August 14, 1998
Patriot American Hospitality, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxx III
Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xx
Ladies and Gentlemen:
This letter agreement between Patriot American Hospitality, Inc.
(the "REIT") and Wyndham International, Inc., as successor to Patriot
American Hospitality Operating Company (the "OPCO") (each a "Company" and
collectively, the "Companies"), and UBS AG, London Branch ("UB-LB"), as
successor to UBS (as defined), acting through its agent Warburg Dillon Read
LLC, modifies and amends, in part, certain of the terms and conditions of
that certain Forward Stock Contract, dated December 31, 1997 (the "Forward
Agreement") between the Companies and Union Bank of Switzerland, London
Branch ("UBS"), as amended. Defined terms not otherwise defined herein shall
have the meanings ascribed to them under the Forward Agreement.
As of July 28, 1998, the average closing price of the Paired Shares
was below the first Mandatory Unwind Threshold, and UBS is providing notice
to the Companies that a Mandatory Unwind Event occurred. However, the
amendments to the Forward Stock Contract contained herein, amend the
Mandatory Unwind Thresholds retroactively to July 28, 1998 and through the
Maturity Date.
1. "Mandatory Unwind Thresholds," as defined in Section II of the Forward
Agreement, shall be deleted in its entirety and replaced as follows:
Notwithstanding the terms and conditions of the Forward Agreement, the
Companies and UBS agree as follows:
Mandatory Unwind Threshold Unwind Share Limit
-------------------------- ------------------
$16.00 100.0%
2. "Maturity Date" shall be October 15, 1998.
3. a) Section IV shall be deleted in its entirety and replaced as follows:
IV. Interim Settlement
On each Interim Settlement Date, if the Forward Price exceeds the
closing price of the Paired Shares on such Interim Settlement Date,
then on the Business Day following the Fifth Exchange Trading Day
thereafter the Companies shall deliver Cash Collateral to UBS in an
amount equal to the Interim Settlement Amount to a Cash Collateral
Account of UBS; provided, however, that with the prior written
consent of UBS and without affecting the Forward Price (e.g., as if
Cash Collateral had been delivered), the Companies may deliver, in
lieu of such Cash Collateral, Paired
Shares to Warburg Dillon Read LLC for the account of UBS equal to
125% of the Interim Settlement Shares; provided, further, that no such
Paired Shares may be delivered unless they are subject to a
registration statement complying with Section III.A 4. above. If either
Cash Collateral or Interim Settlement Shares is delivered pursuant to
Section IV, then during the period between each Interim Settlement Date
or between the final Interim Settlement Date and the Maturity Date,
the Interim Settlement Amount shall be recalculated and the amount of
Cash Collateral (or Interim Settlement Shares, as the case may be)
shall be adjusted to equal such recalculated Interim Settlement Amount
on a bi-weekly basis.
b) Subsections A and B of Section V shall be deleted in their entirety and
replaced by:
A. [This subsection intentionally left blank]
B. [This subsection intentionally left blank]
c) The first sentence of Subsection C of Section V shall be deleted in its
entirety.
4. a) After "Condition Precedent to Physical Settlement" and before
"Mandatory Unwind Event" in Section VI, the following shall be added:
Early Settlements
with respect to Other
Substantially Similar
Transactions: The Companies agree that (i) prior to the
early settlement, unwind or liquidation of
any transaction that is substantially
similar to the transaction contemplated by
this Forward Stock Contract (an "Other
Transaction" including without limitation
the Nationsbank and Xxxxx Xxxxxx
transactions of approximately $125 million
each), the Companies shall promptly, after
learning that any such event may occur,
give telephone notice (confirmed in writing)
of such upcoming settlement, unwind or
liquidation, (ii) any such settlement,
unwind or liquidation shall constitute a
Mandatory Unwind Event under clause (ii) of
"Mandatory Unwind Event" in this Section VI,
and (iii) UBS may required all or part of
the Transaction to be settled at least
coincident with an Other Transaction.
b) To clause (ii) under "Mandatory Unwind Event" in Section VI, the
following shall be added:
(6) the Companies settle, unwind or liquidate any transaction that is
substantially similar to this Transaction, thus giving rise to a
Mandatory Unwind Event under "Early Settlements with respect to
Other Substantially Similar Transactions" of this Section VI.
(7) Failure to deliver to UBS on or before September 30, 1998, an
effective registration statement as contemplated by
Section III.A.4. above.
5. The modifications and amendments contemplated by this letter agreement
shall not be effective unless this letter agreement is executed by all of the
parties hereto on or before August 14, 1998.
6. The agreement of UBS to the modifications and amendments provided for
herein shall not constitute or imply any agreement or undertaking to agree to
any other modification or agreement with respect to the Forward Agreement.
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Sincerely,
UBS AG, London Branch
By: /s/ By: /s/
--------------------------- -------------------------------
Name: Xxxxx Xxxxx Name: Xxx Xxxxxx
Title: Title:
AGREED TO AND ACCEPTED
Patriot American Hospitality, Inc.
By: /s/
---------------------------
Name:
Title:
Wyndham International, Inc.
By: /s/
---------------------------
Name:
Title:
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