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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 Xxxxxxx 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
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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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(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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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 Xxxxxxx, Procter & Xxxx 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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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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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 Xxxx-Xxxxx-Xxxxxx 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 Xxxxx Xxxxxx Inc. ("Xxxxx
Xxxxxx"), the Special Committee of
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the Board of Directors of Wyndham's arrangements with Xxxxxxx Xxxxx & Co.
("Xxxxxxx Xxxxx"), and the Stockholders' arrangements with Xxxxxxxxxx
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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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 Xxxxxxxxxx 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 Xxxxx Xxxxxx and Xxxxxxx Xxxxx, 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) Xxxxxxx, Procter & Xxxx LLP shall have delivered an
opinion addressed to Stockholder substantially to the same effect as the
opinion of Xxxxxxx, Procter & Xxxx 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.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxxxx
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with copies to:
Crow Family Holdings
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: M. Xxxxx Xxxxxx, Esq.
and:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxx X. XxXxxxx
(b) If to Purchaser, to it at:
Patriot American Hospitality, Inc.
0000 XXX Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: President
with a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, 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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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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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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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.
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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]
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{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/ XXXX X. XXXXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman & CEO
CF SECURITIES, L.P.
Mill Springs Holding, Inc.
By: /s/ XXXXXX X. XXXX
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
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CONSENTED TO FOR THE PURPOSES OF SECTION 5.13:
WYNDHAM HOTEL CORPORATION
By: /s/ XXXXX X. XXXXXXXX
---------------------------
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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
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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.
