rc Steven M. Pesner, P.C. Stephen M. Baldini, Esq. Nancy Chung, Esq. Sean E. O’Donnell, Esq. AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. 590 Madison Avenue New York, New York 10022 (2 12) 872- 1070 Laurence A. Weiss, Esq. (Cal. BarNo. 64638) HELLER EHRMAN WHITE & McAULIFFE L.L.P. 333 Bush Street San Francisco, CA 941 04 Attorney for Defendants Patriot American Hospitality, Inc., Wyndham International, Inc., Paul A. Nussbaum and JamesD. Carreker IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION ) MDL No. 1300 1 In Re PATRIOT,4MERIC. JOSPITALITY ) AFFIDAVIT OF SEAN E. O’DONNELL INC., SECURITIES LITIGATION. ) (“OPEN MARKET ACTION”) This Document Relates To: ), ), NO. 3-99-CV1866-D Levitch v. Patriot American Hospitality. Inc. NO.99-CV 14 16-D ;NO. 99-CV1429-L Meisenburg v. Patriot American Hospitality. Inc. No. 3-99-CV1686-X 1 2 3 SEAN E. O’DONNELL, being duly sworn, deposes and says: 4 5 1. I am an attorney and a member in good standing of the bar of the State of New York. I 6 am an associate of the law firm of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel for Defendants 7 Patriot American Hospitality, Inc., Wyndham International, Inc., Paul A. Nussbaum and James D. 8 Carreker. 9 10 11 2. I submit this affidavit in support of Defendants’ Motion to Dismiss Plaintiffs’ First 12 Amended Consolidated Complaint filed September 22,2000 (the “Open Market Action”). 13 14 3. Annexed hereto as Exhibit A is a summary chart of forward-looking statements from the 15 challenged press releases, along with the accompanying cautionary warnings. 16 17 4. Annexed hereto as Exhibit B are excerpts from SEC filings containing Patriot’s 18 disclosures. 19 20 5. Annexed hereto as Exhibit C are articles discussing the Asian financial crisis and the 21 impact on credit markets specifically for REITs, as reported in the Washington Post, The Kansas City 22 Star, and Housing Economics. 23 24 25 AKIN, GUMP, STRAUSS, HAUER& FELD, MOTION TO DISMISS(OPEN MARKETACTION): MDL NO. 1300 2 LLP J w 1 6. Annexed hereto as Exhibit D are articles discussing the IRS Restructuring Bill, as 2 reported in The Baltimore Sun, The Washington Post, The New York Times, The Dallas Morning News 3 TheStreet.com, The Boston Herald, and the Los Angeles Times. 4 5 declare under penalty of perjury that the foregoing is true and correct. 6 7 Dated: October 19, 2000 8 9 10 11 Sean E. O'Donnell 12 13 14 Sworn to before me this 15 19'h day of October, 2000. 16 17 18 19 20 21 22 53 24 25 AKIN, GUMP, STRAUSS, HAUER& FELD, ~OTIONTo DISMISS (OPEN MARKET ACTION): MDLNo. 1300 3 LLP 1 SUMMARY CHART OF FORWARD-LOOKING STATEMENTS AND ACCOMPANYING CAUTIONARY WARNINGS FROM THE CHALLENGED PRESS RELEASES OPEN MARKET COMPLAINTDATE TITLE 030 January 5,1998 PAH Completes Acquisition of Wyndham Hotel Corp. 03 5 February 12, 1998 PAH and Wyndham Announce Fourth Quarter and Year-End Operating Results 138 February 27, 1998 PAH and Wyndham Announce Private Placement of Equity With One YearPrice Adjustment Agreement 141 March 27, 1998 PAH Says Pending Transactions Unaffected by IRS Restructuring Proposal May 4,1998 PAH and Wyndham Announce First Quarter Results July 29, 1998 PAH and Wyndham Announce Second Quarter Results September 16, 1998 PAH and Wyndham Announce Boards of Directors Have Reached Decision Regarding Restructuring 164 November 9,1998 PAH and Wyndham Announce Third Quarter Results 073 December 16, 1998 Patriot Announces $1 Billion Equity Investment by Investor Group DA TE TITLE CAUTIONARYWARNINGS TITLE DATE 1/5/98 PAH Completes Acquisition Certain matter discussed in this press release may constitute forward-looking of Wyndham Hotel Corp. statements within the meaning of the federal securities laws. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the foreword-looking statements due to a number of factors, including general economics conditions, competition for hotel services in a given market, the availability of equity and debt financing, interest rates and other risks detailed from time to time in the filings of Patriot American Hospitality, Inc., Patriot American Hospitality Operating Company, Wyndham Hotel Corporation and Interstate Hotels with the Securities and Exchange Commission, including quarterly reports on Form, 10-Q, reports on Form 8-K and annual reports on Form 10-K. Reference is hereby made tothe “Risk Factors” set forth in the Form 10-K for the fiscal year ended December 3 1, 1996 filed by Patriot American Hospitality, Inc., Patriot American Hospitality Operating Company, Wyndham Hotel Corporation and Interstate Hotels. 0319890001 NY Doc 213390~2 2 OPENFORWARD-LOOKING STATEMENTS:"The closing ofour acquisition of Wyndham marks the culmination of months MARKET of strategic planning and painstaking attention to the long-term vision of this company," said [defendant] COMPLAINT Nussbaum. "Through this transaction, we have acquired one of the best hotel operating companies in the country, 730 and a leading upscale brand with extraordinary potentialfor growth through conversions ofsome of our existing hotels, theconversion of certain of theMarriott hotels we will own through our acquisition of Interstate Hotel Company, and future acquisitions, as well as through new construction and adaptive reuse programs that we will announce in the near future. "While theclosing process has been a lengthy one, we were focused on putting the companies together in a way that would enable us to immediately implement our growth strategies upon completion of the merger, rather than closing the transaction quickly and subsequently trying to assimilate cultures, set objectives and define responsibilities. I'm pleased to say that the time waswell spent, and that we now have a multi-branded company operating as Wyndham International which will manage the growth not only of theWyndham brand, but our other brands which currently include Carefree Resorts. Club House. Grand Bay. Re2istry and Grand Heritage. With this acquisition completed, we will proceed with the closing of ouracquisitions of WHG Resorts & Casinos (NYSE: WHG) later this month and Interstate Hotels Company (NYSE: IHC) at the end of the first quarter," [defendant] Nussbaum said. According to [defendant] Carreker, the necessary components are in place to facilitate rapid growth of the companies' multiple brands. "Since we announced the merger agreement last April, we have worked closely with Patriot American to ensure that we were developing the best possible infrastructure to manage our growth and to increase shareholder value over the long term. What we have created is an operating company, now called Wyndham International, comprised of several different division responsible for our brands, as well as our third- party management business, which will be assimilated into Interstate upon completion of that transaction. Similar to consumerproducts companies, where each brand is supported by an entire division, we will shepherd the 2rowth of ourbranded and non-branded hotel management business while the REIT continues to focus on mergers, acquisitions and asset management. With an excellent management team in place. as well as an outstanding portfolio of upscale properties, we areready to move forward as a truly world-class hotel company," Carreker said. "While Patriot will continue to evolve as we complete future acquisitions, we are confident that the operational structure and systems we've taken time to create will enable us to make a relatively seamless transition as a significantly larger company with unparalleled growth potential,'' [Defendant] Nussbaum said. "We're excited about the prospects of another dynamic year and look forward topursuing opportunities facilitated by the size and financial strength of ourcompanies." 0319890001 NY Doc 213390~2 3 DATETITLE CAUTIONARY WARNINGS 211 2/98 PAH and Wyndham Certain matter discussed in this press release may constitute forward-looking Announce 4'hQuarter and statements within the meaning of the federal securities laws. Actual results and Year-End Operating Results the timing of certain events could differ materially from those projected in or contemplated by the foreword-looking statements due to a number of factors, including general economics conditions, competition for hotel services in a given market, the availability of equity and debt financing, interest rates and other risks detailed from time to time in the filings of Patriot American Hospitality, Inc., Patriot American Hospitality Operating Company, Wyndham Hotel Corporation and Interstate Hotels with the Securities and Exchange Commission, including quarterly reports on Form, 10-Q, reports on Form 8-K and annual reports on Form 10-0. Reference is hereby made to the "Risk Factors'' set forth in the Form 10-K for the fiscal year ended December 3 1, 1996 filed by Patriot American Hospitality, Inc., Patriot American Hospitality Operating Company, Wyndham Hotel Corporation and Interstate Hotels. OPENFORWARD-LOOKING STATEMENTS: [According to defendant Nussbaum,] "The fourth quarter marked aperiod of MARKET significant transitionfor Patriot American, as we worked to complete our acquisitions of Wyndham Hotel COMPLAINT Corporation and WHG Resorts and Casinos, Inc., both of which were completed in January ... In the months prior to a35 the consummation of the merger.patriot American and Wyndham Hotel Corporation worked closely together such that, when we closed the Wyndham merger on January 5, the integration process was well