EXHIBIT 4.3
AMENDMENT NO. 3 TO
PAIRING AGREEMENT
THIS AMENDMENT is made as of January 5, 1998 to the Pairing Agreement dated
as of February 17, 1983 and amended on February 18, 1988 and on July 1, 1997
(the "Pairing Agreement"), between PATRIOT AMERICAN HOSPITALITY, INC. (formerly
California Jockey Club, which was formerly Bay Xxxxxxx Realty Enterprises,
Inc.), a Delaware corporation ("Realty"), and PATRIOT AMERICAN HOSPITALITY
OPERATING COMPANY (formerly Bay Xxxxxxx Operating Company), a Delaware
corporation ("Operating Company").
WHEREAS, Patriot American Hospitality, Inc., a Virginia corporation ("Old
Patriot"), and Wyndham Hotel Corporation, a Delaware corporation ("Wyndham"),
entered into an Agreement and Plan of Merger, dated as of April 14, 1997, as
ratified by Realty and Operating Company pursuant to Ratification Agreements
dated July 24, 1997, (collectively, 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 Realty (as successor
by merger to Old Patriot) with Realty as the surviving corporation (the
"Merger"); and
WHEREAS, CF Securities, L.P., a Texas limited partnership ("CF
Securities"), and Old Patriot entered into a Stock Purchase Agreement dated as
of April 14, 1997 (the "Stock Purchase Agreement"), which provides for CF
Securities to sell all of the shares of common stock, par value $.01 per share,
of Wyndham (the "Wyndham Common Stock") owned by CF Securities to Realty and
Operating Company, and to receive in exchange therefor, in accordance with the
terms of the Stock Purchase Agreement, a combination of (i) shares of Realty
Common Stock and Operating Company Common Shares, which shares will be paired,
(ii) shares of Series A Convertible Preferred Stock, par value $.01 per share,
of Realty, which shares (a) shall not be paired with shares of any class or
series of stock of Operating Company and (b) shall be convertible into paired
shares of Realty Common Stock and Operating Company Common Shares under certain
circumstances, and (iii) cash; and
WHEREAS, pursuant to and in compliance with Section 9 of the Pairing
Agreement, Realty and Operating Company desire to amend the Pairing Agreement to
provide for the issuance of shares of any class or series of capital stock,
other than Realty Common Stock or Operating Company Shares, without effective
provision for the simultaneous issuance or transfer of the same number of shares
of the same class or series of capital stock of the other company and without
effective provision for the pairing of such shares, as set forth in this
Amendment.
WHEREAS, to assist Realty in qualifying and maintaining its status as a
real estate investment trust, the Amended and Restated Certificate of
Incorporation of Realty and the Amended and Restated Certificate of
Incorporation of Operating Company (collectively, the "New Charters") will
provide that (i) no Person (other than a Look-Through Entity) (as such
terms are defined in the New Charters) may Beneficially Own or Constructively
Own (as such terms are defined in the New Charters) shares of any class or
series of common stock, par value $.01 per share, or preferred stock, par value
$.01 per share (collectively, "Equity Stock"), of Realty or Operating Company in
excess of 8.0% of the total outstanding shares of such class or series of Equity
Stock of Realty or Operating Company (the "Ownership Limit") and no Look-Through
Entity (as defined in the New Charters) shall Beneficially Own or Constructively
Own shares of Equity Stock in excess of 9.8% of the total outstanding shares of
such class or series of Equity Stock of Realty or Operating Company (the "Look-
Through Ownership Limit"), unless the Ownership Limit or Look-Through Ownership
Limit, as the case may be, is waived by the Board of Directors of the relevant
corporation, and that (ii) any Transfer (as defined in the New Charters) that,
if effective, would (a) result in any Person Beneficially Owning or
Constructively Owning shares of Equity Stock in excess of the Ownership Limit or
Look-Through Ownership Limit, as applicable, (b) result in the shares of capital
stock of Realty being beneficially owned (within the meaning of Section
856(a)(5) of the Internal Revenue Code of 1986, as amended (the "Code")) by
fewer than 100 persons within the meaning of Section 856(a)(5) of the Code, (c)
result in Realty being "closely held" within the meaning of Section 856(h) of
the Code or (d) cause Realty to Constructively Own 10% or more of the ownership
interest in a tenant of the real property of Realty or a subsidiary of Realty
within the meaning of Section 856(d)(2)(B) of the Code (collectively, the
"Transfer Restrictions"), shall be void ab initio, and the intended transferee
shall acquire no right or interest in such shares of Equity Stock; and
WHEREAS, the New Charters will each provide that any shares of any class or
series of Equity Stock of Realty or Operating Company that are Transferred to a
Person (other than a Look-Through Entity) in excess of the Ownership Limit or to
a Look-Through Entity in excess of the Look-Through Ownership Limit or in
violation of any of the Transfer Restrictions shall, subject to certain
provisions of the New Charters, be automatically converted into an equal number
of shares of excess stock, par value $.01 per share ("Excess Stock"), of Realty
or Operating Company, as the case may be, and shall be simultaneously
transferred to a trust (a "Trust") and registered in the name of a trustee (a
"Trustee") and that such Trust and Trustee shall be designated by Realty and
Operating Company in accordance with the Pairing Agreement.
NOW THEREFORE, in consideration of the mutual agreements set forth herein
and in the Pairing Agreement, the parties hereto agree as follows:
1. Section 8 of the Pairing Agreement is hereby deleted in its entirety
and is replaced with the following:
"8. Preferred Stock.
(a) Subject to the terms of the Cooperation Agreement dated as of
December 18, 1997, between Realty and Operating Company (the "Cooperation
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Agreement"), shares of capital stock of any class or series other than
Realty Common Stock, irrespective of whether such shares are convertible
into paired shares of Realty Common Stock and Operating Company Common
Shares, may be issued by Realty to any person without effective provision
for the simultaneous issuance or transfer to the same person of the same
number of shares of that same class or series of capital stock of Operating
Company and without effective provision for the pairing of such shares of
capital stock of Realty and Operating Company, as the Board of Directors of
Realty shall in its sole discretion determine (any such shares of capital
stock of any class or series issued by Realty pursuant to this Section 8(a)
are referred to herein as "Unpaired Realty Shares").
(b) Subject to the terms of the Cooperation Agreement, shares of
capital stock of any class or series other than Operating Company Common
Shares, irrespective of whether such shares are convertible into paired
shares of Realty Common Stock and Operating Company Common Shares, may be
issued by Operating Company to any person without effective provision for
the simultaneous issuance or transfer to the same person of the same number
of shares of that same class or series of capital stock of Realty and
without effective provision for the pairing of such shares of capital stock
of Operating Company and Realty, as the Board of Directors of Operating
Company shall in its sole discretion determine (any such shares of capital
stock of any class or series issued by Operating Company pursuant to this
Section 8(b) together with Unpaired Realty Shares are referred to herein as
"Unpaired Shares").
(c) Unpaired Shares may be transferred on the books of Realty or
Operating Company, as the case may be, without a simultaneous transfer to
the same transferee of any shares of any other class or series of capital
stock of Realty or Operating Company."
2. Section 10 is hereby deleted in its entirety and is replaced with the
following:
"10. Exemption from the Ownership Limit. Operating Company agrees that
it shall not exempt any Person (as defined in the New Charters) from the
Ownership Limit or the Look-Through Ownership Limit (as defined in the New
Charters) pursuant to Section C of Article IV of the New Charters without
the prior written consent of Realty, which consent shall not be unreasonably
withheld."
3. This Amendment shall become effective as of the Effective Time of
the Merger (as defined in the Merger Agreement).
4. Subject to the Amendment set forth herein, the Pairing Agreement
shall continue to be in full force and effect.
5. Capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Pairing Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.
PATRIOT AMERICAN HOSPITALITY, INC.,
a Delaware Corporation
By: /s/ Xxx X. Xxxxxxx
--------------------------------
Name: Xxx X. Xxxxxxx
Title: Chief Financial Officer
PATRIOT AMERICAN HOSPITALITY
OPERATING COMPANY, a Delaware
Corporation
By: /s/ Xxx X. Xxxxxxx
---------------------------------
Name: Xxx X. Xxxxxxx
Title: Chief Financial Officer
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