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EXHIBIT 10.39
FORM OF
SUBSCRIPTION AGREEMENT
This Subscription Agreement (the "Agreement"), dated as of __________
__, 1997, is entered into by and between Wyndham Hotel Corporation, a Delaware
corporation ("Wyndham") and Patriot American Hospitality Operating Company, a
Delaware corporation ("OPCO").
W I T N E S S E T H:
WHEREAS, the shares of common stock, par value $.01 per share, of OPCO
(the "OPCO Stock") and the shares of common stock, par value $.01 per share
(the "Patriot Stock"), of Patriot American Hospitality, Inc., a Delaware
corporation ("Patriot"), are paired and trade as a single unit on the New York
Stock Exchange in accordance with that certain Pairing Agreement, dated as of
February 17, 1983, as amended, between Patriot and OPCO (the "Pairing
Agreement"); and
WHEREAS, Wyndham and Patriot have entered into an Agreement and Plan
of Merger (the "Merger Agreement") dated as of April __, 1997 (as ratified on
________, 1997 by Patriot and OPCO following the merger of Patriot with and
into California Jockey Club) pursuant to which Wyndham will merge with and into
Patriot (the "Merger") and Wyndham's stockholders will be entitled to receive
shares of Patriot Stock pursuant to the terms and subject to the conditions set
forth in the Merger Agreement. Capitalized terms used herein without
definition shall have the respective meanings ascribed to such terms in the
Merger Agreement; and
WHEREAS, to maintain the paired share structure of Patriot and OPCO
and to comply with the Pairing Agreement, Wyndham wishes to contract for the
issuance to its stockholders as Merger Consideration of, and OPCO wishes to
issue, an aggregate number of whole shares of OPCO Stock (each an "Issuable
Share" and collectively the "Issuable Shares") that will be equal to, and
paired with, the number of whole shares of Patriot Stock to be issued to the
Wyndham stockholders pursuant to the Merger upon the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, to effect a distribution to the stockholders of Wyndham,
Wyndham and Patriot desire to have OPCO issue the Subscribed Shares directly to
the stockholders of Wyndham.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the parties hereto agree as follows:
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1. Issuance of Shares.
(a) Subject to the satisfaction or waiver of the
conditions set forth in Article 9 of the Merger Agreement, Wyndham hereby
agrees to pay to OPCO, immediately prior to the consummation of the Merger, the
aggregate Purchase Price (as defined below) for the Issuable Shares. Subject
to the satisfaction or waiver of the conditions set forth in Article 9 of the
Merger Agreement, OPCO hereby agrees to issue the Issuable Shares directly to
the stockholders of Wyndham (the "Designees") in accordance with Sections 1(b)
and 2 below; provided, that upon such issuance of Issuable Shares to any
Designee there is a simultaneous issuance of an equivalent number of shares of
Patriot Stock to such Designee in compliance with the provisions of the Pairing
Agreement. The purchase price per Issuable Share (the "Purchase Price") shall
be equal to the product of (x) the Fair Market Value (as defined in the Merger
Agreement) of a Paired Share, multiplied by (y) the relative value of a share
of OPCO Stock as compared to a share of Patriot Stock, determined by agreement
of the parties to this Agreement. For purposes of this Agreement, the term
"fair market value" shall mean the average closing price of the Paired Shares
of Patriot Stock and OPCO Stock on the New York Stock Exchange for the four (4)
trading days immediately preceding the Closing Date.
(b) The parties hereto acknowledge and agree that the
Issuable Shares will be issued directly to the stockholders of Wyndham in
connection with the Merger and will be paired with the Patriot Stock issued in
the Merger and neither Wyndham nor Patriot will at any time become a
stockholder of OPCO or have any right to receive OPCO Stock.
2. Payment and Issuance of Issuable Shares.
(a) Subject to the terms and conditions of this Agreement
and subject to the satisfaction or waiver of the conditions set forth in
Article 9 of the Merger Agreement, Wyndham shall, immediately prior to the
consummation of the Merger, cause to be paid to OPCO the aggregate Purchase
Price for the Issuable Shares by check or wire transfer in immediately
available funds. Simultaneously with the payment of the aggregate Purchase
Price, the Designees shall be identified as the recipients of the Issuable
Shares.
(b) Immediately following payment of the aggregate
Purchase Price and the identification of the Designees pursuant to clause (a)
above, OPCO shall cause the Issuable Shares to be deposited with the Exchange
Agent pursuant to and in accordance with Section 5.4(a) of the Merger Agreement
for issuance in accordance with Article 5 of the Merger Agreement.
(c) No fractional Issuable Shares will be issued to any
Designee hereunder. In lieu thereof, payment, if any, will be made pursuant
to, and in accordance with, Section 5.4(e) of the Merger Agreement.
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3. Authorization and Reservation. OPCO shall take all actions
necessary to authorize and reserve for issuance the Issuable Shares pursuant to
this Agreement.
4. Representations and Warranties of OPCO. OPCO hereby
represents and warrants to Wyndham as follows:
(a) OPCO has all necessary corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement by OPCO have been duly and validly
authorized by all necessary corporate action, and no other corporate
proceedings on the part of OPCO are necessary to authorize this Agreement or to
consummate the transactions hereunder. This Agreement has been duly and
validly executed and delivered by OPCO and, assuming the due authorization,
execution and delivery hereof by Wyndham, constitutes the legal, valid and
binding obligation of OPCO, enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally and by
equitable principles to which the remedies of specific performance and
injunctive and similar forms of relief are subject.
(b) The Issuable Shares, when issued, sold and delivered
in accordance with this Agreement, will be validly issued, outstanding, fully
paid and nonassessable, and free and clear of any and all liens, pledges,
encumbrances, charges or claims created by OPCO, and not subject to preemptive
or any other similar rights.
(c) The execution and delivery of this Agreement by OPCO
does not, and the performance of its obligations hereunder and the consummation
of the subscription by it will not, (A) conflict with or violate the
certificate of incorporation or bylaws or equivalent organizational documents
of OPCO or any of its subsidiaries, (B) conflict with, violate or result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, the Pairing Agreement as amended in
accordance with the terms of the Pairing Agreement Amendment (as defined in the
Merger Agreement) and the Cooperation Agreement (as defined in the Merger
Agreement), (C) subject to the making of the filings and obtaining the
approvals identified herein or in the Merger Agreement, conflict with or
violate any Laws applicable to OPCO or any of its subsidiaries or by which any
property or asset of OPCO or any of its subsidiaries is bound or affected, or
(D) conflict with or result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
result in the loss or modification in a manner materially adverse to OPCO or
its subsidiaries of any material right or benefit under, or give to others any
right of termination, amendment, acceleration, repurchase or repayment,
increased payments or cancellation of, or result in the creation of a lien or
other encumbrance on any property or asset of OPCO or any of its subsidiaries
pursuant to, any contract to which OPCO or any of its subsidiaries is a party
or by which OPCO or any of its subsidiaries or any property or asset of OPCO or
any subsidiary is bound or affected, except, in the case of clauses (C) and (D)
for any such conflicts or violations which would not prevent or delay in any
material respect consummation of the Merger, or otherwise, individually or in
the
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aggregate, prevent OPCO from performing its obligations under this Agreement in
any material respect, and would not, individually or in the aggregate, have a
New Patriot Material Adverse Effect.
(d) The execution and delivery of this Agreement by OPCO
does not, and the performance of its obligations hereunder and the consummation
of the subscription by it will not, 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 New Patriot Material
Adverse Effect.
5. Representations and Warranties of Wyndham. Wyndham hereby
represents and warrants to OPCO as follows:
(a) Wyndham has all necessary power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement by Wyndham and the performance by
it of its obligations hereunder have been duly and validly authorized by all
necessary action and no other proceedings on the part of Wyndham are necessary
to authorize this Agreement or to consummate the transactions hereunder. This
Agreement has been duly and validly executed and delivered by Wyndham and,
assuming the due authorization, execution and delivery hereof by OPCO,
constitutes the legal, valid and binding obligation of Wyndham, enforceable
against it in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights generally and by equitable principles to which the remedies
of specific performance and injunctive and similar forms of relief are subject.
(b) The execution and delivery by Wyndham of this
Agreement does not, and the consummation by Wyndham of the transactions
contemplated hereby will not, violate any provision of, or result in a breach,
default or acceleration of any obligation under any contract, agreement or
other instrument to which Wyndham is a party or by which Wyndham is bound.
6. Termination. This Agreement shall terminate effective upon
termination of the Merger Agreement pursuant to Section 10.1 thereof.
7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
8 Assignment; Binding Effect; Benefit. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors. This Agreement may not be assigned by either party
without prior written consent of the other party; provided, however, that
Wyndham may assign its rights and obligations hereunder to an affiliate of
Wyndham, provided that (i) such affiliate agrees to be bound hereby, (ii)
Wyndham remains
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liable hereunder, and (iii) such assignment does not adversely effect the
Transactions from the perspective of the other parties.
9. 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.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement.
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IN WITNESS WHEREOF the parties hereto have executed this Subscription
Agreement as of the date first set forth above.
PATRIOT AMERICAN HOSPITALITY
OPERATING COMPANY
By:
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Name:
Title:
WYNDHAM HOTEL CORPORATION
By:
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Name:
Title:
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