<PAGE>

                                                                   Exhibit 10.9

                             FORWARD STOCK CONTRACT


To:               Patriot American Hospitality, Inc.
                  1950 Stemmons Freeway, Suite 6001
                  Dallas, Texas  75207
                  Attn.:  William W. Evans III

To:               Patriot American Hospitality Operating Company
                  1950 Stemmons Freeway, Suite 6001
                  Dallas, Texas 75207
                  Attn.:  Leslie Ng

From:             Union Bank of Switzerland, London Branch
                  c/o UBS Securities LLC, as agent
                  299 Park Avenue
                  New York, NY  10171

Date:             31 December 1997


Ladies and Gentlemen,

The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction"). This Confirmation constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below.

The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc.) are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern. References herein to the "Transaction" shall be deemed to be references
to a "Swap Transaction" solely for the purposes of the 1991 ISDA Definitions.

This Confirmation supplements, forms a part of, and is subject to, the ISDA
Master Agreement dated as of 31 December 1997, as amended and supplemented from
time to time (the "Agreement"), between you and us. All provisions contained in
the Agreement govern this Confirmation except as expressly modified below. In
the event of any inconsistency between the provisions of that agreement and this
Confirmation, this Confirmation will prevail for the purposes of this
Transaction.

The Agreement and each Confirmation thereunder will be governed by and construed
in accordance with the laws of the State of New York without reference to choice
of law doctrine.

I.     The Transaction

Patriot American Hospitality, Inc. (the "REIT") and Patriot American Hospitality
Operating Company (the "OPCO") (each a "Company" and collectively, the
"Companies") and the Union Bank of Switzerland, London Branch ("UBS") acting
through UBS Securities LLC as its agent for each purchase or sale of Securities
("UBS LLC"), hereby agree to make the payments and deliveries provided for in
Sections III., IV. and V. hereof, all on the terms more particularly specified
herein (this "Confirmation").

II.     Definitions

For the purpose of this Confirmation, the following terms shall have the
meanings set opposite:


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                             FORWARD STOCK CONTRACT

Adjustments:                        In the event of:

                                    (a) a subdivision, consolidation or
                                    reclassification of the Paired Shares, or a
                                    free distribution or dividend of any Paired
                                    Shares to all existing, holders of Paired
                                    Shares by way of bonus, capitalization or
                                    similar issue; or

                                    (b) a distribution or dividend to all
                                    existing holders of Paired Shares of, (i)
                                    additional Paired Shares or (ii) other share
                                    capital or securities granting right to
                                    payment of dividends and/or the proceeds of'
                                    liquidation of either Company equally or
                                    proportionally with such payments to holders
                                    of' Paired Shares;

                                    an adjustment shall thereupon be effected to
                                    the Forward Price and/or the Underlying
                                    Shares at the time of such event with the
                                    intent that following such adjustment, the
                                    value of this Transaction is economically
                                    equivalent to the value immediately prior to
                                    the occurrence of the event causing the
                                    adjustment.

Calculation Agent:                  UBS, whose calculations and determinations
                                    shall be made in a commercially reasonable
                                    manner and shall be binding absent manifest
                                    error.

Calculation Period:                 Means each period commencing on and
                                    including:

                                    (i) in the case of the first Calculation
                                    Period, the Effective Date and ending on but
                                    excluding the earlier of the first Interim
                                    Settlement Date or Day S, and

                                    (ii) for each period thereafter, an Interim
                                    Settlement Date and ending on but excluding
                                    the earlier of the next following Interim
                                    Settlement Date or Day S.

                                    If there is a Partial Settlement, then (i)
                                    the Calculation Period for the Settlement
                                    Shares covered by such Partial Settlement
                                    shall end on Day S for such Partial
                                    Settlement and (ii) the Calculation Period
                                    for the remaining Underlying Shares shall be
                                    determined without regard to such Partial
                                    Settlement.

Collateral Release Shares:          Paired Shares delivered pursuant to
                                    Section V.C.

Collateral Valuation Date:          In the event that the Companies posts cash
                                    collateral pursuant to Section V. or VI. any
                                    day upon which the amount of collateral
                                    required is calculated.

Compounding Period:                 Means each period commencing on and
                                    including:

                                    (i) in the case of the first Compounding
                                    Period, the Effective Date and ending on but
                                    excluding the earlier of the first Interim
                                    Settlement Date or Day S, and

                                    (ii) for each period thereafter, an Interim
                                    Settlement Date and ending on but excluding
                                    the earlier of the next following Interim
                                    Settlement Date or Day S.

                                    If there is a Partial Settlement, then (i)
                                    the Compounding Period for the Settlement
                                    Shares covered by such Partial Settlement
                                    shall end on Day S for such Partial
                                    Settlement and (ii) the Compounding Period
                                    for the remaining Underlying Shares shall be
                                    determined without regard to such Partial
                                    Settlement.


                                       2

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                             FORWARD STOCK CONTRACT

Customer Account:                   The account established in favor of the
                                    Companies pursuant to the Customer Agreement
                                    dated the date hereof between the Companies
                                    and UBS Securities LLC.

Daycount Fraction:                  Actual/360.

Day S:                              For Settlement pursuant to Section III. or
                                    VI. or Interim Net Stock Settlement pursuant
                                    to Section IV., the day upon which
                                    settlement activities shall begin.

Dividend Amount:                    (A) Means, on each Interim Settlement Date
                                    or Day S an amount in U.S. Dollars equal to
                                    the sum of all cash distributions paid on
                                    either a REIT share or on an OPCO share
                                    comprising part of a Paired Share, during
                                    the relevant Compounding Period; and

                                    (B) Separately, and not included in Dividend
                                    Amount, UBS will cause UBS LLC to pay to the
                                    Companies on the Business Day after the
                                    relevant dividend payment date declared by
                                    the Companies' Board of Directors, (i) all
                                    cash dividends on Paired Shares that have
                                    gone ex-dividend, but on which dividends
                                    have not been paid, prior to the end of the
                                    final Compounding Period for any settlement,
                                    based on a number of Paired Shares equal to
                                    the number of Settlement Shares for such
                                    settlement, (ii) all cash dividends received
                                    by UBS at any time, on Paired Shares
                                    delivered by the Companies pursuant to
                                    Section III. E. that have gone ex-dividend
                                    after Day S but prior to the end of the
                                    Unwind Period for any settlement, and (iii)
                                    all cash dividends paid on Paired Shares
                                    held in the Customer Account.

Effective Date:                     31 December 1997

Exchange Trading Day:               Each day on which the Relevant Exchange is
                                    open for trading.

Forward Price:                      On each Interim Settlement Date or Day S,
                                    the Forward Price shall be determined for
                                    such day by:

                                    a) multiplying the Initial Price for the
                                    Compounding Period by the sum of

                                    1 plus the product of (i) the appropriate
                                    Daycount Fraction and (ii) the sum of (x)
                                    LIBOR, determined as of the previous Interim
                                    Settlement Date (or in the case of the first
                                    Interim Settlement Date, as of the Effective
                                    Date) for a Designated Maturity of 3 months,
                                    and (y) the Spread; and

                                    b) subtracting the Dividend Amount at that
                                    date;

                                    PROVIDED HOWEVER that if the Companies
                                    deliver Interim Settlement Shares pursuant
                                    to Section IV. or Collateral Release Shares
                                    pursuant to Section V.C. during any
                                    Calculation Period, the Forward Price for
                                    purposes of determining the Initial Price
                                    for the first Compounding Period during such
                                    Calculation Period, shall be adjusted to a
                                    price equal to the closing price of the
                                    Paired Shares on the Exchange Trading Day
                                    immediately prior to the most recent Interim
                                    Settlement Date, adjusted up for any
                                    positive result or down for any negative
                                    result of the following formula:

                                    (i) the Interim Settlement Amount for the
                                    most recent Interim Settlement Date.


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                             FORWARD STOCK CONTRACT

                                    minus,

                                    (ii) the product of (x) the number of
                                    Interim Settlement Shares or Collateral
                                    Release Shares, as the case may be, and (y)
                                    the average closing price of the Paired
                                    Shares on the five (5) Exchange Trading Days
                                    immediately following the receipt of the
                                    Interim Settlement Shares by UBS pursuant to
                                    Section IV. or the Collateral Release Shares
                                    pursuant to Section V.C.

                                    then divide such result by,

                                    (iii) the number of Underlying Shares.

Initial Price:                      Means,

                                    a) for the Compounding Period ending on the
                                    first Interim Settlement Date, an amount in
                                    U.S. Dollars equal to $28.8125, and

                                    b) for each subsequent Compounding Period,
                                    the Forward Price as calculated on or
                                    adjusted as of the preceding Interim
                                    Settlement Date.

Interim Settlement Dates:           31 March 1997, 30 June 1998, 30 September
                                    1998, subject to adjustment in accordance
                                    with the Modified Following Business Day
                                    convention.

Interim                             Settlement Amount: on any Interim Settlement
                                    Date, the product of (a) the number of
                                    Underlying Shares, and (b) the amount by
                                    which the Forward Price exceeds the closing
                                    price of the Paired Shares on the Exchange
                                    Trading Day immediately prior to such
                                    Interim Settlement Date.

Interim                             Settlement Shares: The Interim Settlement
                                    Amount divided by the closing price of the
                                    Paired Shares on the Exchange Trading Day
                                    immediately prior to such Interim Settlement
                                    Date.

LIBOR                               Means USD-LIBOR-BBA as such term in defined
                                    in the Agreement.

Mandatory Unwind Date:              In the case of a Mandatory Unwind Event 
                                    specified in clause (i) of Mandatory Unwind
                                    provisions of Section VI., at least three 
                                    Exchange Trading Days following such 
                                    Mandatory Unwind Event. In the case of a 
                                    Mandatory Unwind Event specified in clause 
                                    (ii) of such provision, the date specified 
                                    in the notice delivered to the Companies 
                                    pursuant to such provision of Section VI.

<TABLE>
<CAPTION>
Mandatory Unwind               Mandatory
Thresholds:                Unwind Thresholds             Unwind Share Limit
                           -----------------             ------------------
<S>                        <C>                           <C>                       
                                $20.00                   up to 33.0% of Underlying Shares
                                $18.75                            67.0%
                                $17.25                            100.0%

</TABLE>

Maturity Date:                      One (1) year after the Effective Date,
                                    subject to extension upon the written
                                    approval of UBS in its sole discretion.


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                             FORWARD STOCK CONTRACT

Maturity Placement Fee:             0.50%, based on the mechanics in Section E.
                                    The parties may agree to alter the
                                    settlement mechanics which may result in a
                                    different Maturity Placement Fee.

Paired Shares:                      Shares of beneficial interest, $0.01 par
                                    value per share, of the REIT (the "REIT 
                                    Shares") and shares of Common Stock, par
                                    value $0.01 per share, of OPCO (the "OPCO
                                    Shares"), which are paired and traded as a
                                    unit consisting of one (1) REIT Share and
                                    one (1) OPCO Share.

Relevant Exchange:                  Means, with respect to any Exchange Trading
                                    Day, the principal Stock Exchange on which
                                    the Paired Shares are traded on that day.

Settlement Amount:                  The product of the Settlement Price and the
                                    Settlement Shares.

Settlement Disruption Event:        Means an event beyond the control of the
                                    parties as a result of which The Depository
                                    Trust Company ("DTC") or any successor
                                    depository cannot effect a transfer of the
                                    Settlement Shares or the Paired Shares. If
                                    there is a Settlement Disruption Event on a
                                    Valuation Date, then the transfer of the
                                    Paired Shares that would otherwise be due to
                                    be made by UBS LLC for the account of UBS or
                                    the transfer of the Paired Shares that would
                                    otherwise be due to be made by the
                                    succeeding Exchange Trading Day on which
                                    settlement can take place through DTC,
                                    provided that if such a Settlement
                                    Disruption Event persists for five
                                    consecutive Business Days, then the Party
                                    obliged to deliver such Settlement Shares
                                    shall use its best efforts to cause such
                                    Shares to be delivered promptly thereafter
                                    to the other Party in any commercially
                                    reasonable manner.

Settlement Price:                   If Day S is an Interim Settlement Date or
                                    the Maturity Date, the Forward Price;
                                    otherwise the Forward Price adjusted for
                                    LIBOR breakage adjustments (either positive
                                    or negative) for the such Forward Price for
                                    the period from Day S to the next following
                                    Interim Settlement Date. Any breakage
                                    adjustments shall be calculated by the
                                    Calculation Agent in accordance with normal
                                    industry standards.

Settlement Shares:                  The number of shares up to the full amount
                                    of Underlying Shares subject to settlement
                                    under Section III. or VI.

Spread:                             1.40% per annum.

Stock Exchange:                     Means the New York Stock Exchange, the
                                    American Stock Exchange or NASDAQ.

Stock Settlement
Unwind Price:                       The daily average closing price of the
                                    Paired Shares for Exchange Trading Days
                                    during the Unwind Period.

Trade Date:                         31 December 1997.

UBS LLC:                            UBS Securities LLC

Unwind Period:                      In the event of Stock Settlement or Net
                                    Stock Settlement 100 Exchange Trading Days
                                    (or a proportionately smaller number of
                                    Exchange Trading Days for partial
                                    settlements) beginning on Day S; provided
                                    that UBS may extend such period (such
                                    extension not to exceed 20 Exchange Trading
                                    Days) and that the


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                             FORWARD STOCK CONTRACT

                                    Unwind Period shall be automatically
                                    extended i) upon the occurrence of a Market
                                    Disruption Event and ii) for any day during
                                    the Unwind Period that the Company is not
                                    able to provide an updated and effective
                                    registration statement to UBS.

Underlying Shares:                  3,250,000 Paired Shares of the Companies
                                    (NYSE ticker "PAH"), subject to adjustment
                                    in the event of partial settlements.

Valuation date:                     In the case of determining any Physical
                                    Settlement value, Net Stock Settlement
                                    Shares or Stock Settlement Shares, Day S,
                                    the day preceding Day S and all Exchange
                                    Trading Days during the Unwind Period; in
                                    the case of determining any Preliminary
                                    Stock Settlement Shares or Preliminary Net
                                    Stock Settlement Shares, the Exchange
                                    Trading Day immediately preceding Day S; in
                                    the case of determining the Interim
                                    Settlement Amount and related calculation,
                                    the day prior to the Interim Settlement
                                    Date, and the five (5) Exchange Trading Days
                                    following receipt of Interim Settlement
                                    Shares by UBS.

Valuation Time:                     4:00 pm EST, or in the event the Relevant
                                    Exchange closes early, such closing time.

III.     Settlement

A.       Notice and Procedures

1.       The Companies may on any Exchange Trading Day up to and including the
         Maturity Date, upon the giving of at least five (5) Business Days
         telephonic notice to UBS (the "Settlement Notice"), settlement all or
         part of this Transaction. The Settlement Notice shall specify:

                  (i)  the Settlement Shares,

                  (ii) the settlement method subject to change upon notice as
                  described below in this section (Physical, Stock or Net Stock
                  Settlement, as such methods are described below); and

                  (iii) Day S, which smut be an Exchange Trading Day; provided
                  however, that if Physical or Net Stock Settlement is selected
                  and in UBS' reasonable judgement the settlement of the
                  Settlement Shares would potentially violate or contravene any
                  legal or regulatory prohibition or requirement applicable to
                  UBS or cause UBS to contravene any established UBS corporate
                  policy or compliance policy which relates to any legal or
                  regulatory prohibition or requirement applicable to UBS (other
                  than any corporate policy limiting the amount of UBS's
                  investment in another entity) then UBS shall at least three
                  (3) Business Days prior to proposed Day S, notify the
                  Companies telephonically (confirmed by writing) of any such
                  impediment and is estimate of the period during which such
                  impediment will preclude UBS' ability to settle all or part of
                  this Transaction.

                  The Settlement Notice shall be effective only if the notice
                  requirements specified above are fulfilled; provided, that if
                  such notice is incomplete, and i) if no settlement method is
                  specified, then the settlement method shall be deemed to be
                  Physical Settlement and ii) if no Day S is specified, Day S
                  shall be deemed to be one Exchange Trading Date after the
                  Maturity Date and Settlement Shares shall be deemed to equal
                  Underlying Shares; and provided further that the Companies may
                  upon telephonic notice to UBS of at least one (1) Exchange
                  Trading Day prior to the proposed Say S, withdraw any
                  Settlement Notice.


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                             FORWARD STOCK CONTRACT

         In the case of any partial settlement, following such settlement the
         number of Underlying Shares to which this Transaction shall relate
         shall be adjusted, as of Day S, by subtracting the number of Settlement
         Shares from the number of Underlying Shares (as the same may have been
         adjusted prior to such Partial Settlement) immediately prior to such
         Day S. The Settlement Shares shall not be subject to forward accretion
         and shall be treated separately from the remaining Underlying Shares
         during any Unwind Period.

         In the event that the Company provided notice of Stock or Net Stock
         Settlement, on any day during the applicable unwind period, upon
         providing one Business Day's telephonic notice, the Company may elect
         to effect Physical Settlement for all remaining Settlement Shares. The
         number of Settlement Shares deemed to have already been settled shall
         equal the Settlement Shares times a fraction, the numerator of which
         shall equal the number of elapsed Exchange Trading Days in the Unwind
         Period until the notice date and the denominator of which shall equal
         the total Exchange Trading Days in the Unwind period as agreed to among
         the parties; provided however, that the number of Settlement Shares
         deemed to have already been settled shall be adjusted to reflect
         adjustments (if any) to the Unwind Period prior to the notice date for
         Physical Settlement. In the event that the Companies elect to effect
         Physical Settlement pursuant to this paragraph, (i) the notice day
         shall become the final day of the Unwind Period with regard to
         Settlement Shares that are deemed to have been settled, and (ii) the
         Exchange Trading Day immediately following the notice day shall become
         Day S for the remaining Settlement Shares and the Settlement Price for
         these remaining Settlement Shares shall be recalculated accordingly.

2.       On Day S, the Settlement Price for the Settlement Shares and the
         Settlement Amount shall be determined for Day S.

3.       The Settlement Amount shall be determined and the settlement procedures
         executed pursuant to the settlement method (B, C, or D of this Section
         III.) selected by the Companies in their sole discretion.

4.       It shall be a condition precedent to any right of the Companies to
         elect Stock Settlement (III. C. below) or Net Stock Settlement (III. D.
         below), that the Companies must (i) notify UBS (in writing or
         telephonically) of such election at least five (5) Business Days prior
         to Day S and (ii) prior to Day S, cause to be filed with the Securities
         and Exchange Commission (the "Commission") and cause to become
         effective under the Securities Act of 1933, as amended (the "Securities
         Act") a registration statement that results in UBS being able to resell
         all Paired Shares to be delivered by the Companies to UBS LLC for the
         account of UBS in effecting such Stock Settlement or Net Stock
         Settlement without further registration under the Securities Act. Such
         registration statement shall include one or more preliminary
         prospectuses, prospectuses, and any amendments and supplements therefor
         such that any preliminary prospectus or prospectus, as amended or
         supplemented, shall not contain any untrue statement of a material fact
         or omit to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading in light of the
         circumstances under which they are made. In addition, the Companies
         shall not deliver any Paired Shares to UBS LLC for the account of UBS
         pursuant to Section IV. below unless at the time of such delivery a
         registration statement has become effective under the Securities Act
         that results in UBS being able to resell such Paired Shares without
         further registration under the Securities Act, such Registration
         Statement to include one or more preliminary prospectuses, prospectus
         and any amendments or supplements thereto such that any preliminary
         prospectus or prospectus, as amended or supplemented, shall not contain
         any untrue statement of a material fact required to be stated therein
         or necessary to make the statements therein not misleading in light of
         the circumstances under which they are made. The Companies further
         agree that it will cause any such Registration Statement referred to in
         this paragraph 5 of Section III.A. to remain in effect until the
         earliest of the date on which (i) all Paired Shares issued pursuant
         hereto and not required to be delivered to the Companies hereunder have
         been sold by UBS LLC for the account of UBS and UBS agrees to notify
         the Companies of such fact, within two (2) Business Days of its
         occurrence, (ii) UBS LLC for the account of UBS is able to sell the
         Paired Shares subject thereto under Rule 144(k), or (iii) UBS has
         advised the Companies that it no longer requires that such registration
         statement be effective; provided, however, that in no event shall the
         Companies be obligated to


                                       7

<PAGE>

                             FORWARD STOCK CONTRACT

         keep such Registration Statement effective for more than 10 Exchange
         Trading Days after the end of the applicable Unwind Period.

B.       Physical Settlement

         If the Companies elect Physical Settlement, the Companies shall settle
         by delivering cash in an amount equal to the Settlement Amount in
         exchange for the Settlement Shares ("Physical Settlement") on the
         Exchange Trading Day immediately succeeding Day S. UBS shall cause UBS
         LLC for the account of UBS to deliver the Settlement Shares to the
         Companies on the Exchange Trading Day immediately succeeding Day S upon
         receipt of such Physical Settlement.

C.       Stock Settlement

         If the Companies elect to settle the Settlement Amount by delivering
         Paired Shares in exchange for the Settlement Shares ("Stock
         Settlement"), the number of Paired Shares to be delivered (the "Stock
         Settlement Shares") shall be equal to (i) the Settlement Amount divided
         by (ii) the Stock Settlement Unwind Price. The mechanics for settlement
         are set forth in Section III. E. below.

D.       Net Stock Settlement

         If the Companies elect to settlement the Settlement Amount on a net
         stock basis ("Net Stock Settlement"), the number of the net stock
         settlement shares (the "Net Stock Settlement Shares") shall equal:

                  a) (i) the number of Settlement Shares, times (ii) the amount
                  (positive or negative) equal to the Settlement Price minus the
                  Stock Settlement Unwind Price,

                  such product divided by,

                  b)  the Stock Settlement Unwind Price.

         If such calculation yields a negative number, this shall indicate the
         number of Paired Shares to be delivered by UBS LLC for the account of
         UBS to the Companies. The mechanics for settlement are set forth in
         Section III. E. below. (This section does not apply for purposes of
         Interim Net Stock Settlement).

E.       Stock and Net Stock Settlement Mechanics

         1.       Preliminary Stock Settlement:

                  If the Companies elect Stock Settlement, the Companies shall
                  deliver to UBS LLC for the account of UBS, by 11:00 a.m. on
                  Day S, that number of Paired Shares (the "Preliminary Stock
                  Settlement Shares") equal to the product of (i) the Settlement
                  Amount divided by the closing price of the Paired Shares on
                  the Exchange Trading Day immediately preceding Day S, times
                  (ii) 10.5%. Upon receipt of the Preliminary Stock Settlement
                  Shares, UBS will cause UBS LLC to deposit the Settlement
                  Shares in the Companies' Customer Account.

         2.       Preliminary Net Stock Settlement:

                  If the Companies elect Net Stock Settlement and if the
                  Settlement Price exceeds the closing price of the Paired
                  Shares on the Exchange Trading Day immediately preceding Day
                  S, the Companies shall deliver to UBS LLC for the account of
                  UBS by 11:00 a.m. on Day S, that number of Paired Shares (the
                  "Preliminary Net Stock Settlement Shares) equal to:


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<PAGE>

                             FORWARD STOCK CONTRACT

                  a) the sum of (i) the product of the number of Settlement
                  Shares times the difference between the Settlement Price and
                  the closing price of the Paired Shares on the Exchange Trading
                  Day immediately preceding Day S and (ii) 5% of the Settlement
                  Amount, and

                  such amount divided by

                  b) the closing price of the Paired Shares on the Exchange
                  Trading Day immediately preceding Day S.

                  If the closing price of the Paired Shares on the Exchange
                  Trading Day immediately preceding Day S exceeds the Settlement
                  Price, the Companies shall not be required to deliver any
                  shares to UBS LLC for the account of UBS under this subsection
                  III.E.2.

         3.       By 11:00 a.m. on every fifth (5th) Exchange Trading Day (other
                  than the final Exchange Trading Day) during the Unwind Period
                  and on the Business Day following the final Exchange Trading
                  Day of the Unwind Period:

                  (a)  For Stock Settlement:

                  Stock Settlement Shares shall be calculated as if such
                  Exchange Trading Day were the final Exchange Trading Day of
                  the Unwind Period.

                  (i) If (a) Stock Settlement Shares (calculated as set forth
                  above) are greater than (b) the sum of (x) Preliminary Stock
                  Settlement Shares plus (y) any shares previously delivered
                  pursuant to this subparagraph (i), ten the Companies shall
                  deliver that number of Paired Shares equal to the difference
                  between (a) and (b) to UBS LLC for the account of UBS, and

                  (ii) as of the final day of the Unwind Period, if (a) the sum
                  of (x) Preliminary Stock Settlement Shares plus (y) any shares
                  previously delivered pursuant to this settlement under
                  subparagraph (i), above is greater than Stock Settlement
                  Shares, then UBS LLC, for the account of UBS, shall deliver
                  that number of Paired Shares equal to the difference between
                  (a) and (b) above to the Companies' Customer Account.

                  (b)  For Net Stock Settlement:

                  Net Stock Settlement Shares shall be calculated as if such
                  Exchange Trading Day were the final Exchange Trading Day of
                  the Unwind Period.

                  (i) if (a) Net Stock Settlement Shares are greater than (b)
                  the sum of (x) Preliminary Net Stock Settlement Shares plus
                  (y) any shares previously delivered pursuant to this
                  settlement under this subparagraph (i), then the Companies
                  shall deliver Paired Shares (which Paired Shares may be
                  delivered from its Margin Account) equal in number to the
                  difference between (a) and (b) to UBS LLC for the account of
                  UBS, or

                  (ii) as of the final day of the Unwind Period, if (a) the sum
                  of (x) Preliminary Net Stock Settlement Shares plus (y) any
                  shares previously delivered pursuant to this settlement under
                  subparagraph (i), above is greater than (b) net Stock
                  Settlement Shares, then UBS LLC, for the account of UBS, shall
                  deliver that number of Paired Shares equal to the difference
                  between (a) and (b) above to the Companies' Customer Account.

         4.       The Companies shall cause all shares delivered by it to UBS
                  LLC for the account of UBS to be fully and effectively
                  registered under the Securities Act (as provided in Section
                  III.A.5.
                  above).


                                       9

<PAGE>

                             FORWARD STOCK CONTRACT

         5.       On the Exchange Trading Day following the final Exchange
                  Trading Day of the Unwind Period, UBS LLC for the account of
                  UBS shall release all claims to Paired Shares held in the
                  Companies' Customer Account, including any Settlement Shares
                  delivered pursuant to Preliminary Stock Settlement (Section
                  III. E.1. above), and deliver all such Paired Shares to the
                  Companies with the dollar value of all fractional shares
                  settled in cash.

         6.       In the event of Stock or Net Stock Settlement pursuant to
                  Section III. C. or III.D., the Companies shall pay an unwind
                  accretion fee, in cash or stock, calculated in accordance with
                  the following formula:

                  Settlement Amount x (days in Unwind Period) x (1 month LIBOR +
                  Spread)

         7.       In the event of Stock or Net Stock Settlement pursuant to
                  Section III.C. or III.D., the Companies shall pay a placement
                  fee to UBS LLC for the account of UBS calculated as:

                  Settlement Amount x Maturity Placement Fee %

IV.      Interim Net Stock 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 a number of Paired Shares to UBS
         LLC for the account of UBS equal to the Interim Settlement Shares;
         provided however, that if the Companies are restricted by law or
         regulation or self-regulatory requirements or related policies and
         procedures, whether or not such requirements, policies or procedures
         are imposed by law directly or have been voluntarily adopted by the
         Companies to insure compliance with applicable laws, or in its
         reasonable judgement is otherwise unable or unwilling to deliver
         registered Paired Shares, the Companies shall deliver Cash Collateral
         to UBS as described in Section V.B. below.

V.       Collateral Provisions

A.       If the Companies fail to deliver an effective resale registration
         statement within 60 days of a written request by UBS for the Companies
         to deliver of an effective resale registration statement, then until an
         effective resale registration statement is provided and an Interim Net
         Stock Settlement can be effected, the Companies shall deliver Cash
         Collateral in an amount equal to the Interim Settlement Amount to UBS.
         If Cash Collateral is delivered pursuant to this Section V.A., then
         until an Interim net Settlement can be effected or the transaction is
         settled on a Physical Settlement basis or a registration statement
         becomes effective, the Interim Settlement Amount shall be recalculated
         and the amount of Cash Collateral shall be adjusted to equal such
         recalculated Interim Settlement Amount on a biweekly (every 2 weeks)
         basis.

B.       In the event that the Companies do not deliver Paired Shares pursuant
         to Section IV. for one or more of the reasons described in the
         provision at the end of such paragraph, then, unless Cash Collateral
         has been delivered pursuant to Section V.A. above, the Companies shall
         deliver Cash Collateral in an amount equal to the Interim Settlement
         Amount to a Cash Collateral Account at UBS.

C.       If the Companies have delivered Cash Collateral to UBS pursuant to
         Sections V.A. or V.B. above, at the Companies' option, the Companies
         may deliver freely salable registered Paired Shares to UBS equal in
         saleable market value, based on closing market prices on the Exchange
         Trading Day prior to such delivery, to the value of the Cash Collateral
         held in the Cash Collateral Account at UBS. Prior to the next Interim
         Settlement Date, if on any five consecutive Business Days the Market
         Price of the Paired Shares closes above the Forward Price as of the
         prior Reset Date, UBS shall deliver all cash collateral held, to the
         Companies. On


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<PAGE>

                             FORWARD STOCK CONTRACT

         the day after such Exchange Trading Date, UBS shall release all claims
         to Cash Collateral held in the Cash Collateral Account and deliver such
         amounts to the Companies. On any subsequent Interim Settlement Date, if
         Cash Collateral is held by UBS, UBS shall deliver to the Companies
         within five (5) Business Days after such Interim Settlement Date, the
         amount by which the amount of Cash Collateral exceeds the Interim
         Settlement Amount.

D.       Security Interest.

         The Companies hereby pledges to UBS, as security for its obligations
         herein, a first priority continuing security for its obligations
         herein, a first priority continuing security interest in, lien on and
         right of set-off against all Cash Collateral Paid to UBS, or UBS
         Securities LLC, as its agent. Upon release to the Companies by UBS of
         such Cash Collateral, the security interest and lien granted hereunder
         will be released immediately, and, to the extent possible, without any
         further action by either party.

E.       Representations

         As of the Trade Date of this Confirmation, the Companies represent to
         UBS (which representations will be deemed to be repeated as of each
         date that the Companies Pay Cash Collateral to UBS) that:

         (i) each Company has the power to grant a security interest in and lien
         on any Cash Collateral it Pays to UBS and has taken all necessary
         actions to authorize the granting of that security interest and lien;

         (ii) each Company is the sole owner of or otherwise has the right to
         Pay all Cash Collateral to UBS hereunder, free and clear of any
         security interest, lien, encumbrance or other restrictions other than
         the security interest and lien created hereby;

         (iii) upon Payment of any Cash Collateral to UBS under the terms of
         this Confirmation, UBS will have a valid and perfected first priority
         security interest therein (assuming that any third-party financial
         intermediary or other entity not within its control involved in the
         transfer of the Cash Collateral gives the notice sand takes the action
         required of it under applicable law for perfection of that interest);

         (iv) the performance by each Company of its obligations under this
         Confirmation will not result in the creation of any security interest,
         lien or other encumbrance on any Cash Collateral other than the
         security interest and lien granted hereunder; and

         (v) the Companies will be solvent and able to pay its debts as they
         mature, will have capital sufficient to carry on business and all
         business in which it engages, and will have assets which will have a
         present fair market valuation greater tan the amount of all of its
         liabilities.

F.       Other Collateral Provisions

         During settlement of the Transaction pursuant to Sections III. Or VI.
         Any Cash Collateral held by UBS shall be held until the end of the
         applicable Unwind Period and shall be released upon the final
         Settlement Date for that Unwind Period.

G.       Definitions related to Collateral Provisions

         "Cash Collateral" means the amount of cash denominated in USD, if any,
         Paid by the Companies to or for the benefit of UBS, acting through UBS
         Securities LLC as its agent, pursuant to Sections IV. or V. of this
         Confirmation.


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<PAGE>

                             FORWARD STOCK CONTRACT

         "Local Business Day" means a day on which commercial banks in New York,
         New York are open for business (including dealings in foreign
         exchange).

         "Paid", "Pays" or "Payment" means payment in same day funds in the same
         manner provided for payments to be made to UBS, or UBS Securities LLC
         as its agent under this Confirmation.

VI.      Certain Covenants and Other Provisions

Ability to Settle in Stock:         As of the date hereof, the Companies have 
                                    not, and after the date hereof, the 
                                    Companies will not, enter into any
                                    obligation that would contractually
                                    prohibit the Companies from Stock Settlement
                                    of any shares under this Agreement.

Allocation between the REIT
and OPCO:                           As between the _________ and OPCO, (i) any
                                    delivery to or by the Companies of the REIT
                                    Share portion of Paired Shares pursuant to
                                    this Confirmation shall be made by delivery
                                    to or by the REIT, (ii) any delivery to or
                                    by the Companies of the OPCO share portion
                                    of Paired Shares pursuant to this
                                    Confirmation shall be made by delivery to or
                                    by OPCO, and (iii) any delivery to or by the
                                    Companies of cash pursuant to this
                                    Confirmation shall be allocated between the
                                    REIT and OPCO between and among themselves
                                    based on the ratios that the Companies
                                    allocate proceeds of any issuance of Paired
                                    Shares pursuant to the Pairing Agreement
                                    between the Companies as amended from time
                                    to time without effect on any obligation of
                                    the Companies to UBS or on any obligation of
                                    UBS to the Companies. Such Allocation ratios
                                    are currently set at 95% to the REIT and 5%
                                    to the OPCO.

Condition Precedent to
Physical Settlement:                It shall be a condition precedent to any
                                    right of the Companies to elect Physical
                                    Settlement, that the Companies must, not
                                    more than 180 days prior to such Day S, have
                                    completed the private placement or public
                                    offering of such number of Shares or any
                                    security that may be converted, exchanged or
                                    exercised into Shares, having such initial
                                    purchase price so as to provide the
                                    Companies with net cash proceeds in an
                                    amount not less than the Settlement Amount.

Mandatory Unwind Event:             If at any time prior to the Maturity Date:

                                    (i) the average closing price on the
                                    Relevant Exchange of the Paired Shares on
                                    any two consecutive Exchange Trading Days,
                                    other than a day on which a Market
                                    Disruption Event has occurred, is equal to
                                    or less than any of the Mandatory Unwind
                                    Thresholds, then such day shall be declared
                                    an Interim Settlement Date, and UBS shall
                                    have the right upon written notice to the
                                    Companies, to require the parties to settle
                                    all or a portion of the Transaction (up to
                                    the cumulative Unwind Share Limit for the
                                    corresponding Mandatory Unwind Threshold) on
                                    the Mandatory Unwind Date pursuant to the
                                    settlement procedures set forth in Section
                                    III. Above.

                                    Once a Mandatory Unwind Event has occurred,
                                    if the trading price of the Paired Shares is
                                    less than a lower mandatory Unwind
                                    Threshold, UBS shall have the right upon
                                    providing notice to the Companies, to
                                    require the Parties to settle pursuant to
                                    Section III above on the Mandatory Unwind
                                    Date, all or a portion of the Transaction,
                                    up to a number of Paired Shares equal to the
                                    number of Underlying Shares multiplied by
                                    the corresponding cumulative Unwind Share
                                    Limit, on the


                                       12

<PAGE>

                             FORWARD STOCK CONTRACT

                                    mandatory Unwind Date pursuant to the
                                    settlement procedures set forth in Section
                                    III. above; or,

                                    (ii) if any of the following events occur:

                                    (1) any Financial Covenant Default as more
                                    particularly described in Exhibit A attached
                                    hereto;

                                    (2) any Event of Default that has not been
                                    cured or (except for Events of Default with
                                    respect to those provisions of the REITS
                                    Credit Agreement specified in Exhibit A
                                    attached hereto) waived under the REIT's
                                    Credit Agreement and Term Loan Credit
                                    Agreement, both dated as of July 18, 1997,
                                    by and among the REIT as borrower, various
                                    lenders and The Chase Manhattan Bank as
                                    Administrative Agent;

                                    (3) any Event of Default that has not been
                                    a) cured under any other unsecured and/or
                                    recourse lending agreement involving the
                                    Companies' Specified Indebtedness in
                                    aggregate in the amount of $10,000,000, or
                                    b) waived under any other unsecured and/or
                                    recourse lending agreement involving the
                                    Companies' Specified Indebtedness in
                                    aggregate in the amount of $250,000,000;

                                    (4) Bankruptcy or Insolvency (as such terms
                                    are defined in the Agreement); and/or

                                    (5) any failure of the Companies to post
                                    Cash Collateral pursuant to Section III. or
                                    IV. herein if such failure is not remedied
                                    on or before the third Local Business Day
                                    after notice of such failure is given to the
                                    Companies.

                                    then, UBS LLC for the account of UBS may
                                    upon providing five Business Days notice to
                                    the Companies, require all or part of the
                                    Transaction to be settled early on the
                                    Mandatory unwind Date pursuant to the
                                    settlement procedures set forth in Section
                                    III.

                                    For purposes of the settlement procedures
                                    set forth in Section III, "Day S" shall be
                                    the Mandatory Unwind Date and the
                                    "Settlement Shares" shall be the number of
                                    Paired Shares to be settled pursuant to
                                    clause (i) or (ii) above. The Companies may
                                    elect the method of settlement for such
                                    early settlement in accordance with the
                                    settlement provisions set forth herein;
                                    provided however, that if Stock Settlement
                                    or Net Stock Settlement is elected, and (1)
                                    no resale Registration Statement has been
                                    provided and declared effective prior to Day
                                    S or (2) any resale Registration Statement
                                    so provided and declared effective becomes,
                                    on Day S or during an Unwind Period, the
                                    subject of a stop order suspending its
                                    effectiveness or is the subject of any
                                    proceeding for that purpose or any such
                                    proceeding is threatened by the Commission,
                                    then the Companies at their sole opinion may
                                    choose to (A) cash collateralize 125% of the
                                    obligation to UBS in a manner similar to
                                    that described in Section V., (B) effect
                                    Physical Settlement as to all of the
                                    Settlement Shares in accordance with Section
                                    III.B. hereof on the Exchange Trading Day
                                    immediately succeeding the occurrence of one
                                    of the events specified in (1) or (2) above
                                    or (C) effect settlement with unregistered
                                    Paired Shares to allow UBS to unwind the
                                    Transaction and liquidate any position it
                                    may hold in Paired Shares by means of
                                    negotiated private resales, to the extent
                                    and in the manner permitted by applicable
                                    federal and state securities laws. In


                                       13

<PAGE>

                             FORWARD STOCK CONTRACT

                                    recognition that such negotiated private
                                    resales, if any, are likely to be completed
                                    at prices reflective of a discount to the
                                    prevailing open market prices for any freely
                                    tradeable Paired Shares, the Companies agree
                                    to deliver such number of supplemental
                                    Paired Shares as UBS may reasonably request
                                    to which UBS shall assign a dollar price in
                                    order to approximate an aggregate amount
                                    equal to the aggregate discount accepted by
                                    UBS in connection with the resale of the
                                    unregistered Stock Settlement Shares or the
                                    Companies shall pay an amount to UBS equal
                                    to the aggregate discount accepted by UBS in
                                    connection with the resale of the
                                    unregistered Stock Settlement Shares.

                                    Upon completion of all settlement
                                    activities. UBS LLC for the account of UBS,
                                    will promptly return all remaining shares in
                                    the Companies' Customer Account to the
                                    Companies.

Market Disruption Event:            A Market Disruption Event is the occurrence
                                    or existence on any Exchange Trading Day
                                    during the one-half hour period that ends at
                                    the Valuation Time of any suspension of or
                                    limitation imposed on trading on (i) any of
                                    the Relevant Exchanges or (ii) any of the
                                    exchange or boards of trade or futures
                                    contract market on which options of future
                                    contracts on the Paired Shares of the
                                    Companies are traded that, in the reasonable
                                    determination of the Calculation Agent, is
                                    material. In the event that a Market
                                    Disruption Event occurs or is continuing on
                                    a Valuation Date, any determination of the
                                    closing price of the Paired Shares shall be
                                    postponed to the first succeeding Exchange
                                    Trading Day on which there is no Market
                                    Disruption Event, provided that if there is
                                    a Market Disruption Event on each of the
                                    five Exchange Trading Days immediately
                                    following the original Valuation Date that
                                    but for the Market Disruption Event on each
                                    of the five Exchange Trading Days
                                    immediately following the original Valuation
                                    Date that but for the Market Disruption
                                    Event would have been a day on which the
                                    closing price of the Paired Shares would
                                    have been determined, such fifth Exchange
                                    Trading Day shall be deemed to be the
                                    Valuation Date notwithstanding the Market
                                    Disruption Event and the Calculation Agent
                                    shall, in consultation with the Companies,
                                    determine the closing price for the
                                    Valuation Date based upon the last closing
                                    price prior to such Market Disruption Event,
                                    and if applicable, shall effect the
                                    settlement of the Underlying Shares by using
                                    such last closing price for the
                                    determination of the Stock Settlement Unwind
                                    Price.

                                    The Calculation Agent shall within one (1)
                                    Business Day notify the other party of the
                                    existence or occurrence of a Market
                                    Disruption Event on any day that but for the
                                    occurrence or existence of a Market
                                    Disruption Event would have been a Valuation
                                    Date.

Regulatory Compliance:              Each party agrees that if the delivery of
                                    shares upon settlement is subject to any
                                    restriction imposed by a regulatory
                                    authority, it shall not be an event of
                                    default, and the parties will negotiate in
                                    good faith a procedure to effect settlement
                                    of such shares in a manner which complies
                                    with any relevant rules of such regulatory
                                    authority and which is satisfactory in form
                                    and substance to their respective counsel.

Securities Law Compliance:          Each party agrees that it will comply, in
                                    connection with this Transaction and all
                                    related or contemporaneous sales and
                                    purchases of the Companies' Paired Shares,
                                    with the applicable provisions of the
                                    Securities Act, the securities Exchange Act
                                    of 1934 (the "Exchange Act") and the rules
                                    and regulations thereunder.


                                       14

<PAGE>

                             FORWARD STOCK CONTRACT

Settlement:                         All settlements shall occur through DTC or
                                    any other mutually acceptable depository.

Settlement Stock Delivery:          Pursuant to the Stock Settlement and Net
                                    Stock Settlement provision sunder Section
                                    III. above, UBS LLC for the account of UBS
                                    shall deliver all Settlement Shares to the
                                    Companies' Customer Account. Such Paired
                                    Shares will serve as collateral until
                                    released by UBS LLC for the account of UBS
                                    in accordance with the settlement mechanics
                                    noted under III.E. above, or delivered to
                                    the Companies pursuant to Section III.E.5.
                                    Paired Shares held in the Companies'
                                    Customer Account shall not be voted.

                                    The Companies covenant and agree with UBS
                                    that Paired Shares delivered by the
                                    Companies pursuant to settlement events in
                                    accordance herewith will be duly authorized,
                                    validly issued, fully paid and
                                    non-assessable. The issuance of such Paired
                                    Shares will not require the consent,
                                    approval, authorization, registration, or
                                    qualification of any government authority,
                                    except such as shall have been obtained on
                                    or before the delivery date to UBS LLC for
                                    the account of UBS in connection with any
                                    registration statement filed with respect to
                                    any share or otherwise.

Settlement Volume:                  In the event of a settlement other than a
                                    mandatory Unwind Event, on any Exchange
                                    Trading Day during an Unwind Period, UBS, 
                                    pursuant to its hedging activities relating
                                    to this Transaction, shall not sell Paired 
                                    Shares in an amount in excess of 20% of the 
                                    average daily volume for the 20 Exchange 
                                    Trading Days immediately preceding Day S.

Trading Authorization:              The following individuals and/or any 
                                    individual authorized in writing by 
                                    the Treasurer of the Companies are
                                    authorized by the Companies to provide
                                    trading instructions to UBS LLC for the
                                    account of UBS with regard to this
                                    Transaction.

                                    William W. Evans for the REIT

                                    and

                                    Leslie NG for OPCO

                                       15
<PAGE>

                             FORWARD STOCK CONTRACT

VII.     Delivery Instructions:

Party A:          Chase NYC
                  UBS Securities LLC
                  ABA 021000021
                  A/C No. ###-##-####
                  Attn:  GED

Party B:          The Chase Manhattan Bank
                  ABA 021000021
                  for the account of Patriot American Revolving Credit Facility
                  DDA# ###-##-####
                  Attn:  Daniella Cassagnolli

                  Please confirm that the foregoing correctly sets forth the
                  terms of our agreement by executing the copy of the
                  Confirmation enclosed for that purpose and returning it to Ms.
                  Gale Herzing, 29th Floor.

Yours faithfully,

Union Bank of Switzerland, London Branch:

By: ___________________________________       By: ______________________________
Name:                                         Name:
Title:                                        Title:
Date:                                         Date:

Patriot American Hospitality, Inc.


By: ___________________________________       By: ______________________________
Name:                                         Name:
Title:                                        Title:
Date:                                         Date:


Patriot American Hospitality Operating Company:


By: ___________________________________       By: ______________________________
Name:                                         Name:
Title:                                        Title:
Date:                                         Date:

                                       16