 Books and Records.
(a) The books of account and other financial records of
Patriot and each of the Patriot Subsidiaries are true, complete and correct in
all material respects, have been maintained in accordance with good business
practices, and are accurately reflected in all material respects in the
financial statements included in the Patriot SEC Reports.
(b) The minute books and other records of Patriot and each of
the Patriot Subsidiaries have been made available to Wyndham, contain in all
material respects accurate records of all meetings and accurately reflect in
all material respects all other corporate action of the shareholders and
directors and any committees of the Board of Directors of Patriot and each of
the Patriot Subsidiaries.
7.11 Properties. All of the real estate properties owned or leased by
Patriot and each of the Patriot Subsidiaries are set forth in Section 7.11 of
the Patriot Disclosure Letter. Except as set forth in Section 7.11 of the
Patriot Disclosure Letter, Patriot owns fee simple or leasehold title (each as
indicated in Section 7.11 of the Patriot Disclosure Letter) to each of the real
properties identified in Section 7.11 of the Patriot Disclosure Letter (the
"Patriot Properties"), free and clear of Encumbrances, and except as set forth
in Section 7.11 of the Patriot Disclosure Letter, there are no Encumbrances
which affect such properties. The Patriot Properties (specifically including
the leasehold interest therein granted to a tenant) are not subject to any
Property Restrictions, except for (i) Encumbrances and Property Restrictions
and other matters set forth in Section 7.11 of the Patriot Disclosure Letter,
(ii) Property Restrictions imposed or promulgated by law or any governmental
body or authority with respect to real property, including zoning regulations
that do not adversely affect the current use of the property, materially
detract from the value or materially interfere with the present use of the
property, (iii) Encumbrances and Property Restrictions disclosed on existing
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title policies, commitments (and the documents listed as exceptions therein),
reports or current surveys (in each case, except as provided in Section 7.11 of
the Patriot Disclosure Letter, copies of which title policies, commitments (and
the documents listed as exceptions therein), reports and surveys have been
delivered or made available to Wyndham and are listed in Section 7.11 of the
Patriot Disclosure Letter), and (iv) mechanics', carriers', supplier's,
workmen's or repairmen's liens and other Encumbrances, Property Restrictions
and other limitations of any kind, if any, which, individually or in the
aggregate, are not material in amount, do not materially detract from the value
of or materially interfere with the present use of any of the Patriot
Properties subject thereto or affected thereby, and do not otherwise materially
impair business operations conducted by Patriot, or its tenant, and the Patriot
Subsidiaries and which have arisen or been incurred only in the ordinary course
of business. Such Encumbrances and Property Restrictions described in Section
7.11 of the Patriot Disclosure Letter are not convertible into shares of
capital stock of Patriot or any Patriot Subsidiary nor does Patriot or any
Patriot Subsidiary hold a participating interest therein. Valid policies of
title insurance have been issued insuring Patriot's the fee simple title (or,
to the extent disclosed in Section 7.11 of the Patriot Disclosure Letter, the
leasehold estate) in the Patriot Properties and Patriot is the named insured in
such title insurance policies. Such policies are maintained with respect to
each of the Patriot Properties in an amount of (i) the cost of acquisition of
such property (or, if acquired through merger, the stipulated value thereof) or
(ii) the cost of construction by Patriot and the Patriot Subsidiaries of the
improvements located on such property (measured at the time of such
construction), except, in each case, (x) as listed in Section 7.11 of the
Patriot Disclosure Letter or (y) where the failure to maintain such title
insurance could not have a Patriot Material Adverse Effect. Such policies are,
at the date hereof, in full force and effect and no claim has been made against
any such policy and Patriot has no knowledge of any facts or circumstances
which would constitute a basis for such a claim. To the best knowledge of
Patriot, (i) no certificate, permit or license from any governmental authority
having jurisdiction over any of the Patriot Properties or any agreement,
easement or other right which is necessary to permit the lawful use and
operation of the buildings and improvements on any of the Patriot Properties or
which is necessary to permit the lawful use and operation of all driveways,
roads and other means of egress and ingress to and from any of the Patriot
Properties has not been obtained and is not in full force and effect, and there
is no pending threat of modification or cancellation of any of same; (ii) no
written notice of any violation of any federal, state or municipal law,
ordinance, order, regulation or requirement affecting any portion of any of the
Patriot Properties has been issued by any governmental authority; (iii) there
are no structural defects relating to any of the Patriot Properties; (iv) there
is no Patriot Property whose building systems are not in working order in any
material respect; (v) there is no physical damage to any Patriot Property in
excess of $20,000 for which there is no insurance in effect (other than
reasonable and customary deductibles) covering the full cost of the
restoration; and (vi) there is no current renovation or restoration to any
Patriot Property, the cost of which exceeds $50,000, except in each instance as
set forth in Section 7.11 of the Patriot Disclosure Letter. Except as noted in
Section 7.11 of the Patriot Disclosure Letter, Patriot and the Patriot
Subsidiaries have valid and subsisting leases for all leased Patriot
Properties, the use and occupancy of each of the Patriot Properties complies in
all material respects with all applicable codes and zoning laws and
regulations, and Patriot has no knowledge of any pending or threatened
proceeding or action that will in any manner affect the size of, use of,
improvements on, construction on, or access to any of the Patriot Properties,
with such exceptions as are not material and do not interfere with the use
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made and proposed to be made of such Patriot Properties. Neither Patriot nor
any of the Patriot Subsidiaries has received any written notice to the effect
that (A) any condemnation or rezoning proceedings are pending or threatened
with respect to any of the Patriot Properties or (B) any zoning, building or
similar law, code, ordinance, order or regulation is or will be violated by the
continued maintenance, operation or use of any buildings or other improvements
on any of the Patriot Properties or by the continued maintenance, operation or
use of the parking areas. Except as set forth on Schedule 7.11 of the Patriot
Disclosure Letter and except as could otherwise not have a Patriot Material
Adverse Effect, following a casualty, each of the Patriot Properties could be
reconstructed and used for hotel purposes under applicable zoning laws and
regulations, except that in certain circumstances such reconstruction would
have to comply with the dimensional requirements of applicable zoning laws and
regulations in effect at the time of reconstruction. Except as set forth in
Sections 7.9 and 7.11 of the Patriot Disclosure Letter and except as could
otherwise not have a Patriot Material Adverse Effect, there are no outstanding
abatement proceedings or appeals with respect to the assessment of any Patriot
Property for the purpose of real property taxes, and there are no agreements
with any governmental authority with respect to such assessments or tax rates
on any Patriot Property.
7.12 Environmental Matters. Patriot and the Patriot Subsidiaries are
in compliance with all Environmental Laws, except for any noncompliance that,
either singly or in the aggregate, could not have a Patriot Material Adverse
Effect. Except as set forth in Section 7.12 of the Patriot Disclosure Letter,
Patriot has previously made available to Wyndham copies of all documents
concerning any environmental or health and safety matter adversely affecting
Patriot and copies of environmental audits or risk assessments, site
assessments, documentation regarding off-site disposal of Hazardous Materials,
spill control plans and material correspondence with any federal, state or
local government, court, administrative agency, commission, or other
governmental authority, domestic or foreign, regarding the foregoing. Except
as set forth in Section 7.12 of the Patriot Disclosure Letter or disclosed in
the Patriot SEC Reports and except for any matter, which if the outcome were
adverse, would not reasonably be expected to have a Patriot Material Adverse
Effect, there is no administrative or judicial enforcement proceeding pending
or to the best knowledge of Patriot, threatened against Patriot or any Patriot
Subsidiary under any Environmental Law. Except as set forth in Section 7.12 of
the Patriot Disclosure Letter or disclosed in the Patriot SEC Reports and
except for any matter, which if the outcome were adverse, would not reasonably
be expected to have a Patriot Material Adverse Effect, neither Patriot nor any
Patriot Subsidiary or, to the best knowledge of Patriot, any legal predecessor
of Patriot or any Patriot Subsidiary, has received any written notice that it
is potentially responsible under any Environmental Law for response costs or
natural resource damages, as those terms are defined under the Environmental
Laws, at any location and, to the best knowledge of Patriot, neither Patriot
nor any Patriot Subsidiary has transported or disposed of, or allowed or
arranged for any third party to transport or dispose of, any waste containing
Hazardous Materials at any location included on the National Priorities List,
as defined under the Comprehensive Environmental Response, Compensation, and
Liability Act, or any location proposed for inclusion on that list or at any
location on any analogous state list. Except as set forth in Section 7.12 of
the Patriot Disclosure Letter, and except for any matter, which if the outcome
were adverse, would not reasonably be expected to have a Patriot Material
Adverse Effect, Patriot has no knowledge of any release on the real property
owned or leased by Patriot or any
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Patriot Subsidiary or predecessor entity of Hazardous Materials in a manner
that could reasonably be expected to result in an order to perform a response
action or in material liability under the Environmental Laws and, to the best
knowledge of Patriot, there is no hazardous waste treatment, storage or
disposal facility, and except for the following which, to the best knowledge of
Patriot, would not reasonably be expected to have Patriot Material Adverse
Effect based on its current condition, underground storage tank, landfill,
surface impoundment, underground injection well, friable asbestos or PCB's, as
those terms are defined under the Environmental Laws, located at any of the
real property owned or leased by Patriot or any Patriot Subsidiary or
predecessor entity or facilities utilized by Patriot or the Patriot
Subsidiaries.
7.13 Employee Benefit Plans. With respect to all the employee benefit
plans, programs and arrangements maintained for the benefit of any current or
former employee, officer or director of Patriot or any of its subsidiaries (the
"Patriot Benefit Plans"), except as set forth in Section 7.13 of the Patriot
Disclosure Letter or in the Patriot SEC Reports, (a) each Patriot Benefit Plan
has been operated in all material respects in accordance with the terms and
requirements of applicable law and all required returns and filings for each
Patriot Benefit Plan have been timely made, (b) neither Patriot nor any of the
Patriot Subsidiaries has incurred any direct or indirect material liability
under, arising out of or by operation of Title I or Title IV of ERISA, in
connection with any Patriot Benefit Plan or other retirement plan or
arrangement, and no fact or event exists that could reasonably be expected to
give rise to any such material liability, (c) all material contributions due
and payable on or before the date hereof in respect of each Patriot Benefit
Plan have been made in full and in proper form, (d) neither Patriot nor any of
the Patriot Subsidiaries have ever sponsored or been obligated to contribute to
any "multiemployer plan" (as defined in Section 3(37) of ERISA), "multiple
employer plan" (as defined in Section 413 of the Code) or "pension plan" (as
defined in Section 3(2) of ERISA), (e) except as otherwise required under
ERISA, the Code and applicable state laws, no Patriot Benefit Plan currently or
previously maintained by Patriot or any of the Patriot Subsidiaries provides
any post-retirement health or life insurance benefits, and neither Patriot nor
any of the Patriot Subsidiaries maintains any obligations to provide
post-retirement health or life insurance benefits in the future, (f) all
material reporting and disclosure obligations imposed under ERISA and the Code
have been satisfied with respect to each Patriot Benefit Plan and (g) no
benefit or amount payable or which may become payable by Patriot or any of the
Patriot Subsidiaries pursuant to any Patriot Benefit Plan, agreement or
contract with any employee in connection with the Merger, shall constitute an
"excess parachute payment," within the meaning of Section 280G of the Code,
which is or may be subject to the imposition of any excise tax under Section
4999 of the Code or which would not be deductible by reason of Section 280G of
the Code.
7.14 Labor Matters. Except as set forth in Section 7.14 of the
Patriot Disclosure Letter, neither Patriot nor any Patriot Subsidiary is a
party to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor union organization.
There is no unfair labor practice or labor arbitration proceeding pending or,
to the knowledge of Patriot, threatened against Patriot or any of the Patriot
Subsidiaries relating to their business, except for any such proceeding which
could not reasonably be expected to have a Patriot Material Adverse Effect. To
the knowledge of Patriot, there are no organizational efforts with respect to
the formation of a collective
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bargaining unit presently being made or threatened involving employees of
Patriot or any of the Patriot Subsidiaries.
7.15 No Brokers. Neither Patriot nor any of the Patriot Subsidiaries
has entered into any contract, arrangement or understanding with any person or
firm which may result in the obligation of such entity or Wyndham to pay any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or consummation of
the transactions contemplated hereby, except that Patriot has retained
PaineWebber and Salomon Brothers as its financial advisors in connection with
the transactions contemplated by this Agreement. Other than the foregoing
arrangements, Wyndham's arrangements with Smith Barney, the arrangement of the
Special Committee with Merrill Lynch, and the Crow Family Entities'
arrangements with Montgomery Securities, Patriot is not aware of any claim for
payment of any finder's fees, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to this Agreement or
consummation of the transactions contemplated hereby.
7.16 Opinion of Financial Advisor. Patriot has received the opinion
of PaineWebber to the effect that, as of the date hereof, the Merger
Consideration is fair to the holders of Patriot Stock from a financial point of
view.
7.17 Wyndham Stock Ownership. Neither Patriot nor any of the Patriot
Subsidiaries owns any shares of capital stock of Wyndham or other securities
convertible into capital stock of Wyndham.
7.18 Related Party Transactions. Set forth in the Patriot SEC Reports
and/or Section 7.18 of the Patriot Disclosure Letter is a list of all
arrangements, agreements and contracts entered into by Patriot or any of the
Patriot Subsidiaries (which are or will be in effect as of or after the date of
this Agreement) involving payments in excess of $60,000 with (i) any consultant
(excluding legal counsel, accountants and financial advisors), (ii) any person
who is an officer, director or affiliate of Patriot or any of the Patriot
Subsidiaries, any relative of any of the foregoing or any entity of which any
of the foregoing is an affiliate or (iii) any person who acquired Patriot Stock
in a private placement. All such documents are listed in Section 7.18 of the
Patriot Disclosure Letter and the copies of such documents, which have
previously been provided or made available to Wyndham and its counsel, are true
and correct.
7.19 Contracts and Commitments.
(a) Sections 7.5 and 7.19 of the Patriot Disclosure Letter
sets forth (i) all notes, debentures, bonds and other evidence of indebtedness
which are secured or collateralized by mortgages, deeds of trust or other
security interests in the Patriot Properties or personal property of Patriot
and each of the Patriot Subsidiaries, (ii) each Commitment entered into by
Patriot or any of the Patriot Subsidiaries which may result in total payments
or liability in excess of $50,000, and (iii) all leases and subleases entered
into by Patriot or any of the Patriot Subsidiaries, as lessor or sublessor
which may result in total payments or liability in excess of $50,000.
Descriptions of the foregoing are listed in Sections 7.5 and 7.19 of the
Patriot Disclosure Letter and the copies of such documents, which have
previously been provided or made available to Wyndham and its counsel, are true
and correct copies.
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None of Patriot or any of the Patriot Subsidiaries has received any written
notice of a default that has not been cured under any of the documents
described above or is in default respecting any payment obligations thereunder
beyond any applicable grace periods, except where such default could not
reasonably be expected to have a Patriot Material Adverse Effect.
(b) All joint venture agreements to which Patriot or any of
the Patriot Subsidiaries is a party are set forth in Sections 7.5 and 7.19 of
the Patriot Disclosure Letter and neither Patriot nor any of the Patriot
Subsidiaries is in default with respect to any obligations, which individually
or in the aggregate are material, thereunder.
7.20 Patriot Stock. The Patriot Stock to be issued in connection with
the Merger and this Agreement, when issued in accordance with the terms of this
Agreement, will have been duly and validly authorized by all necessary
corporate action on the part of Patriot. The Patriot Stock to be issued in
connection with the Merger and this Agreement, when issued in accordance with
the terms of this Agreement, will be validly issued, fully paid, nonassessable
and free of preemptive rights.
7.21 Disclosure. The representations, warranties and statements made
by Patriot in this Agreement, the Ancillary Agreements and in the Patriot
Disclosure Letter and in the certificates and other documents expressly
identified in this Agreement as having been delivered pursuant hereto do not
contain any untrue statement of a material fact, and, when taken together with
each other and the Patriot SEC Reports, do not omit to state any material fact
necessary to make such representations, warranties and statements, in light of
the circumstances under which they are made, not misleading.
7.22 Definition of Patriot's Knowledge. As used in this Agreement,
the phrase "to the knowledge of Patriot" or "to the best knowledge of Patriot"
or any similar phrase means the actual knowledge of those individuals
identified in Section 7.22 of the Patriot Disclosure Letter.
ARTICLE 8. COVENANTS
8.1 Acquisition Proposals.
(a) Wyndham represents and warrants that it has terminated any
discussions or negotiations relating to, or that may reasonably be expected to
lead to, any Acquisition Proposal (as defined below). From and after the date
hereof until the termination of this Agreement, Wyndham shall not, nor shall it
permit any of the Wyndham Subsidiaries to, nor shall it authorize or permit any
officer, director, employee, agent, advisor or representative of, Wyndham or
any of the Wyndham Subsidiaries to, directly or indirectly (i) solicit,
initiate or encourage the submission of, any inquiries, proposals or offers
from any person relating to an Acquisition Proposal, (ii) enter into any
agreement with respect to any Acquisition Proposal, or (iii) enter into, engage
in, or participate or continue in, any discussions or negotiations regarding,
or furnish to any person any information with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes, or would reasonably be expected to lead to, any Acquisition
Proposal. Notwithstanding anything to the contrary in
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this Agreement, Wyndham may (A) furnish information to, or participate in
discussions or negotiations with, any person or entity that makes or expresses
a bona fide intention to make an unsolicited proposal to acquire Wyndham and/or
any of the Wyndham Subsidiaries pursuant to a merger, consolidation, share
exchange, business combination, tender or exchange offer or other similar
transaction if the Board of Directors of Wyndham determines, based on the
advice of its outside legal counsel (the "Wyndham Legal Counsel"), that such
action is necessary in order to comply with the directors' fiduciary duties to
the stockholders of Wyndham under applicable law; provided, however, that prior
to Wyndham's furnishing such information or participating in such discussions
or negotiations, such person or entity shall have executed a confidentiality
and standstill agreement with Wyndham having terms substantially similar to
those contained in that certain letter agreement dated January 27, 1997 (the
"Patriot Confidentiality Agreement") between Patriot and Wyndham relating to
the provision of Evaluation Material (as defined in the Patriot Confidentiality
Agreement) by Wyndham to Patriot and (B) comply with Rules 14d-9 and 14e-2
promulgated under the Exchange Act with respect to an Acquisition Proposal.
(b) As used herein, the term "Acquisition Proposal" shall mean
any proposed or actual (i) merger, consolidation or similar transaction
involving Wyndham, (ii) sale, lease or other disposition, directly or
indirectly, by merger, consolidation, share exchange or otherwise, of any
assets of Wyndham or the Wyndham Subsidiaries representing 15% or more of the
consolidated assets of Wyndham and the Wyndham Subsidiaries, (iii) issue, sale
or other disposition of (including by way of merger, consolidation, share
exchange or any similar transaction) securities (or options, rights or warrants
to purchase, or securities convertible into, such securities) representing 15%
or more of the votes attached to the outstanding securities of Wyndham, (iv)
transaction in which any person shall acquire beneficial ownership (as such
term is defined in Rule 13d-3 under the Exchange Act), or the right to acquire
beneficial ownership, or any "group" (as such term is defined under the
Exchange Act) shall have been formed which beneficially owns or has the right
to acquire beneficial ownership of, 15% or more of the outstanding shares of
Wyndham Common Stock, (v) recapitalization, restructuring, liquidation,
dissolution, or other similar type of transaction with respect to Wyndham or
any of the Wyndham Subsidiaries, or (vi) transaction which is similar in form,
substance or purpose to any of the foregoing transactions; provided, however,
that the term "Acquisition Proposal" shall not include the Merger and the
transactions contemplated thereby.
(c) Unless the Board of Directors of Wyndham determines in
good faith, after receiving advice of Wyndham Legal Counsel, that doing so
would reasonably be expected to be a breach of the directors' fiduciary duties
under applicable law, Wyndham promptly shall advise Patriot orally and in
writing of any Acquisition Proposal or any inquiry regarding any Acquisition
Proposal and the identity of the person making such Acquisition Proposal or
inquiry.
8.2 Conduct of Businesses.
(a) General. Prior to the Effective Time, except as
specifically permitted by this Agreement, unless the other party has consented
in writing thereto, Patriot and Wyndham and, following the Business
Combination, BMOC:
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(i) Shall use their reasonable best efforts, and shall
cause each of their respective Subsidiaries to use their reasonable best
efforts, to preserve intact their business organizations and goodwill and keep
available the services of their respective officers and material employees;
(ii) Shall, subject to Section 8.1 and this Section 8.2,
confer on a regular basis with one or more representatives of the other to
report on material operational matters and any proposals to engage in material
transactions;
(iii) Shall, subject to Section 8.1 and this Section 8.2,
promptly notify the other of any material emergency or other material change in
the condition (financial or otherwise), business, properties, assets,
liabilities, prospects or the normal course of their businesses or in the
operation of their properties (including, in the case of Wyndham and the
Wyndham Subsidiaries, properties under management by Wyndham or any of the
Wyndham Subsidiaries), any material governmental complaints, investigations or
hearings (or communications indicating that the same may be contemplated), or
the breach in any material respect of any representation or warranty contained
herein; and
(iv) Shall promptly deliver to the other true and
correct copies of any report, statement or schedule filed by or with respect to
it with the SEC subsequent to the date of this Agreement.
(b) Conduct by Wyndham. Prior to the Effective Time, unless
Patriot has consented in writing thereto or unless otherwise specifically
permitted by this Agreement, but in any event subject to Section 8.2(f),
Wyndham:
(i) Shall, and shall cause each Wyndham Subsidiary to,
conduct its operations according to their usual, regular and ordinary course in
substantially the same manner as heretofore conducted, subject to clauses
(ii)-(x) below;
(ii) Shall not, and shall cause each Wyndham Subsidiary
not to, acquire, enter into an option to acquire or exercise an option or
contract to acquire additional real property or interests therein, incur or
guarantee additional indebtedness, encumber assets or commence or guarantee
construction of, or enter into any agreement or commitment to develop or
construct or guarantee, other real estate projects, except that Wyndham may
incur additional indebtedness under its revolving credit facility as in effect
on the date hereof in an aggregate amount of $50,000,000 and except for those
Commitments set forth in Section 6.19 of the Wyndham Disclosure Letter;
(iii) Shall not amend the Wyndham Certificate or the
Wyndham Bylaws, and shall cause each Wyndham Subsidiary not to amend its
charter, bylaws, joint venture documents, partnership agreements or equivalent
documents;
(iv) Shall not (A) issue any shares of its capital
stock, effect any stock split, reverse stock split, stock dividend,
recapitalization or other similar transaction, except pursuant to the Existing
Wyndham Options, (B) grant, confer or award any option, warrant, conversion
right or other right not existing on the date hereof to acquire any shares of
its
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capital stock, (C) increase any compensation, other than in the ordinary course
of business consistent with past practice, or enter into or amend any
employment agreement with any of its present or future officers or directors,
or (D) adopt any new employee benefit plan (including any stock option, stock
benefit or stock purchase plan) or amend any Wyndham Employee Benefit plan in
any material respect, except for changes which are not more favorable to
participants in such plans;
(v) Shall not (A) declare, set aside or pay any
dividend or make any other distribution or payment with respect to any shares
of its capital stock, or (B) except in connection with the use of shares of
capital stock to pay the exercise price or tax withholding in connection with
the Wyndham Stock Plans, directly or indirectly redeem, purchase or otherwise
acquire any shares of its capital stock or capital stock of any of the Wyndham
Subsidiaries, or make any commitment for any such action;
(vi) Except pursuant to Commitments set forth in Section
6.19 of the Wyndham Disclosure Letter, shall not, and shall not permit any of
the Wyndham Subsidiaries to, sell, lease or otherwise dispose of (A) any
Wyndham Properties or any portion thereof or any of the capital stock of or
partnership or other interests in any of the Wyndham Subsidiaries or (B) except
in the ordinary course of business, any of its other assets which are material,
individually or in the aggregate;
(vii) Except pursuant to Commitments set forth in Section
6.19 of the Wyndham Disclosure Letter and except to the extent permitted by
Section 8.2(f), shall not, and shall not permit any of the Wyndham Subsidiaries
to, make any loans, advances or capital contributions to, or investments in,
any other person (except Wyndham or a wholly-owned Wyndham Subsidiary);
(viii) Shall not, and shall not permit any of the Wyndham
Subsidiaries to, pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in accordance with their
terms, of liabilities reflected or reserved against in, or contemplated by, the
most recent consolidated financial statements (or the notes thereto) of Wyndham
included in the Wyndham SEC Reports or incurred in the ordinary course of
business consistent with past practice or pursuant to Commitments set forth in
Section 6.19 of the Wyndham Disclosure Letter or entered into in accordance
with this Agreement;
(ix) Shall not, and shall not permit any of the Wyndham
Subsidiaries to, enter into any Commitment which may result in total payments
or liability by it in excess of $100,000 per year (provided, however, that
nothing contained in this clause (ix) shall permit Wyndham or any Wyndham
Subsidiary to take any action prohibited by the other provisions of this
Section 8.2), other than Commitments for expenses of attorneys, accountants and
investment bankers incurred in connection with the transactions contemplated by
this Agreement; and
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(x) Shall not, and shall not permit any of the Wyndham
Subsidiaries to, enter into any material Commitment with any officer, director,
consultant or affiliate of Wyndham or any of the Wyndham Subsidiaries.
(c) Garden Club Transaction. Notwithstanding any other
provisions to the contrary contained in this Agreement, including, without
limitation, Section 8.2(b), Wyndham or any Wyndham Subsidiary may enter into an
agreement regarding, and consummate, an acquisition transaction or business
combination involving the businesses and/or assets set forth on Section 8.2(c)
of the Wyndham Disclosure Letter.
(d) Conduct by Patriot and BMOC.
(i) Prior to the Effective Time, unless Wyndham has
consented in writing thereto or unless otherwise specifically permitted by this
Agreement, neither Patriot nor, following consummation of the Business
Combination, BMOC, shall (A) directly or indirectly through a Patriot
Subsidiary or a BMOC Subsidiary, merge or consolidate with, or acquire all or
substantially all of the assets, or beneficial ownership of fifty percent (50%)
or more of the outstanding capital stock or other equity interests, of any
person or entity, or (B) declare, set aside or pay any dividend or make any
other distribution or payment with respect to any shares of capital stock of
Patriot or BMOC, as the case may be, except quarterly cash dividends not
exceeding $50,000,000 in addition to (1) dividends, distributions or payments
to the extent required in order for Patriot to maintain Patriot's REIT status
under the Code or avoid the imposition of any income or excise tax, or (2)
dividends payable to the stockholders of CJC, or (C) except in connection with
the use of shares of capital stock (x) to pay the exercise price or tax
withholding in connection with any of its existing stock plans or (y) in
connection with the redemption, exercise, exchange or conversion of partnership
units of Patriot OP or BMOC OP, directly or indirectly redeem, purchase or
otherwise acquire any shares of capital stock of Patriot or BMOC, as the case
may be, or capital stock or equity interests of any of the Patriot Subsidiaries
or BMOC Subsidiaries, or make any commitment for any such action, or (D) issue
any shares of Patriot Stock (or, following consummation of the Business
Combination, Paired Shares of Patriot Stock and BMOC Stock) or grant, confer or
award any option, warrant, conversion right or other right not existing on the
date of this Agreement to acquire any shares of Patriot Stock (or, following
consummation of the Business Combination, Paired Shares of Patriot Stock and
BMOC Stock), except (1) pursuant to the Patriot Stock Plans or other stock
option, stock benefit or stock purchase plan of Patriot or BMOC from time to
time in effect, (2) in connection with any transaction otherwise permitted by
the terms of this Agreement, and (3) pursuant to the offer and sale from time
to time of shares of Patriot Stock (or, following consummation of the Business
Combination, Paired Shares of Patriot Stock and BMOC Stock) or options,
warrants, conversion rights or other rights having an offering price of not
more than $500,000,000 in the aggregate.
(ii) Notwithstanding any other provisions to the
contrary contained in this Agreement, prior to the Effective Time, Patriot,
Patriot OP, BMOC and/or BMOC OP may enter into an agreement regarding, and
consummate, an acquisition transaction or business combination involving the
businesses and/or assets set forth in Section 8.2(d)(ii) of the Patriot
Disclosure Letter (A) under the heading "Sombrero Portfolio" and (B) under the
heading "Rock General Account Unencumbered Assets."
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(iii) The outstanding Indebtedness (as hereinafter
defined) of Patriot, the Patriot Subsidiaries, BMOC and the BMOC Subsidiaries
shall not at any time prior to the Effective Time exceed $1,250,000,000 in the
aggregate. For purposes of this Section 8.2(d)(iii), "Indebtedness" means,
with respect to any person, all obligations of such person for borrowed money
plus all obligations of such person under any purchase money mortgages plus any
note or bond issued by such person. Notwithstanding the foregoing, the
outstanding Indebtedness of any of Patriot, the Patriot Subsidiaries, BMOC or
the BMOC Subsidiaries prior to the Effective Time may exceed $1,250,000,000 in
the aggregate if and to the extent the Interim Transactions Committee (as
hereinafter defined) so approves.
(iv) Except as otherwise provided in this Section
8.2(d), subject to the provisions of Sections 8.2(e) and 8.2(f) and without
limiting any of the other rights of Patriot set forth herein or otherwise,
prior to the Effective Time, Patriot and the Patriot Subsidiaries may enter
into leases with respect to all or any portion of the Patriot Properties,
acquire, lease, enter into an option to acquire, lease or exercise an option or
contract to acquire, or enter into or invest in a joint venture or otherwise
make an investment in, additional real property, incur additional indebtedness,
encumber assets or commence construction of, or enter into any agreement or
commitment to develop or construct, other real estate projects.
(v) Without the prior written approval of Wyndham,
neither Patriot (nor, following consummation of the Business Combination, BMOC)
shall, prior to the Effective Time, directly or indirectly, through a Patriot
Subsidiary or a BMOC Subsidiary, (i) enter into or participate in active
negotiations with any third party which would reasonably be expected to lead to
the acquisition by Patriot, BMOC, a Patriot Subsidiary or a BMOC Subsidiary, of
any other brand name that would be competitive with Wyndham's brand (a
"Competitive Brand"), or (ii) enter into any agreement with respect to the
acquisition by Patriot, BMOC, a Patriot Subsidiary or a BMOC Subsidiary, of a
Competitive Brand. Notwithstanding the preceding sentence, Patriot, BMOC, a
Patriot Subsidiary or a BMOC Subsidiary, may, without the prior written
approval of Wyndham, take any other actions not inconsistent with the
foregoing, including, without limitation, responding to unsolicited inquiries
from third parties concerning the acquisition by Patriot, BMOC, a Patriot
Subsidiary or a BMOC Subsidiary, of a Competitive Brand, but shall promptly
advise Wyndham of any such unsolicited inquiries.
(e) Liberty Portfolio. Notwithstanding any other provision to
the contrary contained in this Agreement, prior to the Effective Time, Patriot
and/or Patriot OP or any of the Patriot Subsidiaries may make an investment in
all or any portion of the commercial real estate assets set forth in Section
8.2(e) of the Patriot Disclosure Letter (the "Liberty Portfolio") that does not
(A) exceed $220,000,000 in the aggregate or (B) result in Patriot having to
consolidate the accounts of the Liberty Portfolio within the accounts of
Patriot (a "Liberty Consolidation"). Patriot may make additional investments
in the Liberty Portfolio in excess of $220,000,000 or take any action that
would result in a Liberty Consolidation (an "Additional Liberty Investment")
only in accordance with the following provisions of this Section 8.2(e).
Prior to the Effective Time, Patriot shall promptly notify Wyndham of
any determination by the Board of Directors of Patriot or any Patriot
Subsidiary, or by the Board
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of Directors of BMOC or any BMOC Subsidiary, which determination shall require
the unanimous approval of the Board of Directors of Patriot or BMOC, as the
case may be, to enter into an agreement, arrangement or understanding, or take
any other action, pursuant to which Patriot, such Patriot Subsidiary, or BMOC
or such BMOC Subsidiary, would, upon consummation thereof, make an Additional
Liberty Investment, which notice shall include a reasonably detailed
description of the proposed Additional Liberty Investment, and Patriot or such
Patriot Subsidiary, or BMOC or such BMOC Subsidiary, shall not enter into any
such agreement, arrangement or understanding, or take any such other action, at
any time prior to the date which is fifteen business days immediately following
the date of such notice (the "Wyndham Notice Period"), unless Patriot or BMOC,
as the case may be, has received the prior written consent of Wyndham. Upon
expiration of the Wyndham Notice Period, (i) if Wyndham shall not have
previously provided to Patriot or BMOC, as the case may be, written notice of
Wyndham's desire to terminate this Agreement pursuant to Section 10.1(m) (the
"Wyndham Termination Notice"), Patriot or such Patriot Subsidiary, or BMOC or
such BMOC' Subsidiary, may proceed with such Additional Liberty Investment,
Wyndham shall be deemed to have consented thereto for purposes of this
Agreement, and this Agreement shall remain in full force and effect, or (ii) if
Wyndham shall have previously provided to Patriot or BMOC, as the case may be,
the Wyndham Termination Notice, the parties shall nevertheless proceed with the
Merger in accordance with and subject to the terms and conditions of this
Agreement in the event that Patriot or BMOC, as the case may be, provides
written notice to Wyndham no later than the tenth business day following the
expiration of the Wyndham Notice Period (the "Patriot Notice Period") to the
effect that the Board of Directors of Patriot or BMOC, as the case may be, has,
notwithstanding its earlier decision, determined not to proceed with the
proposed Additional Liberty Investment. James Carreker and two directors of
Wyndham selected by Wyndham shall have the right to participate in the
discussions of the Board of Directors of Patriot or BMOC, as the case may be,
that relate to a proposed Additional Liberty Investment, provided, however,
that such persons shall not have the right to participate in final
deliberations or any vote by the Board of Directors of Patriot or BMOC, as the
case may be, regarding such proposed Additional Liberty Investment.
(f) Interim Transactions Committee. Promptly following the
execution of this Agreement, Patriot and Wyndham shall constitute and establish
a committee which shall evaluate and consider proposed acquisitions or other
transactions ("Transactions") by Patriot or Wyndham or any of their respective
Subsidiaries between the date hereof and the Effective Time (the "Interim
Transactions Committee"). The Interim Transactions Committee shall consist of
Paul Nussbaum, an individual selected by Patriot who is reasonably satisfactory
to Wyndham, and two individuals selected by Wyndham who are reasonably
acceptable to Patriot. The Interim Transactions Committee shall be abolished
at the Effective Time.
Transactions by Patriot or any of the Patriot Subsidiaries involving a
proposed purchase price (inclusive of any indebtedness to be assumed in
connection therewith) (A) exceeding $100,000,000 individually, or (B) that,
when taken together with all previous Transactions entered into by Patriot or
any of the Patriot Subsidiaries between the date of this Agreement and the
Effective Time, would exceed $100,000,000 (the "Patriot Transactions
Threshold"), shall require the approval of a majority of the members of the
Interim Transactions Committee, in addition to any other approvals that may be
sought by Patriot or required by law; provided, however, that this Section
8.2(f) shall not apply to any of the
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transactions permitted by Sections 8.2(d)(ii) or 8.2(e); and provided, further,
that between the date of the Business Combination and the Effective Time,
neither BMOC nor any of the BMOC Subsidiaries shall engage in Transactions
exceeding the Patriot Transaction Threshold without the prior approval of
Wyndham (provided that for purposes of this Section 8.2(f), such Transactions
by BMOC or any of the BMOC Subsidiaries shall be included for purposes of
computing the Patriot Transactions Threshold). Notwithstanding Section
8.2(d)(i)(A), Patriot or any of the Patriot Subsidiaries, or with respect to
the following clause (A), BMOC or any of the BMOC Subsidiaries, may (A) acquire
or invest in any hospitality or related assets involving a proposed purchase
price (inclusive of any indebtedness to be assumed in connection therewith) not
exceeding the Patriot Transactions Threshold, and (B) subject to Section
8.2(j), merge or consolidate with, or acquire all or substantially all of the
assets, or beneficial ownership of fifty percent (50%) or more of the
outstanding capital stock or other equity interests, of any person or entity,
irrespective of the purchase price involved if such Transaction is first
approved by a majority of the members of the Interim Transactions Committee.
Any such Transaction so approved by the Interim Transaction Committee as
provided herein shall be deemed not to have occurred for purposes of Section
8.2(d)(i) or computing the Patriot Transactions Threshold or otherwise for
purposes of this Section 8.2(f), and any such Transaction not exceeding the
Patriot Transactions Threshold as provided herein shall be deemed not to have
occurred for purposes of Section 8.2(d)(i).
Transactions by Wyndham or any of the Wyndham Subsidiaries involving a
proposed purchase price (inclusive of any indebtedness to be assumed in
connection therewith) (A) exceeding $50,000,000 individually, or (B) that, when
taken together with all previous Transactions entered into by Wyndham or any of
the Wyndham Subsidiaries between the date of this Agreement and the Effective
Time, would exceed $50,000,000 (the "Wyndham Transactions Threshold"), shall
require the approval of a majority of the members of the Interim Transactions
Committee, in addition to any other approvals that may be sought by Wyndham or
required by law; provided, however, that this Section 8.2(f) shall not apply to
any of the transactions permitted by Section 8.2(c). Notwithstanding Section
8.2(b), Wyndham or any of the Wyndham Subsidiaries may (A) acquire or invest in
any non-real estate hospitality assets (including management or franchise
agreements) involving a proposed purchase price (inclusive of any indebtedness
to be assumed in connection therewith) not exceeding the Wyndham Transactions
Threshold, and (B) merge or consolidate with, or acquire all or substantially
all of the assets, or beneficial ownership of fifty percent (50%) or more or
other equity interests, of any person or entity, irrespective of the purchase
price involved if such Transaction is first approved by a majority of the
members of the Interim Transactions Committee. Any such transaction approved
by the Interim Transaction Committee as provided herein shall be deemed not to
have occurred for purposes of Section 8.2(b) or computing the Wyndham
Transactions Threshold or otherwise for purposes of this Section 8.2(f), and
any such Transaction not exceeding the Wyndham Transactions Threshold as
provided herein shall be deemed not to have occurred for purposes of Section
8.2(b).
(g) Offices Relocation. Patriot and Wyndham agree that
between the date hereof and the Effective Time, Patriot and Wyndham shall
cooperate with each other in good faith to arrange for the relocation of the
offices of Patriot and/or Wyndham in a manner mutually satisfactory to the
parties.
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(h) Organizational Matters. Prior to the Effective Time,
Patriot, BMOC and Wyndham shall cooperate with each other in good faith and use
all reasonable efforts to establish and develop a combined organization,
management and operational structure for Patriot and BMOC, provided that
Patriot is satisfied, in its reasonable judgment after consultation with
Wyndham, that there are no adverse tax or regulatory consequences (except for
immaterial consequences). The parties acknowledge the delivery of a memorandum
from Goodwin, Procter & Hoar LLP (the "Structure Memorandum") regarding the
structure of the Merger and the transactions relating thereto, which memorandum
sets forth the structuring plan currently contemplated by Patriot and Wyndham,
and the parties agree to cooperate to implement such plan or find mutually
acceptable alternatives to such plan.
(i) Wyndham Debentures. Prior to the Effective Time, Wyndham
shall use all reasonable efforts to (A) repurchase, redeem or otherwise retire
the 10 1/2% Senior Subordinated Notes Due 2006 (the "Notes") in accordance with
the terms and conditions of the Indenture, dated May 24, 1996, among Wyndham,
certain Wyndham Subsidiaries and Banc One, Columbus, N.A. (the "Indenture") on
terms reasonably satisfactory to Patriot, or (B) take such action, including
the repurchase of Notes, as may be necessary or appropriate to cause the
Indenture to be amended to remove or defease those covenants, agreements and
undertakings selected by Patriot that may be removed or defeased in accordance
with the Indenture on terms reasonably satisfactory to Patriot.
(j) Patriot Change in Line of Business. Notwithstanding
anything to the contrary contained in this Agreement, prior to the Effective
Time, without the prior approval of the Board of Directors of Wyndham, none of
Patriot, BMOC or their respective Subsidiaries shall enter into any line of
business in which Patriot is not engaged as of the date of this Agreement (a
"New Business"), including, subject to Section 8.2(e), taking any action that
would cause the results of operations of a New Business to be consolidated for
financial reporting purposes with those of Patriot or BMOC; provided, however,
that Patriot shall not be deemed to be engaged in a new line of business by
virtue of any investment in the Liberty Portfolio permitted by Section 8.2(e)
or by virtue of any of the transactions contemplated by Section 8.2(d)(ii).
(k) Business Combination. To the extent that Patriot's
consent is required under the Business Combination Agreement, Patriot shall not
consent to the taking of any action by CJC or BMOC that, if taken by Patriot
prior to consummation of the Business Combination, would be specifically
prohibited by the terms of Section 8.2, unless Patriot is required to give such
consent by law or pursuant to any existing agreements.
8.3 Meetings of Stockholders.
(a) Promptly following consummation of the Business
Combination, (i) Patriot will take all action necessary in accordance with
applicable law and its certificate of incorporation and bylaws to convene a
meeting of its stockholders as promptly as practicable to consider and vote
upon the approval of this Agreement, as ratified by New Patriot pursuant to the
Patriot Ratification Agreement, the Pairing Agreement Amendment and, if
required by applicable law or the rules of the NYSE, the Stock Purchase
Agreement, and (ii) Wyndham will take all action necessary in accordance with
applicable law and its certificate of
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incorporation and bylaws to convene a meeting of its stockholders as promptly
as practicable to consider and vote upon the approval of this Agreement as
ratified by New Patriot pursuant to the Patriot Ratification Agreement. The
proxy statement of Patriot related to its stockholders' meeting shall contain
the recommendation of the Board of Directors of Patriot that its stockholders
approve this Agreement, as ratified by New Patriot pursuant to the Patriot
Ratification Agreement, the Pairing Agreement Amendment and, if stockholder
approval of the Stock Purchase Agreement is required by applicable law or the
rules of the NYSE, the Stock Purchase Agreement. The proxy statement of
Wyndham related to its stockholders' meeting shall contain the recommendation
of the Board of Directors of Wyndham that its stockholders approve this
Agreement as ratified by New Patriot pursuant to the Patriot Ratification
Agreement. Patriot and Wyndham, subject to and in accordance with applicable
law, each shall use their reasonable best efforts to obtain such approval,
including without limitation, by timely mailing the Proxy Statement (as defined
in Section 8.7 hereof) contained in the Form S-4 (as defined in Section 8.7
hereof) to its stockholders. Patriot and Wyndham shall coordinate and
cooperate with each other and with BMOC with respect to the timing of their
respective stockholders' meetings and shall use their reasonable best efforts
to hold such meetings on the same day and on the same day as the stockholders'
meeting of BMOC. Notwithstanding any of the foregoing, in no event shall any
of Patriot, BMOC or Wyndham be required to hold its stockholders' meeting prior
to September 30, 1997.
(b) Promptly following consummation of the Business
Combination, BMOC will take all action necessary in accordance with applicable
law and its certificate of incorporation and bylaws to convene a meeting of its
stockholders as promptly as practicable to consider the vote upon the approval
of the BMOC Stock Issuance, the BMOC Charter Amendment, the Pairing Agreement
Amendment and, if required by applicable law or the rules of the NYSE, the
Stock Purchase Agreement. The proxy statement of BMOC related to its
stockholders meeting shall contain the recommendation of the Board of Directors
of BMOC that its stockholders approve the BMOC Stock Issuance, the Pairing
Agreement Amendment, the BMOC Charter Amendment and, if stockholder approval of
the Stock Purchase Agreement is required under applicable law or the rules of
the NYSE, the Stock Purchase Agreement, and BMOC shall, subject to and in
accordance with applicable law, use its reasonable best efforts to obtain such
approval, including, without limitation, by timely mailing the Proxy Statement
(as defined in Section 8.7 hereof) contained in the Form S-4 (as defined in
Section 8.7 hereof) to its stockholders. BMOC shall coordinate and cooperate
with Patriot and Wyndham with respect to the timing of its meeting and their
respective meetings and shall use its reasonable best efforts to hold its
meeting on the same day as such other meetings.
8.4 Filings; Other Action. Subject to the terms and conditions
herein provided, Wyndham, Patriot and BMOC shall: (a) to the extent required,
promptly make their respective filings and thereafter make any other required
submissions under the HSR Act with respect to the Merger and, if applicable,
the Stock Purchase; (b) use all reasonable best efforts to cooperate with one
another in (i) determining which filings are required to be made prior to the
Effective Time with, and which consents, approvals, permits or authorizations
are required to be obtained prior to the Effective Time from, governmental or
regulatory authorities of the United States, the several states and foreign
jurisdictions and any third parties in connection with the execution and
delivery of this Agreement, the Wyndham/BMOC Subscription Agreement and the
other Ancillary Agreements and consummation of the transactions
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contemplated by such agreements and (ii) timely making all such filings and
timely seeking all such consents, approvals, permits or authorizations; (c) use
all reasonable best efforts to obtain in writing any consents required from
third parties to effectuate the Merger and the transactions contemplated hereby
and by the Ancillary Agreements in reasonably satisfactory form to Wyndham and
Patriot; and (d) use all reasonable best efforts to take, or cause to be taken,
all other action and do, or cause to be done, all other things necessary,
proper or appropriate to consummate and make effective the transactions
contemplated by this Agreement, the Wyndham/BMOC Subscription Agreement and the
other Ancillary Agreements. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the purpose of this
Agreement, the Wyndham/BMOC Subscription Agreement or the other Ancillary
Agreements, the proper officers and directors of Patriot, BMOC and Wyndham
shall take all such necessary action.
8.5 Access to Information.
(a) Upon reasonable notice to the other, each of Patriot and
Wyndham shall (and shall cause their respective Subsidiaries to) afford to the
officers, employees, accountants, counsel and other representatives of the
other, reasonable access, during normal business hours during the period prior
to the Effective Time, to all its properties, books, contracts, Commitments and
records and permit such persons to make such inspections as they may reasonably
require and, during such period, each of Patriot and Wyndham and, upon
consummation of the Business combination, BMOC shall (and shall cause its
Subsidiaries to) furnish promptly to the other all information concerning its
business, properties, personnel and accountants as the other may reasonably
request.
(b) All such information shall be deemed "Evaluation Material"
as such term is defined in those certain letter agreements dated January 27,
1997 between Patriot and Wyndham (the "Confidentiality Agreements"), except as
otherwise provided in such Confidentiality Agreements.
8.6 Publicity. Patriot, Wyndham and BMOC shall consult with each
other before issuing any press release or otherwise making any public
statements with respect to this Agreement or any transaction contemplated
hereby and shall not issue any such press release or make any such public
statement without the prior consent of the other parties, which consent shall
not be unreasonably withheld; provided, however, that a party may, without the
prior consent of the other party, issue such press release or make such public
statement as may be required by law or the applicable rules of any stock
exchange if it has used its reasonable best efforts to consult with the other
party and to obtain such party's consent but has been unable to do so in a
timely manner.
8.7 Proxy Statement; Registration Statement.
(a) As promptly as practicable following the stockholders'
meetings of CJC and BMOC at which the Business Combination will be submitted to
the stockholders of CJC and BMOC for their approval, (i) each of Patriot,
Wyndham and BMOC shall prepare and file with the SEC (with appropriate requests
for confidential treatment, unless the parties hereto otherwise agree) under
the Exchange Act, a joint proxy statement/prospectus and forms of
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proxies (such joint proxy statement/prospectus together with any amendments to
supplements thereto, the "Proxy Statement") relating to the stockholder
meetings of each of Patriot, Wyndham and BMOC and the vote of the stockholders
of (A) Patriot and Wyndham, with respect to this Agreement as ratified by New
Patriot pursuant to the Patriot Ratification Agreement, (B) Patriot, with
respect to an amendment to the Pairing Agreement (the "Pairing Agreement
Amendment") pursuant to and in accordance with the terms of the Stock Purchase
Agreement, and (C) BMOC, with respect to the BMOC Stock Issuance, the Pairing
Agreement Amendment and the BMOC Charter Amendment, and (ii) following
clearance by the SEC of the Proxy Statement, Patriot and BMOC shall prepare and
file with the SEC under the Securities Act a registration statement on Form S-4
(such registration statement, together with any amendments or supplements
thereto, the "Form S-4"), in which the Proxy Statement will be included as a
prospectus, in connection with the registration under the Securities Act of (A)
the Paired Shares of Patriot Stock and BMOC Stock to be distributed to the
stockholders of Wyndham in the Merger, (B) the Paired Shares of Patriot Stock
and BMOC Stock to be issued and sold to the Principal Stockholder pursuant to
the Stock Purchase Agreement, (C) the shares of Unpaired Patriot Stock to be
issued and sold to the Principal Stockholder pursuant to the Stock Purchase
Agreement, (D) the Paired Shares of Patriot Stock and BMOC Stock to be issued
to the Principal Stockholder upon conversion of the shares of Unpaired Patriot
Stock to be issued and sold to the Principal Stockholder pursuant to the Stock
Purchase Agreement, and (E) as contemplated by the Registration Rights
Agreement, the resale of certain Paired Shares of Patriot Stock and BMOC Stock
to be issued in the Merger and pursuant to the Stock Purchase Agreement (the
securities referred to in the foregoing clauses (A) - (E) being referred to
herein collectively as the "Registered Securities"). Patriot and BMOC will
cause the Proxy Statement and the Form S-4 to comply as to form in all material
respects with the applicable provisions of the Securities Act, the Exchange Act
and the rules and regulations thereunder, and Wyndham will cause the Proxy
Statement to comply as to form in all material respects with the applicable
provisions of the Exchange Act and the rules and regulations thereunder. Each
of Patriot and BMOC, on the one hand, and Wyndham, on the other hand, shall
furnish all information about itself and its business and operations and all
necessary financial information to the other as the other may reasonably
request in connection with the preparation of the Proxy Statement and the Form
S-4. Each of Patriot and BMOC shall use its reasonable best efforts, and
Wyndham will cooperate with them, to have the Form S-4 declared effective by
the SEC as promptly as practicable (including clearing the Proxy Statement with
the SEC). Each of Patriot, Wyndham, and BMOC agrees promptly to correct any
information provided by it for use in the Proxy Statement and the Form S-4 if
and to the extent that such information shall have become false or misleading
in any material respect, and each of the parties hereto further agrees to take
all steps necessary to amend or supplement the Proxy Statement and, in the case
of Patriot and BMOC, the Form S-4, and to cause the Proxy Statement and, in the
case of Patriot and BMOC, the Form S-4, as so amended or supplemented to be
filed with the SEC and to be disseminated to their respective stockholders, in
each case as and to the extent required by applicable federal and state
securities laws. Each of Patriot, Wyndham, and BMOC agrees that the
information provided by it for inclusion in the Proxy Statement or the Form S-4
and each amendment or supplement thereto, at the time of mailing thereof and at
the time of the respective meetings of stockholders of Patriot, Wyndham, and
BMOC, will not include an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Each of Patriot and
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BMOC will advise Wyndham, and deliver copies (if any) to Wyndham, promptly
after either receives notice thereof, of any request by the SEC for amendment
of the Proxy Statement or the Form S-4 or comments thereon and responses
thereto or requests by the SEC for additional information, or notice of the
time when the Form S-4 has become effective or any supplement or amendment has
been filed, the issuance of any stop order, the suspension of the qualification
of the Registered Securities issuable in connection with the Merger or pursuant
to the Stock Purchase or of the Registered Securities for offering or sale in
any jurisdiction.
(b) Each of Patriot, Wyndham and BMOC shall use its best
efforts to timely mail the Proxy Statement to its stockholders. It shall be a
condition to the mailing of the Proxy Statement that (i) Patriot shall have
received "comfort" letters from Coopers & Lybrand LLP, independent public
accountants for Wyndham, of the kind contemplated by the Statement of Auditing
Standards with respect to Letters to Underwriters promulgated by the American
Institute of Certified Public Accountants (the "AICPA Statement"), dated as of
the date on which the Form S-4 shall become effective (and Patriot shall also
receive such a letter as of the Effective Time), each addressed to Patriot and
BMOC, in form reasonably satisfactory to Patriot and BMOC, concerning the
procedures undertaken by Coopers & Lybrand LLP with respect to the financial
statements and information of Wyndham and the Wyndham Subsidiaries contained in
the Form S-4 and the other matters contemplated by the AICPA Statement and
otherwise customary in scope and substance for letters delivered by independent
public accountants in connection with transactions such as those contemplated
by this Agreement and (ii) Wyndham shall have received a "comfort" letter from
Ernst & Young LLP, independent public accountants for Patriot and BMOC, of the
kind contemplated by the AICPA Statement, dated as of the date on which the
Form S-4 shall become effective (and Wyndham shall also receive such a letter
as of the Effective Time), each addressed to Wyndham, in form reasonably
satisfactory to Wyndham, concerning the procedures undertaken by Ernst & Young
LLP with respect to the financial statements and information of Patriot and
BMOC and their respective Subsidiaries contained in the Form S-4 and the other
matters contemplated by the AICPA Statement and otherwise customary in scope
and substance for letters delivered by independent public accountants in
connection with transactions such as those contemplated by this Agreement.
8.8 Listing Application. Each of Patriot, Wyndham and BMOC shall
cooperate and promptly prepare and submit to the NYSE all reports, applications
and other documents that may be necessary or desirable to enable all of the
Paired Shares of Patriot Stock and BMOC Stock that will be outstanding or will
be reserved for issuance at the Effective Time to be listed for trading on the
NYSE. Each of Patriot, Wyndham and BMOC shall furnish all information about
itself and its business and operation and all necessary financial information
to the other as the other may reasonably request in connection with the such
NYSE listing process. Each of Patriot, Wyndham and BMOC agrees promptly to
correct any information provided by it for use in the NYSE listing process if
and to the extent that such information shall have become false or misleading
in any material respect. Each of Patriot, Wyndham and BMOC will advise and
deliver copies (if any) to the other parties, promptly after it receives notice
thereof, of any request by the NYSE for amendment of any submitted materials or
comments thereon and responses thereto or requests by the NYSE for additional
information.
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8.9 Further Action. Each party hereto shall, subject to the
fulfillment at or before the Effective Time of each of the conditions of
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may reasonably be required to effect the Merger
and the transactions contemplated by this Agreement and the Ancillary
Agreements. In connection with the Closing, Wyndham and each Wyndham
Subsidiary shall use its best efforts to deliver to Patriot such deeds, bills
of sale, assignments, certificates, affidavits, indemnities and other
agreements and documents as are reasonably required to effectuate consummation
of the transactions described herein.
8.10 Affiliates of Wyndham.
(a) At least 30 days prior to the Closing Date, Wyndham shall
deliver to Patriot a list of names and addresses of those persons who were, in
Wyndham's reasonable judgment, at the record date for its stockholders' meeting
to approve the Merger, "affiliates" (each such person, an "Affiliate") of
Wyndham within the meaning of Rule 145. Wyndham shall provide Patriot such
information and documents as Patriot shall reasonably request for purposes of
reviewing such list. Wyndham shall use its reasonable best efforts to deliver
or cause to be delivered to Patriot, prior to the Closing Date, from each of
the Affiliates of Wyndham identified in the foregoing list, an Affiliate Letter
in the form attached hereto as Exhibit G. Patriot shall be entitled to place
legends as specified in such Affiliate Letters on the certificates evidencing
any Paired Shares of Patriot Stock and BMOC Stock to be received by such
Affiliates pursuant to the terms of this Agreement, and to issue appropriate
stop transfer instructions to the transfer agent for the Paired Shares of
Patriot Stock and BMOC Stock, consistent with the terms of such Affiliate
Letters.
(b) Patriot and BMOC shall each file the reports required to
be filed by it under the Exchange Act and the rules and regulations adopted by
the SEC thereunder, and it will take such further action as any Affiliate of
Wyndham may reasonably request, all to the extent required from time to time to
enable such Affiliate to sell Paired Shares of Patriot Stock and BMOC Stock
received by such Affiliate in the Merger without registration under the
Securities Act pursuant to (i) Rule 145(d)(1) or (ii) any successor rule or
regulation hereafter adopted by the SEC.
8.11 Expenses. Subject to the provisions of Section 10.3, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, except
that (a) the filing fee(s) in connection with the filing of the Form S-4 with
the SEC, (b) the filing fee in connection with the listing of the Paired Shares
of Patriot Stock and BMOC Stock on the NYSE, if any, (c) the expenses incurred
for printing and mailing the Form S-4 and the Proxy Statement, and (d) the
filing fee in connection with the filing(s) under the HSR Act, shall be shared
equally by Wyndham, on the one hand, and Patriot, on the other hand, and except
that nothing contained herein shall limit or otherwise affect any provision of
the Registration Rights Agreement, the Proxy Agreement or the Stock Purchase
Agreement. Subject to the provisions of Section 10.3, all costs and expenses
for professional services rendered in connection with the transactions
contemplated by this Agreement including, but not limited to, investment
banking and legal services, will be paid by each party incurring such costs and
expenses.
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8.12 Indemnification.
(a) In the event of any threatened or actual claim, action,
suit, proceeding or investigation, whether civil, criminal or administrative,
in which any person who is now, or has been at any time prior to the date
hereof, or who becomes prior to the Effective Time, a director or officer of
Wyndham or any of the Wyndham Subsidiaries (any such person or entity, an
"Indemnified Party") is, or is threatened to be, made a party based in whole or
in part on, or arising in whole or in part out of, or pertaining to (i) the
fact that he is or was a director (including in his capacity as a member of a
committee of the Board of Directors), officer of Wyndham or any of the Wyndham
Subsidiaries, or is or was serving at the request of Wyndham or any of the
Wyndham Subsidiaries as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or (ii)
this Agreement or any of the transactions contemplated hereby, whether in any
case asserted or arising before or after the Effective Time, the parties hereto
agree to cooperate and use their reasonable efforts to defend against and
respond thereto. It is understood and agreed that Wyndham shall indemnify and
hold harmless, and after the Effective Time Patriot shall indemnify and hold
harmless, as and to the full extent permitted by applicable law, each
Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorneys' fees and expenses), judgments, fines
and amounts paid in settlement in connection with any such threatened or actual
claim, action, suit, proceeding or investigation, and in the event of any such
threatened or actual claim, action, suit, proceeding or investigation (whether
asserted or arising before or after the Effective Time) and that (x) Wyndham,
and Patriot after the Effective Time, shall promptly pay expenses in advance of
the final disposition of any claim, suit, proceeding or investigation to each
Indemnified Party to the fullest extent permitted by law, and (y) Wyndham, and
Patriot after the Effective Time, shall be entitled to participate therein and,
to the extent that Wyndham or Patriot, as the case may be, so desires, to
assume the defense thereof with counsel selected by Wyndham or Patriot, as the
case may be (provided that the Indemnified Party shall have the right to employ
separate counsel but the fees and expenses of such counsel shall be at the
Indemnified Party's expense unless in such claim or action there is, in the
opinion of independent counsel, a conflict concerning any material issue
between the position of Wyndham or Patriot, as the case may be, and the
Indemnified Party, in which case if the Indemnified Party notifies Wyndham or
Patriot, as the case may be, in writing that the Indemnified Party elects to
employ separate counsel at the expense of Wyndham or Patriot, as the case may
be, Wyndham or Patriot, as the case may be, shall not have the right to assume
such defense of such action on behalf of the Indemnified Party; provided,
however, that Wyndham or Patriot, as the case may be, shall not be required to
pay the fees and expenses of more than one separate counsel for all Indemnified
Parties); provided, that neither Patriot nor Wyndham shall be liable to pay any
amounts in any settlement effected without its prior written consent (which
consent shall not be unreasonably withheld). Any Indemnified Party wishing to
claim indemnification under this Section 8.12, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify in writing Wyndham, and
after the Effective Time, Patriot, thereof, provided that the failure to so
notify shall not affect the obligations of Wyndham or Patriot except to the
extent such failure to notify materially prejudices such party. No settlement
of any such claim, action, suit, proceeding or investigation shall be made
without the written consent of the Indemnified Parties with respect thereto
unless such Indemnified Party shall receive a full and unconditional release
thereof.
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(b) Patriot agrees that all rights to indemnification existing
in favor, and all limitations on the personal liability, of the Indemnified
Parties provided for in the Wyndham Certificate or the Wyndham Bylaws or the
charter or bylaws or similar organizational documents of any of the Wyndham
Subsidiaries, or pursuant to the indemnification agreements set forth on
Section 8.12(b) of the Wyndham Disclosure Letter, as in effect as of the date
hereof with respect to matters occurring prior to the Effective Time shall
survive the Merger and shall continue in full force and effect for a period of
not less than six (6) years from the Effective Time; provided, however, that
all rights to indemnification in respect of any claim (a "Claim") asserted or
made within such period shall continue until the disposition of such Claim. At
or prior to the Effective Time, Patriot shall purchase directors' and officers'
liability insurance coverage for Wyndham's directors and officers in a form
reasonably acceptable to Wyndham which shall provide such directors and
officers with coverage for six (6) years following the Effective Time of not
less than the existing coverage under, and have other terms not substantially
less favorable to the insured persons than, the directors' and officers'
liability insurance coverage presently maintained by Wyndham; provided,
however, that in any event the cost of such policy shall not exceed $350,000
per year (the "Maximum Amount"); and provided, further, that if such coverage
cannot be obtained for such cost, Patriot will maintain, for such six-year
period, the maximum amount of comparable coverage as shall be available for the
Maximum Amount on such terms.
(c) This Section 8.12 is intended for the irrevocable benefit
of, and to grant third party rights to, the Indemnified Parties (as
contemplated by Section 11.3) and shall be binding on all successors and
assigns of Patriot and Wyndham. Each of the Indemnified Parties shall be
entitled to enforce the covenants contained in this Section 8.12. The
provisions for indemnification contained in this Section 8.12 are not intended
to be exclusive and are without prejudice to any other rights to
indemnification or advancement of funds which any Indemnified Party may
otherwise have.
(d) In the event Patriot or any of its successors or assigns
(i) consolidates with or merges into any other person or entity and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers or conveys all or substantially all of its properties
and assets to any person or entity, then, and in each such case, proper
provision shall be made so that the successors and assigns of Patriot assume
the obligations set forth in this Section 8.12.
8.13 Reorganization.
(a) From and after the date hereof and until the Effective
Time, none of Patriot, BMOC or Wyndham or any of their respective Subsidiaries
or other affiliates shall knowingly take any action, or knowingly fail to take
any action, that would cause the Merger not to qualify as a reorganization
within the meaning of Section 368(a) of the Code.
(b) If and to the extent so requested by Patriot, and subject
to receipt of the consents referred to in Section 8.13(b) of the Wyndham
Disclosure Letter, Wyndham agrees that prior to the Closing Date, all direct or
indirect Subsidiaries of Wyndham holding "real estate assets" within the
meaning of Section 856 of the Code will be liquidated such that
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Wyndham holds all such assets, except as otherwise provided on Section 8.13 of
the Wyndham Disclosure Letter.
8.14 Stop Transfer. Wyndham acknowledges and agrees to be bound by
and comply with the provisions of the Proxy Agreement as if a party thereto
with respect to transfers of record ownership of shares of the Wyndham Common
Stock, and agrees to notify the transfer agent of the provisions of the Proxy
Agreement and to request that the transfer agent place a stop transfer order on
the shares that are subject to the provisions of such agreement.
8.15 Brand Conversions. Following the Effective Time, Patriot shall
review its portfolio of hospitality assets to determine which of such assets
should in Patriot's reasonable judgment be converted to the Wyndham brand.
8.16 Ratification by New Patriot. Unless this Agreement shall have
been earlier terminated in accordance with Section 10.1, following consummation
of the Business Combination, the Board of Directors of New Patriot shall
ratify, confirm and adopt this Agreement, the Merger and the other transactions
contemplated hereby; shall, pursuant to and in accordance with the terms of
this Agreement, enter into the Patriot Ratification Agreement following
consummation of the Business Combination; and shall recommend that the holders
of Patriot Stock adopt and approve this Agreement, the Patriot Ratification
Agreement and the Pairing Agreement Amendment at the Patriot's stockholders'
meeting.
8.17 Wyndham's Accumulated and Current Earnings and Profits. At the
Closing, Wyndham shall deliver to Patriot (A) a statement of accumulated and
current E&P of Wyndham (as determined for federal income tax purposes) as of a
date not more than thirty (30) days prior to the Closing Date, together with
evidence of such accumulated and current E&P of Wyndham (as determined for
federal income tax purposes) from Coopers & Lybrand LLP in a form reasonably
satisfactory to Patriot, and (B) a statement of estimated accumulated and
current E&P of Wyndham (as determined for federal income tax purposes) as of
the Closing Date. Wyndham further agrees that prior to the Closing Date, it
shall cause Coopers & Lybrand LLP to agree (i) to deliver to Patriot, prior to
December 25, 1997, a statement of accumulated and current E&P of Wyndham (as
determined for federal income tax purposes) at the Effective Time and (ii) that
Patriot shall be entitled to rely on such statement for purposes of preparing
and filing its federal, state, local and foreign tax returns required to be
filed by it, determining the amount of dividends to be paid to stockholders and
paying any Taxes owed by it.
8.18 Private Letter Ruling. As soon as reasonably practicable after
the execution of this Agreement, Patriot shall request from the Internal
Revenue Service (the "IRS") a private letter ruling (the "Ruling") concerning
the Independent Contractor Issue (as defined below). For purposes hereof, the
term "Independent Contractor Issue" shall mean a conclusion by the IRS that
rental income received by Patriot OP from BMOC and/or BMOC OP with respect to
real estate owned or leased by Patriot OP (the "Owned Real Estate") will
constitute "rents from real property," as such term is defined in Section
856(d) of the Code, even though a subsidiary of Patriot OP provides services to
BMOC and/or BMOC OP with respect to the Owned Real Estate pursuant to
management contracts. If the Ruling is obtained prior to the Effective Time,
Patriot, BMOC and Wyndham agree that they shall cooperate in good faith to
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restructure the assets of Patriot and BMOC consistent with the structure
described in the Structure Memorandum, subject to such modifications as to
which Patriot, BMOC and Wyndham may hereafter agree. If the Ruling is not
obtained prior to the Effective Time, unless Patriot, BMOC and Wyndham
otherwise agree, Wyndham shall, prior to the Effective Time, sell, transfer and
convey all issued and outstanding shares of capital stock of Wyndham Management
Corporation to BMOC, and at Patriot's election, such sale, transfer or
conveyance shall be qualified under Section 338(h)(10) of the Code.
8.19 Employee Benefit Matters. Patriot and Wyndham agree that the
Surviving Corporation and/or BMOC after the Effective Time will provide benefit
plans to the employees of Wyndham and the Wyndham Subsidiaries that will be
comparable, in the aggregate, to those provided by Wyndham and the Wyndham
Subsidiaries to their employees immediately prior to the date of this
Agreement. Notwithstanding the foregoing, nothing contained in this Agreement
shall be construed to grant any right of continued employment to any present
employee of Wyndham or any Wyndham Subsidiary. Patriot and BMOC agree that, as
reasonably promptly as practicable following the Effective Time, Patriot and
BMOC shall cause to be filed a registration statement on an appropriate form
under the Securities Act relating to the stock option plans of Patriot and BMOC
then in effect and covering the shares issuable upon exercise of the Assumed
Options.
8.20 Stock Purchase Agreement; Purchase and Sale Agreement. Patriot
shall perform its obligations under the Stock Purchase Agreement, and Patriot
and BMOC shall cause each of Patriot OP and BMOC OP, respectively, to perform
its obligations under the Purchase and Sale Agreement, provided that neither
the Principal Stockholder nor the Crow Family Entities are in material breach
of the terms of the Stock Purchase Agreement and Purchase and Sale Agreement,
respectively.
ARTICLE 9. CONDITIONS
9.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger and the other
transactions contemplated herein shall be subject to the fulfillment at or
prior to the Closing Date of the following conditions, any or all of which may
be waived, in whole or in part by the parties hereto, to the extent permitted
by applicable law:
(a) Stockholder Approvals.
(i) This Agreement, as ratified by New Patriot pursuant
to the Patriot Ratification Agreement, the Pairing Agreement Amendment and, if
required by applicable law or the rules of the NYSE, the Stock Purchase
Agreement, shall have been approved by the requisite vote of the stockholders
of Patriot; and
(ii) This Agreement, as ratified by New Patriot pursuant
to the Patriot Ratification Agreement, shall have been approved by the
requisite vote of the stockholders of Wyndham; and
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(iii) The BMOC Stock Issuance, the Pairing Agreement
Amendment, the BMOC Charter Amendment and, if required by applicable law or the
rules of the NYSE, the Stock Purchase Agreement, shall have been approved by
the requisite vote of the stockholders of BMOC.
(b) HSR Act. The waiting period applicable to consummation of
the Merger and, if applicable, the Stock Purchase, under the HSR Act, if
applicable, shall have expired or been terminated.
(c) No Injunctions or Restraints. Neither of the parties
hereto shall be subject to any order, ruling or injunction of a court of
competent jurisdiction which prohibits consummation of the transactions
contemplated by this Agreement. In the event any such order, ruling or
injunction shall have been issued, each party agrees to use its reasonable best
efforts to have any such order, ruling or injunction lifted, stayed or
reversed.
(d) Form S-4. The Form S-4 shall have been declared effective
by the SEC under the Securities Act, and no stop order suspending the
effectiveness of the Form S-4 shall have been issued by the SEC, and no
proceedings for that purpose shall have been initiated or, to the knowledge of
Patriot or Wyndham, threatened by the SEC.
(e) Listing. Patriot and BMOC shall have obtained the
approval for the listing of the Paired Shares of Patriot Stock and BMOC Stock
issuable in the Merger and the Stock Purchase on the NYSE, subject to official
notice of issuance.
(f) Consents, Approvals, Etc. All consents, authorizations,
orders and approvals of (or filings or registrations with) any governmental
commission, board, other regulatory body or third parties required to be made
or obtained by Patriot, BMOC or Wyndham and their respective subsidiaries and
affiliated entities in connection with the execution, delivery and performance
of this Agreement and the Ancillary Agreements shall have been obtained or
made, except where the failure to have obtained or made any such consent,
authorization, order, approval, filing or registration, could not reasonably be
expected to have (i) a Wyndham Material Adverse Effect or (ii) a material
adverse effect on the business, results of operations or financial condition of
New Patriot, the New Patriot Subsidiaries, BMOC and the BMOC Subsidiaries,
taken as a whole (a "New Patriot Material Adverse Effect"), as the case may be.
Notwithstanding the foregoing provisions of this Section 9.1(f), the
amendments, consents, authorizations, modifications and approvals relating to
the matters referred to in Section 9.3(j) shall not be a condition to the
obligations of Wyndham to effect the Merger.
(g) Business Combination. The Business Combination shall have
been consummated.
(h) Opinion of Counsel. At the Closing, Patriot and Wyndham
shall have received the opinion of Goodwin, Procter & Hoar LLP, or other
nationally recognized law firm selected by Patriot, and subject to customary
conditions and qualifications (including reliance, in part, on representations
of Patriot and Wyndham and certain stockholders of Wyndham), (i) to the effect
that (x) the Merger and the Stock Purchase will be treated for
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federal income tax purposes as a reorganization under Section 368(a) of the
Code, and (y) prior to the Merger, Patriot and New Patriot have qualified to be
treated as a REIT within the meaning of Sections 856-860 of the Code including,
without limitation, the requirements of Sections 856 and 857 of the Code, for
all applicable tax years to which Patriot and New Patriot's federal income tax
returns are subject to audit and Patriot and New Patriot are subject to
assessment for taxes reportable therein, and (z) after the Merger, New Patriot
will be organized in conformity with the requirements for qualifications as a
REIT under Sections 856 through 860 of the code, the manner of operation of New
Patriot has enabled it to meet the requirements for qualification as a REIT
under Sections 856 through 860 of the Code as of the Effective Time of the
Merger and the proposed manner of operations of New Patriot after the Merger
will enable New Patriot to qualify as a REIT under Sections 856 through 860 of
the Code, and (ii) confirming the prior opinions rendered to Wyndham in that
certain opinion letter of Goodwin, Procter & Hoar LLP dated as of the date
hereof.
9.2 Conditions to Obligations of Wyndham to Effect the Merger. The
obligation of Wyndham to effect the Merger shall be subject to the fulfillment
at or prior to the Closing Date of the following conditions, unless waived by
Wyndham:
(a) Representations and Warranties. Except as to such
breaches of the representations and warranties of Patriot made in this
Agreement, which, together with any breaches of the representations and
warranties made by New Patriot and BMOC in the Patriot Ratification Agreement
and the BMOC Ratification Agreement, respectively, individually or in the
aggregate, could not reasonably be expected to have a New Patriot Material
Adverse Effect (disregarding for such purposes all materiality and knowledge
qualifiers contained in the individual representations and warranties of
Patriot, BMOC and New Patriot contained in this Agreement, the BMOC
Ratification Agreement and the Patriot Ratification Agreement, respectively),
each of the representations and warranties of Patriot, BMOC and New Patriot
contained in this Agreement, the BMOC Ratification Agreement and the Patriot
Ratification Agreement, respectively, were true and correct when made on the
dates of this Agreement, the BMOC Ratification Agreement and the Patriot
Ratification Agreement, respectively, and each of the representations and
warranties of Patriot, BMOC and New Patriot contained in this Agreement, the
BMOC Ratification Agreement and the Patriot Ratification Agreement,
respectively, shall be true and correct in all material respects as of the
Closing Date (or to the extent a representation or warranty is by its terms
made as of another date, then as of such date) as though made on and as of the
Closing Date, except to the extent that the taking by Patriot of any of the
actions permitted by Sections 8.2(d)(i) and 8.2(d)(iii) (collectively, the
"Patriot Permitted Actions") or consummation of the Business Combination or any
of the transactions permitted by Sections 8.2(d)(ii), 8.2 (e) and 8.2(f)
(collectively, the "Permitted Transactions") has resulted in any of such
representations and warranties (other than the representations and warranties
contained in Sections 7.1(c), 7.5(iii) or (iv), 7.7, 7.9, 7.12 and 7.13 of this
Agreement to which this exception shall not apply, unless such inaccuracy
relates to any event, matter or condition disclosed in BMOC's or CJC's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 filed with the
SEC, the preliminary proxy statement filed by Patriot on or about February 26,
1997 relating to the Business Combination (the "Business Combination
Preliminary Proxy Statement") or the Patriot Disclosure Letter) being
inaccurate as of the Closing Date, in which case, each such representation and
warranty shall for such purpose be deemed to be qualified by the phrase "except
to the extent that the
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[Patriot Permitted Action(s)] [Patriot Permitted Transaction(s)] has caused
this representation and warranty to be inaccurate as stated as of the Closing
Date," and a reference to the applicable Patriot Permitted Action or Patriot
Permitted Actions and/or Patriot Permitted Transaction or Patriot Permitted
Transactions shall be deemed to be substituted for the phrases "[Patriot
Permitted Action(s)]" and "[Patriot Permitted Transaction(s)]" therein.
Wyndham shall have received a certificate, dated the Closing Date, signed on
behalf of Patriot by an authorized officer of Patriot to the foregoing effect.
(b) Performance of Obligations. Patriot and BMOC shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement, the New Patriot Ratification Agreement
and the BMOC Ratification Agreement to be performed or complied with by Patriot
or BMOC, as the case may be, on or prior to the Closing Date.
(c) Absence of Patriot Changes. From the date of this
Agreement through the Closing Date, there shall not have occurred any changes
concerning Patriot or any of the Patriot Subsidiaries that, when combined,
without duplication, with all other changes concerning Patriot, any of the
Patriot Subsidiaries, BMOC, any of the BMOC Subsidiaries, CJC or any of the CJC
Subsidiaries (collectively, "New Patriot Changes"), have had or could be
reasonably likely to have a New Patriot Material Adverse Effect; provided,
however, that consummation of any of the Patriot Permitted Transactions or the
taking of any of the Patriot Permitted Actions shall not, in and of itself, be
deemed a New Patriot Material Adverse Effect. Wyndham shall have received a
certificate, dated the Closing Date, signed on behalf of Patriot by an
authorized officer of Patriot to the foregoing effect.
(d) Absence of BMOC and CJC Changes. From the date of this
Agreement through the Closing Date, there shall not have occurred any changes
concerning BMOC or any of the BMOC Subsidiaries or CJC or any of the CJC
Subsidiaries that, when combined, without duplication, with all other New
Patriot Changes, have had or could be reasonably likely to have a New Patriot
Material Adverse Effect; provided, however, that any event, matter or condition
disclosed in BMOC' or CJC's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 filed with the SEC, the Business Combination
Preliminary Proxy Statement or the Patriot Disclosure Letter shall not be
deemed a New Patriot Material Adverse Effect; and provided, further, that
consummation of any of the Patriot Permitted Transactions or the taking of any
of the Patriot Permitted Actions shall not, in and of itself, be deemed a New
Patriot Material Adverse Effect. Wyndham shall have received a certificate,
dated the Closing Date, signed on behalf of Patriot and BMOC by an authorized
officer of Patriot and BMOC, respectively, to the foregoing affect.
(e) Stock Purchase Agreement. The Stock Purchase shall have
been consummated.
(f) Registration Rights Agreement. Patriot and BMOC shall
have entered into the Registration Rights Agreement in substantially the form
of Exhibit B.
(g) Composition of Board of Directors. The Boards of
Directors of Patriot and BMOC shall have been fixed and elected in the manner
provided in Sections 4.1 and 4.3
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and shall consist of the directors designated as provided therein, and the
officers of Patriot and BMOC shall be elected as provided in Sections 4.2 and
4.4 and shall consist of the officers designated as provided therein.
(h) Ratification Agreements; Wyndham/BMOC Subscription
Agreement. Patriot shall have entered into the Patriot Ratification Agreement
and BMOC shall have entered into the BMOC Ratification Agreement and the
Wyndham/BMOC Subscription Agreement.
(i) Cooperation Agreement. Patriot and BMOC shall have
entered into the Cooperation Agreement in substantially the form of Exhibit A
hereto.
9.3 Conditions to Obligation of Patriot to Effect the Merger. The
obligations of Patriot to effect the Merger shall be subject to the fulfillment
at or prior to the Closing Date of the following conditions, unless waived by
Patriot:
(a) Representations and Warranties. Except as to such
breaches of the representations and warranties, individually or in the
aggregate, which could not reasonably be expected to have a Wyndham Material
Adverse Effect (disregarding for such purposes all materiality and knowledge
qualifiers contained in the individual representations and warranties of
Wyndham contained in this Agreement), each of the representations and
warranties of Wyndham contained in this Agreement shall be true and correct as
of the date of this Agreement and as of the Closing Date (or to the extent a
representation or warranty is by its terms made as of another date, then as of
such date) as though made on and as of the Closing Date, except to the extent
that the taking by Wyndham of any of the actions permitted by Sections
8.2(b)(ii) and 8.2(b)(vii) (collectively, the "Wyndham Permitted Actions") or
any of the transactions permitted by Sections 8.2(c) and 8.2 (f) (collectively,
the "Wyndham Permitted Transactions") has resulted in any of such
representations and warranties being inaccurate as of the Closing Date, in
which case, each such representation and warranty shall for such purpose be
deemed to be qualified by the phrase "except to the extent that the [Wyndham
Permitted Action(s)] [Wyndham Permitted Transaction(s)] has caused this
representation and warranty to be inaccurate as stated as of the Closing Date,"
and a reference to the applicable Wyndham Permitted Action or Wyndham Permitted
Action(s) and/or Wyndham Permitted Transaction or Wyndham Permitted
Transactions shall be deemed to be substituted for the phrases "[Wyndham
Permitted Action(s)]" and "[Wyndham Permitted Transaction(s)]" therein.
Patriot shall have received a certificate, dated the Closing Date, signed on
behalf of Wyndham by an authorized officer of Wyndham to the foregoing effect.
(b) Performance of Obligations. Wyndham shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement, the New Patriot Ratification Agreement and the BMOC
Ratification Agreement to be performed or complied with by it on or prior to
the Closing Date.
(c) Absence of Changes. From the date of this Agreement
through the Closing Date, there shall not have occurred any changes concerning
Wyndham or any of the Wyndham Subsidiaries that, when combined with all other
changes, have had or could be reasonably likely to have a Wyndham Material
Adverse Effect, and Patriot shall have received
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a certificate, dated the Closing Date, signed on behalf of Wyndham by an
authorized officer of Wyndham to the foregoing effect; provided, however, that
consummation of the transaction permitted by Section 8.2(c) shall not, in and
of itself, be deemed a Wyndham Material Adverse Effect.
(d) Purchase and Sale Agreement. The closing of the
transactions contemplated by the Purchase and Sale Agreement shall have become
effective subject only to the Merger becoming effective at the Effective Time,
except that such consummation shall not be a condition to Patriot's obligations
if Patriot is in material breach of the terms of the Purchase and Sale
Agreement.
(e) Stock Purchase Agreement. The Stock Purchase shall have
been consummated, except that such effectiveness shall not be a condition to
Patriot's obligations if Patriot is in material breach of the terms of the
Stock Purchase Agreement.
(f) Restructuring of Wyndham Assets. Wyndham shall have
completed the restructuring of certain assets of Wyndham and/or Wyndham
Subsidiaries as described in Section 8.13(b) hereof, and shall have obtained
all necessary and required waivers in connection therewith (or waivers
thereof).
(g) Ratification Agreements. Wyndham shall have entered into
the Patriot Ratification Agreement and the BMOC Ratification Agreement.
(h) Cooperation Agreement. Wyndham shall have provided to
Patriot, within ten (10) business days following the date on which Patriot and
BMOC execute and deliver the Cooperation Agreement in substantially the form of
Exhibit A hereto, written confirmation of the acknowledgment and acceptance by
Wyndham of such execution and delivery, provided that Patriot shall have
provided to Wyndham written notice of such execution and delivery at least
eleven (11) business days prior to the Closing Date.
(i) Wyndham Debentures. Wyndham shall have (A) repurchased,
redeemed or otherwise retired the Notes in accordance with the terms and
conditions of the Indenture on terms reasonably satisfactory to Patriot, or (B)
caused the Indenture to be amended to remove or defease those covenants,
agreements and undertakings selected by Patriot that may be removed or defeased
in accordance with the Indenture, on terms reasonably satisfactory to Patriot.
(j) Anatole and Hospitality Properties Trust. Wyndham shall
have received to Patriot's satisfaction (A) all amendments, consents,
authorizations, modifications and approvals summarized in Sections A and C of
Schedule II of the Purchase and Sale Agreement and (B) such amendments,
consents, authorizations, modifications and approvals required under any lease
or related management contract of a Wyndham Property or a hotel property leased
or managed by a Wyndham Affiliate owned by Hospitality Properties Trust or an
Affiliate thereof to the transactions contemplated by this Agreement.
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ARTICLE 10. TERMINATION; AMENDMENT; WAIVER
10.1 Termination. This Agreement may be terminated and abandoned at
any time prior to the Effective Time, whether before or after approval of
matters presented in connection with the Merger by the stockholders of the
Wyndham and Patriot:
(a) by mutual written consent of Patriot and Wyndham; or
(b) by either Patriot or Wyndham, if any United States federal
or state court of competent jurisdiction or other governmental entity shall
have issued a final order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger or the
BMOC Stock Issuance or the Purchase and Sale and such order, decree, ruling or
other action shall have become final and nonappealable, provided that the party
seeking to terminate shall have used its best efforts to appeal such order,
decree, ruling or other action; or
(c) by either Patriot or Wyndham, if the Merger shall not have
been consummated on or before December 7, 1997 (other than due to the failure
of the party seeking to terminate this Agreement to perform its obligations
under this Agreement required to be performed at or prior to the Effective
Time); or
(d) by either Patriot or Wyndham if the Business Combination
shall not have been consummated on or before September 1, 1997 (other than due
to the failure of the party seeking to terminate this Agreement to perform its
obligations under this Agreement required to be performed at or prior to the
Effective Time or, in the case of Patriot, its obligations under the Business
Combination Agreement required to be performed on or prior to September 1,
1997); or
(e) by either Patriot or Wyndham, if any required approval of
the stockholders of Patriot, BMOC or Wyndham that is a condition to the
obligations of Patriot or Wyndham under Section 9.1 shall not have been
obtained by reason of the failure to obtain the required vote upon a vote held
at a duly held meeting of stockholders or at any adjournment thereof; or
(f) by either Patriot or Wyndham, if (X) Congress shall have
enacted, or proposed the enactment of, legislation or any bill having the
effect of (A) eliminating the "grandfathered" status of Patriot under Section
269B(a)(3) of the Code by virtue of Section 136(c)(3) of the Deficit Reduction
Act of 1984, or (B) causing the Merger and the Stock Purchase to fail to be
treated for federal income tax purposes as a reorganization under Section
368(a) of the Code, or otherwise eliminating the treatment of the Merger and
the Stock Purchase for federal income tax purposes as a reorganization under
Section 368(a) of the Code, or (Y) Congress shall have enacted legislation or
any bill having the effect of causing Wyndham to recognize gain as a result of
the Merger; or
(g) by Patriot, if Wyndham shall have (i) withdrawn, modified
or amended in any respect adverse to Patriot its approval or recommendation of
this Agreement or any of the transactions contemplated herein, (ii) failed to
include such recommendation in the Proxy
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Statement, (iii) recommended any Acquisition Proposal from a person other than
Patriot or any of its Affiliates, (iv) publicly expressed no opinion and
remained neutral toward any Acquisition Proposal, or (v) resolved to do any of
the foregoing, provided that, in any such case, Wyndham shall within five (5)
business days after demand by Patriot, deposit the Section 10.3(a)(i) Amount
(as hereinafter defined) with the escrow agent to be distributed in accordance
with Section 10.4; or
(h) by Wyndham, if, notwithstanding the provisions of Section
8.1, the Board of Directors of Wyndham determines in good faith, after
receiving advice of Wyndham Legal Counsel, that such action is necessary in
order for the Board of Directors of Wyndham to comply with the directors'
fiduciary duties to stockholders under applicable law and the Board of
Directors of Wyndham authorizes or desires to authorize Wyndham to execute an
agreement (a "Superior Proposal Agreement") providing for a Superior Proposal
(as hereinafter defined), provided that Wyndham has, prior to the termination
of this Agreement and/or the execution of such Superior Proposal Agreement,
deposited the Section 10.3(a)(i) Amount with the escrow agent to be distributed
in accordance with Section 10.4. For purposes of this Agreement, a "Superior
Proposal" means any bona fide Acquisition Proposal, the terms of which the
Board of Directors of Wyndham determines in its good faith judgment, after
receiving advice from a financial advisor of national standing, to be more
favorable to Wyndham's stockholders than the Merger; or
(i) by Wyndham, if (A) Patriot has failed to perform in any
material respect any of its obligations required to be performed by it under
this Agreement, the Patriot Ratification Agreement or the Stock Purchase
Agreement and such failure continues for more than 30 days after notice unless
failure to so perform has been caused by or results from a breach of this
Agreement by Wyndham, or (B) BMOC has failed to perform in any material respect
any of its obligations required to be performed by it under the Wyndham/BMOC
Subscription Agreement or the BMOC Ratification Agreement and such failure
continues for more than 30 days after notice unless failure to so perform has
been caused by or results from a breach of the Wyndham/BMOC Subscription
Agreement by Wyndham; or
(j) by Wyndham, if the (A) Board of Directors of New Patriot
fails to ratify, confirm and adopt this Agreement, the Patriot Ratification
Agreement and the other transactions contemplated hereby on or prior to the
twentieth business day following consummation of the Business Combination (the
"Business Combination Date"), or in the event that New Patriot shall not have
entered into the New Patriot Ratification Agreement on or prior to such
twentieth business day, or (B) the Board of Directors of BMOC fails to ratify,
confirm and adopt this Agreement, the BMOC Ratification Agreement and the other
transactions contemplated hereby on or prior to the twentieth business day
following the Business Combination Date, or in the event that BMOC shall not
have entered into the BMOC Ratification Agreement on or prior to such twentieth
business day; or
(k) by Patriot, if (A) Wyndham shall have failed to perform
in any material respect any of its obligations required to be performed by it
under this Agreement and such failure continues for more than 30 days after
notice unless failure to so perform has been caused by or results from a breach
of this Agreement by Patriot, (B) if Wyndham has failed to perform in any
material respect any of its obligations required to be performed by it under
the
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Wyndham/BMOC Subscription Agreement and such failure continues for more than 30
days after notice unless failure to so perform has been caused by or results
from a breach of the Wyndham Subscription Agreement by BMOC, or (C) if Wyndham
shall not have entered into the Patriot Ratification Agreement or the BMOC
Ratification Agreement on or prior to the twentieth business day following the
Business Combination Date; or
(l) by Wyndham, in accordance with and subject to Section
5.2(a), if the Average Closing Price of a Paired Share of Patriot Stock and
BMOC Stock is less than $40.21 (as may be adjusted pursuant to Section 5.2(a));
or
(m) by Wyndham, if (i) Wyndham has provided written notice to
Patriot of its desire to terminate this Agreement upon the expiration of the
Wyndham Notice Period, and (ii) Patriot has not provided written notice to
Wyndham prior to the expiration of the Patriot Notice Period to the effect that
the Board of Directors of Patriot has, notwithstanding its earlier decision,
determined not to proceed with an Additional Liberty Investment, in each case
in accordance with the terms of Section 8.2(e).
(n) by Patriot or Wyndham, if the Stock Purchase Agreement has
been terminated pursuant to Section 1.1(a) or Section 5.7(a)(vi) thereof.
10.2 Effect of Termination. In the event of termination of this
Agreement by either Wyndham or Patriot as provided in Section 10.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Patriot or Wyndham, other than the provisions of
Section 8.5(b), this Section 10.2, Sections 8.11, 10.3 and 11.4 and the last
sentence of Section 11.3. Nothing contained in this Section 10.2 shall relieve
any party for any willful breach of the representations, warranties, covenants
or agreements set forth in this Agreement.
10.3 Termination Fees and Expenses.
(a) As a condition to the willingness of Patriot and Wyndham
to enter into this Agreement and to compensate Patriot and Wyndham for entering
into this Agreement, taking action to consummate the transactions hereunder and
incurring the costs and expense related thereto, each of Patriot and Wyndham
agree as follows:
(i) Wyndham shall deposit with the escrow agent an
amount in cash equal to $30,000,000 (the "Section 10.3(a)(i) Amount") in
accordance with and subject to the provisions of Section 10.1(g) and Section
10.1(h).
(ii) If Patriot or Wyndham shall have terminated this
Agreement pursuant to Section 10.1(d), then Patriot shall pay to Wyndham an
amount in cash equal to $25,000,000, provided that in the case of such
termination by Wyndham, such amount shall be payable only if Wyndham is not in
material breach at the time of termination of this Agreement (which breach has
continued for more than 30 days after notice or cannot reasonably be expected
to be cured within such period (unless such breach was caused by or resulted
from a breach of this Agreement by Patriot)).
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(iii) If Wyndham shall have terminated this Agreement
pursuant to Section 10.1(j), then Patriot shall pay to Wyndham an amount in
cash equal to $50,000,000.
(iv) If (A) Patriot or Wyndham shall have terminated
this Agreement pursuant to Section 10.1(e) due to the failure of any required
approval of the stockholders of Patriot or BMOC, or (B) Wyndham shall have
terminated this Agreement pursuant to Section 10.1(m), then Patriot shall pay
Wyndham an amount in cash equal to Wyndham's documented out-of-pocket fees and
expenses ("Expenses") actually incurred by it prior to such termination in
connection with this Agreement and the transactions contemplated hereby,
including, without limitation, fees and expenses of accountants, attorneys and
investment bankers; provided that the aggregate amount of Expenses required to
be reimbursed pursuant to this Section 10.3(a)(iv) shall not exceed $7,000,000,
and provided, further, that in the case of such a termination by Wyndham, such
amount shall be payable only if Wyndham is not in material breach at the time
of termination of this Agreement (which breach has continued for more than 30
days after notice or cannot reasonably be expected to be cured within such
period (unless such breach was caused by or resulted from a breach of this
Agreement by Patriot)).
(b) Any payment required to be paid by Patriot to Wyndham
pursuant to this Section 10.3 shall be payable (by wire transfer of immediately
available funds to an account designated by Wyndham) contemporaneously with,
and as a condition to the effectiveness of, a termination by Patriot, and, in
the case of a termination by Wyndham, within five (5) business days after
demand by Wyndham.
10.4 Payment of Termination Amount or Expenses.
(a) In the event that Wyndham is obligated to deposit with the
escrow agent the Section 10.3(a)(i) Amount as provided in Sections 10.1(g) and
10.1(h), the escrow agent shall pay to Patriot from the Section 10.3(a)(i)
Amount deposited into escrow in accordance with the next sentence, an amount
equal to the lesser of (i) the Section 10.3(a)(i) Amount and (ii) the sum of
(x) the maximum amount that can be paid to Patriot without causing Patriot to
fail to meet the requirements of Sections 856(c)(2) and (3) of the Code
determined as if the payment of such amount did not constitute income described
in Sections 856(c)(2)(A)-(H) or 856(c)(3)(A)-(i) of the Code ("Qualifying
Income"), as determined by Patriot's certified public accountants, plus (y) in
the event Patriot receives either (a) a letter from Patriot's counsel
indicating that Patriot has received a ruling from the IRS described in Section
10.4(b)(ii) or (b) an opinion from Patriot's counsel as described in Section
10.4(b)(ii), an amount equal to the Section 10.3(a)(i) Amount less the amount
payable under clause (x) above. To secure Wyndham's obligation to pay these
amounts, Wyndham shall deposit into escrow an amount in cash equal to the
Section 10.3(a)(i) Amount with an escrow agent selected by Patriot and on such
terms (subject to Section 10.4(b) as shall be agreed upon by Patriot and the
escrow agent.
(b) The escrow agreement shall provide that the Section
10.3(a)(i) Amount in escrow or any portion thereof shall not be released to
Patriot unless the escrow agent receives any one or combination of the
following: (i) a letter from Patriot's certified public accountants indicating
the maximum amount that can be paid by the escrow agent to Patriot without
causing Patriot to fail to meet the requirements of Sections 856(c)(2) and (3)
of the Code determined as if the payment of such amount did not constitute
Qualifying Income or a
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subsequent letter from Patriot's accountants revising that amount, in which
case the escrow agent shall release such amount to Patriot, or (ii) a letter
from Patriot's counsel indicating that Patriot received a ruling from the IRS
holding that the receipt by Patriot of the Section 10.3(a)(i) Amount would
either constitute Qualifying Income or would be excluded from gross income
within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively,
Patriot's legal counsel has rendered a legal opinion to Patriot to the effect
that the receipt by Patriot of the Section 10.3(a)(i) Amount would either
constitute Qualifying Income or would be excluded from gross income within the
meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow
agent shall release the remainder of the Section 10.3(a)(i) Amount to Patriot.
Wyndham agrees to amend this Section 10.4 at the request of Patriot as may
reasonably be necessary (and without substantial cost or burden to Wyndham) in
order to (x) maximize the portion of the Section 10.3(a)(i) Amount that may be
distributed to Patriot hereunder without causing Patriot to fail to meet the
requirements of Sections 856(c)(2) and (3) of the Code, (y) improve Patriot's
chances of securing a favorable ruling described in this Section 10.4(b) or (z)
assist Patriot in obtaining a favorable legal opinion from its counsel as
described in this Section 10.4(b); provided that Patriot's legal counsel has
rendered a legal opinion to Patriot to the effect that such amendment would not
cause Patriot to fail to meet the requirements of Section 856(c)(2) or (3) of
the Code. The escrow agreement shall also provide that any portion of the
Section 10.3(a)(i) Amount held in escrow for fifteen years shall be released by
the escrow agent to Wyndham. Wyndham shall not be a party to such escrow
agreement and shall not bear any cost of or have liability resulting from the
escrow agreement.
(c) Notwithstanding anything to the contrary set forth in this
Agreement, in the event Wyndham has not deposited the Section 10.3(a)(i) Amount
into escrow in accordance with Section 10.4 when obligated to do so and Patriot
is required to file suit to seek all or a portion of the Section 10.3(a)(i)
Amount, it shall be entitled to all expenses, including attorneys' fees and
expenses, which it has incurred in enforcing its rights hereunder; provided
that payment of such expenses shall be subject to the limitations of Section
10.4(a) (determined as if such expenses were included in the Section 10.3(a)(i)
Amount).
10.5 Extension; Waiver. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations
or other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the first sentence of
Section 11.5, waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
ARTICLE 11. GENERAL PROVISIONS
11.1 Nonsurvival of Representations, Warranties and Agreements. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall not survive the Merger,
provided, however, that the
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agreements contained in Article 5, the last sentences of Sections 8.4, 8.16 and
8.17, and Sections 8.10, 8.12, 8.15, 8.17, 8.18 and 8.19 and this Article 11
shall survive the Merger.
11.2 Notices. Any notice required to be given hereunder shall be in
writing and shall be sent by facsimile transmission (confirmed by any of the
methods that follow), courier service (with proof of service), hand delivery or
certified or registered mail (return receipt requested and first-class postage
prepaid) and addressed as follows:
If to Patriot: Patriot American Hospitality, Inc.
Tri-West Plaza
3030 LBJ Freeway
Suite 1500
Dallas, TX 75234
Attn: Paul A. Nussbaum
With copies to: Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: Gilbert G. Menna, P.C.
If to Wyndham: Wyndham Hotel Corporation
2001 Bryan Street
Suite 2300
Dallas, TX 75201
Attn: James D. Carreker
With copies to: Locke Purnell Rain Harrell
2200 Ross Avenue
Suite 2200
Dallas, TX 75201
Attn: M. Charles Jennings, Esq.
and:
Daniel A. Decker
Chairman, Special Committee of the Board
of Directors of Wyndham Hotel Corporation
2200 Ross Avenue
Suite 4200 West
Dallas, TX 75201
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
delivered.
11.3 Assignment; Binding Effect; Benefit. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned prior
to the Closing by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of
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the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, except for the provisions of Article 5 and Sections
8.10, 8.12 (including for the benefit of the Indemnified Parties) and 8.13,
nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto or their respective heirs, successors,
executors, administrators and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
11.4 Entire Agreement. This Agreement, the Exhibits, the Wyndham
Disclosure Letter and the Patriot Disclosure Letter and any documents expressly
identified in this Agreement as having been delivered by the parties in
connection herewith constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings among the partes with respect thereto except that the
Confidentiality Agreements shall remain in effect and shall be binding upon
Patriot and Wyndham in accordance with their respective terms. No addition to
or modification of any provision of this Agreement shall be binding upon any
party hereto unless made in writing and signed by all parties hereto.
11.5 Amendment. This Agreement may be amended by the parties hereto,
by action taken by their respective Boards of Directors, at any time before or
after approval of matters presented in connection with the Merger by the
stockholders of Wyndham, Patriot and BMOC, but after any such stockholder
approval, no amendment shall be made which by law requires the further approval
of stockholders without obtaining such further approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
11.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to its
rules of conflict of laws. Each of Wyndham, Patriot and BMOC hereby
irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of Delaware and of the United States of
America located in the State of Delaware (the "Delaware Courts") for any
litigation arising out of or relating to this Agreement and the transactions
contemplated hereby (and agrees not to commence any litigation relating thereto
except in such courts), waives any objection to the laying of venue of any such
litigation in the Delaware Courts and agrees not to plead or claim in any
Delaware Court that such litigation brought therein has been brought in any
inconvenient forum.
11.7 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof
each signed by less than all, but together signed by all of the parties hereto.
11.8 Headings. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
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11.9 Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and
vice versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa.
11.10 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties,
covenants or agreements contained in this Agreement. The waiver by any party
hereto of a breach of any provision hereunder shall not operate or be construed
as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
11.11 Incorporation. The Wyndham Disclosure Letter and the Patriot
Disclosure Letter and all Exhibits and Schedules attached hereto and thereto
and referred to herein and therein are hereby incorporated herein and made a
part hereof for all purposes as if fully set forth herein.
11.12 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
11.13 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions and other equitable remedies to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions thereof in any Delaware Court, this being in addition to any other
remedy to which they are entitled at law or in equity. Any requirements for
the securing or posting of any bond with respect to such remedy are hereby
waived by each of the parties hereto.
11.14 Certain Definitions.
(a) As used in this Agreement, the word "Subsidiary" or
"Subsidiaries" when used with respect to any party means any corporation,
partnership, joint venture, business trust or other entity, of which such party
directly or indirectly owns or controls at least a majority of the securities
or other interests having by their terms ordinary voting power to elect a
majority of the board of directors or others performing similar functions with
respect to such corporation or other organization or a majority of the economic
interest in such entity.
(b) As used in this Agreement, the word "person" means an
individual, a corporation, a partnership, an association, a joint-stock
company, a trust, a limited liability company, any unincorporated organization
or any other entity.
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(c) As used in this Agreement, the word "affiliate" shall have
the meaning set forth in Rule 12b-2 of the Exchange Act.
(d) As used in this Agreement, the phrase "transactions
contemplated by this Agreement" shall include without limitation, each act and
transaction to be performed or completed under this Agreement or any of the
Ancillary Agreements by any party hereto or thereto.
11.15 Schedules. Any fact or item disclosed in one section of any
Disclosure Letter or schedule hereto ("Schedule") shall be deemed to be
disclosed with respect to any other relevant section of such Disclosure Letter
or Schedule, whether or not an explicit cross-reference appears.
[remainder of page intentionally left blank]
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{Signature Page to Agreement and Plan of Merger}
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first written
above.
WYNDHAM HOTEL CORPORATION
ATTEST:
By: /s/ CARLA S. MORELAND By: /s/ JAMES D. CARREKER
------------------------------------ -------------------------------
Name: Carla S. Moreland Name: James D. Carreker
Title: Vice President - General Title: President
Counsel and Secretary
PATRIOT AMERICAN HOSPITALITY, INC.
ATTEST:
By: /s/ REX E. STEWART By: /s/ PAUL A. NUSSBAUM
------------------------------------ -------------------------------
Name: Rex E. Stewart Name: Paul A. Nussbaum
Title: Title: Chairman & CEO
<PAGE> 1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of April 14,
1997, is between Patriot American Hospitality, Inc., a Virginia corporation
("Purchaser"), and CF Securities, L.P., a Texas limited partnership
("Stockholder").
RECITALS
WHEREAS, Purchaser, California Jockey Club, a Delaware corporation
("Club") and Bay Meadows Operating Company, a Delaware corporation ("Operating
Company") have entered into an Agreement and Plan of Merger dated as of
February 24, 1997, pursuant to which Purchaser, Club and Operating Company
agreed to engage in a business combination among Purchaser, Club and Operating
Company (the "Business Combination");
WHEREAS, the shares of common stock, par value $.01 per share, of Club
and the shares of common stock, par value $.01 per share, of Operating Company
(the "Operating Company Stock") are paired and transferable and traded only in
combination as a single unit;
WHEREAS, upon the effectiveness of the Business Combination, Purchaser
will have merged with and into Club with Club being the surviving company (the
term "Purchaser", when used in a post-Business Combination context, shall mean
Club after the Business Combination becomes effective);
WHEREAS, the Stockholder is a major stockholder of Wyndham Hotel
Corporation, a Delaware corporation ("Wyndham");
WHEREAS, Purchaser and Wyndham are entering into an Agreement and Plan
of Merger of even date herewith (the "Merger Agreement") (all capitalized terms
used but not defined herein shall have the meanings set forth in the Merger
Agreement), pursuant to which Purchaser and Wyndham are agreeing to engage in a
merger transaction between Purchaser and Wyndham (the "Merger");
WHEREAS, pursuant to the Merger, Wyndham shall, upon consummation
thereof, have merged with and into Purchaser with Purchaser being the surviving
corporation, and holders of common stock, par value $.01 per share, of Wyndham
(the "Wyndham Common Stock") shall be entitled to receive shares of common
stock, par value $.01 per share, of Purchaser (the "Purchaser Stock") and
shares of Operating Company Stock which will be paired and transferable and
traded only in combination as a single unit (the "Paired Shares");
WHEREAS, as a condition to the willingness of Purchaser to enter into
this Agreement and the Merger Agreement, certain management stockholders of
Wyndham (the "Management Stockholders") and Stockholder have entered into a
Proxy Agreement, dated as of the date
<PAGE> 2
hereof (the "Proxy Agreement"), pursuant to which each of the Management
Stockholders and Stockholder have, among other things, granted to Purchaser an
irrevocable proxy to vote his, her or its shares of Wyndham Common Stock,
including the Stockholder Shares (as hereinafter defined), in favor of the
Merger Agreement;
WHEREAS, as a condition to the willingness of Purchaser to enter into
this Agreement and the Merger Agreement, Stockholder has entered into a
Standstill Agreement, dated as of the date hereof but to be effective upon
consummation of the Merger (the "Standstill Agreement"), pursuant to which
Stockholder has agreed to refrain from taking certain actions and to perform
certain other obligations with respect to Purchaser and the Paired Share
Consideration, Unpaired Share Consideration and Cash Consideration (as such
terms are hereinafter defined) to be issued to Stockholder hereunder, upon the
terms and subject to the conditions set forth in the Standstill Agreement;
WHEREAS, as of the date hereof, Stockholder beneficially owns 9,447,745
shares of Wyndham Common Stock (together with any shares of Wyndham Common
Stock acquired by Stockholder after the date hereof and prior to the
termination of this Agreement, whether upon the exercise of options, conversion
of convertible securities or otherwise, the "Stockholder Shares");
WHEREAS, it is intended that the Merger and the purchase by Purchaser of
the Stockholder Shares pursuant to this Agreement will be treated as an
integrated transaction that for federal income tax purposes qualifies as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code") and pursuant to which the consideration
received by the shareholders pursuant to the Merger Agreement and this
Agreement shall be tax-free to such shareholders to the extent such
consideration consists of Unpaired Share Consideration and, to the extent
consisting of Purchaser Stock, Paired Shares.
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement and consummate the Merger and certain other transactions contemplated
thereby, Purchaser has required that Stockholder agree, and Stockholder has
agreed, to sell to Purchaser the Stockholder Shares on the terms and conditions
provided for herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound, Purchaser and
Stockholder hereby agree as follows:
ARTICLE 1. PURCHASE AND SALE
1.1 Purchase and Sale of Stockholder Shares. On the Closing Date (as
hereinafter defined), immediately prior to the Merger (i) Stockholder shall
transfer, assign and deliver to Purchaser, and Purchaser shall purchase from
Stockholder, all of the Stockholder Shares and
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<PAGE> 3
(ii) Purchaser shall issue or cause to be issued to Stockholder and, if
required pursuant to the provisions of paragraph (b) below, pay or cause to be
paid to Stockholder in exchange therefor a combination of (x) Paired Shares of
Purchaser Stock and Operating Company Stock, (y) shares of unpaired Series A
Preferred Stock, par value $.01 per share, of Purchaser (the "Unpaired
Preferred Stock") and, if applicable, (z) cash, as follows:
(a) Determination of Consideration. At the Closing (as
hereinafter defined) Purchaser shall pay to Stockholder the number of Paired
Shares of Purchaser Stock and Operating Company Stock (the "Paired Share
Consideration") and the cash consideration, if any, that it would have received
pursuant to the Merger Agreement if it were still a stockholder of Wyndham at
the Effective Time (hereinafter used as defined in the Merger Agreement) and,
as such a stockholder, had made the Stockholder Cash Election (as hereinafter
defined), provided, however, that the Paired Share Consideration to be issued
to Stockholder shall be limited and reduced (after taking into account the cash
consideration to be paid to Stockholder as described above) so that (X) neither
Stockholder nor any other person will, immediately after the Closing, own, or
be deemed to own under the applicable attribution rules of Section 318 (as
modified by Section 856(d)(5)) of the Code, Paired Shares of Purchaser Stock
and Operating Company Stock in excess of 9.8% of the outstanding (excluding any
shares which are outstanding but not vested) Paired Shares of Purchaser Stock
and Operating Company Stock immediately after the Merger, and (Y) the receipt
thereof by Stockholder would not otherwise cause any amount derived or received
by, or allocated to, Purchaser to fail to qualify as "rents from real property"
by reason of Section 856(d)(2)(B) of the Code (such limitations set forth in
the foregoing clauses (X) and (Y) being referred to herein collectively as the
"Paired Ownership Limitations"). Stockholder shall also receive a number of
shares of Unpaired Preferred Stock (the "Unpaired Share Consideration") such
that the aggregate number of Paired Shares and shares of Unpaired Preferred
Stock issued as Paired Share Consideration and Unpaired Share Consideration
equals the number of Paired Shares that otherwise would be issued to the
Stockholders as Paired Share Consideration pursuant to the foregoing provisions
of this paragraph (a) but for the Paired Ownership Limitations; provided,
however, that the shares of Unpaired Preferred Stock to be issued as Unpaired
Share Consideration pursuant to the foregoing shall be reduced to the extent
that the issuance of such stock causes any rent derived or received by
Purchaser or its affiliates to fail to qualify as "rents from real property" by
reason of Section 856(d)(2)(B) of the Code or causes the Purchaser to be
"closely held" within the meaning of Section 856(a)(6) of the Code (such
limitations set forth in this proviso being referred to herein as the "Unpaired
Ownership Limitations"). To the extent that the number of shares of Unpaired
Preferred Stock to be issued as Unpaired Share Consideration is reduced
pursuant to the Unpaired Ownership Limitations, Stockholder shall receive cash
in lieu of Unpaired Share Consideration, with a share of Unpaired Preferred
Stock being valued for such purpose at a value equal to the "Fair Market Value"
(determined in accordance with Section 5.3(a) of the Merger Agreement) of a
Paired Share of Purchaser Stock and Operating Company Stock. Purchaser shall
reasonably determine, after taking into account the results of the
investigation described in Section 2.3
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<PAGE> 4
hereof and such other facts and circumstances known to Purchaser as are
relevant to such determination, the effect, if any, of the Paired Ownership
Limitations and the Unpaired Ownership Limitations on the relative amounts of
the types of consideration to be paid hereunder, but such limitations shall not
decrease or increase the total amount of the consideration payable hereunder;
provided, however, that if the product of the number of Paired Shares of
Purchaser Stock and Operating Company Stock constituting the Paired Share
consideration multiplied by the "Fair Market Value" (determined in accordance
with Section 5.3(a) of the Merger Agreement) of a Paired Share of Purchaser
Stock and Operating Company Stock is less than Fifty Million Dollars
($50,000,000), then Stockholder may terminate this Agreement at or prior to the
Closing. The Unpaired Preferred Stock shall have the provisions described on
Exhibit A hereto, unless Purchaser and Stockholder otherwise agree.
(b) Cash Election.
On or before the date that is three weeks before the date on which
Purchaser in good faith intends to make the general mailing to its stockholders
of the proxy material soliciting their votes with respect to the Merger
Agreement (but no more than a month before such date, such intended mailing
date being hereinafter referred to as the "Intended Mailing Date"), Purchaser
shall deliver to Stockholder a written notice notifying Stockholder of the date
on which Purchaser intends to make such mailing and requesting Stockholder to
make a cash election (the "Stockholder Cash Election") in the form it would be
permitted to make if it were a holder of Wyndham Common Stock at the Effective
Time. On or before the date that is two weeks before the Intended Mailing
Date, Stockholder shall deliver the Stockholder Cash Election to Purchaser.
1.2 Closing. Subject to the terms and conditions of this Agreement,
the closing of the purchase and sale of the Stockholder Shares (the "Closing")
shall take place (a) at the offices of Goodwin, Procter & Hoar LLP, Exchange
Place, Boston, Massachusetts, at 10:00 a.m., local time, on the day on which
the Closing of the Merger is to occur, assuming the last of the conditions set
forth in Article 3 shall have been fulfilled or waived in accordance herewith,
or (b) at such other time, date or place as the parties hereto may agree. The
date on which the Closing occurs is hereinafter referred to as the "Closing
Date." At the Closing, Purchaser shall transfer, assign and deliver to
Stockholder the Paired Share Consideration, the Unpaired Share Consideration
and, if applicable, any cash due under Section 1.1(a), against delivery to
Purchaser of certificates for the Stockholder Shares so purchased, duly
endorsed or accompanied by stock powers duly executed in blank. If
certificates, duly endorsed or accompanied by stock powers duly executed in
blank, for less than all of the Stockholder Shares are delivered to Purchaser
at the Closing, Purchaser may purchase the Stockholder Shares for which
certificates, duly endorsed or accompanied by stock powers duly executed in
blank, have been so delivered. At the Closing, each of Purchaser and
Stockholder shall also execute and deliver to the other the Registration Rights
Agreement attached hereto as
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<PAGE> 5
Exhibit B. In addition, Purchaser covenants that, on or before the Closing,
Purchaser shall have taken all actions necessary such that the representations
and warranties set forth in Section 2(a) of such agreement are true and correct
at Closing.
ARTICLE 2. REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Stockholder as follows:
(a) Organization and Good Standing. On the date hereof,
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Virginia and has all necessary
corporate power and authority to carry on its business and to own and lease the
assets which it owns and leases. At the Closing, Purchaser will be a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and will have all necessary corporate power and
authority to carry on its business and to own and lease the assets which it
owns and leases.
(b) Power and Authorization. Purchaser has the legal right,
power and authority to enter into and perform its obligations under this
Agreement and the other agreements and documents required to be delivered by it
hereunder. The execution, delivery and performance by Purchaser of this
Agreement have been duly authorized by all necessary corporate action on the
part of Purchaser. This Agreement constitutes the legal, valid and binding
obligation of Purchaser, enforceable against it in accordance with its terms.
The Paired Shares and shares of Unpaired Preferred Stock issued to the
Stockholders at the Closing will, when issued, be duly authorized, validly
issued, fully paid and non-assessable.
(c) SEC Documents. Purchaser has filed all required forms,
reports and documents with the Securities and Exchange Commission (the "SEC")
since December 31, 1995 (collectively, the "Purchaser SEC Reports"), which were
required to be filed after that date pursuant to the applicable requirements of
the Securities Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder (collectively, the "Securities Laws"). The
Purchaser SEC Reports were filed with the SEC in a timely manner. As of their
respective dates, the Purchaser SEC Reports (i) complied as to form in all
material respects with the applicable requirements of the Securities Laws and
(ii) did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading. Each of the consolidated balance sheets of Purchaser included in
or incorporated by reference into the Purchaser SEC Reports (including the
related notes and schedules) fairly presents the consolidated financial
position of Purchaser and the Purchaser Subsidiaries as of its date and each of
the consolidated statements of income, retained earnings
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<PAGE> 6
and cash flows of Purchaser included in or incorporated by reference into the
Purchaser SEC Reports (including any related notes and schedules) fairly
presents the results of operations, retained earnings or cash flows, as the
case may be, of Purchaser and the Purchaser Subsidiaries for the periods set
forth therein (subject, in the case of unaudited statements, to normal year-end
audit adjustments), in each case in accordance with generally accepted
accounting principles consistently applied during the periods involved, except
as may be noted therein and except, in the case of the unaudited statements, as
permitted by Form 10-Q pursuant to Section 13 or 15(d) of the Exchange Act.
(d) Consents and Approvals; No Violation. Neither the
execution and delivery of this Agreement by Purchaser nor the consummation of
the transactions contemplated hereby will (i) conflict with or result in any
breach of any provision of the certificate of incorporation or bylaws of
Purchaser, (ii) require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority,
except (A) as may be required pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (B) as may be required
under the "blue sky," takeover or securities laws of various states, or (C)
where the failure to obtain such consent, approval, authorization or permit, or
to make such filing or notification, would not reasonably be expected to have a
material adverse effect on the business, results of operations or financial
condition of Purchaser and the Purchaser Subsidiaries taken as a whole (a
"Purchaser Material Adverse Effect"), (iii) result in a default (or give rise
to any right of termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, license, agreement or other
instrument or obligation to which Purchaser or any of the Purchaser
Subsidiaries is a party or by which Purchaser or any of the Purchaser
Subsidiaries or any of their respective assets may be bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to which
requisite waivers or consents have been obtained or which, in the aggregate,
would not reasonably be expected to have a Purchaser Material Adverse Effect,
or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Purchaser, any of the Purchaser Subsidiaries or any of
their respective assets, except for violations which would not reasonably be
expected to have a Purchaser Material Adverse Effect.
(e) No Brokers. Neither Purchaser nor any of the Purchaser
Subsidiaries has entered into any contract, arrangement or understanding with
any person or firm which may result in the obligation of such entity or
Stockholder to pay any finder's fees, brokerage or agent's commissions or other
like payments in connection with the negotiations leading to this Agreement or
consummation of the transactions contemplated hereby, except that Purchaser has
engaged PaineWebber Incorporated ("PaineWebber") and Salomon Brothers Inc.
("Salomon Brothers") as its financial advisors in connection with the
transactions contemplated by this Agreement and is responsible for all fees,
commissions, and like payments arising from such engagements. Other than the
foregoing arrangements, Wyndham's arrangements with Smith Barney Inc. ("Smith
Barney"), the Special Committee of
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<PAGE> 7
the Board of Directors of Wyndham's arrangements with Merrill Lynch & Co.
("Merrill Lynch"), and the Stockholders' arrangements with Montgomery
Securities, Purchaser is not aware of any claim for payment of any finder's
fees, brokerage or agent's commissions or other like payments in connection
with the negotiations leading to this Agreement or consummation of the
transactions contemplated hereby.
2.2 Representations and Warranties of Stockholder. Stockholder
hereby represents and warrants to Purchaser as follows:
(a) Ownership of Shares. Stockholder (and, if applicable, any
Affiliate to which Stockholder has transferred any Stockholder Shares pursuant
to Section 5.14 hereof) owns of record or beneficially the Stockholder Shares
and such shares constitute all of the shares of Common Stock owned of record or
beneficially by such Stockholder. Stockholder will not sell or transfer any
Stockholder Shares except as permitted by Section 5.14 hereof or purchase or
acquire any other shares of Purchaser's stock prior to the Closing. Upon
transfer and delivery by Stockholder to Purchaser of the Stockholder Shares
owned by Stockholder pursuant to this Agreement, Purchaser shall acquire good
and marketable title to such shares, free and clear of all claims, liens,
charges, proxies (other than any agreement with Purchaser), encumbrances and
security interests (other than any created by Purchaser). Wyndham has
consented to the transactions contemplated by this Agreement and has waived any
and all rights it may have with respect to such transactions, including any
rights under the Stockholders' Agreement dated May 24, 1996 among Wyndham and
certain of its Stockholders.
(b) Organization and Good Standing. Stockholder is duly
organized, validly existing and in good standing under the laws of the State of
Texas.
(c) Power and Authorization. Stockholder has full legal
right, power and authority to enter into and perform its obligations under this
Agreement and the other agreements and documents required to be delivered by it
hereunder. The execution, delivery and performance by Stockholder of this
Agreement have been duly authorized by all necessary action on the part of
Stockholder. This Agreement constitutes the legal, valid and binding
obligation of Stockholder, enforceable against it in accordance with its terms.
(d) Consents and Approvals: No Violation. Neither the
execution and delivery of this Agreement by Stockholder nor the consummation by
Stockholder of the transactions contemplated hereby will (i) conflict with any
of the organizational documents of Stockholder, (ii) require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except (A) as may be required pursuant to
the HSR Act, (B) as may be required under the "blue sky," takeover or
securities laws of various states, or (C) where the failure to obtain such
consent, approval, authorization or permit, or to make such filing or
notification, could not have a material adverse effect on
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<PAGE> 8
the transactions contemplated hereby or the likelihood of their occurring (a
"Stockholder Material Adverse Effect"), (iii) result in a default (or give rise
to any right of termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, license, agreement or other
instrument or obligation to which Stockholder or any of its assets may be
bound, except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained or
which, in the aggregate, could not have a Stockholder Material Adverse Effect,
or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Stockholder or any of its assets, except for
violations which in the aggregate could not have a Stockholder Material Adverse
Effect.
(e) No Brokers. Stockholder has not entered into any
contract, arrangement or understanding with any person or firm which may result
in the obligation of such entity or Purchaser to pay any finder's fees,
brokerage or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or consummation of the transactions
contemplated hereby, except that Stockholder has engaged Montgomery Securities
as Stockholder's financial advisor in connection with the transactions
contemplated by this Agreement (and is responsible for all fees, commissions
and like payments arising from such engagement). Other than the foregoing
arrangements, Purchaser's arrangements with PaineWebber and Salomon Brothers,
and Wyndham's arrangements with Smith Barney and Merrill Lynch, Stockholder is
not aware of any claim for payment of any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
to this Agreement or consummation of the transactions contemplated hereby.
(f) Tax Matters. There is no plan or intention of
Stockholder, and to the best of the knowledge of Stockholder there is no
intention on the part of the other stockholders of Wyndham, to sell, exchange,
or otherwise dispose of a number of Paired Shares or Unpaired Preferred Shares
received in the Merger or pursuant to this Agreement that would reduce the
Wyndham stockholders' ownership of Purchaser Stock (including Unpaired
Preferred Shares and that portion of Paired Shares consisting of Purchaser
Stock) to a number of shares having a value, as of the effective date of the
Merger, of less than 50 percent of the value of all of the formerly outstanding
stock of Wyndham as of the same date. For purposes of this representation,
shares of Wyndham Common Stock exchanged for cash or other property (including
Paired Shares to the extent they consist of shares in Operating Company),
exchanged for cash in lieu of fractional Paired Shares or fractional Unpaired
Preferred Shares will be treated as outstanding Wyndham Common Stock on the
date of the transaction. Moreover, shares of Wyndham Common Stock and Paired
Shares (to the extent they consist of shares in Purchaser) and Unpaired
Preferred Shares held by Wyndham stockholders and otherwise sold, redeemed, or
disposed of prior or subsequent to the transaction will be considered in making
this representation.
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2.3 Covenants of Purchaser and Stockholder.
Stockholder agrees to cooperate with Purchaser after the date
hereof in determining and investigating whether there exist any circumstances
which could cause Purchaser to be "closely held" within the meaning of Section
856(a) of the Code or to derive or accrue or be allocated any amount that is
treated as other than "rents from real property" by reason of Section
856(d)(2)(B) of the Code and without limiting the foregoing agrees to provide
to Purchaser as promptly as practical all relevant information and documents
(or, with respect to information and documents which Stockholder does not have
or own, use commercially reasonable efforts to obtain and provide them to
Purchaser as promptly as practical) which Purchaser reasonably requests in
connection with such determination and investigation. Purchaser in turn agrees
to cooperate with Stockholder after the date hereof in connection with such
determination and investigation and without limiting the foregoing agrees to
discuss with Stockholder, at mutually convenient times, the facts and
circumstances which Purchaser believes are relevant to any such determination.
ARTICLE 3. CONDITIONS PRECEDENT
3.1 Mutual Condition. The obligations of Purchaser and Stockholder
to enter into and consummate the transactions contemplated hereby are subject
to the satisfaction or waiver by the parties to the Merger Agreement of the
conditions set forth in Section 9.1 of the Merger Agreement and to the approval
by the stockholders of Operating Company, if required, of the issuance of the
Unpaired Preferred Stock as contemplated by this Agreement.
3.2 Certain Conditions Precedent to Purchaser's Obligations. The
obligations of Purchaser to enter into and consummate the transactions
contemplated hereby are subject to the fulfillment (or waiver in writing by
Purchaser in its sole discretion) on or prior to the Closing Date of the
conditions that:
(a) the representations and warranties of Stockholder
contained in this Agreement shall be true and correct on and as of the date
hereof and in all material respects on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date;
(b) Stockholder shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by Stockholder on or prior to the Closing
Date;
(c) Stockholder shall have delivered to Purchaser
certificates, dated the Closing Date and signed by a duly authorized officer of
Stockholder, to the foregoing effect;
(d) Stockholder shall have delivered to Purchaser an opinion
of counsel to Stockholder as to the matters set forth in Sections 2.2(a), (b),
(c) and (d) hereof (provided that
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with respect to Sections 2.2(a) and (d) the opinion need only relate to such
factual matters as to which such counsel has knowledge);
(e) the conditions to the obligations of Purchaser to effect
the Merger set forth in Section 9.3 of the Merger Agreement (other than Section
9.3(e) thereof) shall have been satisfied or waived; and
(f) Stockholder shall have delivered a certificate as to its
non-foreign status in accordance with the regulations under Section 1445 of the
Code.
3.3 Certain Conditions Precedent to the Stockholder's Obligations.
The obligation of Stockholder to enter into and complete the transactions
contemplated hereby is subject to the fulfillment (or waiver in writing by
Stockholder in its sole discretion) on or prior to the Closing Date of the
conditions that:
(a) the representations and warranties of Purchaser contained
in the second sentence of Section 2.1(a) and in Sections 2.1(b), (c), (d) and
(e) in this Agreement shall be true and correct on and as of the date hereof
and in all material respects on and as of the Closing Date with the same force
and effect as though made on and as of the Closing Date;
(b) Purchaser shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by Purchaser on or prior to the Closing Date;
(c) Purchaser shall have delivered to Stockholder a
certificate, dated the Closing Date and signed by a duly authorized officer of
Purchaser, to the foregoing effect;
(d) Purchaser shall have delivered to Stockholder an opinion
of counsel to Purchaser as to the matters set forth in the second sentence of
Section 2.1(a) and in Sections 2.1(b) and (d) hereof (provided that with
respect to Section 2.1(d) the opinion need only relate to agreements as to
which such counsel has knowledge);
(e) Goodwin, Procter & Hoar LLP shall have delivered an
opinion addressed to Stockholder substantially to the same effect as the
opinion of Goodwin, Procter & Hoar LLP addressed to Stockholder and delivered
to it on the date hereof; and
(f) the conditions to the obligations of Wyndham to effect the
Merger set forth in Section 9.2 of the Merger Agreement (other than Section
9.2(e) thereof) shall have been satisfied or waived.
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ARTICLE 4. INDEMNIFICATION
4.1 Indemnification by Stockholder. Stockholder shall indemnify and
hold Purchaser and its officers, directors and shareholders harmless against
and in respect of any and all losses, costs, expenses, claims, damages,
obligations and liabilities, including interest, costs of investigation,
penalties and reasonable attorneys' fees and disbursements ("Damages") which
Purchaser or any such person may suffer, incur or become subject to arising out
of, based upon or otherwise in respect of any inaccuracy in or breach of any
representation or warranty of Stockholder made in or pursuant to this Agreement
or any breach or nonfulfillment of any covenant or obligation of Stockholder
contained in this Agreement.
4.2 Indemnification by Purchaser. Purchaser shall indemnify and hold
Stockholder and its officers, directors and partners harmless against and in
respect of any and all Damages which Stockholder or any such person may suffer,
incur or become subject to arising out of, based upon or otherwise in respect
of any inaccuracy in or breach of any representation or warranty of Purchaser
made in or pursuant to Sections 2.1(a), (b), (d) and (e) of this Agreement or
any breach or nonfulfillment of any covenant or obligation of Purchaser
contained in this Agreement.
4.3 Third Party Claims.
(a) Each party shall promptly notify the other of the
assertion by any third party of any claim with respect to which the
indemnification set forth in this Section relates. The indemnifying party
shall have the right, upon notice to the indemnified party within ten (10)
business days after the receipt of any such notice, to undertake the defense of
and, with the consent of the indemnified party (which consent shall not
unreasonably be withheld), to settle or compromise such claim. The failure of
the indemnifying party to give such notice and to undertake the defense of or
to settle or compromise such a claim shall constitute a waiver of the
indemnifying party's rights under this Section 4.3(a) and in the absence of
gross negligence or willful misconduct on the part of the indemnified party
shall preclude the indemnifying party from disputing the manner in which the
indemnified party may conduct the defense of such claim or the reasonableness
of any amount paid by the indemnified party in satisfaction of such claim.
(b) The election by the indemnifying party, pursuant to
Section 4.3(a), to undertake the defense of a third party claim shall not
preclude the party against which such claim has been made also from
participating or continuing to participate in such defense, so long as such
party bears its own legal fees and expenses for so doing.
ARTICLE 5. MISCELLANEOUS
5.1 Further Action. Stockholder and Purchaser shall, subject to the
fulfillment at or before the Closing Date of each of the conditions of
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may reasonably be required
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to effect the transactions contemplated hereby. Purchaser agrees that
following consummation of the Business Combination it shall use reasonable best
efforts to cause Operating Company to take such actions as this Agreement
contemplates that Operating Company will take in connection with the
transactions contemplated hereby.
5.2 Parties in Interest; Assignment. Neither of the parties to this
Agreement may assign any of its rights or obligations under this Agreement
without the prior written consent of the other party hereto provided, however,
that Stockholder may assign some or all of the Stockholder Shares and its
rights hereunder with respect to such shares if and to the extent and in the
manner specifically permitted by Section 2.2(a) hereof. Subject to the
foregoing, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
5.3 Entire Agreement; Amendments; Waiver. This Agreement, the Merger
Agreement, the Proxy Agreement and the Standstill Agreement each contain the
entire understanding between Stockholder and Purchaser with respect to its
specific subject matter. This Agreement may be amended only by written
instrument duly executed by the parties hereto. No party may waive any term,
provision, covenant or restriction of this Agreement except by a duly signed
writing referring to the specific provision to be waived.
5.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered personally
or transmitted by telex, fax or telegram, to the respective parties as follows:
(a) If to Stockholder, to it at:
CF Securities, LP.
2001 Ross Avenue
Suite 3200
Dallas, Texas 75201
Attention: Ms. Susan T. Groenteman
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<PAGE> 13
with copies to:
Crow Family Holdings
2001 Ross Avenue
Suite 3200
Dallas, Texas 75201
Attention: M. Kevin Bryant, Esq.
and:
Vinson & Elkins L.L.P.
2001 Ross Avenue
Suite 3700
Dallas, Texas 75201
Attention: Mr. Derek R. McClain
(b) If to Purchaser, to it at:
Patriot American Hospitality, Inc.
3030 LBJ Freeway
Suite 1500
Dallas, Texas 75234
Attention: President
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Gilbert G. Menna, P.C.
or to such other address as any party may have furnished to the others in
writing.
5.5 Governing Law. This Agreement will be governed by and construed
in accordance with the internal laws of the State of Delaware.
5.6 Survival. All representations, warranties, covenants and
agreements of the parties hereto shall survive indefinitely after the Closing,
except those contained in Section 2.1(c), which shall not survive the Closing.
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<PAGE> 14
5.7 Termination.
(a) This Agreement may be terminated and the transactions
contemplated herein may be abandoned at any time prior to the Closing:
(i) by Purchaser or Stockholder, if the Merger
Agreement shall have been terminated;
(ii) by mutual consent of Purchaser and Stockholder;
(iii) by Stockholder, if Purchaser has failed to perform
in any material respect any of its respective obligations required to be
performed by it under this Agreement and such failure continues for more
than 30 days after notice unless failure to so perform has been caused
by or results from a breach of this Agreement by Stockholder;
(iv) by Purchaser, if Stockholder shall have failed to
perform in any material respect any of the obligations required to be
performed by Stockholder under this Agreement and such failure continues
for more than 30 days after notice unless failure to so perform has been
caused by or results from a breach of this Agreement by Purchaser;
(v) by Stockholder, if the Operating Company
Ratification Agreement (as defined in the Merger Agreement) is not
executed and delivered by Operating Company on or prior to the 20th
business day following the date on which the Business Combination is
effected; or
(vi) by Purchaser, at any time (including on the Closing
Date) after the date which is five days following the date on which the
Business Combination becomes effective, if Purchaser shall reasonably conclude
that, as a result of circumstances discovered in connection with the
investigation referenced in Section 2.3 hereof or matters or information
obtained in any other manner, there is a realistic possibility (as such term is
defined in Treasury Regulation Section 1.6694-2(b)) that the amount of cash
required to be paid by Purchaser pursuant to the third sentence of Section
1.1(a) hereof would exceed Twenty-Five Million Dollars ($25,000,000) (a
"Realistic Possibility"). If Purchaser wishes to exercise its right to
terminate this Agreement pursuant to this Section 5.7(a)(vi), it shall send a
notice to Stockholder specifying in reasonable detail the facts and
circumstances, including, if applicable, those which relate to the attribution
of stock ownership, which have caused Purchaser to conclude that there is a
Realistic Possibility, such notice to be sent on or prior to the date (the
"Notice Date") which is at least eleven business days before the scheduled date
for Wyndham's stockholders' meeting to be held to consider and act upon the
Merger, provided, however, that Purchaser may send such a notice, or amend or
supplement any notice
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<PAGE> 15
previously sent, at any time prior to the Closing to reflect any change in
circumstances or any additional information obtained or learned by Purchaser
within five business days before, or at any time after, the Notice Date (any
notice, amendment or supplement sent pursuant to this sentence shall be
referred to herein as a "Preliminary Notice"). If Stockholder has not solved
or otherwise addressed by the Final Notice Date (as hereinafter defined), with
respect to any Preliminary Notice, the circumstances, matters or information
reflected in any such Preliminary Notice so that Purchaser no longer reasonably
concludes that there is a Realistic Possibility, then Purchaser may at any time
thereafter send Stockholder, or deliver to Stockholder at the Closing, an
additional notice (the "Final Notice") terminating this Agreement, and any such
Final Notice shall be effective when sent or delivered. The "Final Notice
Date" with respect to any Preliminary Notice shall be (x) the date which is ten
business days after the date on which Purchaser sends such Preliminary Notice
pursuant to this Section 5.7(a)(vi); provided, however, that if such
Preliminary Notice is sent later than the Notice Date, the Final Notice Date
shall be the later of (y) the date which is five business days after the date
on which the Purchaser sends such Preliminary Notice or (z) the earlier of (i)
the business day prior to the date scheduled for the Closing or (ii) the Final
Notice Date determined pursuant to clause (x) above; provided further, however,
that if the Final Notice Date shall be determined by using clause (y), the
scheduled date for the Closing shall be postponed until the business day
following the Final Notice Date, notwithstanding anything in this Agreement to
the contrary.
(b) A party terminating this Agreement pursuant to this
Section 5.7 shall give written notice thereof to each other party hereto,
whereupon this Agreement shall terminate and the transactions contemplated
hereby shall be abandoned without further action by any party; provided,
however, that if such termination is by Purchaser pursuant to Section
5.7(a)(iv) or if such termination is by Stockholder pursuant to Section
5.7(a)(iii), nothing herein shall affect the non-breaching party's right to
damages on account of such other party's breach.
5.8 Remedies. Stockholder acknowledge that the Stockholder Shares
are unique and that Purchaser will not have an adequate remedy at law if
Stockholder fails to perform any of its obligations hereunder, and Stockholder
agrees that Purchaser shall have the right, in addition to any other right it
has, to specific performance or equitable relief by way of injunction if
Stockholder fails to perform any of its obligations hereunder. Any
requirements for the securing or posting of any bond with respect to such
remedy are hereby waived. Stockholder agrees that its sole remedy after the
Closing concerning the performance or nonperformance by Purchaser under this
Agreement or in any way related to the subject matter of this Agreement, and
regardless of whether a claim is based in contract or in tort, shall be
indemnification pursuant to the provisions of Section 4 hereof and claims for
damages.
5.9 Counterparts; Headings. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall
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<PAGE> 16
constitute one and the same document. The article and section headings
contained herein are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
5.10 Expenses. Each of Purchaser and Stockholder shall pay the fees
and expenses it incurs in connection with this Agreement, other than as a
result of the breach hereof by the other party hereto.
5.11 Certain Definitions. For purposes of the Agreement:
(a) "beneficially owned" shall have the meaning set forth in
Rule 13d-3 promulgated under the Exchange Act, as such Rule is in effect on the
date hereof.
(b) "business day" means any day which is neither a Saturday
or Sunday nor a legal holiday on which banks are authorized or required to be
closed in New York, New York or Dallas, Texas.
(c) As used in this Agreement, the word "Subsidiary" or
"Subsidiaries" when used with respect to any party means any corporation,
partnership, joint venture, business trust or other entity, of which such party
directly or indirectly owns or controls at least a majority of the securities
or other interests having by their terms ordinary voting power to elect a
majority of the board of directors or others performing similar functions with
respect to such corporation or other organization.
(d) As used in this Agreement, the word "person" means an
individual, a corporation, a partnership, an association, a joint-stock
company, a trust, a limited liability company, any unincorporated organization
or any other entity.
(e) As used in this Agreement, the word "affiliate" shall have
the meaning set forth in Rule 12b-2 of the Exchange Act.
5.12 Condition Subsequent. If for any reason the Merger does not
become effective on the Closing Date or the first business day thereafter, the
transactions contemplated hereby shall be automatically rescinded, the parties
shall return any consideration they received to the parties who provided such
consideration (with duly executed stock powers, if appropriate), and this
Agreement shall be deemed null and void.
5.13 Consent by Wyndham. Wyndham hereby consents to the execution of
this Agreement and to the transactions contemplated hereby and hereby waives
any rights it may have with respect to the transactions contemplated hereby
under the Stockholders Agreement dated May 24, 1996 among Wyndham and the
stockholders named therein or any other agreement or document.
16
<PAGE> 17
5.14 Transfers to Affiliates. Notwithstanding the transfer
restrictions contained in Section 2.2(a) hereof, CF Securities, L.P. may
transfer any Stockholder Shares to an Affiliate (as defined in that certain
Standstill Agreement dated the date hereof by and between Purchaser and CF
Securities, L.P. (the "Standstill Agreement")); provided, that prior to any
such transfer any such Affiliate shall have executed and delivered an agreement
with Purchaser dated the date of the transfer pursuant to which such Affiliate
agrees to be bound by all of the terms and conditions of, and makes, as of a
time immediately prior to such transfer, each of the representations and
warranties contained in (applied to such Affiliate as if such Affiliate were CF
Securities L.P. for purposes thereof), this Agreement, the Standstill
Agreement, the Proxy Agreement and that certain Voting Agreement dated the date
hereof by and between Purchaser and CF Securities, L.P. (the "Voting
Agreement"); provided further, that no such transfer shall relieve CF
Securities, L.P. of any obligations in this Agreement, the Standstill
Agreement, the Proxy Agreement or the Voting Agreement, and CF Securities, L.P.
shall continue to be bound by such agreements as if such transfer had not
occurred.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
17
<PAGE> 18
{Signature Page to Stock Purchase Agreement}
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written.
PATRIOT AMERICAN HOSPITALITY, INC.
By: /s/ PAUL A. NUSSBAUM
-----------------------------------
Name: Paul A. Nussbaum
Title: Chairman & CEO
CF SECURITIES, L.P.
Mill Springs Holding, Inc.
By: /s/ HARLAN R. CROW
-----------------------------------
Name: Harlan R. Crow
Title: Chief Executive Officer
<PAGE> 19
CONSENTED TO FOR THE PURPOSES OF SECTION 5.13:
WYNDHAM HOTEL CORPORATION
By: /s/ CARLA S. MORELAND
---------------------------
<PAGE> 20
Exhibit A
Series A Preferred Stock Terms
DIVIDENDS The Series A Preferred Stock will be entitled to dividends
when, as and if declared and paid on the Paired Shares in
an amount equal to the dividend paid on the Paired Shares
(the sum of the dividends paid in respect of the common
shares of Club Stock and Operating Company Stock, which
shares together comprise the Paired Shares). Dividends on
the Series A Preferred Stock will rank pari passu with
dividends on the Paired Shares.
VOTING The Series A Preferred Stock will be entitled to one vote
per share, voting together as a class with the common
shares of Club which constitute part of the Paired Shares,
on any matter submitted for a vote of the stockholders of
Club.
CONVERSION The Series A Preferred Stock will be convertible at any
time into Paired Shares on a one-for-one basis by the
holders thereof, subject to the ownership restrictions set
forth in Club's charter and bylaws (the "Ownership
Restrictions"). In addition, the Series A Preferred Stock
will be mandatorily convertible at any time and in any
amount upon notice by Club, provided that the amount so
converted will not cause a violation of the Ownership
Restrictions.
LIQUIDATION Upon a liquidation, dissolution or winding up of Club, the
holders of the Series A Preferred Stock will be entitled
to receive, on a per share basis, (i) the Operating
Company Dissolution Preference (described below) and (ii)
a ratable share, together with the holders of the common
shares of Club which constitute part of the Paired Shares,
in the assets of Club available for distribution on the
common stock. "Operating Company Dissolution Preference"
means, as applicable, either (A) if Operating Company has
previously been or is simultaneously liquidated, dissolved
or wound up, a preference equal to the amount per share of
Operating Company Stock which was or will be received by
the holders of Operating Company Stock upon the
liquidation, dissolution or winding up of Operating
Company or (B) if Operating Company has not previously
been or is not simultaneously liquidated, dissolved or
wound up, a preference per share equal to an amount
determined by an independent investment banker selected by
Club's Board of Directors (with the agreement of the
majority holder of the Series A Preferred Stock, if there
is one at such time) to be equal to the then current value
of a share of Operating Company Stock, without regard to
the paired share structure. If Operating Company has been
previously liquidated, dissolved or wound up, then any
Operating Company Dissolution Preference will "accrue
interest" at the applicable federal rate
<PAGE> 21
from the date the liquidating distributions were made on
the Operating Company Stock unless and until paid.
AMOUNT TO BE
ISSUED Shares of Series A Preferred Stock will only be issued to
the extent that the issuance of Paired Shares would cause
a violation of the Ownership Restrictions.
<PAGE> 1
PROXY AGREEMENT
PROXY AGREEMENT, dated as of April 14, 1997 (this "Agreement"), among
Patriot American Hospitality, Inc., a Virginia corporation ("Patriot"), CF
Securities, L.P., a Texas limited partnership ("Family Securities" or the
"Principal Stockholder") and James D. Carreker, Leslie V. Bentley, Anne L.
Raymond and Stanley M. Koonce, Jr. (the "Management Stockholders"and, together
with the Principal Stockholder, the "Stockholders" and each a "Stockholder"),
and Wyndham Hotel Corporation, a Delaware corporation ("Wyndham").
WHEREAS, as of the date hereof each Stockholder owns (either
beneficially or of record), or in the case of the Trust Shares, has the right
to vote the number of shares of common stock, par value $.01 per share (the
"Wyndham Stock"), of Wyndham set forth on Exhibit A hereto (all such shares and
any shares of Wyndham hereafter acquired by the Stockholders prior to the
termination of this Agreement being referred to herein as the "Shares"); and
WHEREAS, Patriot, California Jockey Club, a Delaware corporation ("CJC")
and Bay Meadows Operating Company, a Delaware corporation ("OPCO") have entered
into an Agreement and Plan of Merger, dated as of February 24, 1997 (the
"Business Combination Agreement"), which provides, upon the terms and subject
to the conditions thereof, for the merger of Patriot with and into CJC (the
"CJC Merger") (the term "Patriot" shall mean "CJC" from and after the time the
CJC Merger becomes effective); and
WHEREAS, Family Securities and Patriot are entering into a Stock
Purchase Agreement dated as of the date hereof (the "Stock Purchase
Agreement"), which provides for Family Securities to sell Shares to Patriot and
OPCO; and
WHEREAS, Patriot and Wyndham are entering into an Agreement and Plan of
Merger, dated as of the date hereof (as the same may be amended from time to
time, the "Merger Agreement"), which provides, upon the terms and subject to
the conditions thereof, for the merger of Wyndham with and into CJC as
successor by merger to Patriot (the "Merger"); and
WHEREAS, as a condition to the willingness of Patriot to enter into the
Merger Agreement, Patriot has requested that each Stockholder agree, and, in
order to induce Patriot to enter into the Merger Agreement each such
Stockholder is willing to agree, to grant Patriot an irrevocable proxy to vote
the Shares pursuant to the terms and conditions hereof; and
WHEREAS, the Shares are subject to the provisions of a Stockholders'
Agreement, dated May 24, 1996 among Wyndham and the stockholders named therein
(the "Stockholders' Agreement"), certain of the Shares of the Management
Stockholders are subject to existing pledge agreements (the "Pledge
Agreements") as described in Exhibit B hereto and certain of the other Shares
of the Management Stockholders (the "Trust Shares") are held in trust pursuant
to the trust documents (the "Trusts") described in Exhibit C hereto (the
Stockholders' Agreement, the Pledge Agreements and the Trusts are hereinafter
collectively referred to as the "Existing Restrictions").
<PAGE> 2
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
Each Stockholder hereby severally represents and warrants to Patriot as
follows:
SECTION 1.01. Due Authority. Such Stockholder has full power,
corporate or otherwise, and authority to execute and deliver this Agreement and
to perform its obligations hereunder. This Agreement has been duly executed
and delivered by or on behalf of such Stockholder and, assuming its due
authorization, execution and delivery by Patriot, constitutes a legal, valid
and binding obligation of such Stockholder, enforceable against such
Stockholder in accordance with its terms.
SECTION 1.02. No Conflict; Consents. (a) The execution and delivery of
this Agreement by such Stockholder do not, and the performance by such
Stockholder of the obligations under this Agreement and the compliance by such
Stockholder with any provisions hereof do not and will not, (i) conflict with
or violate any law, statute, rule, regulation, order, writ, judgment or decree
applicable to such Stockholder or such Stockholder's Shares, (ii) conflict with
or violate the Stockholder's charter, bylaws, partnership agreement or other
organizational documents, if applicable, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of such Stockholder's Shares pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which such Stockholder is a party or by which
such Stockholder or such Stockholder's Shares are bound.
(b) The execution and delivery of this Agreement by such
Stockholder do not, and the performance of this Agreement by such Stockholder
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority by such
Stockholder except for applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended, and except where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, could not prevent or delay the performance by such Stockholder
of his or her obligations under this Agreement in any material respect.
(c) Such Stockholder is not, and will not be during the Proxy
Term (as hereinafter defined), in violation of or default under any of the
Pledge Agreements or any
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<PAGE> 3
related agreements, and no other person or entity has or will have during the
Proxy Term any right directly or indirectly to vote or control or affect the
voting of the Shares.
SECTION 1.03. Title to Shares. (a) Such Stockholder is the record or
beneficial owner of such Stockholder's Shares (or in the case of the Trust
Shares, has the full and complete right to vote, acting alone) free and clear
of any proxy or voting restriction (other than those provided in the
Stockholders' Agreement, all of which have been waived with respect to, and are
not applicable to, the actions and transactions contemplated by this
Agreement). The Shares set forth opposite such Stockholder's name on Exhibit A
hereto constitute all of the shares of Wyndham Stock owned of record or
beneficially by such Stockholder.
(b) Such Stockholder has, and during the Proxy Term will have
(except as a result of transfers permitted by Section 2.01), sole power of
disposition with respect to all of the Shares, subject to the Existing
Restrictions, and the sole voting power with respect to the matters (other than
the provisions in the Stockholders' Agreement with respect to the election of
directors, all of which provisions have been waived with respect to, and are
not applicable to, the actions and transactions contemplated by this Agreement)
set forth in Article II hereof with respect to all of the Shares.
SECTION 1.04. No Encumbrances. Such Stockholder's Shares and the
certificates representing such Shares are now and at all times during the Proxy
Term hereof (except as a result of transfers permitted by Section 2.01) will be
held by such Stockholder, or by a nominee or custodian for the benefit of such
Stockholder, the pledgees under the Pledge Agreements or the trustees under the
Trusts, free and clear of all proxies, voting trusts and voting agreements,
understandings or arrangements providing for any right on the part of any
person other than such Stockholder to vote such Shares (other than those
provided in the Stockholders' Agreement, all of which have been waived with
respect to, and are not applicable to, the actions and transactions
contemplated by this Agreement) and, subject to the Existing Restrictions, free
and clear of all liens, claims, security interests and any other encumbrances
whatsoever except any such encumbrances or proxies arising under this
Agreement.
SECTION 1.05. Acknowledgment of Reliance. Such Stockholder understands
and acknowledges that Patriot is entering into the Merger Agreement in reliance
upon such Stockholder's execution and delivery of this Agreement.
SECTION 1.06. Brokers. Patriot shall not be obligated or otherwise
liable for any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of any Stockholder.
Patriot hereby represents and warrants to each Stockholder as follows:
3
<PAGE> 4
SECTION 1.07. Due Authority. Patriot has full power, corporate or
otherwise, and authority to execute and deliver this Agreement and to perform
its obligations hereunder. This Agreement has been duly executed and delivered
by or on behalf of Patriot and, assuming its due authorization, execution and
delivery by each Stockholder and Wyndham, constitutes a legal, valid and
binding obligation of Patriot, enforceable against Patriot in accordance with
its terms.
SECTION 1.08. No Conflict; Consents. (a) The execution and delivery of
this Agreement by Patriot do not, and the performance by Patriot of the
obligations contemplated by this Agreement and the compliance by Patriot with
any provisions hereof do not and will not, (i) conflict with or violate any
law, statute, rule, regulation, order, writ, judgment or decree applicable to
Patriot, (ii) conflict with or violate Patriot's charter or bylaws or (iii)
result in any breach of or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Patriot is a party or by
which Patriot is bound.
(b) The execution and delivery of this Agreement by Patriot do
not, and the performance of this Agreement by Patriot will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority by Patriot except for applicable
requirements, if any, of the Securities Exchange Act of 1934, as amended, and
except where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, could not prevent or delay
the performance by Patriot of its obligations under this Agreement in any
material respect.
SECTION 1.09. Brokers. No Stockholder shall be obligated or otherwise
liable for any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by Patriot.
ARTICLE II
CERTAIN COVENANTS OF STOCKHOLDERS
Each Stockholder hereby covenants and agrees with Patriot as follows:
SECTION 2.01. Transfer of Shares. Other than pursuant to the terms of
the Stock Purchase Agreement and as otherwise provided herein, during the Proxy
Term each Stockholder shall not hereafter (a) sell, tender, transfer, pledge,
encumber, assign or otherwise dispose of any of such Stockholder's Shares, (b)
deposit such Stockholder's Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or grant any proxy or
power of attorney with respect thereto, (c) enter into any contract, option or
other arrangement or undertaking with respect to the direct or indirect sale,
transfer, pledge, encumbrance, assignment or other disposition of any Wyndham
Stock, or (d) take any
4
<PAGE> 5
action that would make any representation or warranty of such Stockholder
contained herein untrue or incorrect or have the effect of preventing or
disabling such Stockholder from performing such Stockholder's obligations under
this Agreement; provided, however, that such Stockholder may transfer or pledge
any of such Stockholder's Shares to a person or entity with Patriot's prior
written consent, which consent shall not be unreasonably withheld, it being
understood that withholding consent shall not be unreasonable if, without
limitation, Patriot determines such transfer or pledge may eliminate or reduce
in any manner the certainty or likelihood of the Shares being voted as
contemplated by this Agreement for any reason, including without limitation the
financial condition, identity or location of the transferee or pledgee, any
applicable legal restrictions or any other reason; provided further that no
such transfer or pledge shall be made unless prior thereto the proposed
transferee or pledgee shall have entered into a written agreement with Patriot,
containing terms and conditions reasonably satisfactory to Patriot, in which
such transferee or pledgee shall agree to be bound by all the terms and
conditions of this Agreement.
SECTION 2.02. Voting of Shares; Further Assurances. (a) Each
Stockholder, by this Agreement, with respect to those Shares that such
Stockholder owns of record, does hereby constitute and appoint Patriot, or any
nominee of Patriot, with full power of substitution, during and for the Proxy
Term, as such Stockholder's true and lawful attorney and irrevocable proxy, for
and in such Stockholder's name, place and stead, to vote each of such Shares as
such Stockholder's proxy, at every meeting of the stockholders of Wyndham or
any adjournment thereof or in connection with any written consent of Wyndham's
stockholders, (i) in favor of the adoption of the Merger Agreement and
approval of the Merger and the other transactions contemplated by the Merger
Agreement, (ii) against (x) any Acquisition Proposal, as that term is defined
in the Merger Agreement, and any proposal for any action or agreement that
would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of Wyndham under the Merger Agreement or which
could result in any of the conditions of Wyndham's obligations under the Merger
Agreement not being fulfilled and (y) any change in the directors of Wyndham,
any change in the present capitalization of Wyndham or any amendment to
Wyndham's certificate of incorporation or bylaws, any other material change in
Wyndham's corporate structure or business, or any other action which in the
case of each of the matters referred to in this clause (y) could reasonably be
expected to impede, interfere with, delay, postpone or materially adversely
affect the transactions contemplated by the Merger Agreement or the Stock
Purchase Agreement or the likelihood of such transactions being consummated,
and (iii) in favor of any other matter necessary for consummation of the
transactions contemplated by the Merger Agreement which is considered at any
such meeting of stockholders or in such consent, and in connection therewith to
execute any documents which are necessary or appropriate in order to effectuate
the foregoing or, at the request of Patriot, to permit Patriot to vote such
Shares directly. Each Stockholder further agrees to cause the Shares owned by
such Stockholder beneficially to be voted in accordance with the foregoing.
Each Stockholder intends this proxy to be irrevocable and coupled with an
interest during the Proxy Term and hereby revokes any proxy previously granted
by such Stockholder with respect to such Stockholder's Shares.
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<PAGE> 6
(b) Each Stockholder hereby further agrees, with respect to
any Shares not voted pursuant to paragraph (a) above, that during the Proxy
Term, at any meeting of stockholders of Wyndham, however called, or in
connection with any written consent of Wyndham's stockholders, such Stockholder
shall vote (or cause to be voted) the Shares held of record or beneficially by
such Stockholder, except as specifically requested in writing by Patriot in
advance, (i) in favor of the adoption of the Merger Agreement and approval of
the Merger and the other transactions contemplated by the Merger Agreement,
(ii) against (x) any Acquisition Proposal, as that term is defined in the
Merger Agreement, and any proposal for any action or agreement that would
result in a breach of any covenant, representation or warranty or any other
obligation or agreement of Wyndham under the Merger Agreement or which could
result in any of the conditions of Wyndham's obligations under the Merger
Agreement not being fulfilled or (y) any change in the directors of Wyndham,
any change in the present capitalization of Wyndham or any amendment to
Wyndham's certificate of incorporation or bylaws, any other material change in
Wyndham's corporate structure or business, or any other action which in the
case of each of the matters referred to in this clause (y) could reasonably be
expected to, impede, interfere with, delay, postpone or materially adversely
affect the transactions contemplated by the Merger Agreement or the Stock
Purchase Agreement or the likelihood of such transactions being consummated,
and (iii) in favor of any other matter necessary for consummation of the
transactions contemplated by the Merger Agreement which is considered at any
such meeting of stockholders or in such consent, and in connection therewith to
execute any documents which are necessary or appropriate in order to effectuate
the foregoing.
(c) Each Stockholder further agrees, with respect to any voting
securities of Patriot, CJC and OPCO held of record or beneficially by such
Stockholder or any affiliates of such Stockholder, that during the Proxy Term,
at any meeting of stockholders of Patriot, CJC or OPCO, however called, or in
connection with any written consent of Patriot's, CJC's or OPCO's stockholders,
such Stockholder shall vote (or cause to be voted) and cause its affiliates to
vote (or cause to be voted) such voting securities of, as applicable, Patriot,
CJC or OPCO (i) in favor of the adoption of the Business Combination Agreement
and the Merger Agreement and the other transactions contemplated by the
Business Combination Agreement and the Merger Agreement and any other matter
necessary for consummation of the transactions contemplated by the Merger
Agreement or the Business Combination Agreement which is considered at any such
meeting of stockholders or in such consent and (ii) against any matter which
could reasonably be expected to, impede, interfere with, delay, postpone or
materially adversely affect the transactions contemplated by the Merger
Agreement, the Stock Purchase Agreement or the Business Combination Agreement
or the likelihood of such transactions being consummated.
(d) For the purposes of this Agreement, "Proxy Term" shall
mean (A) with respect to the obligations of the Principal Stockholder
hereunder, the period from the execution of this Agreement until the earliest
of (w) the termination of the Merger Agreement pursuant to Section 10.1(h)
thereof, (x) the Effective Time, (y) the termination of the Merger Agreement
pursuant to Section 10.1(c) thereof or (z) thirty (30) days following a
termination of the Merger Agreement other than pursuant to Sections 10.1(c) or
10.1(h) thereof and
6
<PAGE> 7
(B) with respect to the obligations of the Management Stockholders hereunder,
the period from the execution of this Agreement until, in the case of any
termination of the Merger Agreement other than pursuant to Section 10.1(h) of
the Merger Agreement, the earliest of (i) thirty days after the date of any
such termination, (ii) the termination of the Merger Agreement pursuant to
Section 10.1(c) thereof or (iii) the Effective Time, and, in the case of any
termination pursuant to Section 10.1(h) of the Merger Agreement, December 7,
1997 if such termination occurs prior to November 7, 1997, or thirty (30) days
following the date of such termination if such termination occurs on or after
November 7, 1997.
(e) Each Stockholder agrees that such Stockholder will not
enter into any agreement or understanding with any person or entity or take any
action during the Proxy Term which will permit any person or entity to vote or
give instructions to vote the Shares in any manner inconsistent with the terms
of this Section 2.02. Each Stockholder further agrees to take such further
action and execute such other instruments as may be necessary to effectuate the
intent of this Agreement, including without limitation, any number of proxies
and other documents permitting Patriot to vote the Shares or to direct the
record owners thereof to vote the Shares in accordance with this Agreement.
SECTION 2.03. Certain Events. Each Stockholder agrees that this
Agreement and the obligations hereunder shall attach to such Stockholder's
Shares and, subject to the Pledge Agreements, shall be binding upon any person
or entity to which legal or beneficial ownership of such Shares shall pass,
whether by operation of law or otherwise, including without limitation, if
applicable, such Stockholder's heirs, guardians, administrators or successors.
SECTION 2.04. No Solicitation. During the Proxy Term, no Stockholder
shall, nor, to the extent applicable to such Stockholder, shall it permit any
of its affiliates (other than Wyndham to the extent permitted by Section 8.1)
to, nor shall it authorize any partner, officer, director, advisor or
representative of, such Stockholder or any of its affiliates (other than
Wyndham to the extent permitted by Section 8.1) to, (i) solicit, initiate or
knowingly encourage the submission of, any inquiries, proposals or offers from
any person relating to an Acquisition Proposal, (ii) enter into any agreement
with respect to any Acquisition Proposal (other than Wyndham to the extent
permitted by Section 10.1(h)), or (iii) enter into or participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or take any other action to knowingly facilitate any inquiries
or the making of any proposal that constitutes, or would reasonably be expected
to lead to, an Acquisition Proposal.
SECTION 2.05. Stop Transfer. (a) Each Stockholder agrees with, and
covenants to, Patriot that such Stockholder may not request that Wyndham
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of such Stockholder's Shares, unless
such transfer is made in compliance with this Agreement. Each Stockholder
agrees, with respect to any Shares in certificated form, that such Stockholder
will tender to Wyndham, within twenty business days after the date hereof, the
certificates representing such Shares and Wyndham will inscribe upon such
certificates the following legend, which Patriot or Wyndham, as the case may
be, shall cause to be removed promptly
7
<PAGE> 8
following the Proxy Term: "The shares of Common Stock, par value $.01 per
share, of Wyndham Hotel Corporation (the "Company"), represented by this
certificate are subject to a Proxy Agreement dated as of April 14, 1997, and
may not be sold or otherwise transferred, except in accordance therewith.
Copies of such Agreement may be obtained at the principal executive offices of
the Company." Each Stockholder agrees that, within ten business days after the
date hereof, such Stockholder will no longer hold any Shares, whether
certificated or uncertificated, in "street name" or in the name of any nominee.
Pursuant to the Merger Agreement, Wyndham has agreed to notify its transfer
agent of the provisions set forth in this Section and each Stockholder agrees
to provide such documentation and to do such other things as may be required to
give effect to such provisions with respect to such Shares.
(b) Each Stockholder hereby agrees to deliver to Patriot, on
or prior to the Closing Date, a written agreement substantially in the form
attached as Exhibit A to the Merger Agreement.
ARTICLE III
GENERAL PROVISIONS
SECTION 3.01. Severability. If any term or other provision of this
Agreement is determined to be invalid, illegal or incapable of being enforced
by any rule of law or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the extent possible.
SECTION 3.02. Entire Agreement. This Agreement constitutes the entire
agreement of the parties and supersedes all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
SECTION 3.03. Amendments. This Agreement may not be modified, amended,
waived, altered or supplemented, except upon the execution and delivery of a
written agreement executed by the parties hereto; provided, however, that
Patriot may in writing waive or consent to a modification of any provision of
this Agreement with respect to any Stockholder without the agreement of any
other party hereto.
SECTION 3.04. Assignment. This Agreement shall not be assigned by
operation of law or otherwise, except in accordance with Section 2.01.
8
<PAGE> 9
SECTION 3.05. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and, after the CJC
Merger, CJC, and nothing in this Agreement, express or implied, is intended to
or shall confer upon any other person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
SECTION 3.06. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof or was otherwise breached.
It is accordingly agreed that the parties shall be entitled to specific relief
hereunder, including, without limitation, an injunction or injunctions to
prevent and enjoin breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof, in any state or federal court in
the State of Delaware, in addition to any other remedy to which they may be
entitled at law or in equity. Any requirements for the securing or posting of
any bond with respect to any such remedy are hereby waived.
SECTION 3.07. Governing Law; Jurisdiction and Venue. This Agreement
shall be governed by, and construed in accordance with, the internal laws of
the State of Delaware without regard to its rules of conflict of laws. The
parties hereto hereby irrevocably and unconditionally consent to and submit to
the exclusive jurisdiction of the courts of the State of Delaware and of the
United States of America located in such state (the "Delaware Courts") for any
litigation arising out of or relating to this Agreement and the transactions
contemplated hereby (and agrees not to commence any litigation relating thereto
except in such courts), waives any objection to the laying of venue of any such
litigation in the Delaware Courts and agrees not to plead or claim in any
Delaware Court that such litigation brought therein has been brought in any
inconvenient forum.
SECTION 3.08. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 3.09. Definitions. Terms used in this Agreement and not
otherwise defined herein shall have the meanings set forth in the Merger
Agreement.
SECTION 3.10. Directors and Officers. Notwithstanding anything herein
to the contrary, the covenants and agreements set forth herein shall not
prevent any of the Stockholders or their representatives or designees who are
serving on the Board of Directors of Wyndham or who are officers of Wyndham
from taking any action, subject to the applicable provisions of the Merger
Agreement, while acting in such capacity as a director or officer of Wyndham.
SECTION 3.11. Stockholders' Agreement Consent. To the extent that the
execution or performance of this Agreement or the actions and transactions
contemplated hereby conflict with or violate, or would in the future conflict
with or violate, the provisions of the Stockholders' Agreement, Wyndham and the
Stockholders hereby consent to the execution and
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<PAGE> 10
delivery of this Agreement and comparable agreements with other stockholders of
Wyndham and the actions and transactions contemplated hereby and thereby and
agree that the provisions of this Agreement and those agreements shall control
and be deemed to supersede any such provisions in the Stockholders' Agreement.
SECTION 3.12. Exculpation. No Stockholder shall have any liability or
obligation whatsoever under or by reason of this Agreement (or a separate
similar agreement) because of a breach by any other stockholder of Wyndham of
its obligations hereunder or thereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10
<PAGE> 11
{Signature Page to Proxy Agreement}
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
PATRIOT AMERICAN HOSPITALITY, INC.
By: /s/ PAUL A. NUSSBAUM
-----------------------------------------
Name: Paul A. Nussbaum
Title: Chairman & CEO
CF SECURITIES, L.P.
By: Mill Spring Holdings, Inc.
its General Partner
By: /s/ HARLAN R. CROW
-----------------------------------------
Name: Harlan R. Crow
Title: Chief Executive Officer
/s/ JAMES D. CARREKER
--------------------------------------------
James D. Carreker
THE CARREKER DESCENDANTS TRUST
By: /s/ JAMES D. CARREKER
-----------------------------------------
Name: James D. Carreker
Title: Trustee
/s/ LESLIE V. BENTLEY
--------------------------------------------
Leslie V. Bentley
THE LISA SUSANNE BENTLEY TRUST
By: /s/ LESLIE V. BENTLEY
-----------------------------------------
Name: Leslie V. Bentley
Title: Trustee
<PAGE> 12
THE KRISTEN MICHELLE SCHAFFNER TRUST
By: /s/ LESLIE V. BENTLEY
-----------------------------------------
Name: Leslie V. Bentley
Title: Trustee
THE WENDI ELIZABETH SCHAFFNER TRUST
By: /s/ LESLIE V. BENTLEY
-----------------------------------------
Name: Leslie V. Bentley
Title: Trustee
THE BROOKE ANDREA BENTLEY TRUST
By: /s/ LESLIE V. BENTLEY
-----------------------------------------
Name: Leslie V. Bentley
Title: Trustee
/s/ ANNE L. RAYMOND
--------------------------------------------
Anne L. Raymond
/s/ STANLEY M. KOONCE, JR.
--------------------------------------------
Stanley M. Koonce, Jr.
WYNDHAM HOTEL CORPORATION
By: /s/ JAMES D. CARREKER
-----------------------------------------
Name: James D. Carreker
Title: President
<PAGE> 13
EXHIBIT A
<TABLE>
<CAPTION>
Number of Shares of
Name and Address Wyndham Stock Owned
of Stockholder by Stockholder
- --------------------- --------------------------
<S> <C>
CF Securities, L.P. 9,447,745
James D. Carreker 1,173,416
The Carreker Descendants Trust 77,671
Leslie V. Bentley 330,377
The Lisa Susanne Bentley Trust 15,420
The Kristen Michelle Schaffner Trust 15,420
The Wendi Elizabeth Schaffner Trust 15,420
The Brooke Andrea Bentley Trust 15,420
Anne L. Raymond 380,151
Stanley M. Koonce, Jr. 388,001
</TABLE>
<PAGE> 14
EXHIBIT B
1) Pledge Agreement dated September 30, 1996 between James D. Carreker and
Smith Barney Inc. with respect to 588,235 shares of Wyndham Stock.
2) Pledge Agreement dated September 30, 1996 between Leslie V. Bentley and
Smith Barney Inc. with respect to 117,647 shares of Wyndham Stock.
3) Pledge Agreement dated September 30, 1996 between Stanley M. Koonce, Jr.
and Smith Barney Inc. with respect to 117,647 shares of Wyndham Stock.
4) Pledge of 208,492 shares of Wyndham Stock by James D. Carreker in favor
of Wyndham in connection with Promissory Note dated March 20, 1996.
5) Pledge of 76,736 shares of Wyndham Stock by Leslie V. Bentley in favor
of Wyndham in connection with Promissory Note dated March 20, 1996.
6) Pledge of 187,790 shares of Wyndham Stock by Anne L. Raymond in favor of
Wyndham in connection with Promissory Note dated March 20, 1996.
7) Pledge of 78,176 shares of Wyndham Stock by Stanley M. Koonce, Jr. in
favor of Wyndham in connection with Promissory Note dated March 20,
1996.
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<PAGE> 15
EXHIBIT C
1) The Carreker Descendants Trust
2) The Lisa Susanne Bentley Trust
3) The Brooke Andrea Bentley Trust
4) The Kristen Michelle Schaffner Trust
5) The Wendi Elizabeth Schaffner Trust
15
<PAGE> 1
REVOCABLE PROXY
The undersigned agrees to, and hereby grants to Patriot American
Hospitality, Inc. (the "Company"), a proxy with full power of substitution to
vote, or to execute and deliver written consents or otherwise act with respect
to, the 100 shares of common stock, par value $.01 per share (the "Common
Stock"), of Wyndham Hotel Corporation ("Wyndham") he owns beneficially or of
record, as fully, to the same extent and with the same effect as the
undersigned might or could do under any applicable laws or regulations
governing the rights and powers of stockholders of a Delaware corporation, (i)
in favor of the adoption of the Merger Agreement, dated as of April 14, 1997,
by and between the Company and Wyndham (the "Merger Agreement") and approval of
the Merger and the other transactions contemplated by the Merger Agreement,
(ii) against (x) any Acquisition Proposal and any proposal for any action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of Wyndham under the Merger
Agreement or which could result in any of the conditions of Wyndham's
obligations under the Merger Agreement not being fulfilled and (y) any change
in the directors of Wyndham, any change in the present capitalization of
Wyndham or any amendment to Wyndham's certificate of incorporation or bylaws,
any other material change in Wyndham's corporate structure or business, or any
other action which in the case of each of the matters referred to in this
clause (y) could reasonably be expected to, impede, interfere with, delay,
postpone or materially adversely affect the transactions contemplated by the
Merger Agreement or the Stock Purchase Agreement or the likelihood of such
transactions being consummated, and (iii) in favor of any other matter
necessary for consummation of the transactions contemplated by the Merger
Agreement which is considered at any such meeting of stockholders or in such
consent, and in connection therewith to execute any documents which are
necessary or appropriate in order to effectuate the foregoing or, at the
request of Purchaser, to permit Purchaser to vote such Shares directly on any
matter requiring a vote of the Company's stockholders, including, without
limitation, the election of directors, regardless of (A) whether such vote is
sought at an annual or special meeting of Wyndham's stockholders, or by written
consent in lieu of a meeting, or otherwise, or (B) whether such vote is to be
cast in person, or by proxy, or as otherwise permitted by law.
Any defined terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Merger Agreement.
/s/ HARLAN R. CROW
------------------------------------
Harlan R. Crow
Date: April 14, 1997
<PAGE> 1
EXHIBIT 99.1
<TABLE>
<S> <C>
NEWS RELEASE
Patriot American Hospitality, Inc. Wyndham Hotel Corporation
3030 LBJ Freeway, Suite 1500 2001 Bryan, Suite 2300
Dallas, TX 75234 Dallas, TX 75201
NYSE: PAH NYSE: WYN
AT PATRIOT AMERICAN FRB CHICAGO:
------------------- -----------
Paul Nussbaum, Chairman & CEO Claire Koeneman Bess Gallanis
Rex Stewart, CFO Analyst Inquiries Media Inquiries
(972) 888-8063 (312) 640-6784 (312) 640-6737
Suzanne Cottraux, Director of Corporate
Communications & Investor Relations
(212) 713-7917 (Temporarily In New York)
(972) 888-8041 (in Dallas)
</TABLE>
AT WYNDHAM:
Mike Silverman, VP of Finance (212) 713-7935 (temporarily in New York), (214)
963-1265 (in Dallas)
Cary Broussard, Corporate Communications Manager, (214) 863-1337
Kate McDonough, Gavin Anderson & Co., (212) 373-0284
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<PAGE> 2
FOR IMMEDIATE RELEASE
MONDAY, APRIL 14, 1997
PATRIOT AMERICAN HOSPITALITY AND
WYNDHAM HOTEL CORPORATION
ANNOUNCE DEFINITIVE MERGER AGREEMENT;
PATRIOT WILL ACQUIRE WYNDHAM AND
ELEVEN HOTELS FROM RELATED PARTNERSHIPS
FOR APPROXIMATELY $1.1 BILLION
IN STOCK, CASH AND ASSUMPTION OF DEBT
TRANSACTIONS WILL MAKE PATRIOT AMERICAN
THE FIRST FULLY INTEGRATED AND NATIONALLY BRANDED PAIRED SHARE HOTEL REIT; ADD
HIGHLY VALUED WYNDHAM BRAND; PROVIDE OPERATING EXPERTISE TO PATRIOT'S PAIRED
OPERATING COMPANY
DALLAS, TX, APRIL 14, 1997 -- In a transaction that will create the nation's
first fully integrated and nationally branded paired-share hotel real estate
investment trust (REIT), Patriot American Hospitality, Inc. (NYSE:PAH) and
Wyndham Hotel Corporation (NYSE:WYN) jointly announced today that they have
entered into a definitive agreement providing for Patriot's acquisition of
Wyndham. Under terms of the merger agreement, Patriot will acquire all of the
assets of Wyndham, including Wyndham's portfolio of 23 owned or leased hotels,
with an aggregate of 4,877 rooms, management and franchise agreements
associated with Wyndham's 79 managed and franchised properties throughout North
America and the Wyndham(SM), Wyndham Garden(R) and Wyndham Hotels & Resorts(SM)
proprietary brand names for approximately $763 million (based on Patriot's
closing share price as of April 11, 1997), including approximately $611 million
in Patriot stock (up to $100 million of which may be replaced with cash, at the
option of Wyndham shareholders) and $152 million in assumption or retirement of
debt.
In addition, Patriot American announced today that it has signed a
definitive agreement with partnerships affiliated with members of the Trammell
Crow family providing for the acquisition by Patriot of 11 full-service
Wyndham-branded hotels with 3,072 rooms, located throughout the United States
for approximately $330 million in cash, plus approximately $14 million in
additional consideration subject to two of the hotels meeting certain
operational targets. Patriot expects that the acquisition of Wyndham and the
purchase of the Wyndham branded hotels from the Crow family partnerships,
transactions which together are valued at approximately $1.1 billion, will be
completed concurrently early in the fourth quarter of 1997.
"The acquisition of Wyndham culminates Patriot's evolution from a hotel
REIT into a nationally branded, fully integrated hotel company," said Paul A.
Nussbaum, chairman and chief executive officer of Patriot American. "In
Wyndham, we will acquire an exceptional
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<PAGE> 3
hotel management organization, along with a respected and rapidly growing hotel
brand. In acquiring Wyndham, we also maximize the benefits arising from our
acquisition of the paired share ownership structure and take another
significant step towards becoming a world-class hotel company."
"The merger of Patriot American and Wyndham is a tremendous strategic
fit, combining Wyndham's hotel management, franchise and development
businesses, with Patriot's proven hotel acquisition and asset management
expertise," said James D. Carreker, chairman, chief executive officer and
president of Wyndham. "This combination will create a powerful new force in
the hospitality industry, with numerous avenues for growth. In joining with
Patriot, we enhance our ability to grow the Wyndham brand both nationally and
internationally. Likewise, Patriot gains the benefit of an experienced hotel
management organization as it continues to aggressively pursue its hotel
acquisition strategy."
THE FIRST NATIONALLY BRANDED AND FULLY INTEGRATED HOTEL COMPANY WITH THE TAX-
ADVANTAGED "PAIRED SHARE" OWNERSHIP STRUCTURE
As a result of its previously announced merger with California Jockey
Club and Bay Meadows Operating Company (AMEX:CJ), which is scheduled to close
on or before June 30, Patriot American will become one of only four public
companies, and one of only two hotel REITs, to enjoy the benefits of the unique
"paired share" ownership structure. Through this structure, Patriot's stock
will be Paired with an operating company and traded as a single unit. Patriot
will be able to own hotels and lease them to the paired operating company,
while retaining the benefits of REIT tax status. Following the Wyndham
acquisition, Patriot will be the first paired-share REIT to integrate hotel
acquisition, ownership, management, construction and development capabilities,
along with the marketing power of a nationally-recognized hotel brand, within
this uniquely efficient corporate structure.
"The acquisition of Wyndham capitalizes on the power of the paired share
ownership structure," said Nussbaum. "Following the Wyndham acquisition, our
paired operating company will gain the knowledge and experience of the Wyndham
organization, one of the most dynamic and successful management companies in
the hospitality industry. We will also gain ownership of the Wyndham brand,
which has become synonymous with high quality and superior customer service in
the upscale segment of the lodging industry. And we will accomplish all of
this while retaining the tax benefits of Patriot's REIT status."
Nussbaum said that, from a financial perspective, Patriot expects the
acquisitions announced today to be accretive to Patriot's funds from operations
(FFO) per share upon completion, and to contribute significantly to FFO per
share growth in 1998 and future years.
Upon completion of the Cal Jockey/Bay Meadows and Wyndham transactions,
Patriot intends to rename its paired operating company as "Wyndham
International," The paired
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<PAGE> 4
shares of Patriot American Hospitality and Wyndham International will trade on
the New York Stock Exchange under the symbol" "PAH."
THE MERGER AGREEMENT
Under terms of the merger agreement, Wyndham will merge with and into
Patriot, with Patriot being the surviving corporation. Each share of Wyndham
will be converted into the right to receive 0.712 paired shares of Patriot,
subject to adjustment as described below. The 0.712 exchange ratio reflects
Patriot's acquisition of Cal Jockey/Bay Meadows, which will be completed prior
to the Wyndham merger and which, for tax reasons, will involve the merger of
Patriot with and into Cal Jockey. On a pre-Cal Jockey merger basis, the
exchange ratio equates to 1.372 Patriot shares for each outstanding Wyndham
share. Based on Patriot's April 11, 1997 closing share price of $22.25, the
exchange ratio reflects a market value of $30.53 for each Wyndham share. The
exchange ratio is subject to adjustment in the event that Patriot's average
share price for the twenty trading days preceding the fifth trading day prior
to the shareholders' meetings called to approve the merger drops below a
specified price (the equivalent of approximately $21.86 on a pre-Cal Jockey
merger basis). Between this figure and another specified price (the equivalent
of approximately $20.87 on a pre-Cal Jockey merger basis), the Exchange Ratio
will be adjusted to provide Wyndham shareholders with Patriot shares having a
value of $30.00 based on the average Patriot price. Below the lower figure,
the Exchange Ratio will be fixed at 0.746 (which equates to approximately 1.438
Patriot Shares on a pre-Cal/Jockey merger basis), although Wyndham will have
the ability to terminate the merger agreement without liability to Patriot.
In order to maintain Patriot's status as a REIT and satisfy certain tax
issues, the shareholders of Wyndham will have the option to receive cash for a
portion of their shares in Wyndham, up to a maximum of $100 million (or
approximately 16% of the total consideration payable to Wyndham shareholders in
the merger). The cash will be apportioned on a pro rata basis among all
Wyndham shareholders who elect to receive cash for a portion of their shares.
Cash consideration per share will equal the market value (based on a
trailing average) of the paired shares otherwise issuable in exchange for
outstanding Wyndham shares.
The merger is expected to be tax-free to shareholders of Wyndham with
respect to the REIT portion of the paired shares received by such shareholders.
The paired operating company portion (which is expected to represent 5% to 10%
of the total consideration) of the paired shares, as well as any cash received
by Wyndham shareholders in lieu of paired shares, will generally be taxable to
the shareholders of Wyndham.
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<PAGE> 5
A FULLY INTEGRATED MANAGEMENT ORGANIZATION
Following the acquisition of Wyndham, Paul Nussbaum will continue to
serve as chairman and chief executive officer of Patriot, with responsibility
for all of Patriot's activities, including acquisitions, asset management,
financing and strategic planning. William W. Evans III, who currently serves
in Patriot's office of the chairman, will assume the position of president of
Patriot and will be appointed to Patriot's board. Anne L. Raymond, currently
chief financial officer of Wyndham, will serve as chief financial officer of
Patriot following the merger.
Following the merger, James D. Carreker, Wyndham's chairman, chief
executive officer and president, will serve as chairman and chief executive
officer of Patriot's paired operating company, Wyndham International. Tom W.
Lattin, who currently serves as Patriot's president, will assume a senior
position at Wyndham International, as executive vice president overseeing the
continuing development of the Wyndham brand name through third-party management
and franchising. Rex E. Stewart, who currently serves as chief financial
officer of Patriot, will serve as chief financial officer of Wyndham
International.
Wyndham International will include the Carefree Resorts organization,
for management of the Carefree Resorts portfolio acquired by Patriot in
January, and an Historic Hotels Division, for management of the Grand Heritage
Hotel portfolio and other historic or landmark hotel properties. Both the
Carefree Resorts organization and the Historic Hotels Division will report to
Mr. Carreker.
"The senior executive teams of Patriot and Wyndham complement each other
very well," said Nussbaum. "As a result of the merger, as well as our
acquisition of Carefree Resorts in January and our planned acquisition of Grand
Heritage Hotels, we will have one of the deepest and most experienced
management organizations in the lodging industry, with expertise in all phases
of the business, from acquisitions to brand management, from operations to
construction and development."
"On a personal level, Jim Carreker and I have known each other for many
years," said Nussbaum. "We worked together closely last year to develop a
lessee relationship between Patriot and Wyndham. I am particularly pleased
that Jim will serve as chairman and chief executive officer of the paired
operating company and that members of the Wyndham management team will be
integrated throughout our combined organization. The paired operating company,
as well as Patriot as a whole, will benefit from Jim's leadership and the
skills of the team he has developed at Wyndham."
Patriot also announced that, following the merger with Wyndham, the
Board of Directors of Patriot and its paired operating company will each
consist of 11 members, including three designees of Wyndham to the Wyndham
International Board and two designees of Wyndham to the Patriot board. The
Crow family will also have the right to designate one member of both boards.
It is currently anticipated that Harlan Crow, Managing Partner of Crow Family
Holdings, will serve as the designee of the Crow family
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<PAGE> 6
to the Patriot Board. The remaining directors for each Board will be selected
by Patriot and will include members of Patriot's existing Board as well as
additional members to be selected prior to the merger. Paul Nussbaum, the
chairman of Patriot, will also serve as a director of the paired operating
company. James Carreker, the chairman of Wyndham International, will also
serve on the Board of Patriot as one of the two Wyndham designees.
THE COMBINED PORTFOLIO
Upon completion of the transactions announced today, as well as the
previously announced acquisition of Grand Heritage Hotels, Patriot American's
hotel portfolio will include 88 owned or leased hotels, aggregating over 20,500
rooms, located in major markets and primary tourist destinations throughout the
United States, as well as in Canada and the Caribbean. Additionally, apart
from these transactions, Patriot American has signed contracts or letters of
intent to acquire 19 hotels, aggregating over 4,600 rooms, for an aggregate
purchase price (excluding related acquisition costs) of approximately $441
million. Assuming completion of these acquisitions, substantially all of which
are currently expected to close prior to completion of the Wyndham merger,
Patriot's post-merger portfolio will include 107 owned or leased hotels, with
over 25,000 rooms. In addition to the owned portfolio, following the Grand
Heritage acquisition and the Wyndham merger, Patriot and its paired operating
company will manage or franchise 81 hotels (including 14 hotels currently under
construction), aggregating over 17,800 rooms, located throughout North America.
Finally, Patriot will own three upscale hotel brands: Wyndham, Carefree Resorts
and Grand Heritage.
"The combined company will be well positioned to optimize growth
opportunities, both in the acquisition of additional hotels and in the
development of Wyndham's management and franchise businesses," said Nussbaum.
"Notably, Patriot will directly own or lease more than half of the hotels in
its portfolio. This creates a solid base from which to grow the management
business and continue to build value in our various brands."
"From a hotel acquisitions perspective, Patriot will have the ability to
maximize returns on newly-acquired properties by leasing them to Wyndham
International," said Carreker. "Additionally, Patriot will have the ability to
create value by reflagging existing and subsequently acquired properties
utilizing one of our own proprietary brands. This serves to capture for our
shareholders the cash flow in management and franchise fees that would
otherwise be paid to third parties and, perhaps more importantly, serves to
build equity and public awareness in the brands we own."
In addition to Wyndham, Grand Heritage and Carefree Resort properties,
Patriot's portfolio also includes hotels operating under numerous national and
international hotel brands, including Marriott, Doubletree, Hilton, Hyatt,
Holiday Inn, Four Points by Sheraton, Radisson, Embassy Suites and WestCoast.
As part of its continuing hotel acquisition strategy, Patriot has established
relationships with various hotel management and franchise
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<PAGE> 7
companies. "We intend to maintain our relationships with other major hotel
companies, and to continue to encourage such companies to bring acquisition
opportunities to Patriot," said Nussbaum. "At the same time, we fully intend
to maximize the value of our own brands by reflagging properties or by adding
the Wyndham flag to unbranded hotels within our portfolio."
CAL JOCKEY/BAY MEADOWS MERGER REMAINS ON-TRACK
In announcing the merger with Wyndham, executives of Patriot reiterated
Patriot's commitment to complete Patriot's merger with Cal Jockey and Bay
Meadows as expeditiously as possible. Patriot announced that it will soon file
revised proxy materials with the Securities and Exchange Commission for the Cal
Jockey/Bay Meadows merger. "We are absolutely committed to completing the Cal
Jockey/Bay Meadows merger," said Nussbaum. "We have remained in regular
contact with management and the Boards of Cal Jockey and Bay Meadows and are
working closely with them in preparing definitive proxy materials. In this
regard, we expect to distribute proxies and convene shareholder meetings to
complete the Cal Jockey/Bay Meadows merger on or before June 30, 1997."
SHAREHOLDER VOTE ON WYNDHAM MERGER EXPECTED IN THE FOURTH QUARTER
The definitive merger agreement between Patriot American and Wyndham has
been unanimously approved by the Board of Directors of both companies and by
the Special Committee of Wyndham's Board formed to independently review the
merger and the merger agreement. In connection with the merger, Patriot
American has received a fairness opinion from its financial advisor,
PaineWebber Incorporated. Wyndham has received a fairness opinion with respect
to the merger from its financial advisor, Smith Barney, Inc., and the Special
Committee of the Wyndham Board of Directors has received a separate fairness
opinion from its financial advisor, Merrill Lynch and Co. The merger agreement
is subject to approval by the shareholders of both companies and is also
subject to various closing conditions, including the prior completion of Cal
Jockey/Bay Meadows merger and the concurrent completion of a substantial number
of the hotel acquisitions contemplated by Patriot's agreement with the Crow
family partnerships. In the event that Wyndham terminates the merger agreement
under certain circumstances, including in order to pursue a superior proposal
(as defined in the merger agreement), Wyndham will be obligated to pay Patriot
American certain break-up fees, as specified in the merger agreement. If
Patriot American terminates the merger agreement under certain circumstances,
it will be required to pay certain break-up fees to Wyndham. Patriot American
and Wyndham have announced that they intend to complete proxy materials as
expeditiously as possible following the Cal Jockey/Bay Meadows merger and to
submit the Wyndham merger to shareholder votes early in the fourth quarter.
In connection with the signing of the merger agreement, certain
significant Wyndham shareholders, including members of the Crow family and
executive officers of Wyndham,
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<PAGE> 8
who hold an aggregate of approximately 59% of Wyndham's outstanding shares,
have agreed with Patriot to vote their shares in favor of the merger. These
voting agreements are terminable in the event that Wyndham terminates the
merger agreement under certain circumstances.
ABOUT WYNDHAM
Based in Dallas, Texas, Wyndham Hotel Corporation is an international
hotel company operating upscale hotels primarily under the Wyndham brand name.
The Wyndham brand consists of three upscale full-service hotel products:
Wyndham Hotels, Wyndham Garden Hotels and Wyndham Resorts. The Wyndham brand
is tailored to urban, suburban and select resort markets to best serve its core
customers, which include individual and group business travelers. While the
Company's core business is managing upscale Wyndham brand products, the Company
also manages non-Wyndham properties, including extended stay hotels under the
Homegate Studios & Suites brand. Wyndham Hotel Corporation has been committed
to growth through development, acquisitions, third-party management contracts
and by investing in the development of the Wyndham brand.
ABOUT PATRIOT AMERICAN
Patriot American is currently the nation's second-largest hotel REIT,
with a portfolio of 54 hotels with over 12,500 rooms. Upon completion of its
acquisition of California Jockey Club and Bay Meadows Operating Company,
Patriot American will be one of only two paired-share hotel REITs, a structure
which will allow the company maximum flexibility to lease newly acquired
properties to its paired operating company or to independent lessees, as
situations warrant. Having tripled the size of its rooms portfolio in the 18
months since its IPO, Patriot American is continuing to acquire full-service
hotel properties throughout North America.
FORWARD LOOKING STATEMENTS
Certain matters discussed in this press release may constitute forward-
looking statements within the meaning of the federal securities laws. Actual
results and the timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due to a number
of factors, including general economic conditions, competition for hotel
services in a given market the availability of equity and debt financing,
interest rates and other risks detailed from time to time in the filings of
Patriot American Hospitality, Inc. and Wyndham Hotel Corporation with the
Securities and Exchange Commission, including quarterly reports on Form 10-Q,
reports on Form 8-K and annual reports on Form 10-K. Reference is hereby made
to the "Risk Factors" set forth in the Forms 10-K for the fiscal year ended
December 31, 1996 filed by Patriot American Hospitality, Inc. and Wyndham Hotel
Corporation.
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<PAGE> 9
Table To Follow
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<PAGE> 10
HOTEL ASSETS PATRIOT WILL ACQUIRE FROM PARTNERSHIPS RELATED TO THE TRAMMELL
CROW FAMILY
<TABLE>
<CAPTION>
Hotels Hotel Location Rooms
- --------------------------------------- --------------------- ------
<S> <C> <C>
Wyndham Bel Age Los Angeles, CA 199
Wyndham Franklin Plaza Philadelphia, PA 758
Wyndham Milwaukee Center Milwaukee, WI 221
Wyndham Riverfront Hotel, New Orleans New Orleans, LA 202
Wyndham Northwest Chicago Chicago, IL 408
Wyndham Palm Springs Palm Springs, CA 410
Wyndham Garden Hotel-Las Colinas Dallas, TX 168
Wyndham Garden Hotel-Novi Detroit, MI 148
Wyndham Garden Hotel-Pleasanton Pleasanton, CA 171
Wyndham Garden Hotel-Wood Dale Chicago, IL 162
Garden Hotel-La Guardia Airport New York, NY 225
</TABLE>
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<PAGE> 1
AGREEMENT AMONG FILING PARTIES
THIS AGREEMENT is made and entered into as of April 24, 1997, by and
among CF Securities, L.P., a Texas limited partnership, Mill Spring Holdings,
Inc., a Texas corporation, Harlan R. Crow, James D. Carreker, Leslie V.
Bentley, Anne L. Raymond and Stanley M. Koonce (collectively referred to herein
as the "Filing Parties").
WHEREAS, Rule 13d-1(f)(1)(iii) under the Securities Exchange Act of
1934, as amended (the "ACT"), requires that, when a Schedule 13D is filed on
behalf of more than one person, an agreement be executed and filed as an
exhibit to the Schedule 13D reflecting that the Schedule 13D is being filed on
behalf of all such persons.
NOW, THEREFORE, in consideration of the premises and the mutual
promises stated herein, the Filing Parties hereby agree as follows:
(i) Each Filing Party agrees that a single Schedule 13D (and any
amendments thereto) shall be filed jointly on behalf of all the Filing Parties
with respect to shares of common stock, $.01 par value per share, of Wyndham
Hotel Corporation, a Delaware corporation.
(ii) Each Filing Party acknowledges and agrees that, pursuant to
Rule 13d-1(f)(1) under the Act, each Filing Party individually is (i) eligible
to use the Schedule 13D and (ii) responsible for the timely filing of such
Schedule 13D and any amendments thereto and for the completeness and accuracy
of the information concerning such Filing Party contained in such Schedule 13D.
None of the Filing Parties, however, shall be responsible for the completeness
or accuracy of information concerning any other Filing Party contained in such
Schedule 13D, or any amendments thereto, unless such Filing Party knows or has
reason to believe that such information is incomplete or inaccurate.
(iii) This agreement shall not be assignable by any Filing Party.
Any assignment in violation of the foregoing shall be null and void.
(iv) This agreement shall terminate upon the written notice of
termination given by any Filing Party to the other Filing Parties.
(v) This agreement may be executed in several counterparts, each
of which shall be deemed to be an original copy hereof.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned hereby executed this Agreement
Among Filing Parties as of the date or dates indicated below.
Dated: April 24, 1997 CF SECURITIES, L.P., a Texas limited
partnership
By: Mill Spring Holdings, Inc., a Texas
corporation and its general partner
By: /s/ Harlan R. Crow
---------------------------------
Name: Harlan R. Crow
----------------------------
Title: President
---------------------------
Dated: April 24, 1997 MILL SPRING HOLDINGS, INC., a Texas
corporation
By: /s/ Harlan R. Crow
----------------------------------------
Name: Harlan R. Crow
-----------------------------------
Title: President
----------------------------------
Dated: April 24, 1997 /s/ Harlan R. Crow
-------------------------------------------
Harlan R. Crow
Dated: April 24, 1997 /s/ James D. Carreker
-------------------------------------------
James D. Carreker
Dated: April 24, 1997 /s/ Leslie V. Bentley
-------------------------------------------
Leslie V. Bentley
Dated: April 24, 1997 /s/ Anne L. Raymond
-------------------------------------------
Anne L. Raymond
Dated: April 24, 1997 /s/ Stanley M. Koonce, Jr.
-------------------------------------------
Stanley M. Koonce, Jr.
