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EXHIBIT 4.4
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COOPERATION AGREEMENT
between
PATRIOT AMERICAN HOSPITALITY, INC.
and
PATRIOT AMERICAN HOSPITALITY OPERATING COMPANY
dated as of
December 18, 1997
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TABLE OF CONTENTS
PAGE
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RECITALS..................................................... 1
ARTICLE I - DEFINITIONS...................................... 2
ARTICLE II - GENERAL COOPERATION AND COORDINATION............ 6
2.1 General......................................... 6
2.2 Joint Board Meetings............................ 7
2.3 Establishment of Cooperation Committee.......... 7
2.4 Corporate Matters Categories.................... 7
2.5 Consideration of Corporate Matters.............. 8
2.6 Reconsideration Process......................... 9
2.7 Change in Patriot's Line of Business............ 9
2.8 Hotel Acquisitions Committee.................... 9
2.9 Limitation on Committees........................ 10
2.10 Voting by Directors............................. 10
2.11 Effectiveness of Certain Sections............... 10
ARTICLE III - ISSUANCE OF PAIRED AND UNPAIRED EQUITY......... 10
3.1 General......................................... 10
3.2 Authority to Issue Paired Equity................ 11
3.3 Procedures in Connection with Issuance of
Paired Equity.............................. 12
3.4 Authority to Issue Unpaired Equity.............. 14
3.5 Procedures in Connection with Issuance of
Unpaired Equity............................ 14
3.6 Holders of Unpaired Equity...................... 14
3.7 Operating Partnership Redemption Provisions..... 14
3.8 Ordinary Course................................. 15
3.9 Indemnification................................. 15
ARTICLE IV - TERMINATION OF DIRECTORS........................ 15
ARTICLE V - CHARTER AND BYLAW PROVISIONS..................... 15
ARTICLE VI - EXCHANGE OF INFORMATION......................... 15
6.1 Provision of Corporate Records; Agreement for
Exchange of Information.................... 15
6.2 Ownership of Information........................ 16
6.3 Compensation for Providing Information.......... 16
(i)
ARTICLE VII - TERMINATION.................................... 16
7.1 Termination by Mutual Consent................... 16
7.2 Other Termination............................... 16
7.3 Effect of Termination........................... 16
ARTICLE VIII - PARTIES' REMEDIES UNDER ARTICLES III, IV,
V and VI...................................... 17
ARTICLE IX - MISCELLANEOUS................................... 17
9.1 Counterparts; Entire Agreement;
Corporate Power............................ 17
9.2 Governing Law................................... 17
9.3 Assignability................................... 17
9.4 Third Party Beneficiaries....................... 18
9.5 Notices......................................... 18
9.6 Severability.................................... 19
9.7 Headings........................................ 19
9.8 Waivers of Defaults............................. 19
9.9 Amendments...................................... 19
9.10 Interpretation.................................. 19
9.11 Dispute Resolution.............................. 20
(ii)
COOPERATION AGREEMENT
This COOPERATION AGREEMENT (this "Agreement"), is made and entered into as
of December 18, 1997, between Patriot American Hospitality, Inc., a Delaware
corporation which operates as a real estate investment trust (together with its
predecessors, "Patriot"), and Patriot American Hospitality Operating Company, a
Delaware corporation ("OPCO"). Certain terms used but not defined below have
the definitions set forth in Article I - Definitions.
RECITALS
WHEREAS, Patriot and Wyndham Hotel Corporation, a Delaware corporation
("Wyndham"), entered into an Agreement and Plan of Merger dated as of April 14,
1997 (the "Merger Agreement") in which Patriot and Wyndham agreed to engage in a
business combination pursuant to which, at the Effective Time (as defined in the
Merger Agreement), Wyndham will merge with and into Patriot with Patriot being
the surviving corporation (the "Merger");
WHEREAS, immediately following the Merger, the shares of common stock, par
value $.01 per share, of OPCO (the "OPCO Paired Stock") and the shares of common
stock, par value $.01 per share, of Patriot (the "Patriot Paired Stock") will be
paired and transferable and traded only in combination as a single unit on the
New York Stock Exchange (together, the "Paired Shares" or "Paired Equity");
WHEREAS, the parties to this Agreement (each a "Party" and, together, the
"Parties") have determined that it is necessary and desirable to set forth the
agreements and understandings that will govern certain matters that may arise
between Patriot and OPCO, including, without limitation, the issuance of Paired
Equity;
WHEREAS, the Parties recognize that an essential and necessary objective
and purpose of this Agreement is to make clear and to provide certainty that
Patriot shall have the sole right and power to (a) authorize, effect and control
Issuances of Paired Equity and (b) control Issuances of Unpaired Equity pursuant
to the operations and authority of the Unpaired Equity Committee, as provided
for herein;
WHEREAS, the Board of Directors of each of OPCO and Patriot (together, the
"Boards") have resolved that, in the business judgment of each of such Boards,
the creation of a single corporate mechanism for Issuances of Paired Equity will
maximize the continued growth of the Paired REIT Structure and overall
shareholder value;
WHEREAS, OPCO acknowledges that any Issuance of Paired Equity may require
certain actions to be taken by OPCO and its Board of Directors that cannot be
effected by Patriot's Board of Directors and that this Agreement requires OPCO
and its Board of Directors to take such actions at the request of Patriot's
Board of Directors as set forth herein; and
WHEREAS, the execution and delivery of this Agreement by the Parties is a
condition to the obligation of Wyndham to consummate the Merger, and the
acknowledgment and agreement to be bound by this Agreement by Wyndham is a
condition to the obligation of Patriot to consummate the Merger.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
ARTICLE I - DEFINITIONS
As used in this Agreement, capitalized terms defined immediately after
their use shall have the respective meanings thereby provided and the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"ACTION" means any demand, action, suit, countersuit, arbitration, inquiry,
proceeding or investigation by or before any federal, state, local, foreign or
international Governmental Authority or any arbitration or mediation tribunal.
"AFFILIATE" of any Person means a Person that controls, is controlled by,
or is under common control with such Person. As used herein, "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through
ownership of voting securities or other interests, by contract, or otherwise.
"BLUE SKY DOCUMENTS" means any and all applications, certificates and other
papers and documents necessary to comply with the applicable securities laws of
any state or other jurisdiction within the United States, including but not
limited to, applications, notices, reports, surety bonds, proscribed forms of
preambles or resolutions relating to the sale of securities, irrevocable
consents and appointments of attorneys for service of process.
"CHANGE OF CONTROL" shall mean the occurrence, with respect to either
Patriot or OPCO, of any one of the following events (Patriot and OPCO being
referred to below, as the case may be, as the "Company"):
(i) any "person," as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Company or any trustee fiduciary or
other person or entity holding securities under any employee benefit plan
or trust of the Company, together with all "affiliates" and "associates"
(as such terms are defined in Rule 12b-2 under the Exchange Act) of such
person, shall become the "beneficial owner" (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing 50% or more of either (A) the combined voting
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power of the Company's then outstanding securities having the right to vote
generally in an election of the Company's Board of Directors (the "Voting
Securities") or (B) the then outstanding Paired Shares (in either such case
other than as a result of an acquisition of securities directly from the
Company); or
(ii) (A) any consolidation or merger of the Company where the
stockholders of the Company, immediately prior to the consolidation or
merger, would not, solely as a result of their capacity as such,
immediately after the consolidation or merger, beneficially own (as such
term is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, securities representing in the aggregate 50% or more of the
voting securities of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company or (C) any
plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as
the result of an acquisition of securities by the Company which, by
reducing the number of Paired Shares or other Voting Securities
outstanding, increases (x) the proportionate number of Paired Shares
beneficially owned by any person to 50% or more of the Paired Shares then
outstanding or (y) the proportionate voting power represented by the Voting
Securities beneficially owned by any person to 50% or more of the combined
voting power of all then outstanding Voting Securities; provided, however,
that if any person referred to in clause (x) or (y) of this sentence shall
thereafter become the beneficial owner of any additional Paired Shares or
other Voting Securities (other than pursuant to a stock split, stock
dividend, or similar transaction) and whose ownership immediately
thereafter shall equal or exceed the amounts set forth in clauses (x) or
(y), then a "Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause (i).
"CHANGE IN PATRIOT'S LINE OF BUSINESS" shall mean an action by Patriot or
Patriot OP (as hereinafter defined) with respect to Patriot's or Patriot OP's
business that results in the consolidation for financial reporting purposes of
the results of operations of Patriot with those of any business activity other
than hospitality and hospitality-related businesses, the gaming business and any
other business in which Patriot or Patriot OP is engaged on the date hereof.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONSENTS" means any consents, waivers or approvals from, or notification
requirements to, any third parties.
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"CROW OWNERSHIP THRESHOLD" means beneficial ownership of at least five
percent (5%) of the lesser of (x) the sum of (i) the number of then outstanding
Paired Shares and (ii) the number of then outstanding shares of Unpaired
Preferred Stock, or (y) the sum of (i) the number of Paired Shares outstanding
immediately after the Merger and (ii) the number of shares of Unpaired Preferred
Stock outstanding immediately after the Merger (the lesser of (x) and (y) being
the "Sum") (provided, however, that in the event the Standstill Agreement dated
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July 24, 1997 between Patriot and CF Securities, L.P. is no longer in effect,
then the Sum shall be (x), irrespective of the number of shares computed
pursuant to (y)).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GOVERNMENTAL APPROVALS" means any notices, reports or other filings to be
made, or any consents, registrations, approvals, permits or authorizations to be
obtained from, any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, local, foreign or
international court, government, department, commission, board, bureau, agency,
official or other regulatory, administrative or governmental authority.
"INFORMATION" means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data.
"ISSUANCE OF PAIRED EQUITY" means a private or public offering, sale,
issuance or delivery of, or commitment or agreement to commit to offer, sell,
issue or deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of any
class or any other debt or equity securities of OPCO (including, without
limitation, indebtedness having the right to vote, indebtedness convertible into
any equity of any class or any other securities) or limited partnership
interests or units of Patriot American Hospitality Operating Partnership, L.P.
("OPCO OP")), or equity equivalents of either (including, without limitation,
stock appreciation rights), if it is contemplated that such stock or other
securities, or any securities underlying such stock or other securities, would
or could be paired with Patriot Stock (as defined in the Merger Agreement) or
any other securities of Patriot, or, in the case of limited partnership
interests or units of OPCO OP, it is contemplated that such interests or units
would be economically (or otherwise) "paired" (even if not pursuant to the
Pairing Agreement (as defined in the Merger Agreement)) with the limited
partnership interests or units of Patriot American Hospitality
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Partnership, L.P. ("Patriot OP"). Issuance of Paired Equity shall also mean (A)
the related issuance by Patriot or Patriot OP of the securities of Patriot or
Patriot OP which are paired with the securities of OPCO or OPCO OP and (B) any
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares for other shares of the companies,
repurchase or redemption of shares, change in corporate structure or the like in
which the outstanding Paired Shares would be increased, decreased, changed into
or exchanged for a different number or kind of Paired Shares or other paired
securities.
"ISSUANCE OF UNPAIRED EQUITY" means, in the case of OPCO, a public or
private offering, sale, issuance, delivery or commitment or agreement to commit
to offer, sell, issue or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or otherwise)
any or all securities described in the immediately preceding definition of
"Issuance of Paired Equity" if it is contemplated that such stock or other
securities, and any securities underlying such stock or other securities, would
not or could not be paired with Patriot Stock (as defined in the Merger
Agreement) or any other securities of Patriot or, in the case of limited
partnership interests or units of OPCO OP, it is contemplated that such
interests or units would not or could not economically (or otherwise) be
"paired" with the limited partnership interests or units of Patriot OP.
"Issuance of Unpaired Equity" means, in the case of Patriot, a public or private
offering, sale, issuance or delivery of, or commitment or agreement to commit to
offer, sell, issue or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or otherwise),
any stock of any class or any other debt or equity securities of Patriot
(including, without limitation, indebtedness having the right to vote and
indebtedness convertible into any equity of any class or any other securities)
or limited partnership interests or units of Patriot OP, or equity equivalents
of either (including, without limitation, stock appreciation rights), if it is
contemplated that such stock or other securities, and any securities underlying
such stock or other securities, would not or could not be paired with OPCO Stock
(as defined in the Merger Agreement) or any other securities of OPCO or, in the
case of limited partnership interests or units of Patriot OP, it is contemplated
that such interests or units would not or could not be economically (or
otherwise) "paired" (even if not pursuant to the Pairing Agreement (as defined
in the Merger Agreement)) with the limited partnership interests or units of
OPCO OP.
"PAIRED EQUITY OFFICER/DIRECTOR" means any officer or officers of Patriot
designated by Patriot's Board of Directors, from time to time, to be a Paired
Equity Officer/Director pursuant to Section 3.2(a) hereof.
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"PAIRED REIT STRUCTURE" means the effectively consolidated structure of
Patriot and OPCO as a result of the paired nature of the Paired Shares.
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"PERSON" means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability entity, any other entity and any Governmental Authority.
"REGISTRATION STATEMENT" means any registration statement filed under the
Securities Act that covers any Paired Equity, including the related prospectus,
all amendments and supplements to such registration statement (including post-
effective amendments), all exhibits and all material incorporated by reference
or deemed to be incorporated by reference in such registration statement.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"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.
"UNPAIRED PREFERRED STOCK" means shares of unpaired preferred stock, par
value $.01 per share, of Patriot.
"UNPAIRED EQUITY COMMITTEE" means that committee whose members shall
consist of (i) the Chairman of Patriot's Board of Directors, (ii) the Chairman
of OPCO's Board of Directors (except as provided below), (iii) two designees of
Patriot from either Patriot's or OPCO's Board of Directors and (iv) one designee
of OPCO from either Patriot's or OPCO's Board of Directors. Upon consummation
of the Merger, the members of the Unpaired Equity Committee shall consist of (i)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ until such time as he shall no longer serve as Chairman of
Patriot's Board of Directors and, after such time, the Chairman of Patriot's
Board of Directors, (ii) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ until such time as he shall no longer
serve as Chairman of OPCO's Board of Directors and, after such time, the
Chairman of OPCO's Board of Directors, (iii) two designees of Patriot from
either Patriot's or OPCO's Board of Directors and (iv) one designee of OPCO from
either Patriot's or OPCO's Board of Directors.
ARTICLE II - GENERAL COOPERATION AND COORDINATION
2.1 General. Patriot and OPCO hereby agree that it is in the best
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interests of both entities and their shareholders that they cooperate to the
fullest extent possible in the conduct of their respective operations. In that
regard, Patriot and OPCO hereby agree to take all necessary action to preserve
the Paired REIT Structure and to maximize the economic and tax advantages
associated therewith.
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2.2 Joint Board Meetings. In furtherance of the foregoing, meetings of
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the Boards of Directors of Patriot and OPCO may be held jointly if their
respective Chairmen so decide.
2.3 Establishment of Cooperation Committee. Patriot and OPCO hereby agree
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to establish, as promptly as practicable following the closing of the Merger,
and thereafter to continue in effect, a committee (the "Cooperation Committee")
consisting of (i) the Chairman of Patriot's Board of Directors (who shall be the
Chairman of the Cooperation Committee), (ii) the Chairman of OPCO's Board of
Directors, (iii) a designee of Patriot's Board of Directors reasonably
acceptable to OPCO (who shall serve at the pleasure of Patriot's Board of
Directors and may be removed and replaced at any time) (provided, however, that
for purposes of the foregoing, OPCO acknowledges that ▇▇▇▇▇ ▇▇▇▇▇▇▇ is a
reasonably acceptable designee), and (iv) the President of OPCO. Initially, the
Cooperation Committee will consist of (i) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (as committee
Chairman), (ii) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, (iii) ▇▇▇▇▇▇▇ ▇▇▇▇▇ (as the designee of
Patriot's Board of Directors) or another designee of such Board of Directors and
(iv) ▇▇▇▇▇ ▇▇▇▇▇▇▇. The Cooperation Committee will normally consider and
propose the agenda listing the matters to be considered at any joint meeting of
the Boards of Directors of Patriot and OPCO, subject to the right of a Board
member to request consideration of additional matters. The Cooperation Committee
shall establish such procedures for the conduct of its business as it shall deem
appropriate from time to time.
2.4 Corporate Matters Categories. All matters to be considered by the
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Board of Directors of either Patriot or OPCO, and all matters related thereto,
except (i) a Change in Patriot's Line of Business and (ii) Issuances of Paired
Equity and Issuances of Unpaired Equity, shall be classified into the most
appropriate of the following three categories:
(a) Routine corporate governance matters, such as approval and
retention of independent accountants, the fixing of employee compensation and
other like matters (each, a "Category 1 Matter");
(b) All other matters, other than a Change of Control and the removal
of the Chairman or Chief Executive Officer of either Patriot or OPCO and, after
the third anniversary of the Merger, all other matters (including a Change of
Control) other than the removal of the Chairman or Chief Executive Officer of
either Patriot or OPCO (each, a "Category 2 Matter"); and
(c) The removal of the Chairman or Chief Executive Officer of either
Patriot or OPCO and, until the third anniversary of the Merger, any proposed
action by Patriot or OPCO, as the case may be, that would result in a Change of
Control (each, a "Category 3 Matter").
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2.5 Consideration of Corporate Matters.
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(a) At any meeting of the Board of Directors of Patriot or OPCO
(whether or not held jointly), each of Patriot and OPCO, as the case may be, may
(the Board submitting any matter being referred to herein as the "Proposing
Board") (i) submit a Category 1 Matter to the consideration and vote of its
Board, irrespective of any consideration or vote by the other Board, (ii) submit
a Category 2 Matter to the consideration and vote of its Board, with such matter
requiring the majority vote of its Board for approval, and (iii) submit a
Category 3 Matter to the consideration and vote of its Board, with such matter
requiring a 66-2/3% vote of its Board for approval.
(b) If the Proposing Board at any such meeting that is not held
jointly (the "Proposing Board Meeting") shall have approved any Category 2
Matter or Category 3 Matter, such Proposing Board shall promptly provide notice
(the "Proposing Board Notice") to the other company in accordance with Section
9.5 hereof of the occurrence of such meeting and the Category 2 Matters or
Category 3 Matters approved at such meeting. The Cooperation Committee shall
convene promptly (in any event, within ten (10) business days) following the
Proposing Board Meeting to consider the actions taken by the Proposing Board.
If the Cooperation Committee votes to approve the action taken by the Proposing
Board with respect to any such matter, then the action authorized by the
Proposing Board may be implemented without consideration of such matter by the
other Board. If the Cooperation Committee does not approve the action taken by
the Proposing Board, the other company's Board (the "Responding Board") may then
hold a meeting within fifteen (15) business days following receipt by such other
company of the Proposing Board Notice to consider and vote upon the Category 2
Matters or Category 3 Matters approved by the Proposing Board and during such
period the action authorized by the Proposing Board may not be implemented. In
the event that the Responding Board approves at such a meeting the action taken
by the Proposing Board or the Responding Board does not hold a meeting within
fifteen (15) business days following receipt of the Proposing Board Notice, the
action authorized by the Proposing Board may thereafter be implemented.
(c) In the event the Responding Board holds a meeting within fifteen
(15) business days following receipt of the Proposing Board Notice but does not
approve the action authorized by the Proposing Board, the action authorized by
the Proposing Board may not be implemented. In such an event, the Cooperation
Committee will convene promptly following the meeting of the Responding Board to
consider the contrary positions of the Proposing Board and the Responding Board
and recommend a resolution of such contrary positions in connection with the
reconsideration process described below (the "Reconsideration Process"). The
Boards will then follow the Reconsideration Process.
(d) At any joint meeting of the Boards of Directors of Patriot and
OPCO, in the event that the Proposing Board approves a Category 2 Matter or
Category 3 Matter but the other Board does not, the action authorized by the
Proposing Board may not be implemented.
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The Cooperation Committee shall convene immediately following the joint meeting
(unless a quorum of the Cooperation Committee is not present, in which case the
Cooperation Committee shall convene as soon as practicable thereafter) to
consider the votes of the Boards taken at such meeting. The Boards will then
follow the Reconsideration Process described below.
2.6 Reconsideration Process. Following any meeting of the Cooperation
-----------------------
Committee as described above, any Proposing Board may reconsider a Category 2
Matter at any subsequent meeting of such Board and, if the Proposing Board
approves such matter by a majority vote at such subsequent meeting, then the
Proposing Board may take the action contemplated by such matter regardless of
the position of the other Board. Following any meeting of the Cooperation
Committee as described above, the Proposing Board may reconsider a Category 3
Matter at any subsequent meeting of such Board and, if the Proposing Board
approves such matter by a 66-2/3% vote at such subsequent meeting, then the
Proposing Board may take the action contemplated by such matter (but only if the
other Board approves such matter by a majority vote in the case of a Change of
Control).
2.7 Change in Patriot's Line of Business. Until the third anniversary of
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the Merger, any Change in Patriot's Line of Business shall require a 66-2/3%
vote of Patriot's Board and a majority vote of OPCO's Board for approval.
2.8 Hotel Acquisitions Committee. Patriot and OPCO hereby agree to
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establish, as promptly as practicable following the closing of the Merger, and
thereafter to continue in effect as provided herein, a hotel acquisitions
committee (the "Hotel Acquisitions Committee") to analyze, evaluate and consider
potential acquisitions by Patriot or OPCO of hotel properties and related assets
(which properties and related assets may consist of a portfolio of hotel
properties and related assets, and which may be acquired in any form, such as by
merger, asset acquisition or otherwise) ("Hotel Acquisitions"). The Hotel
Acquisitions Committee shall have the sole power and authority to authorize
Patriot or OPCO, as the case may be, to enter into a binding agreement with
respect to Hotel Acquisitions involving a proposed purchase price (inclusive of
any indebtedness to be assumed in connection therewith) not exceeding (with
respect to each Hotel Acquisition or such series of Hotel Acquisitions as are
reasonably likely to be considered an integrated transaction) 5% of the total
combined market capitalization of Patriot and OPCO (which for such purposes
shall include, without limitation, the aggregate number of outstanding shares of
Paired Equity, including equity securities of Patriot or OPCO that are
convertible into Paired Equity, and including limited partnership interests or
units of Patriot OP or OPCO OP for which Paired Equity may be received upon
redemption of such interests or units by the holders thereof, in each case
valued at the market value for the underlying Paired Equity) computed as of the
last business day of the month immediately preceding the month during which such
Hotel Acquisition is to be authorized and based on the average closing sale
price of a Paired Share over the five (5) trading days immediately preceding
such business day. The Hotel Acquisitions Committee shall consist of six
members as follows: (i) the Chairman of Patriot's Board of Directors, (ii) the
Chairman of
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OPCO's Board of Directors, (iii) the President of Patriot, (iv) the President of
OPCO, (v) a non-employee director of Patriot's Board of Directors selected by
the Chairman of Patriot's Board of Directors and reasonably satisfactory to the
Board of Directors of OPCO, and (vi) a non-employee director of OPCO's Board of
Directors selected by the Chairman of OPCO's Board of Directors and reasonably
satisfactory to the Board of Directors of Patriot. Notwithstanding the
foregoing, in the event that ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ fails to serve or continue to
serve on the Hotel Acquisitions Committee for any reason, Patriot's Board of
Directors shall have the right to select an individual to replace ▇▇. ▇▇▇▇▇▇▇▇,
provided that such individual shall be reasonably satisfactory to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ (so long as he is Chief Executive Officer of OPCO), ▇▇▇▇▇▇ ▇▇▇▇ (so
long as CF Securities, L.P. continues to meet the Crow Ownership Threshold) and
the Wyndham-BMOC Designees (as defined in the Merger Agreement) other than ▇▇.
▇▇▇▇▇▇▇▇ (with respect to each such designee, so long as such designee continues
to serve on the Board of Directors of either Patriot or OPCO). Further, in the
event that ▇▇. ▇▇▇▇▇▇▇▇ fails to serve or continue to serve on the Hotel
Acquisitions Committee for any reason, ▇▇. ▇▇▇▇ (so long as CF Securities, L.P.
continues to meet the Crow Ownership Threshold) and the remaining Wyndham-BMOC
Designees (with respect to each such designee, so long as such designee
continues to serve on the Board of Directors of either Patriot or OPCO) shall
have the right to select an individual to replace ▇▇. ▇▇▇▇▇▇▇▇ (and in the event
that neither ▇▇. ▇▇▇▇ nor any of the Wyndham-BMOC Designees are then serving on
the Board of Directors of either Patriot or OPCO, then the Board of Directors of
OPCO shall have the right to select an individual to replace ▇▇. ▇▇▇▇▇▇▇▇),
provided that such individual shall be reasonably satisfactory to the Board of
Directors of Patriot. Notwithstanding the foregoing, the Hotel Acquisitions
Committee shall no longer have the power and authority described herein on and
after the third anniversary of the Merger.
2.9 Limitation on Committees. The Parties hereby agree that, for the term
------------------------
of this Agreement, the formation by the Board of Directors of either Party of
either (i) an executive or similar committee of its Board of Directors which is
authorized to act upon any Category 2 Matter or Category 3 Matter or (ii) a
nomination committee for the purpose of nominating directors shall require the
approval of the Board of Directors of the other Party.
2.10 Voting by Directors. Any vote on any matter by the Board of Directors
-------------------
of either Patriot or OPCO or the members of the Cooperation Committee, the
Unpaired Equity Committee or the Hotel Acquisitions Committee provided for
herein shall require for approval the affirmative vote of the applicable number
or percentage of all of the members of either such Board of Directors then in
office or the then existing members of any such Committee, as the case may be.
2.11 Effectiveness of Certain Sections. The provisions of Sections 2.3
---------------------------------
through 2.9, and Section 2.10 with respect to the Cooperation Committee and the
Hotel Acquisitions Committee, shall take effect only upon the consummation of
the Merger.
10
ARTICLE III - ISSUANCE OF PAIRED AND UNPAIRED EQUITY
3.1 General. The parties hereto recognize the paramount importance of
-------
preserving the Paired REIT Structure and have negotiated in good faith the
provisions of this Agreement in such a manner so as to maximize the current and
continued value of such structure by delegating authority to Patriot's Board of
Directors to decide all matters relating to any Issuance of Paired Equity for
the purpose of raising capital or any other purpose and by delegating authority
to the Unpaired Equity Committee as set forth herein to decide all matters
relating to any Issuance of Unpaired Equity by OPCO for the purpose of raising
capital or any other purpose. OPCO hereby acknowledges that any Issuance of
Paired Equity may require certain actions to be taken by OPCO and its Board of
Directors that cannot be effected by Patriot's Board of Directors. OPCO hereby
agrees to take any and all such actions, including, without limitation, those
actions set forth in Section 3.3 hereof, as are deemed by Patriot's Board of
-----------
Directors to be necessary or appropriate to effect any such Issuance of Paired
Equity.
3.2 Authority to Issue Paired Equity.
--------------------------------
(a) The Parties hereby agree that, from and after the date hereof
until the date (the "Termination Date") which is twelve (12) months after the
date on which the Pairing Agreement (as defined in the Merger Agreement) is no
longer in effect, Patriot's Board of Directors shall have the sole right to
authorize and to effect, or to cause OPCO and OPCO's Board of Directors to
effect, an Issuance of Paired Equity and to take or cause to be taken any and
all action in contemplation of, or in connection with, an Issuance of Paired
Equity, and OPCO's certificate of incorporation and bylaws shall so provide. In
connection therewith, Patriot's Board of Directors shall also have the authority
to cause OPCO to comply with the procedures set forth in Section 3.3 hereof.
-----------
(b) Patriot shall be entitled to designate from time to time one or
more officers of Patriot to serve as a Paired Equity Officer/Director. The
Board of Directors of Patriot shall have the authority to appoint any such
Paired Equity Officer/Director to the positions of vice president and assistant
secretary of OPCO. Any Paired Equity Officer/Director may resign or be removed
by Patriot at any time and, at any time thereafter, Patriot may designate a new
Paired Equity Officer/Director. Any Paired Equity Officer/Director shall have
the express authority to do any and all acts and things related to any Issuance
of Paired Equity, including, without limitation, the execution and delivery in
the name and on behalf of OPCO of any and all documents, certificates (including
stock certificates) and other instruments necessary or appropriate in connection
with the issuance of any OPCO Paired Stock pursuant to an Issuance of Paired
Equity, the engagement of investment bankers, accountants, attorneys and other
professionals, and the incurrence of any and all other transaction costs related
thereto.
(c) OPCO hereby covenants and agrees to, and shall at all times and
in all circumstances maintain and support the position that, Patriot has the
sole right and power to
11
authorize and effect, or to cause OPCO and OPCO's Board of Directors to effect,
the Issuance of Paired Equity and OPCO hereby further covenants, warrants and
agrees not to assert otherwise in any forum, proceeding, Action or communication
or take any other action which is inconsistent with its obligations hereunder.
(d) OPCO hereby expressly waives, disclaims and releases any and all
claims, causes of action, rights, defenses and arguments that any Issuance of
Paired Equity approved by Patriot in any way violates or infringes any rights
that OPCO or its past, present or future officers, directors, employees,
shareholders or affiliates may have, including, without limitation, that any
Issuance of Paired Equity approved by Patriot in any way breaches, violates or
infringes any fiduciary duties, duties of one shareholder to another,
partnership duties, joint venturer duties, or any other duties or obligations
that may exist or exist in the future; provided, that nothing herein shall be,
or be asserted to be, an admission that any such duties exist. OPCO further
expressly disclaims, and agrees not to assert that, any such duties or
obligations exist in any way that would interfere with the sole rights of
Patriot with respect to the Issuance of Paired Equity.
3.3 Procedures in Connection with Issuance of Paired Equity.
-------------------------------------------------------
(a) Patriot shall give notice (an "Issuance Notice") to OPCO as
promptly as practicable of each determination by Patriot to engage in an
Issuance of Paired Equity. Such Issuance Notice shall include the proposed
material terms of such issuance, to the extent determined by Patriot, including
whether such issuance is proposed to be pursuant to a public or private
offering, the amount of Paired Equity proposed to be issued, and the manner of
determining the offering price and other terms thereof.
(b) Upon receipt of an Issuance Notice, OPCO and the Directors of
OPCO shall promptly cooperate with Patriot in every way to effect such Issuance
of Paired Equity pursuant to the terms and schedule thereof as established by
Patriot, including, without limitation, the following:
(i) Making available such members of OPCO's management as
shall be requested by Patriot to assist in effecting
such Issuance of Paired Equity;
(ii) In connection with a public offering of Paired Equity,
(A) assisting in the preparation of and (B) executing
and filing with the SEC, a Registration Statement or
Registration Statements under the Securities Act,
including the prospectus contained therein and any
amendments or supplements thereto, or any other
statements, forms or documents required to be executed
pursuant to law or regulation with respect to such
Issuance of Paired Equity, and, in connection therewith,
providing Patriot with such
12
information, including financial statements, market
studies, environmental and engineering reports and other
data, as may be required to be included in such
Registration Statement pursuant to the terms of the
Securities Act;
(iii) Promptly notifying Patriot of any information that comes
to the attention of OPCO which affects or could affect
such Issuance of Paired Equity, including, without
limitation, the occurrence of any event which makes any
statement made in such Registration Statement or related
prospectus or any document incorporated or deemed to be
incorporated therein by reference or in any other
offering document with respect to such Issuance of
Paired Equity untrue in any material respect or which
requires the making of any changes in such Registration
Statement, prospectus or any such offering document so
that, in the case of the Registration Statement, it will
not contain any untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading and, in the case of the prospectus or any
other offering document, it will not contain any untrue
statement of a material fact or omit to state any
material fact required to be stated or necessary to make
the statements therein, in light of the circumstances
under which they were made, not misleading;
(iv) Cooperating with Patriot in the preparation, execution
and filing of any Blue Sky Documents;
(v) Cooperating with Patriot to facilitate the timely
preparation and delivery of certificates, if any,
representing Paired Equity;
(vi) Obtaining any consents, approvals or authorizations of
Governmental Authorities and other third parties as are
necessary in connection with such Issuance of Paired
Equity;
(vii) In connection with any underwritten public offering,
cause appropriate members of OPCO's management to
cooperate and participate on a reasonable basis in the
underwriters' "road show" conferences related to such
offering; and
(viii) Performing any and all other acts and executing and
delivering any and all other certificates, instruments
and other documents as shall be requested by Patriot to
effect any such Issuance of Paired Equity.
13
(c) Upon any Issuance of Paired Equity, the Parties hereby agree that
the net proceeds therefrom shall be allocated ninety-five percent (95%) to
Patriot and five percent (5%) to OPCO, unless and until a different allocation
is agreed to by mutual consent of Patriot and OPCO in accordance with that
certain Pairing Agreement dated as of February 17, 1983 between Patriot
(formerly known as California Jockey Club) and OPCO (formerly known as Bay
▇▇▇▇▇▇▇ Operating Company), as amended from time to time.
(d) From time to time, OPCO may request that Patriot effect an
Issuance of Paired Equity in connection with employee benefit plans, other forms
of incentive compensation and other arrangements or commitments of OPCO. To the
extent that Patriot approves in writing any such plan, arrangement or
commitment, Patriot hereby agrees that it will either (A) issue the Patriot
Paired Stock which forms a part of the Paired Equity when the Paired Equity is
required to be issued pursuant to the terms of any such plan, arrangement or
commitment or (B) indemnify OPCO to the fullest extent permitted under
applicable law from and against any and all Damages (as hereinafter defined) of
OPCO which arise out of any failure by Patriot to issue such Patriot Paired
Stock.
3.4 Authority to Issue Unpaired Equity. From and after the date hereof
----------------------------------
until the Termination Date, each of Patriot and OPCO shall have the right to
engage in an Issuance of Unpaired Equity in accordance with and pursuant to the
procedures contained in Section 3.5 of this Agreement, and to take any and all
action in contemplation of, or in connection with, an Issuance of Unpaired
Equity, including, without limitation, filing a Registration Statement and Blue
Sky Documents and any and all other filings, documents, exhibits, and all
material required to be incorporated by reference or which are deemed
incorporated by reference therein, whether filed pursuant to federal or state
securities laws or otherwise, necessary to effect such Issuance of Unpaired
Equity in accordance with applicable securities laws.
3.5 Procedures in Connection with Issuance of Unpaired Equity.
---------------------------------------------------------
(a) OPCO shall have the right to engage in an Issuance of Unpaired
Equity upon the affirmative vote of a majority of the members of the Unpaired
Equity Committee.
(b) Patriot shall have the right to engage in an Issuance of Unpaired
Equity upon the affirmative vote of a majority of the members of its Board of
Directors.
3.6 Holders of Unpaired Equity. Whenever, from time to time, there shall
--------------------------
be outstanding any class of equity securities of Patriot, OPCO or any of their
respective subsidiaries, which securities are not paired with corresponding
securities of the other company or its subsidiaries, but are convertible or
exchangeable into or for Paired Shares (including, without limitation, any
Unpaired Preferred Stock issued to CF Securities, L.P. after the date hereof)
(the "Unpaired Shares"), then, so long as any such Unpaired Shares were issued
in accordance with the terms of this Agreement, Patriot and OPCO shall issue the
Patriot Paired Stock or the OPCO Paired Stock, as the case may be, underlying
such Unpaired
14
Shares in accordance with the terms thereof. The covenants of Patriot and OPCO
set forth in this Section 3.6 are made for the benefit of the holders of such
-----------
Unpaired Shares and such holders shall be express third-party beneficiaries
thereof. Any Unpaired Preferred Stock issued to CF Securities, L.P. pursuant to
the Stock Purchase Agreement dated as of April 14, 1997 between Patriot American
Hospitality, Inc. and CF Securities, L.P. shall be deemed to have been issued in
accordance with the terms of this Agreement.
3.7 Operating Partnership Redemption Provisions. Patriot OP shall make
-------------------------------------------
all determinations with respect to whether to pay cash or deliver Paired Equity
to limited partners of Patriot OP or OPCO OP who exercise their right to redeem
operating partnership units under the partnership agreements of such operating
partnerships.
3.8 Ordinary Course. Subject to the terms and conditions of this
---------------
Agreement, the provisions of this Agreement shall not be construed as limiting
the independent rights of Patriot and OPCO to conduct their respective
businesses and operations in the ordinary course.
3.9 Indemnification. Patriot hereby agrees to indemnify and hold harmless
---------------
all directors and officers of OPCO from and against all losses, claims, damages,
liabilities and expenses ("Damages") to which any such directors or officers may
become subject insofar as such Damages arise out of an Issuance of Paired Equity
or an Issuance of Unpaired Equity prior to the termination of this Agreement to
the same extent, and on the same terms and conditions (including, without
limitation, provisions, if any, for advancement of expenses and contribution)
that Patriot indemnifies its own directors and officers with respect to such
matters, it being understood that in no event shall a director or officer of
OPCO receive greater indemnification for Damages than would a director or
officer, as the case may be, of Patriot in a like circumstance.
ARTICLE IV - TERMINATION OF DIRECTORS
If at any time any director of OPCO shall interfere or fail to cooperate
fully with any Issuance of Paired Equity, such director shall be deemed to be no
longer acting within the scope of his authority with respect to the management
of the affairs of OPCO and to have failed to remain qualified as a director. In
such event, such director shall automatically cease to be a director. The
determination of whether any director of OPCO has interfered or failed to
cooperate fully with any Issuance of Paired Equity shall be made by Patriot's
Board of Directors and notice of any such determination shall be given by
Patriot to OPCO within 10 days after the date of such determination.
Notwithstanding when such determination and notice shall be made and given, any
such director shall be deemed to have ceased to be a director at the time of any
such interference or failure to cooperate; provided, however, that for purposes
of Section 3.9 hereof and any other right to indemnification to which such
director would otherwise be entitled, such director shall be deemed to have been
acting as a director until such time as such determination and notice shall be
made and given, and such
15
director's right to indemnification, if any, shall in no way be prejudiced
solely by reason of having acted as a director during the period from the time
of such interference or failure to cooperate until such determination and notice
are made and given.
ARTICLE V - CHARTER AND BYLAW PROVISIONS
The Parties hereby agree to take any and all action necessary to cause
their respective charters and bylaws to be amended appropriately to effect the
provisions of this Agreement.
ARTICLE VI - EXCHANGE OF INFORMATION
6.1 Provision of Corporate Records; Agreement for Exchange of Information.
---------------------------------------------------------------------
From and after the date hereof, Patriot and OPCO shall provide, or cause to be
provided, to the other Party and such Party's authorized accountants, counsel
and other designated representatives, as soon as reasonably practicable after
written request therefor, reasonable access to and duplicating rights with
respect to any Information in the possession or under the control of such Party
which the requesting Party reasonably needs (i) to comply with reporting,
disclosure, filing or other requirements imposed on the requesting Party
(including under applicable securities or tax laws) by a Governmental Authority
having jurisdiction over the requesting Party, (ii) for use in any other
judicial, regulatory, administrative, tax or other proceeding or in order to
satisfy audit, accounting, claims, regulatory, litigation, tax or other similar
requirements, (iii) to comply with its obligations under this Agreement, or (iv)
for any other reasonable purpose; provided, however, that in the event that any
Party determines that any such provision of Information is reasonably likely to
be commercially detrimental, violate any law or agreement, or waive any
attorney-client or work product privilege, the Parties shall take all reasonable
measures to attempt to permit the compliance with such obligations in a manner
that avoids any such harm or consequence.
6.2 Ownership of Information. Any Information owned by one Party hereto
------------------------
that is provided to a requesting Party pursuant to Section 6.1 shall be deemed
-----------
to remain the property of the providing Party. Unless specifically set forth
herein, nothing contained in this Agreement shall be construed as granting or
conferring rights of license or otherwise to use any such Information for any
purpose other than those described in Section 6.1.
6.3 Compensation for Providing Information. The Party requesting
--------------------------------------
Information agrees to reimburse the other Party for the reasonable costs, if
any, of gathering and copying such Information, to the extent that such costs
are incurred for the benefit of the requesting Party. Except as may be
otherwise specifically provided elsewhere in this Agreement or in any other
agreement between the parties, such costs shall be computed in accordance with a
commercially reasonable procedure.
16
ARTICLE VII - TERMINATION
7.1 Termination by Mutual Consent. This Agreement may be terminated at
-----------------------------
any time by the mutual consent of the Parties.
7.2 Other Termination. Unless earlier terminated pursuant to Section 7.1,
----------------- -----------
this Agreement shall terminate on the Termination Date.
7.3 Effect of Termination. In the event of any termination of this
---------------------
Agreement, no Party (or any of its directors, officers, employees or agents)
shall have any liability or further obligation to any other Party.
ARTICLE VIII - PARTIES' REMEDIES UNDER ARTICLES III, IV, V and VI
Each Party hereby recognizes and agrees that the specific performance of
its duties under Articles III, IV, V and VI hereof, and the other Party's right
to such specific performance, is of paramount importance, that time is of the
essence with respect thereto and that remedies at law for any breach or
threatened breach of such duties, including monetary damages, would be
inadequate compensation for any loss suffered thereby. Each Party hereby
agrees, therefore, that in the event of any actual or threatened default or
breach by any Party with respect to any of its obligations under Articles III,
IV, V or VI hereof, the other Party shall be entitled to the specific
performance thereof and injunctive or other equitable relief, in addition to any
and all other rights and remedies at law or in equity, and all such rights and
remedies shall be cumulative. Each Party shall be entitled to bring any action
to enforce the provisions of Articles III, IV, V or VI hereof in the Delaware
Court of Chancery, which shall have sole jurisdiction and venue. Each Party
hereby waives (i) any requirement that the other Party secure or post any bond
in any action for equitable relief hereunder, (ii) any defense in any action for
specific performance that a remedy at law would be adequate and (iii) any claim
in any action, suit or proceeding brought hereunder in the Delaware Court of
Chancery that such action, suit or proceeding has been brought in an
inconvenient forum.
ARTICLE IX - MISCELLANEOUS
9.1 Counterparts; Entire Agreement; Corporate Power.
-----------------------------------------------
(a) This Agreement may be executed in one or more original or
facsimile counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the Parties and delivered to the other Party.
17
(b) This Agreement contains the entire agreement between the Parties
with respect to the subject matter hereof and supersedes all previous
agreements, negotiations, discussions, writings, understandings, commitments and
conversations with respect to such subject matter, and there are no agreements
or understandings between the Parties other than those set forth or referred to
herein or therein.
9.2 Governing Law. This Agreement shall be governed by and construed and
-------------
interpreted in accordance with the laws of the State of Delaware, irrespective
of the choice of laws principles of the State of Delaware, as to all matters,
including matters of validity, construction, effect, enforceability, performance
and remedies.
9.3 Assignability. This Agreement shall be binding upon and inure to the
-------------
benefit of the Parties and their respective successors and assigns; provided,
however, that neither Party may assign its respective rights or delegate its
respective obligations under this Agreement without the express prior written
consent of the other Party hereto or thereto.
9.4 Third Party Beneficiaries. Except as set forth in Sections 3.6 and
-------------------------
3.9 hereof, the provisions of this Agreement are solely for the benefit of the
Parties and are not intended to confer upon any Person any rights or remedies
hereunder, and there are no third party beneficiaries of this Agreement and this
Agreement shall not provide any third person with any remedy, claim, liability,
reimbursement, claim of action or other right in addition to those existing
without reference to this Agreement. Notwithstanding anything to the contrary
contained in any other agreement, including, without limitation, the Merger
Agreement, OPCO hereby covenants, warrants and agrees that it shall not take any
action contrary to any covenant, agreement, term or provision of this Agreement.
9.5 Notices. All notices or other communications under this Agreement
-------
shall be in writing and shall be deemed to be duly given when (a) delivered in
person or (b) deposited in the United States mail or private express mail,
postage prepaid, addressed as follows:
If to Patriot, to: Patriot American Hospitality, Inc.
Tri-West Plaza
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chairman of the Board of Directors
with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, P.C.
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
18
If to OPCO, to: Patriot American Hospitality Operating Company, Inc.
Tri-West Plaza
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chairman of the Board of Directors
with a copy, following ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, P.C.
consummation of the ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP
Merger, to: Exchange Place
Boston, MA 02109-2881
Any Party may, by notice to the other Party, change the address to which
such notices are to be given to it.
9.6 Severability. OPCO covenants, warrants and agrees not to claim or
------------
assert that the validity or enforceability of this Agreement is subject to a
defense or claim based on recharacterization, unconscionability or public
policy. If any provision of this Agreement or the application thereof to any
Person or circumstance is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions hereof or thereof, or
the application of such provision to Persons or circumstances or in
jurisdictions other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby or thereby, as the case may
be, is not affected in any manner adverse to any Party. Upon such
determination, the Parties shall negotiate in good faith in an effort to agree
upon such a suitable and equitable provision to effect the original intent of
the parties.
9.7 Headings. The article, section and paragraph headings contained in
--------
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
9.8 Waivers of Defaults. A waiver by any Party of any default by the
-------------------
other Party of any provision of this Agreement shall not be deemed a waiver by
the waiving Party of any subsequent or other default, nor shall it prejudice the
rights of the waiving Party.
9.9 Amendments. The provisions of Articles II, III, IV, VII, Section 9.4
----------
and this Section 9.9 of this Agreement, together with the provisions of Article
I related to the foregoing, shall not be deemed waived, amended, supplemented or
modified by any Party, unless such waiver, amendment, supplement or modification
is in writing and signed by the Party against whom it is sought to enforce such
waiver, amendment, supplement or modification, and has been approved by a
66-2/3% vote of each of the Patriot Board and the
19
OPCO Board. The provisions of this Agreement other than Articles II, III, IV,
VII, Section 9.4 and this Section 9.9 and such provisions of Article I shall not
be deemed waived, amended, supplemented or modified by any Party, unless such
waiver, amendment, supplement or modification is in writing and signed by the
Party against whom it is sought to enforce such waiver, amendment, supplement or
modification. No provision of the respective charters of Patriot and OPCO
effecting any of the provisions of this Agreement shall be amended, repealed,
supplemented or modified unless first approved by a 66-2/3% vote of each of the
Patriot Board and the OPCO Board, and thereafter approved by the affirmative
vote of the majority of the shares of capital stock of the company whose charter
is being acted upon at a meeting of stockholders called for such purpose and
entitled to vote on such amendment, repeal, supplement or modification, voting
together as a single class.
9.10 Interpretation. The recitals in the forepart of this Agreement are an
--------------
integral part hereof and are essential to the construction of this Agreement.
Such recitals shall be given full force and effect and accorded the same
significance as the other provisions hereof. Words in the singular shall be held
to include the plural and vice versa and words of one gender shall be held to
include the other genders as the context requires. The terms "hereof,"
"herein," and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement. Article and Section references are to
the Articles and Sections to this Agreement unless otherwise specified. The
word "including" and words of similar import when used in this Agreement shall
mean "including, without limitation," unless the context otherwise requires or
unless otherwise specified. The word "or" shall not be exclusive.
9.11 Dispute Resolution. Any dispute relating to or any determination with
------------------
respect to any matter set forth in this Agreement other than the enforcement of
any Party's rights under Articles III, IV, V or VI hereof 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 fifteen (15) 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;
20
(b) Subject to the following agreed-upon modifications, discovery
shall be governed by Rule 10 of the CPR Rules:
(i) the Parties hereby 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 (including cross-examination of the
other Party's witnesses); such hearings to take place on six days at a maximum;
and
(d) decision to be rendered in writing, including a statement of
reasons supporting the decision, not more than fifteen (15) days following such
hearings.
Nothing provided in this Section 9.11 shall limit or interfere with the
------------
Parties' right to seek relief pursuant to Article VIII hereof in the Delaware
Court of Chancery.
[Remainder of Page Intentionally Left Blank]
21
IN WITNESS WHEREOF, the Parties have caused this Cooperation Agreement to
be executed by their duly authorized representatives.
PATRIOT AMERICAN HOSPITALITY, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name:
Title:
PATRIOT AMERICAN HOSPITALITY
OPERATING COMPANY
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name:
Title:
22
By its signature below, Wyndham hereby acknowledges the execution and
delivery of this Agreement by the parties hereto and confirms its agreement to
the terms and conditions hereof.
ACKNOWLEDGED AND AGREED:
WYNDHAM HOTEL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
23