Exhibit 10.31
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STOCK PURCHASE AGREEMENT
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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
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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 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
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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
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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 hereof and such other facts and circumstances known to Purchaser
as are relevant to such
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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.
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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
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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 Exhibit B. In addition,
Purchaser covenants that, on or before the Closing, Purchaser shall
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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
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represents and warrants to Stockholder as follows:
(a) Organization and Good Standing. On the date hereof, Purchaser is
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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
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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
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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 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,
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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
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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
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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 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
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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
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represents and warrants to Purchaser as follows:
(a) Ownership of Shares. Stockholder (and, if applicable, any
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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,
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validly existing and in good standing under the laws of the State of Texas.
(c) Power and Authorization. Stockholder has full legal right, power
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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
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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 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
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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,
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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
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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.
2.3 Covenants of Purchaser and Stockholder.
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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
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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
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3.1 Mutual Condition. The obligations of Purchaser and Stockholder to
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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
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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 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
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(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
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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.
ARTICLE 4. INDEMNIFICATION
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4.1 Indemnification by Stockholder. Stockholder shall indemnify and hold
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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
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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
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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.
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(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
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5.1 Further Action. Stockholder and Purchaser shall, subject to the
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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 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
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Agreement may assign any of its rights or obligations under this Agreement
without the prior written consent
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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
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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
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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: Xxxxx X. XxXxxxx, Esq.
(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
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accordance with the internal laws of the State of Delaware.
5.6 Survival. All representations, warranties, covenants and agreements
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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.
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(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 (S)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 previously sent, at any time
prior to the Closing to reflect any change in circumstances or any
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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
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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
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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
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counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document. The article and section
headings contained herein are
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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
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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:
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(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
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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
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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
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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
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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
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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
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Name: Xxxx X. Xxxxxxxx
Title: Chairman and Chief Executive
Officer
CF SECURITIES, L.P.
By: Mill Springs Holding, Inc.
Its: General Partner
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
CONSENTED TO FOR THE PURPOSES OF SECTION 5.13:
WYNDHAM HOTEL CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
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