EXHIBIT 10.36
OPTION AGREEMENT
BY AND AMONG
PATRIOT AMERICAN HOSPITALITY PARTNERSHIP, L.P.
AND THE
GRANTORS NAMED HEREIN
April 14, 1997
TABLE OF CONTENTS
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Page
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ARTICLE I: THE OPTION 1
1.1 Grant of Option.................................................. 1
1.2 Term and Exercise of Option...................................... 1
1.3 Purchase Price and Payment....................................... 2
1.4 No Transfers..................................................... 2
ARTICLE II: CONTRACT TO PURCHASE AND CLOSING PROCEDURES.................... 2
2.1 Purchase and Sale................................................ 2
2.2 Closing; Condition to Obligations................................ 3
2.3 Documents to be Delivered at Closing............................. 3
2.4 Further Assurances............................................... 4
ARTICLE III: REPRESENTATIONS, WARRANTIES AND
COVENANTS OF GRANTOR....................................... 4
3.1 Title to Interests............................................... 4
3.2 Authority........................................................ 5
3.3 Litigation....................................................... 5
3.4 No Other Agreements to Sell...................................... 5
3.5 No Brokers....................................................... 6
3.6 Covenant to Remedy Breaches...................................... 6
3.7 WFLP Indebtedness................................................ 6
3.8 Lease Agreement.................................................. 6
3.9 Additional Grantors.............................................. 6
ARTICLE IV: REPRESENTATIONS, WARRANTIES AND
COVENANTS OF OPTIONEE...................................... 6
4.1 Authority........................................................ 6
4.2 No Brokers....................................................... 7
4.3 Covenant to Remedy Breaches...................................... 7
(i)
Page
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ARTICLE V: POWER OF ATTORNEY............................................... 7
5.1 Grant of Power of Attorney....................................... 7
5.2 Limitation on Liability.......................................... 8
5.3 Ratification; Third Party Reliance............................... 8
ARTICLE VI: INDEMNIFICATION................................................ 9
6.1 Indemnification by the Grantors.................................. 9
6.2 Indemnification by Optionee...................................... 9
6.3 Third Party Claims............................................... 9
ARTICLE VII: MISCELLANEOUS................................................. 10
7.1 Amendment........................................................ 10
7.2 Entire Agreement; Counterparts; Applicable Law................... 10
7.3 Assignability.................................................... 10
7.4 Titles........................................................... 10
7.5 Third Party Beneficiary.......................................... 11
7.6 Severability..................................................... 11
7.7 Dispute Resolution............................................... 11
7.8 Equitable Remedies............................................... 12
7.9 Attorneys' Fees.................................................. 12
7.10 Notices; Exercise of Grantor's Purchase Option................... 12
7.11 Waiver of Rights; Consents with Respect to Partnership Interests. 13
7.12 Computation of Time.............................................. 14
7.13 Survival......................................................... 14
7.14 Time of the Essence.............................................. 14
(ii)
OPTION AGREEMENT
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This Option Agreement (hereinafter referred to as this "Option Agreement")
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is executed as of the 14th day of April, 1997 by and among Patriot American
Hospitality Partnership, L.P., a Virginia limited partnership ("Optionee"), and
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those persons whose names are set forth on Exhibit A hereto ("Ownership
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Exhibit") and who become signatories hereto (each, a "Grantor" and,
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collectively, the "Grantors");
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WHEREAS, each Grantor owns general or limited partnership interests
("Interests") in ISIS 2000 Limited Partnership, a Texas limited partnership (the
"Company"), in the amounts set forth on the Ownership Exhibit;
WHEREAS, Optionee, California Jockey Club, a Delaware corporation ("CJC"),
and Bay Meadow Operating Company, a Delaware corporation ("BMOC"), have entered
into an Agreement and Plan of Merger, dated as of February 24, 1997, pursuant to
which Optionee, CJC and BMOC agreed to engage in a business combination among
Optionee, CJC and BMOC;
WHEREAS, in consideration of, among other things, the execution and
delivery of that Agreement and Plan of Merger by and between Wyndham Hotel
Corporation, a Delaware corporation, and Optionee, dated effective as of April
14, 1997 (the "Merger Agreement"), the Grantors desire to undertake and agree to
do as herein set forth; and
WHEREAS, Optionee desires to acquire from each Grantor, and each Grantor
desires to grant to Optionee, an option to purchase, on the terms and conditions
set forth herein, the Interests owned by such Grantor.
NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Optionee and Grantors hereby agree
as follows:
ARTICLE I: THE OPTION
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1.1 Grant of Option. Each Grantor hereby grants to Optionee an option to
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purchase all right, title and interest of such Grantor in all of such Grantor's
Interests (each such option is hereinafter referred to as a "Purchase Option")
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on the terms and conditions hereinafter set forth.
1.2 Term and Exercise of Option.
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(a) Each Purchase Option becomes effective and may be exercised at any
time from and after the date of the effectiveness of the Wyndham Merger (as such
term is defined in Section 2.1 hereof) through 5:00 p.m., Dallas, Texas time, on
the earlier of (i)
April 30, 1999, or (ii) the "Termination Date" (as such term is defined in
Section 1.2(b) hereof) (the earlier of such dates, the "Option Termination
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Date"). Each Grantor's Purchase Option can be exercised only by the giving
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of notice by Optionee to such Grantor (an "Option Exercise Notice"). If
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Optionee does not exercise a Grantor's Purchase Option by the Option Termination
Date, such Grantor's Purchase Option shall be deemed terminated and shall be of
no further force and effect and such Grantor shall have no further obligations
hereunder. If Optionee exercises any Purchase Option, Optionee must exercise
all Purchase Options.
(b) If at any time the Merger Agreement shall have been effectively
terminated pursuant to its terms (the date of such termination being referred to
as the "Termination Date"), all parties hereto will be relieved of all
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obligations under this Option Agreement and all Closing Documents, and this
Option Agreement shall be of no further force and effect (as defined in Section
2.3) (except for obligations arising under Sections 3.5 and 4.2 and Article VI).
1.3 Purchase Price and Payment. The full purchase price for the Interests
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of each Grantor that will be purchased upon the exercise of such Grantor's
Purchase Option (such purchase price with respect to such Grantor hereinafter
referred to as such Grantor's "Purchase Price") shall be an amount that would
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yield an internal rate of return on total capital contributions of such Grantor
as of the date such Purchase Option is exercised (the "Capital Contribution")
equal to 12.5%. The total unreturned Capital Contribution of each Grantor as of
March 31, 1997, is set forth on the Ownership Exhibit.
1.4 No Transfers. From the date hereof to the Option Termination Date,
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each Grantor hereby agrees not to (i) effect any transfer of its Interest in the
Company or (ii) allow any Encumbrance (as defined in Section 3.1) to attach
thereto (with the exception of the obligation of each Grantor (except for Crow
Family Partnership ("CFP") to remit to Wyndham Finance Limited Partnership, a
Texas limited partnership ("WFLP"), all or a portion of the proceeds received
upon the disposition of Grantor's Interest in satisfaction of indebtedness owed
by Grantor to WFLP (the "WFLP Indebtedness")).
ARTICLE II: CONTRACT TO PURCHASE AND CLOSING PROCEDURES
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2.1 Purchase and Sale. Upon (i) Optionee's exercise of a Grantor's
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Purchase Option, and (ii) Optionee's payment of such Grantor's Purchase Price,
which for each Grantor other than CFP shall be paid to WFLP on behalf of such
Grantor, such Grantor shall, subject to Section 2.2 hereof, sell, transfer,
assign, and convey to Optionee, and Optionee shall purchase and accept from such
Grantor, all right, title and interest of such Grantor in those Interests of
Grantor free and clear of all Encumbrances (as defined in Section 3.1), in
accordance with this Article II; provided, that, in the event that the merger
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("Wyndham Merger") described in the Merger Agreement shall not have become
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effective, no exercise of a Grantor's Purchase Option shall be of any effect.
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2.2 Closing; Condition to Obligations. In connection with or at any time
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after the exercise by Optionee of its Purchase Options, Optionee will specify a
closing date, which date will be no later than the Option Termination Date, for
the closing (the "Closing") of the purchase and sale contemplated by each
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Purchase Option. At such Closing, which shall be held in Dallas, Texas, at a
place and time mutually agreeable between the Company and Optionee, Optionee and
each Grantor (or each Grantor's attorney-in-fact) will execute and deliver the
Closing Documents (as defined in Section 2.3) and deliver the same to Optionee
or a person designated by Optionee (the "Closing Agent"), and Optionee shall
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cause to be delivered to CFP and to WFLP on behalf of the other Grantors, such
Grantor's Purchase Price.
2.3 Documents to be Delivered at Closing. At the Closing, each Grantor
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shall, directly or through the Attorney-in-Fact appointed pursuant to Article V
hereof, execute, acknowledge where deemed desirable or necessary by Optionee,
and deliver to Optionee or the Closing Agent, as applicable, in addition to any
other documents mentioned elsewhere herein, the following (the "Closing
Documents"):
(a) An Assignment and Assumption of Interests (the "Assignment"),
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which assignment shall be in a form satisfactory to Optionee and Grantor, shall
contain a warranty of title that such Grantor owns such Grantor's Interests free
and clear of all Encumbrances (as defined in Section 3.1) (with the exception of
the WFLP Indebtedness in the case of each Grantor other than CFP) and shall
either (i) reaffirm the accuracy of all representations and warranties and the
satisfaction of all covenants made by such Grantor in Article III hereof or (ii)
if such reaffirmation cannot be made, identify those representations, warranties
and covenants of Article III hereof (other than Section 3.6) with respect to
which circumstances have changed, represent that such Grantor has used its best
efforts to prevent and remedy such breach, and reaffirm the accuracy of all
other representations and warranties and the satisfaction of all other covenants
made by such Grantor in Article III hereof.
(b) If requested by Optionee, a certified copy of all appropriate
corporate resolutions or partnership actions authorizing the execution, delivery
and performance by Grantor of this Option Agreement, any agreements or
instruments executed in connection with the transactions contemplated by the
exercise of the applicable Purchase Option, including, without limitation, any
waiver, consent or amendment regarding any rights such Grantor might have
pursuant to the partnership agreement of the Company, or elsewhere, which
consent, waiver or amendment, could, if not given or made, adversely affect the
ability of Optionee to consummate the transactions hereunder contemplated.
(c) A revised Ownership Exhibit, which reflects each Grantor's Capital
Contribution as of the date of the Closing.
(d) Any other documents reasonably necessary to assign, transfer and
convey such Grantor's Interests and effectuate the transactions contemplated
hereby, including
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filings with any applicable governmental jurisdiction in which the Optionee is
required to file its partnership documentation.
2.4 Further Assurances. Each Grantor will, from time to time, execute and
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deliver to Optionee all such other and further instruments and documents and
take or cause to be taken all such other and further action as Optionee may
reasonably request in order to effect the transactions contemplated by this
Option Agreement, including instruments or documents deemed necessary or
desirable by Optionee to effect and evidence the conveyance of such Grantor's
Interests in accordance with the terms of this Option Agreement.
ARTICLE III: REPRESENTATIONS, WARRANTIES AND
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COVENANTS OF GRANTORS
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As a material inducement to Optionee to enter into this Option Agreement
and to consummate the transactions contemplated hereby, each Grantor hereby
severally makes to Optionee each of the representations and warranties set forth
in this Article III, which representations and warranties are true as of the
date hereof. As a condition to Optionee's obligation to complete the purchase
of those Interests of Grantor specified in an Option Exercise Notice, such
representations and warranties must continue to be true as of the date of the
Closing (except as otherwise provided in Section 2.3(a)).
3.1 Title to Interests. With the exception of the WFLP Indebtedness, such
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Grantor owns beneficially and of record, free and clear of any claim, lien,
pledge, voting agreement, option, charge, security interest, mortgage, deed of
trust, encumbrance, rights of assignment, purchase rights or other rights of any
nature whatsoever of any third party (collectively, "Encumbrances"), and has
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full power and authority to convey free and clear of any Encumbrances, its
Interests and, upon delivery of an Assignment by such Grantor conveying all of
its Interests and payment for such Interests as herein provided, Optionee (or
its designee or designees) will acquire good and valid title thereto, free and
clear of any Encumbrance except Encumbrances created in favor of Optionee by the
transactions contemplated hereby and those created by Optionee. All of such
Grantor's interest in the Company are those Interests set forth on the Ownership
Exhibit as such Grantor's Interests. To the knowledge of Grantor, all of such
Grantor's Interests have been validly issued, and Grantor has funded (or will
fund before the same is past due) all capital contributions and advances to the
Company that are required to be funded or advanced prior to the date hereof and
the date of the Closing. There are no agreements, instruments or understandings
with respect to any of such Grantor's Interests except as described herein or as
set forth in the partnership agreement of the Company. In making the
representations in this Section 3.1 regarding the absence of Encumbrances, each
Grantor may assume that the consents and waivers of rights set forth in Section
7.11 hereof have been given by all partners of the Company that are signatories
hereto, and that the WFLP Indebtedness has been repaid.
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3.2 Authority. Such Grantor has full right, authority, power and capacity
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(i) to enter into this Option Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of such Grantor pursuant
to this Option Agreement, (ii) to carry out the transactions contemplated hereby
and thereby and (iii) to transfer, sell and deliver all of such Grantor's
Interests to Optionee (or its designee or designees) upon exercise by Optionee
of such Grantor's Purchase Option and payment therefor in accordance with this
Option Agreement. This Option Agreement and each agreement, document and
instrument executed and delivered by or on behalf of such Grantor pursuant to
this Option Agreement constitutes, or when executed and delivered will
constitute, the legal, valid and binding obligation of such Grantor, each
enforceable in accordance with its respective terms. The execution, delivery
and performance of this Option Agreement and each such agreement, document and
instrument by or on behalf of such Grantor (x) does not and will not violate
such Grantor's partnership agreement, declaration of trust, charter or bylaws,
if applicable, (y) to Grantor's knowledge does not and will not violate any
foreign, federal, state, local or other laws applicable to such Grantor or
require such Grantor to obtain any approval, consent or waiver of, or make any
filing with, any person or authority (governmental or otherwise) that has not
been obtained or made or which does not remain in effect and (z) to Grantor's
knowledge, with the exception of that Lease Agreement, as amended, between the
Company and Crow Phoenix Limited Partnership (the "Lease Agreement"), does not
and will not result in a breach of, constitute a default under, accelerate any
obligation under or give rise to a right of termination of, any indenture, loan
or credit agreement, or any other agreement, contract, instrument, mortgage,
lien, lease, permit, authorization, order, writ, judgment, injunction, decree,
determination or arbitration award to which such Grantor is a party or by which
the property of such Grantor is bound or affected, or result in the creation of
any Encumbrance on any of the property or assets of the Company, which would
adversely affect Grantor's ability to transfer good title. In making the
representations set forth in this Section 3.2, each Grantor may assume that the
consents and waivers of rights set forth in Section 7.11 hereof have been given
by all partners of the Company that are signatories hereto.
3.3 Litigation. There is no litigation or proceeding, either judicial or
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administrative, pending or overtly threatened, affecting all or any portion of
such Grantor's ability to consummate the transactions contemplated hereby. Such
Grantor knows of no outstanding order, writ, injunction or decree of any court,
government, governmental entity or authority or arbitration against or affecting
all or any portion of its Interests, which in any such case would impair such
Grantor's ability to enter into and perform all of its obligations under this
Option Agreement.
3.4 No Other Agreements to Sell. Such Grantor represents that it has made
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no agreement with, and will not up to the Option Termination Date enter into any
agreement with, and has no obligation (absolute or contingent) to, any other
person or firm to sell, transfer or in any way encumber any of such Grantor's
Interests or to refrain from selling such Grantor's Interests, or to enter into
any agreement with respect to a sale, transfer or encumbrance of, or put or call
right with respect to, such Grantor's Interests. In making the representations
set
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forth in this Section 3.4, each Grantor may assume that the consents and
waivers of rights set forth in Section 7.11 hereof have been given by all
partners of the Company that are signatories hereto.
3.5 No Brokers. Such Grantor represents that it has not entered into, and
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covenants that it will not enter into, any agreement, arrangement or
understanding with any person or firm which will result in the obligation of
Optionee to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby.
3.6 Covenant to Remedy Breaches. Each Grantor covenants to use its best
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efforts (i) to prevent the breach of any representation or warranty of such
Grantor hereunder, (ii) to satisfy all covenants of such Grantor hereunder and
(iii) to promptly cure any breach of a representation, warranty or covenant of
such Grantor hereunder upon its learning of same.
3.7 WFLP Indebtedness. Pursuant to the terms of the WFLP Indebtedness,
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there are no restrictions on Grantor's repayment of such indebtedness as
contemplated hereby.
3.8 Lease Agreement. Each of the Grantors and the Company shall use its
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reasonable best efforts to obtain required consents under the Lease Agreement or
a lease with substantially equivalent economic terms to be executed and
delivered as of the Closing, (which shall, in no event, require any economic
expenditure on the part of the Grantors).
3.9 Additional Grantors. The Company will use its reasonable best efforts
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to cause any holder of Interests not a party hereto on the date hereof to become
a party to this Option Agreement.
ARTICLE IV: REPRESENTATIONS, WARRANTIES AND COVENANTS OF OPTIONEE
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As a material inducement to each Grantor to enter into this Option
Agreement and to consummate the transactions contemplated hereby, Optionee
hereby makes to each Grantor each of the representations and warranties set
forth in this Article IV, which representations and warranties shall be true as
of the date hereof. As a condition to each Grantor's obligation to complete the
assignment of its Interests, such representations and warranties must continue
to be true as of the date of the Closing or, if not continuing to be true as of
the date of the Closing, will not materially adversely affect Optionee's ability
to pay each Grantor's Purchase Price.
4.1 Authority. Optionee has full right, authority, power and capacity (i)
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to enter into this Option Agreement and each agreement, document and instrument
to be executed and delivered by or on behalf of it pursuant to this Option
Agreement and (ii) to carry out the transactions contemplated hereby and
thereby. This Option Agreement and each agreement, document and instrument
executed and delivered by Optionee pursuant to this Option
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Agreement constitutes, or when executed and delivered will constitute, the
legal, valid and binding obligation of Optionee, each enforceable in accordance
with their respective terms. The execution, delivery and performance of this
Option Agreement and each such agreement, document and instrument by Optionee
(x) does not and will not violate such Optionee's partnership agreement, (y) to
Optionee's knowledge does not and will not violate any foreign, federal, state,
local or other laws applicable to Optionee or require Optionee to obtain any
approval, consent or waiver of, or make any filing with, any person or authority
(governmental or otherwise) that has not been obtained or made or which does not
remain in effect, and (z) to Optionee's knowledge does not and will not result
in a breach of, constitute a default under, accelerate any obligation under or
give rise to a right of termination of, any indenture, loan or credit agreement,
or any other agreement, contract, instrument, mortgage, lien, lease, permit,
authorization, order, writ, judgment, injunction, decree, determination or
arbitration award to which Optionee is a party or by which the property of such
Grantor is bound or affected, or result in the creation of any Encumbrance on
any of the property or assets of the Company, which would materially adversely
affect Optionee's ability to pay the Purchase Price to each Grantor.
4.2 No Brokers. Optionee represents that it has not entered into, and
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covenants that it will not enter into, any agreement, arrangement or
understanding with any person or firm which will result in the obligation of any
Grantor to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby.
4.3 Covenant to Remedy Breaches. Optionee covenants to use its best
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efforts (i) to prevent the breach of any of its representations or warranties
hereunder, (ii) to satisfy all of its covenants hereunder, and (iii) to promptly
cure any breach of a representation, warranty or covenant of Optionee hereunder
upon its learning of same.
ARTICLE V: POWER OF ATTORNEY
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5.1 Grant of Power of Attorney. Each Grantor (except CFP) does hereby
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irrevocably appoint Xxxxx X. Xxxxxxxx and Xxxx X. Xxxxxxx, and each of them
individually and any successor thereof from time to time (such persons or any
such successor of any of them acting in his, her or its capacity as Attorney-in-
Fact pursuant to this Article V, the "Attorney-in-Fact") as the true and lawful
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Attorney-in-Fact and agent of such Grantor, to act in the name, place and stead
of such Grantor to make, execute, acknowledge and deliver all such other
contracts, orders, receipts, notices, requests, instructions, certificates,
consents, letters and other writings (including without limitation the execution
of Closing Documents and any other documents relating to the acquisition by
Optionee of such Grantor's Interests, and any consents contemplated by Section
7.11 hereof) and, in general, to do all things and to take all action which the
Attorney-in-Fact in its sole discretion may consider necessary or proper in
connection with or to carry out the transactions contemplated by this Option
Agreement and the Closing Documents as fully as could such Grantor if personally
present and acting.
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The Power of Attorney granted by each Grantor (except CFP) pursuant to this
Article V and all authority conferred by this Article V is granted and conferred
subject to and in consideration of the interests of the Optionee and the other
Grantors and is for the purpose of completing the transactions contemplated by
this Option Agreement. The Power of Attorney of each Grantor (except CFP)
granted by this Article V and all authority conferred by this Article V is
coupled with an interest and therefore shall be irrevocable and shall not be
terminated by any act of such Grantor or by operation of law, whether by the
death, disability, incapacity or liquidation of such Grantor or by the
occurrence of any other event or events (including without limitation the
termination of any trust or estate for which such Grantor is acting as a
fiduciary or fiduciaries), and if, after the execution hereof, such Grantor
shall die or become disabled or incapacitated or is liquidated, or if any other
such event or events shall occur before the completion of the transactions
contemplated by this Option Agreement, the Attorney-in-Fact shall nevertheless
be authorized and directed to complete all such transactions as if such death,
disability, incapacity, liquidation or other event or events had not occurred
and regardless of notice thereof. Each Grantor acknowledges that Xxxx X.
Xxxxxxx has, and any successor thereof acting as Attorney-in-Fact may have, an
economic interest in the transactions contemplated by this Option Agreement.
Each Grantor (except CFP) agrees that, at the request of Optionee, it will
promptly execute a separate Power of Attorney on the same terms set forth in
this Article V, such execution to be witnessed and notarized.
5.2 Limitation on Liability. It is understood that the Attorney-in-Fact
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assumes, in her capacity as the Attorney-in-Fact, no responsibility or liability
to any person by virtue of the Power of Attorney granted by each Grantor hereby.
The Attorney-in-Fact, in her capacity as the Attorney-in-Fact, makes no
representations with respect to and shall have no responsibility for the
acquisitions of the Interests by Optionee, and shall not be liable for any error
of judgment or for any act done or omitted or for any mistake of fact or law
except for her own gross negligence or willful misconduct. Each Grantor (except
CFP) agrees to indemnify the Attorney-in-Fact for and to hold the Attorney-in-
Fact harmless against any loss, claim, damage or liability incurred on her part
arising out of or in connection with acting as the Attorney-in-Fact under the
Power of Attorney created by such Grantor hereby, as well as the cost and
expense of investigating and defending against any such loss, claim, damage or
liability, except to the extent such loss, claim, damage or liability is due to
the gross negligence or willful misconduct of the Attorney-in-Fact. Each
Grantor agrees that the Attorney-in-Fact may consult with counsel of her own
choice (who may be counsel for the Company) and shall have full and complete
authorization and protection for any action taken or suffered by her hereunder
in good faith and in accordance with the advice of such counsel. It is
understood that the Attorney-in-Fact may, without breaching any express or
implied obligation to the Grantor hereunder, release, amend or modify any other
Power of Attorney granted by any other Grantor (except CFP) hereunder or any
other person under any related agreement.
5.3 Ratification; Third Party Reliance. Each Grantor (except CFP)
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does hereby ratify and confirm all that the Attorney-in-Fact shall lawfully do
or cause to be done by virtue of the exercise of the powers granted unto it by
such Grantor under this Article V, and such
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Grantor authorizes the reliance of third parties on this Power of Attorney and
waives its rights, if any, as against any such third party for its reliance
hereon.
ARTICLE VI: INDEMNIFICATION
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6.1 Indemnification by the Grantors. Each Grantor shall indemnify and
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hold Optionee, its designee or designees hereunder, and their officers,
directors, partners 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 Optionee or any such person may suffer,
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incur or become subject to arising out of, based upon, as a consequence of
relying upon or otherwise in respect of any inaccuracy in or breach of any
representation or warranty of such Grantor made in or pursuant to this Option
Agreement or any breach or nonfulfillment of any covenant or obligation of such
Grantor contained in this Option Agreement.
6.2 Indemnification by Optionee. Optionee shall indemnify and hold the
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Grantors and their officers, directors, partners and shareholders harmless
against and in respect of any and all Damages which the Grantors or any such
person may suffer, incur or become subject to arising out of, based upon, as a
consequence of relying upon or otherwise in respect of any inaccuracy in or
breach of any representation or warranty of Optionee made in or pursuant to this
Option Agreement or any breach or nonfulfillment of any covenant or obligation
of Optionee contained in this Option Agreement.
6.3 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
6.3(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
6.3(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.
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ARTICLE VII: MISCELLANEOUS
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7.1 Amendment. Any amendment hereto shall be effective only against those
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parties hereto who have acknowledged in writing their consent to such amendment,
provided that Optionee may amend this Option Agreement without notice to or the
consent of any Grantor (i) for the purpose of adding additional Grantors as
parties hereto or deleting Grantors as parties herefrom and conforming the
Ownership Exhibit in connection with such additions or deletions and (ii) to
conform the Ownership Exhibit to the extent the Interests set forth therein do
not accurately or completely reflect the interests of such Grantor in the
Company. No waiver of any provisions of this Option Agreement shall be valid
unless in writing and signed by the party against whom enforcement is sought.
7.2 Entire Agreement; Counterparts; Applicable Law. This Option Agreement
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and all Closing Documents (a) constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, (b) may be executed in several
counterparts, each of which will be deemed an original and all of which shall
constitute one and the same instrument and (c) shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of Texas without giving effect to the conflict of laws provisions thereof.
This Option Agreement shall be enforceable as between a Grantor on the one hand,
and the Optionee on the other hand, upon the execution by both of signature
pages hereto, even though other Grantors may be added hereto thereafter.
7.3 Assignability. This Option Agreement shall be binding upon, and shall
-------------
be enforceable by and inure to the benefit of, the parties hereto and their
respective heirs, legal representatives, successors and assigns; provided,
--------
however, that this Option Agreement may not be assigned (except by operation of
-------
law) by any Grantor or Optionee without the prior written consent of the
Optionee or all Grantors, respectively, and any attempted assignment without
such consent shall be void and of no effect; and provided, further, that
--- -------- -------
Optionee may assign this Option Agreement, the Closing Documents and any
agreement contemplated hereunder or thereunder, in whole or in part, or the
right to acquire from a Grantor its Interest after exercise of such Grantor's
Purchase Option, to a direct or indirect subsidiary of Optionee or to BMOC or a
direct or indirect subsidiary of BMOC without the consent of any Grantor.
7.4 Titles. The titles and captions of the Articles, Sections and
------
paragraphs of this Option Agreement are included for convenience of reference
only and shall have no effect on the construction or meaning of this Option
Agreement.
7.5 Third Party Beneficiary. No provision of this Option Agreement is
-----------------------
intended, nor shall it be interpreted, to provide or create any third party
beneficiary rights or any other rights of any kind in any customer, affiliate,
stockholder, partner, director, officer or employee of any party hereto or any
other person or entity; provided, however, that Sections
-------- -------
10
5.2, 5.3 and 7.11 of this Option Agreement shall be enforceable by and shall
inure to the benefit of the persons described therein.
7.6 Severability. If any provision of this Option Agreement, or the
------------
application thereof, is for any reason held to any extent to be invalid or
unenforceable, the remainder of this Option Agreement and application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Option Agreement with a
valid and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of the void or unenforceable provision and
to execute any amendment, consent or agreement deemed necessary or desirable by
Optionee to effect such replacement.
7.7 Dispute Resolution. Any dispute relating to or any determination with
------------------
respect to any matter set forth in this Option Agreement shall be finally
settled by arbitration conducted expeditiously in accordance with the Center for
Public Resources Rules for Nonadministered Arbitration of Business Disputes (the
"CPR Rules"). The Center for Public Resources shall appoint a neutral advisor
from its National CPR Panel having appropriate experience in the matters that
are the subject of the dispute (the "Advisor"). The arbitration shall be
governed by the United States Arbitration Act, 9 U.S.C. (S)(S)1-16, and judgment
upon the award rendered by the Advisor may be entered by any court having
jurisdiction thereof. The place of arbitration shall be Dallas, Texas.
Such proceedings shall be administered by the Advisor in accordance with
the CPR Rules as he/she deems appropriate; however, such proceedings shall in
any event be governed by the following agreed upon procedures:
(a) the Advisor shall be appointed within 10 days of the service of a
statement of claim, the initial pre-hearing conference shall take place within
twenty (20) days after appointment of the Advisor, and the arbitration hearing
shall commence within sixty (60) days after appointment of the Advisor;
(b) Subject to the following agreed-upon modifications, discovery
shall be governed by Rule 10 of the CPR Rules:
(i) the parties agree to a mandatory exchange of all relevant
documents, to be accomplished within twenty (20) days of request by the
other party; and
(ii) each party shall be entitled to no more than two (2)
depositions; such depositions may be scheduled on ten (10) days notice to
the other Party;
(c) hearings before the Advisor which shall consist of a presentation
by each side of not more than three days; such hearings to take place on six
days at a maximum; and
11
(d) decision to be rendered in writing, with a statement of reasons
supporting the decision, not more than fifteen (15) days following such
hearings.
7.8 Equitable Remedies. The parties hereto agree that irreparable damage
------------------
would occur in the event that any of the provisions of this Option Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Option Agreement and to
enforce specifically the terms and provisions hereof in any federal or state
court located in Dallas, Texas (as to which the parties agree to submit to
jurisdiction for the purposes of such action), this being in addition to any
other remedy to which they are entitled at law or in equity.
7.9 Attorneys' Fees. In connection with any litigation or a court
---------------
proceeding arising out of this Option Agreement, the prevailing party shall be
entitled to recover all costs incurred, including reasonable attorneys' fees and
legal assistants' fees and costs whether incurred prior to trial, at trial, or
on appeal.
7.10 Notices; Exercise of Grantor's Purchase Option. Any notice or
----------------------------------------------
demand which must or may be given under this Option Agreement (including an
Option Exercise Notice) or by law shall, except as otherwise provided, be in
writing and shall be deemed to have been given (i) when physically received by
personal delivery (which shall include the confirmed receipt of a telecopied
facsimile transmission), (ii) five (5) business days after being deposited in
the United States certified or registered mail, return receipt requested,
postage prepaid, or (iii) one (1) business day after being deposited with a
nationally known commercial courier service providing next day delivery service
(such as Federal Express); addressed and delivered or telecopied (a) in the case
of a notice to the Optionee at the following address and telecopy number:
c/o Patriot American Hospitality, Inc.
0000 XXX Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attn: Xxxx X. Xxxxxxxx, Chairman and
Chief Executive Officer
and (b) in the case of a notice to a Grantor, at the address and telecopy number
set forth under such Grantor's name on the Ownership Exhibit hereto.
7.11 Waiver of Rights; Consents with Respect to Partnership Interests.
----------------------------------------------------------------
Each Grantor acknowledges that the agreements contained herein and the
transactions contemplated hereby and any actions taken in contemplation of the
transactions contemplated hereby may conflict with, and may not have been
contemplated by, the partnership agreement
12
of the Company or one or more other agreements among one or more of the partners
of the Company or between the Company and Wyndham Hotel Corporation. With
respect to all of its interests in the Company or any such agreement to which it
may be a party or beneficiary, each Grantor from the date hereof to the Option
Termination Date expressly gives all Consents (and any consents necessary to
authorize the proper parties in interest to give all Consents) and Waivers (as
such terms are hereinafter defined).
As used herein, the term "Consent" means, any consent necessary or
-------
desirable under the partnership agreement of the Company, any other agreement
among all or any of the holders of interests therein, any other agreement
relating thereto or referred to therein or any service agreement between the
Company and Wyndham Hotel Corporation (i) to permit any and all actions
hereunder contemplated relating thereto or to amend such partnership agreement
and/or other agreements so that no provision thereof prohibits, restricts,
impairs or interferes with any such action (such amendments to include, without
limitation, the deletion of provisions which could cause a default under such
agreement if interests therein were transferred, among other things, for cash or
for property or in violation of notice, rights-of-first refusal or other
provisions), (ii) to admit Optionee, or its designee or designees, as a
substituted limited partner or general partner of the Company upon Optionee's,
or its designee's or designees' (as permitted by Section 7.3), acquisition of a
limited or general partner interest in the Company, respectively, and to adopt
such amendment as may be necessary or desirable to effect such admission, and
(iii) to continue such partnership following the transfer of interests therein
to Optionee. As used herein, the term "Waiver" means, the waiving of any and
------
all rights that such Grantor may have with respect to, and (to the extent
possible) that any other person may have with respect to, or that may accrue to
such Grantor or other person upon the occurrence of the actions hereunder
contemplated, including, but not limited to, rights of notice, rights to
response periods, rights to purchase the direct or indirect interests of another
partner in the Company or to sell such Grantor's or other person's direct or
indirect interest therein to another partner or person, rights to sell such
Grantor's or other person's direct or indirect interest therein at a price other
than as provided herein, or rights to prohibit, limit, invalidate, otherwise
restrict or impair any such action or to cause a termination or dissolution of
the Company because of such action. Each Grantor further covenants that such
Grantor will take no action to enjoin, or seek damages resulting from, any
action hereunder contemplated by any holder of a direct or indirect interest in
the Company.
7.12 Computation of Time. Any time period provided for herein which
-------------------
shall end on a Saturday, Sunday or legal holiday shall extend to 5:00 p.m. of
the next full business day. All times are Central Time.
7.13 Survival. It is the express intention and agreement of the
--------
parties hereto that the representations, warranties and covenants of each
Grantor set forth in Section 3.1 of this Option Agreement shall survive the
consummation of the transactions contemplated hereby.
13
7.14 Time of the Essence. Time is of the essence with respect to all
-------------------
obligations of each Grantor under this Option Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
14
OPTION AGREEMENT RE:
ISIS 2000 LIMITED PARTNERSHIP
IN WITNESS WHEREOF, each of the parties hereto has executed this Option
Agreement, or caused this Option Agreement to be duly executed on its behalf, as
of the date first above written.
OPTIONEE: PATRIOT AMERICAN HOSPITALITY
PARTNERSHIP, L.P., a Virginia limited
partnership
By: PAH GP, Inc., a Virginia corporation, its
general partner
By:/s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman and CEO
GRANTOR SIGNATURE PAGE
The undersigned, each desiring to become one of the within named
Grantors to that certain Option Agreement by and among Patriot American
Hospitality Partnership, L.P., a Virginia limited partnership, and such
Grantors, dated as of the date first written above, and to grant the Purchase
Option described therein, each hereby becomes a party to such Option Agreement
and agrees to the terms and conditions thereof and makes the representations,
warranties and covenants contained therein. Each of the undersigned agrees that
this signature page may be attached to any counterpart of said Option Agreement.
/s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------------
Xxxxxxx X. Xxxxxx, Xx.
/s/ Xxxx X. Xxxxxxx
------------------------------
Xxxx X. Xxxxxxx
GRANTOR SIGNATURE PAGE
The undersigned, each desiring to become one of the within named
Grantors to that certain Option Agreement by and among Patriot American
Hospitality Partnership, L.P., a Virginia limited partnership, and such
Grantors, dated as of the date first written above, and to grant the Purchase
Option described therein, each hereby becomes a party to such Option Agreement
and agrees to the terms and conditions thereof and makes the representations,
warranties and covenants contained therein. Each of the undersigned agrees that
this signature page may be attached to any counterpart of said Option Agreement.
CROW FAMILY PARTNERSHIP, LP, a
Delaware limited partnership
By: Crow Family, Inc., its general partner
By:/s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
ISIS CRO, Inc., a Texas corporation
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
