EXHIBIT 10.15
PATRIOT AMERICAN HOSPITALITY OPERATING PARTNERSHIP, L.P.
FIFTH AMENDMENT TO
AGREEMENT OF LIMITED PARTNERSHIP
This Fifth Amendment is made as of September 30, 1997 by and among Patriot
American Hospitality Operating Company, a Delaware corporation, as general
partner (the "General Partner") of Patriot American Hospitality Operating
Partnership, L.P., a Delaware limited partnership (the "Partnership"), and as
attorney-in-fact for each of the limited partners of the Partnership
(collectively, the "Limited Partners"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Contributor")
for the purpose of amending the Agreement of Limited Partnership of the
Partnership dated June 27, 1997, as amended to date (the "Partnership
Agreement"). All capitalized terms used herein and not defined shall have the
respective meanings ascribed to them in the Partnership Agreement.
WHEREAS, the Contributor has made certain Capital Contributions to the
Partnership;
WHEREAS, the General Partner desires to accept such additional Capital
Contributions;
WHEREAS, in connection with such Capital Contributions the General Partner
desires to create a series of Class C Preferred Limited Partner Units of the
Partnership and to make certain conforming changes to the Partnership Agreement;
WHEREAS, the General Partner has determined that such amendment is not
adverse to the Limited Partners;
NOW, THEREFORE, the General Partner undertakes to implement the following
amendments to the Partnership Agreement pursuant to the authority granted to the
General Partner under Section 4.02(a) of the Partnership Agreement:
Section 1. Amendments to Text of Partnership Agreement.
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Article I, Defined Terms is amended to add the following definitions of "Class
C Preferred Unit" and "Class C Preferred Unit Holder" and to replace the
current definition of "Percentage Interest" with the definition of that term
described below. All other terms defined in Article I shall remain in full
force and effect.
"Class C Preferred Unit" means a limited partnership interest
represented by a fractional, undivided share of the Partnership Interests
of all Partners issued hereunder which has the rights, preferences and
other privileges designated herein. The allocation of Class C Preferred
Units among the Partners shall be set forth on Exhibit A, as may be amended
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from time to time.
"Class C Preferred Unitholder" means a limited partner that holds
Class C Preferred Units.
"Percentage Interest" means the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership
Units owned by a Partner (including any outstanding Preferred Units of any
series or class) by the total number of Partnership Units outstanding
(including any outstanding Preferred Units of any series or class). The
Percentage Interest of each Partner shall be as set forth on Exhibit A, as
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may be amended from time to time. For purposes of applying Section
5.01(a)(1)(v), however, a Partner's Percentage Interest shall not include
the number of any Class C Preferred Units held by the Partner. For
purposes of applying Section 5.02(a), a Partner's Percentage Interest shall
not include the number of any Class B or Class C Preferred Units held by
the Partner.
Section 4.02(d) of the Partnership Agreement is deleted and replaced with
the following:
(d) Exchange of Preferred Units.
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(i) In the event the General Partner acquires Class B
Preferred Units from the Preferred Unitholders (in exchange for cash
or Company Shares), the Partnership shall, as soon as practicable
thereafter, exchange each Class B Preferred Unit held by the General
Partner for such number of Partnership Units which are not designated
as Preferred Units, as determined by the Conversion Factor then in
effect.
(ii) If REIT Class B Preferred Units are converted into
preferred stock of Patriot REIT, then the Class B Preferred Units
shall be converted into preferred stock of the Company having the same
designations, preferences and other rights as the Class B Preferred
Units, provided, however, that no such conversion will occur unless
the Company has the authority to issue such preferred stock.
Section 5.01(a) of the Partnership Agreement is deleted and replaced with
the following:
5.01 ALLOCATION OF PROFIT AND LOSS.
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(a) General. Profit and Loss of the Partnership for each fiscal
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year of the Partnership shall be allocated among the Partners as follows:
(1) Profit of the Partnership shall be allocated:
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(i) first, among the Class C Preferred Unitholders until
the excess of the Loss allocated to such Preferred Unitholders
under Section 5.01(a)(2)(iii), over the Profit allocated to such
Preferred Unitholders under this Section 5.01(a)(1)(i), is equal
to zero, in each case on a cumulative basis for all fiscal years
of the Partnership;
(ii) second, among the Class C Preferred Unitholders in
proportion to their respective Percentage Interests until the
excess of the Profit allocated to such Preferred Unitholders
under this Section 5.01(a)(1)(ii) over the Loss allocated to such
Preferred Unitholders under Section 5.01(a)(2)(i) is equal to the
distributions to such Preferred Unitholders under Section
5.02(a)(1), in each case on a cumulative basis for all fiscal
years of the Partnership;
(iii) third, among the Class A Preferred Unitholders until
the excess of the Loss allocated to the Class A Preferred
Unitholders under Section 5.01(a)(2)(ii), over the Profit
allocated to the Class A Preferred Unitholders under this Section
5.01(a)(1)(iii), is equal to zero, in each case on a cumulative
basis for all fiscal years of the Partnership;
(iv) fourth, among the Class A Preferred Unitholders in
proportion to their respective Percentage Interests until the
excess of the Profit allocated to the Class A Preferred
Unitholders under this Section 5.01(a)(1)(iv) over the Loss
allocated to the Class A Preferred Unitholders under Section
5.01(a)(2)(i) is equal to the distributions to such Class A
Preferred Unitholders under Section 5.02(a)(2), in each case on a
cumulative basis for all fiscal years of the Partnership; and
(v) thereafter, among the Partners in accordance with
their respective Percentage Interests.
(2) Loss of the Partnership shall be allocated:
(i) first, between the Class C Preferred Unitholders, as
a class, and the Partners other than the Class C Preferred
Unitholders, as a class, in proportion to the aggregate positive
Capital Account balances of the two classes of Partners (making
appropriate adjustments in the case of a Class C Preferred
Unitholder who also holds Partnership Units of another class, and
also, solely for purposes of this allocation, subtracting from
the aggregate Capital Account balance of the Class C Unitholders
an amount equal to the product of the Class C Preference Amount
and the number of Class C Preferred Units). Allocations of Loss
among the Class C Preferred Unitholders pursuant to this Section
5.01(a)(2)(i) shall
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be made in proportion to their respective Percentage Interests
until their Adjusted Capital Account balances contain only an
amount equal to the product of the Class C Preference Amount and
the number of such Preferred Units held by each such Unitholder.
Allocations of Loss among the Partners other than the Class C
Preferred Unitholders pursuant to this Section 5.01(a)(2)(i)
shall be made in accordance with their respective Percentage
Interests until the balances of their Adjusted Capital Accounts
are equal to zero (or, with respect to the Class A Preferred
Unitholders, their Adjusted Capital Account balances contain only
the Agreed Value of their Capital Contributions);
(ii) second, among the Class A Preferred Unitholders in
proportion to their respective Percentage Interests until the
balances of their Adjusted Capital Accounts are equal to zero;
and
(iii) third, among the Class C Preferred Unitholders in
proportion to their respective Percentage Interests until the
balances of their Adjusted Capital Accounts are equal to zero.
Section 5.02 of the Partnership Agreement is deleted and replaced with the
following:
5.02 OPERATING DISTRIBUTIONS.
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(a) Except as otherwise provided in Section 5.06, cash available
for distribution by the Partnership shall be distributed as follows:
(1) First, if there are any Class C Preferred Units
outstanding on any record date for payment of a REIT Share dividend or
Company Share dividend, the General Partner shall distribute to the
Class C Preferred Unitholder(s) of record on such date (concurrently
with the payment of the applicable dividend), an amount with respect
to each Class C Preferred Unit equal to the Class C Preferred
Distribution Amount, plus the amount of any Special Class C
Distribution Amount then outstanding.
(2) Second, if there are any Class A Preferred Units
outstanding on any record date for payment of a REIT Share dividend,
the General Partner shall distribute to the Class A Preferred
Unitholder(s) of record on such date (concurrently with the payment of
such dividend) an amount with respect to each such Class A Preferred
Unit equal to the Class A Preferred Distribution Amount.
(3) Third, if there are any Class B Preferred Units
outstanding on any record date for payment of a Company Share
dividend, the
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General Partner shall distribute to the Class B Preferred
Unitholder(s) of record on such date (concurrently with the payment of
such distribution) an amount with respect to each such Class B
Preferred Unit equal to the Class B Preferred Distribution Amount.
(4) Fourth, the General Partner shall distribute any
remaining cash available for distribution on a quarterly (or, at the
election of the General Partner, more frequent) basis, in an amount
determined by the General Partner in its sole discretion, to the
Partners who are Partners on the Partnership Record Date for such
quarter (or other distribution period) in accordance with their
respective Percentage Interests on the Partnership Record Date. For
purposes of this Section 5.02(a)(4), Percentage Interests shall not
include any Class B or Class C Preferred Units, but shall include
Class A Preferred Units.
(b) In no event may a Partner receive a distribution of cash
with respect to a Partnership Unit if such Partner is entitled to receive a
dividend with respect to a Company Share or a REIT Share for which all or
part of such Partnership Unit has been or will be exchanged.
Section 5.08 of the Partnership Agreement is deleted and replaced with the
following:
5.08 ADDITIONAL DISTRIBUTIONS PROVISIONS AND DEFINITIONS RELATING TO
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PREFERRED UNITS.
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Notwithstanding any other provision to the contrary in this Agreement,
as long as there remain any Preferred Units outstanding (of any class or
series), the following additional distribution provisions and definitions
shall apply.
(a) "Class A Preferred Distribution Amount" shall mean, for any quarter or
other period with respect to which a REIT Share dividend is paid and a
distribution is required to be made pursuant to Section 5.02(a)(3), an
amount per Class A Preferred Unit equal to the amount of such dividend
per REIT Share. The General Partner agrees that, without the consent
of a majority of the Class A Preferred Unit Holders (such consent not
to be unreasonably withheld or delayed provided all Class A Preferred
Distribution Amounts are current), it will use reasonable efforts to
limit its borrowings from the REIT Partnership or other sources so
that the Partnership has at all times sufficient borrowing capacity to
discharge its obligations with respect to the Class A Preferred
Distribution Amounts.
(b) "Class B Preferred Distribution Amount" shall mean, for any quarter or
other period with respect to which a Company Share dividend is paid
and a
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distribution is required to be made pursuant to Section 5.02(a)(4), an
amount equal to such amount that if it were the sole amount
distributed on a Class B Preferred Unit pursuant to Section 5.02(a)(4)
for such quarter or other period would provide the Class B Preferred
Unitholder with a distribution on such Class B Preferred Unit equal to
103% of the corresponding Company Share dividend to be paid for such
quarter or other period. Notwithstanding the foregoing, the Class B
Preferred Distribution Amount with respect to any Class B Preferred
Unitholder shall not exceed the Class B Preferred Unitholder's Capital
Account balance (after reducing such balance to reflect the items
described in Regulations section 1.704-1(b)(ii)(2)(d)(4), (5) and (6)
and after increasing such Capital Account balance to reflect such
Class B Preferred Unitholder's shares of Partnership Minimum Gain and
Partner Nonrecourse Debt Minimum Gain), determined as of the date of
the relevant distribution.
(c) "Class C Preferred Distribution Amount" shall mean, for any quarter or
other period with respect to which a REIT Share dividend or a Company
Share dividend is paid, an amount per Class C Preferred Unit equal to
the amount of such dividend(s) per REIT Share and/or Company Share.
The Class C Preferred Distribution Amount shall be cumulative, and
shall be deemed to be in arrears and shall accrue if not distributed
by the Partnership at the time such REIT Share dividend or Company
Share dividend is paid. The Class C Preferred Distribution Amount
shall also be appropriately adjusted in the case of an event that
causes the Conversion Factor to be adjusted. In the event that a
dividend is paid with respect to REIT Shares or Company Shares in a
form that the adjustment provided by the foregoing sentence does not
address (for example, a distribution of shares of a subsidiary
corporation in a spinoff transaction), to the extent commercially
reasonable, the Class C Distribution Amount shall be made in the same
form as the dividend on REIT Shares or Company Shares, as applicable,
and otherwise shall be made in an alternate form, or in an amount of
cash, that provides economic value to the Class C Unitholders
substantially equivalent to the relevant dividend. The General
Partner agrees that, unless the condition is waived by Class C
Preferred Unitholders holding more than 50% of the Class C Preferred
Units (such consent not to be unreasonably withheld or delayed
provided all Class C Preferred Distribution Amounts and Special Class
C Distribution Amounts are current) it will use commercially
reasonable efforts to limit its borrowings from the REIT Partnership
or other sources so that the Partnership has at all times sufficient
borrowing capacity to discharge its obligations with respect to the
Class C Preferred Distribution Amount and the Special Class C
Distribution Amount, including without limitation the payment of
distributions in the amount of and at the time of the relevant REIT
Share and Company Share dividends.
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(d) "Special Class C Distribution Amount" shall mean, in the event that
the Partnership fails to distribute the full amount of the Class C
Preferred Distribution Amount for any period with respect to which a
REIT Share dividend or Company Share dividend is paid, an amount equal
to the difference between (x) the annual rate (calculated on the basis
of actual days elapsed from the date on which the relevant
distribution should have been made) of .15 (15%) times the Class C
Preferred Distribution Amount (which includes accrued but
undistributed amounts from prior periods) and (y) any partial
distribution of the Class C Preferred Distribution Amount actually
made with respect to such period.
(e) "Class C Preference Amount" shall mean $23.25 plus any accrued but
undistributed Class C Preferred Distribution Amount and plus any
accrued but undistributed Special Class C Distribution Amount.
Section 11.01(a) is replaced with the following:
(a) any amendment affecting the operation of the Conversion
Factor or the Redemption Right (except as provided in Section 8.05(f) or
7.01(e) hereof) in a manner adverse to the Limited Partners;
The following Section 11.03 is added to the Partnership Agreement:
11.03 VOTING RIGHTS OF CLASS C PREFERRED UNITHOLDERS.
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Notwithstanding the provisions of Section 11.02, the holders of record of
Class C Preferred Units shall be entitled to vote on any matter on which
Limited Partners are entitled to vote. In addition, the holders of Class C
Preferred Units shall have the right to vote as a separate class of
Partnership Units on the following, each of which shall require the consent
of holders of record of Class C Preferred Units representing more than 50%
of the Class C Preferred Units:
(a) Any amendment creating or resulting in any class of Units
with the right to receive distributions in priority to the distributions on
Class C Preferred Units, including without limitation priority as to time
of payment;
(b) Any amendment that would adversely affect the rights of the
Class C Preferred Unitholders to receive the distributions payable with
respect to the Class C Preferred Units hereunder;
(c) Any amendment that would materially and adversely alter the
Partnership's allocations of Profit and Loss with respect to Class C
Preferred Units; and
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(d) Any amendment that imposes on the Class C Preferred
Unitholders (in their capacity as such) any obligation to make Additional
Capital Contributions to the Partnership.
For purposes of clarifying the foregoing, the voting rights of the Class C
Preferred Unitholders shall not include any voting rights with respect to
amendments to the Agreement with respect to the issuance of interests in
the Partnership that are entitled to receive operating distributions in
parity to, or junior to the operating distributions with respect to Class C
Preferred Units, or with respect to the issuance of interests in the
Partnership that are entitled to liquidating distributions in preference to
liquidating distributions on Class C Preferred Units.
Section 2. Acceptance of Capital Contributions.
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(a) The General Partner hereby accepts the Capital Contributions of the
Contributor. The Contributor is already a Limited Partner of the Partnership.
In consideration of such Capital Contributions and pursuant to Section
4.02(a)(i) of the Partnership Agreement, the General Partner hereby issues to
the Contributor the number of Class C Preferred Units listed on Schedule A
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attached hereto. The Agreed Value of the Capital Contributions of the
Contributor with respect to the Class C Preferred Units shall be equal to the
number of Class C Preferred Units issued to the Contributor, multiplied by the
average of the daily market price of Paired Shares for the ten consecutive
trading days immediately preceding the date of this Fifth Amendment, which
market price shall be determined in accordance with the procedures set forth in
the definition of "Cash Amount" in the Partnership Agreement.
(b) The issuance of such Class C Preferred Units shall become effective as
of the date of this Fifth Amendment, which will also be the date upon which such
issuances are recorded on the books and records of the Partnership.
Section 3. Amendment to Partnership Agreement. Pursuant to Article XI of
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the Partnership Agreement, the General Partner hereby amends the Partnership
Agreement by deleting Exhibit A in its entirety and replacing it with Exhibit A
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attached hereto.
Section 4. Defined Terms. Capitalized terms used without definition in this
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Fifth Amendment shall have the meanings set forth in the Partnership Agreement.
Section 5. Partnership Agreement. The Partnership Agreement and this Fifth
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Amendment shall be read together and shall have the same effect as if the
provisions of the Partnership Agreement and this Fifth Amendment were contained
in one document.
[End of Page]
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IN WITNESS WHEREOF, the General Partner has executed this Fifth Amendment
as of the date first written above.
GENERAL PARTNER
PATRIOT AMERICAN HOSPITALITY
OPERATING COMPANY
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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By: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief Financial Officer
LIMITED PARTNERS
By: PATRIOT AMERICAN
HOSPITALITY OPERATING
COMPANY, as attorney-in-fact for
each of the Limited Partners, other
than the Contributor
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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By: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief Financial Officer
CONTRIBUTOR
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇
Schedule A
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Class C Preferred
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Contributor Units
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▇▇▇▇▇ ▇▇▇▇▇▇▇ 476,682
