<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____)*
Candlewood Hotel Company, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
13741M 108
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(CUSIP Number)
Liliya Altshuler, Esq., Dewey Ballantine LLP, 1301 Avenue of the Americas,
New York, NY 10019 Ph: (212) 259-6354
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
October 3, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. ?
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a person's initial
filing on this form with respect to the subject class of securities, and for any
subsequent amendment containing information which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a currently
valid OMR control number.
<PAGE>
- --------------------------------------------------------------------------------
1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
The Mutual Life Insurance Company of New York EIN: 13-1632487)
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
State of New York
- --------------------------------------------------------------------------------
7. Sole Voting Power 342,105
Number of
Shares Bene- 8. Shared Voting Power 0
ficially by ------------------------------------------------------------------
Owned by
Each 9. Sole Dispositive Power 342,105
Reporting ------------------------------------------------------------------
Persons With
10. Shared Dispositive Power 0
------------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
342,105
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 3.65%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) IC
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Page 2 of 64
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Pecks Management Partners Ltd. EIN: 11-3015963
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
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(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
State of New York
- --------------------------------------------------------------------------------
7. Sole Voting Power 736,842
Number of
Shares Bene- 8. Shared Voting Power 0
ficially by ------------------------------------------------------------------
Owned by
Each 9. Sole Dispositive Power 736,842
Reporting ------------------------------------------------------------------
Persons With
10. Shared Dispositive Power 0
------------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
736,842
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 7.54%
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14. Type of Reporting Person (See Instructions) IA
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Page 3 of 64
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Advance Capital Offshore Partners, L.P.
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
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(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
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Cayman Islands
- --------------------------------------------------------------------------------
7. Sole Voting Power 0
Number of
Shares Bene- 8. Shared Voting Power 83,474
ficially by ------------------------------------------------------------------
Owned by
Each 9. Sole Dispositive Power 0
Reporting ------------------------------------------------------------------
Persons With
10. Shared Dispositive Power 83,474
------------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
83,474
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 0.9%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) PN
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Page 4 of 64
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Advance Capital Partners, L.P. EIN: 13-3861661
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
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State of Delaware
- --------------------------------------------------------------------------------
7. Sole Voting Power 0
Number of
Shares Bene- 8. Shared Voting Power 258,631
ficially by ------------------------------------------------------------------
Owned by
Each 9. Sole Dispositive Power 0
Reporting ------------------------------------------------------------------
Persons With
10. Shared Dispositive Power 258,631
------------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
258,631
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 2.7%
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14. Type of Reporting Person (See Instructions) PN
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Page 5 of 64
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Advance Capital Associates, L.P. EIN: 13-3861660
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
State of Delaware
- --------------------------------------------------------------------------------
7. Sole Voting Power 0
Number of
Shares Bene- 8. Shared Voting Power 342,105
ficially by ------------------------------------------------------------------
Owned by
Each 9. Sole Dispositive Power 0
Reporting ------------------------------------------------------------------
Persons With
10. Shared Dispositive Power 342,105
------------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
342,105
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 3.65%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) PN
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Page 6 of 64
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Advance Capital Offshore Associates, LDC
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
Cayman Islands
- --------------------------------------------------------------------------------
7. Sole Voting Power 0
Number of
Shares Bene- 8. Shared Voting Power 83,474
ficially by ------------------------------------------------------------------
Owned by
Each 9. Sole Dispositive Power 0
Reporting ------------------------------------------------------------------
Persons With
10. Shared Dispositive Power 83,474
------------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
83,474
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 0.9%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) OO
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Page 7 of 64
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Advance Capital Management, LLC EIN:
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
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(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
State of Delaware
- --------------------------------------------------------------------------------
7. Sole Voting Power 0
Number of
Shares Bene- 8. Shared Voting Power 342,105
ficially by ------------------------------------------------------------------
Owned by
Each 9. Sole Dispositive Power 0
Reporting ------------------------------------------------------------------
Persons With
10. Shared Dispositive Power 342,105
------------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
342,105
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 3.65%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) OO
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Page 8 of 64
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Private Equity Investors III, L.P. EIN: 13-3946904
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) AF
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
State of New York
- --------------------------------------------------------------------------------
7. Sole Voting Power 0
Number of
Shares Bene- 8. Shared Voting Power 368,421
ficially by ------------------------------------------------------------------
Owned by
Each 9. Sole Dispositive Power 0
Reporting ------------------------------------------------------------------
Persons With
10. Shared Dispositive Power 368,421
------------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
368,421, but 736,842 if considered together with
Equity-Linked Investors-II
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
3.9% but approximately 7.5% if considered together with Equity-Linked
Investors-II
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14. Type of Reporting Person (See Instructions) PN
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Page 9 of 64
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Equity-Linked Investors-II
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) AF
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
State of New York
- --------------------------------------------------------------------------------
7. Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares Bene- 8. Shared Voting Power 368,421
ficially by -----------------------------------------------------------------
Owned by
Each 9. Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Persons With
10. Shared Dispositive Power 368,421
-----------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
368,421, but 736,842 if considered together with Private
Equity Investors III, L.P.
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
3.9%, but approximately 7.5% if considered together with Private Equity
Investors III, L.P.
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) PN
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Page 10 of 64
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Rohit Mojilal Desai SS#: ###-##-####
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) AF
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
United States
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power 0
Shares Bene- -------------------------------------------------------------
ficially by 8. Shared Voting Power 736,842
Owned by -------------------------------------------------------------
Each 9. Sole Dispositive Power 0
Reporting -------------------------------------------------------------
Persons With 10. Shared Dispositive Power 736,842
-------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
736,842
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 7.5%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) IN
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Page 11 of 64
<PAGE>
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Desai Capital Management Incorporated
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) AF
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
State of New York
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power 0
Shares Bene- -----------------------------------------------------------------
ficially by 8. Shared Voting Power 736,842
Owned by -----------------------------------------------------------------
Each 9. Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Persons With 10. Shared Dispositive Power 736,842
-----------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
736,842
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 7.5%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) IA, CO
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Page 12 of 64
<PAGE>
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
LNR Candlewood Holdings, Inc. EIN: 65-0784576
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) WC
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
State of Nevada
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power 0
Shares Bene- -----------------------------------------------------------------
ficially by 8. Shared Voting Power 736,842
Owned by -----------------------------------------------------------------
Each 9. Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Persons With 10. Shared Dispositive Power 736,842
-----------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
736,842
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 7.54%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) CO
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Page 13 of 64
<PAGE>
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Leisure Colony Management Corp. EIN: 59-1091627
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) WC
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
State of Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power 0
Shares Bene- -----------------------------------------------------------------
ficially by 8. Shared Voting Power 736,842
Owned by -----------------------------------------------------------------
Each 9. Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Persons With 10. Shared Dispositive Power 736,842
-----------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
736,842
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 7.54%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) CO
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Page 14 of 64
<PAGE>
- --------------------------------------------------------------------------------
1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
LNR Property Corporation EIN: 65-0777234
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) WC
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
State of Delaware
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power 0
Shares Bene- -----------------------------------------------------------------
ficially by 8. Shared Voting Power 736,842
Owned by -----------------------------------------------------------------
Each 9. Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Persons With 10. Shared Dispositive Power 736,842
-----------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
736,842
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 7.54%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) CO
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-----------------------------------------------------------------------
Page 15 of 64
<PAGE>
- --------------------------------------------------------------------------------
1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Allied Capital Corporation EIN: 52-1081052
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) WC
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
State of Maryland
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power 342,105
Shares Bene- -----------------------------------------------------------------
ficially by 8. Shared Voting Power 0
Owned by -----------------------------------------------------------------
Each 9. Sole Dispositive Power 342,105
Reporting -----------------------------------------------------------------
Persons With 10. Shared Dispositive Power 0
-----------------------------------------------------------------
11. Aggregate Amount Benefically Owned by Each Reporting Person
342,105
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 3.65%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) CO
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------
Page 16 of 64
<PAGE>
Item I. Security and Issuer.
This statement relates to the common stock, par value $.01 per share
("Common Stock"), of Candlewood Hotel Company, Inc., a Delaware Corporation (the
"Issuer"), beneficially owned by the Reporting Persons (as defined below),
through their respective holdings of Series A Cumulative Convertible Preferred
Stock, par value $.01 per share ("Preferred Stock") of the Issuer convertible
into Common Stock at the option of the holder. The Issuer's principal executive
offices are located at Lakepoint Office Park 9342 East Central, Wichita, Kansas
67206-2555.
Item 2. Identity and Background.
This statement is filed by The Mutual Life Insurance Company of New York, a
New York insurance company ("MONY"), Pecks Management Partners Ltd., a New York
corporation ("PECKS"), Advance Capital Offshore Partners, L.P., a Cayman Islands
limited partnership ("Advance Offshore I"), Advance Capital Partners, L.P., a
Delaware limited partnership ("Advance Capital I"), Advance Capital Offshore
Associates, LDC, a Cayman Islands limited duration company and the general
partner of Advance Offshore I ("Advance Offshore II"), Advance Capital
Associates, L.P., a Delaware limited partnership, the general partner of Advance
Capital I and the majority shareholder of Advance Offshore II ("Advance Capital
II"), Advance Capital Management, LLC, a Delaware limited liability company and
the managing general partner of Advance Capital II ("Advance Capital III"),
Private Equity Investors III, L.P., a Delaware limited partnership ("PEI-III"),
Equity-Linked Investors-II, a New York limited partnership ("ELI-II"), Rohit
Mojilal Desai, an individual ("Desai"), Desai Capital Management Incorporated, a
New York corporation and the investment adviser to PEI-III and ELI-II ("DCMI"),
LNR Candlewood Holdings, Inc., a Nevada corporation ("LNR"), Leisure Colony
Management Corp., a Florida corporation and the sole shareholder of LNR
("Leisure"), LNR Property Corporation, a Delaware corporation and the sole
shareholder of Leisure ("LNR Property"), Allied Capital Corporation, a Maryland
corporation ("Allied") (individually, a "Reporting Person", and collectively,
the "Reporting Persons"). Advance Offshore I, Advance Offshore II, Advance
Capital I, Advance Capital II and Advance Capital III are collectively referred
to herein as "Advance Capital". PEI-III, ELI-II, Desai and DCMI are collectively
referred to herein as "DESAI". LNR, Leisure and LNR Property are collectively
referred to herein as "LNR Entities".
The Reporting Persons constitute a group as such term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Information with respect to each Reporting Person is given solely by such
Reporting Person and no Reporting Person has responsibility for the accuracy or
completeness of information supplied by any other Reporting Person. The
Reporting Persons have entered into a Joint Filing Agreement, dated May 29,
1998, a copy of which is attached hereto as Schedule I.
Page 17 of 64
<PAGE>
Item 2 (a), (b), (c).
1. MONY. MONY is a New York insurance company with its principal executive
offices located at 1740 Broadway, New York, New York 10019. It operates
primarily in the insurance industry. For information with respect to the
identity and principal occupation of each executive officer and trustee of MONY
see Schedule II attached hereto.
2. PECKS. PECKS is a New York corporation with its principal executive
offices located at One Rockefeller Plaza, Suite 900, New York, New York 10020.
PECKS is a registered investment adviser. For information with respect to the
identity and principal occupation of each executive officer and director of
PECKS see Schedule III attached hereto.
3. Advance Capital. Advance Offshore I is a Cayman Islands limited
partnership and it operates as an investment fund. Advance Offshore II is a
Cayman Islands limited duration company and its principal occupation is to act
as the general partner of Advance Offshore I. Principal executive offices of
Advance Offshore I and Advance Offshore II are located at CITCO Fund Services,
Safehaven Centre, Grand Cayman, Cayman Islands. Advance Capital I is a Delaware
limited partnership and it operates as an investment fund. Advance Capital II is
a Delaware limited partnership and its principal occupation is to act as the
general partner of Advance Capital I. Advance Capital II is the majority
shareholder of Advance Offshore II. Advance Capital III is a Delaware limited
liability company and its principal occupation is to act as the managing general
partner of Advance Capital II. Principal executive offices of Advance Capital I,
Advance Capital II and Advance Capital III are located at 660 Madison Avenue,
15th Fl., New York, New York 10021. For information with respect to the identity
and principal occupation of each member of Advance Capital III see Schedule IV
attached hereto.
4. DESAI. PEI-III is a Delaware limited partnership. ELI-II is a New York
limited partnership. The principal business of PEI-III and ELI-II is investing
in portfolio of convertible debt securities, convertible preferred stock and
other debt securities with equity features. Rohit M. Desai Associates III, LLC
("RMDA-III") is a Delaware limited liability company and the general partner of
PEI-III. RMDA-III has no business activities other than acting as PEI-III's
general partner. Rohit M. Desai Associates-II ("RMDA-II") is a New York general
partnership and the general partner of ELI-II. RMDA-II has no business
activities other than acting as ELI-II's general partner. The managing member of
RMDA-III is Desai. The principal occupation and employment of Desai is as the
president, treasurer and chairman of the board of directors of DCMI, as the
managing member of RMDA-III, and as the managing general partner of RMDA-II.
Desai is a United States citizen. The partners of RMDA-II are Desai, Katharine
B. Desai and the Rohit M. Desai Family Trust (of which Katharine B. Desai and
Joseph F. McDonald are the trustees under a trust agreement dated July 1, 1987).
The principal occupation and employment of Katharine B. Desai is as the
secretary and director of DCMI. The principal occupation and employment of
Joseph F. McDonald is as a member of the law firm Morgan, Lewis & Bockius. DCMI
is a New York
Page 18 of 64
<PAGE>
corporation whose principal business is to act as an investment adviser. DCMI
acts as an investment adviser to PEI-III, ELI-II and other entities. For
information with respect to the identity, principal occupation and business
address of the sole stockholder, directors and executive officers of DCMI see
Schedule V attached hereto. The business address of each of the above referenced
entities and individuals, except Joseph F. McDonald, is 540 Madison Avenue, 36th
Floor, New York, New York 10022. The business address of Joseph F. McDonald is
c/o Morgan, Lewis & Bockius, 101 Park Avenue, New York, New York 10178
5. LNR Entities. LNR is a Nevada corporation and its principal business is
holding stock of the Issuer. Leisure is a Florida corporation and the sole
shareholder of LNR. LNR Property is a Delaware corporation and the sole
shareholder of Leisure. LNR Property and Leisure are real estate investment and
management companies. Leisure is the entity through which LNR Property owns
interests in its other subsidiaries. Principal executive offices of LNR, Leisure
and LNR Property are located at 760 N.W. 107 Avenue, Suite 300, Miami, Florida
33172. For information with respect to the identity and principal occupation of
each executive officer and director of LNR, Leisure and LNR Property see
Schedule VI attached hereto.
6. Allied. Allied is a Maryland corporation and it operates as a small
business development company. Its principal executive offices are located at
1666 K Street, N.W. 9th Fl., Washington, DC 20006. For information with respect
to the identity and principal occupation of each executive officer and director
of Allied see Schedule VII attached hereto.
Item 2 (d), (e).
During the last five years, neither any Reporting Person nor, to the best
knowledge of the applicable Reporting Person, any person identified on Schedules
II through VII has (i) been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violations with
respect to such laws.
Item 2 (f).
To the best knowledge of the applicable Reporting Person, all persons
identified in Schedules II through VII are United States citizens, except as
specifically provided in the respective schedule.
Item 3. Source and Amount of Funds or Other Consideration.
The shares of Common Stock of the Issuer are beneficially owned by the
Reporting Persons through their respective purchases pursuant to the Stock
Purchase
Page 19 of 64
<PAGE>
Agreement dated September 22, 1997 among the Issuer, the Reporting Persons and
certain other purchasers of the shares of Preferred Stock of the Issuer.
1. MONY acquired 1,540 shares of Preferred Stock on September 23, 1997 for a
purchase price of $1,540,000 and 1,710 shares of Preferred Stock on October 3,
1997 for a purchase price of $1,710,000. MONY used its general account assets in
the amount of $3,250,000 to finance these purchases.
2. PECKS acquired 3,320 shares of Preferred Stock on September 23, 1997 for
a purchase price of $3,320,000 and 3,680 shares of Preferred Stock on October 3,
1997 for a purchase price of $3,680,000. PECKS used its investment funds in the
amount of $7,000,000 to finance these purchases.
3. Advance Offshore I acquired 793 shares of Preferred Stock on October 3,
1997 for a purchase price of $793,000. Advance Capital I acquired 2,457 shares
of Preferred Stock on October 3, 1997 for a purchase price of $2,457,000. Funds
in the aggregate amount of $3,250,000 necessary for the purchases were provided
by capital contributions of limited partners and general partners of Advance
Offshore I and Advance Capital I, respectively.
4. PEI-III acquired 3,500 shares of Preferred Stock on October 3, 1997 for a
purchase price of $3,500,000. ELI-II acquired 3,500 shares of Preferred Stock on
October 3, 1997 for a purchase price of $3,500,000. In making these purchases,
PEI-III and ELI-II used working capital from their respective operating
accounts, which are funded by capital contributions from the limited partners of
PEI-III and ELI-II and gains and proceeds from PEI-III's and ELI-II's investment
portfolios.
5. LNR acquired 3,320 shares of Preferred Stock on September 23, 1997 for a
purchase price of $3,320,000 and 3,680 shares of Preferred Stock on October 3,
1997 for a purchase price of $3,680,000. LNR used its corporate cash flow in the
aggregate amount of $7,000,000 to finance these purchases.
6. Allied Capital Corporation acquired 939 shares of Preferred Stock on
September 23, 1997 for a purchase price of $939,000 and 1,043 shares of
Preferred Stock on October 3, 1997 for a purchase price of $1,043,000. Allied
Capital Corporation II acquired 601 shares of Preferred Stock on September 23,
1997 for a purchase price of $601,000 and 667 shares of Preferred Stock on
October 3, 1997 for a purchase price of $667,000. Allied Capital Corporation and
Allied Capital Corporation II acquired the Preferred Stock using their
respective corporate equity. On December 31, 1997, Allied Capital Corporation
and Allied Capital Corporation II have merged and formed Allied. Allied
presently holds 3,250 shares of Preferred Stock of the Issuer.
Item 4. Purpose of Transaction.
The Reporting Persons hold Preferred Stock for the purpose of investment, in
view of capital appreciation of securities.
Page 20 of 64
<PAGE>
The Reporting Persons intend to reexamine their investment in the Issuer
from time to time and, depending on market considerations and other factors, may
purchase or sell shares of Common Stock, if appropriate opportunities to do so
are available, on such terms and at such time as they consider advisable.
In connection with the issuance of Preferred Stock, the following changes
resulted:
a). The maximum number of the directors of the Issuer was increased from
seven (7) to ten (10) directors and three directors were added to the Board. The
three new directors, elected by a majority of the Board, are: Messrs. Robert
Cresci, Robert Morris and Frank Pados.
b). The Board of Directors authorized issuance of 65,000 shares of Preferred
Stock and reserved 6,842,105 shares of Common Stock to be issued upon conversion
of the Preferred Stock or such lesser or greater number of shares of Common
Stock as the then outstanding shares of Preferred Stock are convertible into.
c). The Issuer's charter and bylaws were amended so as to reflect changes in
capitalization and in the structure of the Board of Directors of the Issuer.
Subject to the foregoing, none of the following events has happened or is
contemplated by the Reporting Persons:
1). The acquisition by any person of additional securities of the Issuer, or
the disposition of securities of the Issuer;
2). An extraordinary corporate transaction, such as a merger, reorganization
or liquidation, involving the Issuer or any of its subsidiaries;
3). A sale or transfer of a material amount of assets of the Issuer or any
of its subsidiaries;
4). Any other material change in the Issuer's business or corporate
structure;
5). Changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person;
6). Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
Page 21 of 64
<PAGE>
7). A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
8). Any action similar to any of those enumerated above.
Item 5. Interest in the Securities of the Issuer.
Item 5 (a), (b).
The Reporting Persons together beneficially own an aggregate of 3,236,842
shares of Common Stock or approximately 26.4% of the issued and outstanding
shares of Common Stock through holding of an aggregate of 30,750 shares of
Preferred Stock of the Issuer (preferences and special rights of Preferred Stock
are listed in the Certificate of Designation, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions Thereof (the "Certificate of
Designation") attached hereto as Exhibit D). Preferred Stock has face value of
$1,000 per share and is convertible at the option of the Reporting Persons into
Common Stock of the Issuer at a price of $9.50 per share. Pursuant to the
Certificate of Designation, holders of the shares of Preferred Stock are
entitled, upon the failure of the Issuer to redeem the shares of Preferred Stock
in accordance with the mandatory redemption provisions of the Certificate of
Designation, to receive warrants to purchase additional Common Stock of the
Issuer ("Warrants") upon terms and conditions stated in the Form of Warrant
attached hereto as Exhibit E. The Reporting Persons, therefore, may be entitled
to receive Warrants to purchase additional Common Stock of the Issuer. According
to the information provided by the Issuer to the Reporting Persons, the Issuer
presently has 9,025,000 shares of Common Stock issued and outstanding. Preferred
Stock votes on an "as converted" basis on all matters calling for a vote of
Common Stock shareholders.
If the Issuer grants, issues or sells any rights or options to purchase
stock, warrants or other property ("Purchase Rights") pro rata to the holders of
Common Stock, the Reporting Persons are entitled, pursuant to the Certificate of
Designation, to a right, at their option, either to have the conversion price of
Preferred Stock adjusted, or to acquire such Purchase Rights as they could have
acquired if they held the number of shares of Common Stock issuable upon
conversion of Preferred Stock held by them immediately prior to the time the
Issuer granted, issued or sold such Purchase Rights.
1. MONY. MONY beneficially owns 342,105 shares of Common Stock of the Issuer
through its holdings of 3,250 shares of Preferred Stock of the Issuer. If MONY
were to convert all its shares of Preferred Stock into shares of Common Stock,
it would own approximately 3.65% of the issued and outstanding shares of Common
Stock. To the best knowledge of MONY, no person other than MONY has the power to
vote or to direct the vote and to dispose or to direct the disposition of any of
the securities beneficially owned by MONY.
Page 22 of 64
<PAGE>
2. PECKS. PECKS beneficially owns 736,842 shares of Common Stock of the
Issuer through its holdings of 7,000 shares of Preferred Stock of the Issuer. If
PECKS were to convert all its shares of Preferred Stock into shares of Common
Stock, it would own approximately 7.54% of the issued and outstanding shares of
Common Stock. To the best knowledge of PECKS, no person other than PECKS has the
power to vote or to direct the vote and to dispose or to direct the disposition
of any of the securities beneficially owned by PECKS.
3. Advance Capital. Advance Offshore I beneficially owns 83,474 shares of
Common Stock of the Issuer through its holdings of 793 shares of Preferred Stock
of the Issuer. If Advance Offshore I were to convert all its shares of Preferred
Stock into shares of Common Stock, it would own approximately 0.9% of the issued
and outstanding shares of Common Stock. Advance Capital I beneficially owns
258,631 shares of Common Stock of the Issuer through its holdings of 2,457
shares of Preferred Stock of the Issuer. If Advance Capital I were to convert
all its shares of Preferred Stock into shares of Common Stock, it would own
approximately 2.7% of the issued and outstanding shares of Common Stock. Advance
Offshore I shares the power to vote or to direct the vote and to dispose or to
direct the disposition of shares of Common Stock which it may be deemed to
beneficially own with Advance Offshore II, its general partner. Advance Capital
II, the majority shareholder of Advance Offshore II and the general partner of
Advance Capital I, has shared power to vote or to direct the vote and to dispose
or to direct the disposition of shares of Common Stock which Advance Offshore I
and Advance Capital I may be deemed to beneficially own. Advance Capital III,
the managing general partner of Advance Capital II, has shared power to vote or
to direct the vote and to dispose or to direct the disposition of shares of
Common Stock which Advance Offshore I and Advance Capital I may be deemed to
beneficially own.
4. DESAI. PEI-III beneficially owns 368,421 shares of Common Stock of the
Issuer through its holdings of 3,500 shares of Preferred Stock of the Issuer. If
PEI-III were to convert all its shares of Preferred Stock into shares of Common
Stock, it would own approximately 3.9% of the issued and outstanding shares of
Common Stock. The power to vote or to direct the vote and to dispose of or to
direct the disposition of shares of Common Stock held by PEI-III is vested in
its general partner RMDA-III but such decisions (and similar decisions with
respect to the rest of PEI-III's investment portfolio) may also be made by DCMI
under an investment and advisory agreement between PEI-III and DCMI.
ELI-II beneficially owns 368,421 shares of Common Stock of the Issuer
through its holdings of 3,500 shares of Preferred Stock of the Issuer. If ELI-II
were to convert all its shares of Preferred Stock into shares of Common Stock,
it would own approximately 3.9% of the issued and outstanding shares of Common
Stock. The power to vote or to direct the vote and to dispose of or to direct
the disposition of shares of Common Stock held by ELI-II is vested in its
general partner RMDA-II but such decisions (and similar decisions with respect
to the rest of ELI-II's investment portfolio) may also be made by DCMI under an
investment and advisory agreement between ELI-II and DCMI.
Page 23 of 64
<PAGE>
Desai is the managing general partner of RMDA-II, managing member of
RMDA-III and the sole stockholder, chairman of the board of directors,
president and treasurer of DCMI. Katherine B. Desai is the secretary and a
director of DCMI, a general partner of RMDA-II and trustee of the Rohit M.
Desai Family Trust. The Rohit M. Desai Family Trust is a general partner of
RMDA-II. Joseph F. McDonald is the trustee of the Rohit M. Desai Family
Trust. Frank J. Pados, Jr. is an executive vice president of DCMI. Damon H.
Ball and Thomas P. Larsen are senior vice presidents of DCMI. Timothy R.
Kelleher, Andre J. McSherry and Tom W. Perlmutter are vice presidents of
DCMI. DCMI and Desai may each be deemed to share the power to vote or to
direct the vote and may be deemed to share the power to dispose or to direct
the disposition with respect to other securities held by PEI-III and ELI-II.
Pursuant to Rule 13d under the Securities Exchange Act of 1934, DCMI, the
Rohit M. Desai Family Trust, Joseph F. McDonald and each person identified
and listed in Schedule V hereby declare that the filing of this Schedule 13D
shall not be construed as an admission that any person other than PEI-III and
ELI-II is the beneficial owner of any securities covered by this Schedule
13D, or that PEI-III and ELI-II is the beneficial owner of any securities
held by the other.
5. LNR Entities. LNR beneficially owns 736,842 shares of Common Stock of the
Issuer through its holdings of 7,000 shares of Preferred Stock of the Issuer. If
LNR were to convert all its shares of Preferred Stock into shares of Common
Stock, it would own approximately 7.54% of the issued and outstanding shares of
Common Stock. Leisure, as the sole shareholder of LNR, and LNR Property, as the
sole shareholder of Leisure, each has shared power to vote or to direct the vote
and to dispose or to direct the disposition of any of the securities
beneficially owned by LNR.
6. Allied. Allied beneficially owns 342,105 shares of Common Stock of the
Issuer through its holdings of 3,250 shares of Preferred Stock of the Issuer. If
Allied were to convert all its shares of Preferred Stock into shares of Common
Stock, it would own approximately 3.65% of the issued and outstanding shares of
Common Stock. To the best knowledge of Allied, no person other than Allied has
the power to vote or to direct the vote and to dispose or to direct the
disposition of any of the securities beneficially owned by Allied.
Item 5 (c).
The Reporting Persons have not effected any transactions in the Preferred or
Common Stock of the Issuer during the past sixty days.
Item 5(d).
No other person is known to have the right to receive or the power to direct
the receipt of dividends from, or the proceeds from the sale of, the shares of
the Common Stock into which the shares of the Preferred Stock beneficially owned
by the Reporting Persons are convertible.
Page 24 of 64
<PAGE>
Item 5(e).
Not Applicable.
Item 6. Contracts, Arrangements, Undertakings or Relationships with Respect to
Securities of the Issuer.
The Reporting Persons are parties to the Stockholders Agreement dated
September 22, 1997 among the Issuer, Doubletree Corporation, the Warren D. Fix
Family Partnership, L.P., Jack P. DeBoer (on behalf of himself and as
representative of the Alexander John DeBoer Trust and the Christopher Scott
DeBoer Trust), and each of the Preferred Stockholders (the "Stockholders
Agreement"). Pursuant to the Stockholders Agreement, the Reporting Persons
agreed to vote their shares for certain nominees for election to the Board of
Directors. One nominee is to be designated by PECKS. The current designee of
PECKS is Mr. Robert Cresci. One nominee is to be designated by PEI-III and
ELI-II, jointly. The current designee of PEI-III and ELI-II is Mr. Frank Pados.
The Stockholders Agreement is attached hereto as Exhibit B.
The Reporting Persons are parties to the Registration Rights Agreement dated
September 22, 1997 among the Issuer, Doubletree Corporation, the Warren D. Fix
Family Partnership, L.P., Jack P. DeBoer (on behalf of himself and as
representative of the Alexander John DeBoer Trust and the Christopher Scott
DeBoer Trust), and each of the Preferred Stockholders (the "Registration Rights
Agreement"). The Registration Rights Agreement is attached hereto as Exhibit C.
Except as described therein, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the Reporting Persons
and any other person with respect to the securities of the Issuer, including any
contract, arrangement, understanding or relationship concerning transfer or
voting of any securities of the Issuer, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or loss, or the giving or withholding of proxies.
Item 7. Material to Be Filed as Exhibits.
Exhibit A: Resolutions of Issuer's Board of Directors in connection with
issuance of the Preferred Stock.
Exhibit B: Stockholders Agreement dated September 22, 1997 among the Issuer,
Doubletree Corporation, the Warren D. Fix Family Partnership, L.P., Jack P.
DeBoer (on behalf of himself and as representative of the Alexander John DeBoer
Trust and the Christopher Scott DeBoer Trust), and each of the Preferred
Stockholders.*
Exhibit C: Registration Rights Agreement dated September 22, 1997 among the
Issuer, Doubletree Corporation, the Warren D. Fix Family Partnership, L.P., Jack
P. DeBoer (on behalf of himself and as representative of the Alexander John
DeBoer Trust and the Christopher Scott DeBoer Trust), and each of the Preferred
Stockholders.*
Page 25 of 64
<PAGE>
Exhibit D: Certificate of Designation, Preferences and Relative, Participating,
Optional and Other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions Thereof of Series A Cumulative Convertible
Preferred Stock of the Issuer certified by the Office of the Secretary of State
of the State of Delaware on September 22, 1997.*
Exhibit E: Form of Warrant.
* These documents were filed with the Securities and Exchange Commission by the
Issuer on October 8, 1997, as Exhibits 4, 10.2 and 10.3 to its Form 8-K for the
period ended September 23, 1997 (SEC File # 000-21583) and are incorporated
herein by reference.
Page 26 of 64
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 29, 1998
J. ROMEO & CO., as nominee for The
Mutual Life Insurance Company of New
York
By: /s/ Peter Coccia
-------------------------------------------
Name: Peter Coccia
Title: Partner
Page 27 of 64
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 29, 1998
PECKS MANAGEMENT PARTNERS LTD.
By: /s/ Robert J. Cresci
-------------------------------------------
Name: Robert J. Cresci
Title: Managing Director
Page 28 of 64
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 29, 1998
ADVANCE CAPITAL PARTNERS, L.P.
By: Advance Capital Associates, L.P.
By: Advance Capital Management,
LLC
By: /s/ Robert A. Bernstein
----------------------------------------
Name: Robert A. Bernstein
Title: Principal
ADVANCE CAPITAL OFFSHORE PARTNERS, L.P.
By: Advance Capital Offshore Associates,
LDC
By: Advance Capital Associates,
L.P.
By: Advance Capital Management,
LLC
By: /s/ Robert A. Bernstein
----------------------------------------
Name: Robert A. Bernstein
Title: Principal
ADVANCE CAPITAL OFFSHORE ASSOCIATES, LDC
By: Advance Capital Associates, L.P.
By: Advance Capital Management,
LLC
By: /s/ Robert A. Bernstein
----------------------------------------
Name: Robert A. Bernstein
Title: Principal
ADVANCE CAPITAL ASSOCIATES, L.P.
By: Advance Capital Management, LLC
Page 29 of 64
<PAGE>
By: /s/ Robert A. Bernstein
------------------------------------------
Name: Robert A. Bernstein
Title: Principal
ADVANCE CAPITAL MANAGEMENT, LLC
By: /s/ Robert A. Bernstein
------------------------------------------
Name: Robert A. Bernstein
Title: Principal
Page 30 of 64
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 29, 1998
PRIVATE EQUITY INVESTORS III, L.P.
By: Rohit M. Desai Associates III, LLC
General Partner
By: /s/ Rohit M. Desai
------------------------------------------
Name: Rohit M. Desai
Title: Managing Member
EQUITY-LINKED INVESTORS-II
By: Rohit M. Desai Associates-II
General Partner
By: /s/ Rohit M. Desai
------------------------------------------
Name: Rohit M. Desai
Title: Managing General Partner
DESAI CAPITAL MANAGEMENT INCORPORATED
By: /s/ Rohit M. Desai
------------------------------------------
Name: Rohit M. Desai
Title: President
/s/ Rohit M. Desai
------------------------------------------
Rohit M. Desai
Page 31 of 64
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 29, 1998
LNR CANDLEWOOD HOLDINGS, INC.
By: /s/ Shelly Rubin
------------------------------------------
Name: Shelly Rubin
Title: Vice President
LEISURE COLONY MANAGEMENT CORP.
By: /s/ Shelly Rubin
------------------------------------------
Name: Shelly Rubin
Title: Vice President
LNR PROPERTY CORPORATION
By: /s/ Shelly Rubin
------------------------------------------
Name: Shelly Rubin
Title: Vice President
Page 32 of 64
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 29, 1998
ALLIED CAPITAL CORPORATION
By: /s/ Kelly A. Anderson
------------------------------------------
Name: Kelly A. Anderson
Title: Principal and Treasurer
Page 33 of 64
<PAGE>
Schedule I
JOINT FILING AGREEMENT
The undersigned parties hereby agree that the Schedule 13D filed herewith
(and any amendments thereto) relating to the Stock of Candlewood Hotel Company,
Inc. is being filed jointly with the Securities and Exchange Commission pursuant
to Section 13-d-1(f) on behalf of each such person.
Dated: May 29, 1998
J. ROMEO & CO., as nominee for The
Mutual Life Insurance Company of New
York
By: /s/ Peter Coccia
------------------------------------------
Name: Peter Coccia
Title: Partner
PECKS MANAGEMENT PARTNERS LTD.
By: /s/ Robert J. Cresci
------------------------------------------
Name: Robert J. Cresci
Title: Managing Director
ADVANCE CAPITAL PARTNERS, L.P.
By: Advance Capital Associates, L.P.
By: Advance Capital Management,
LLC
By: /s/ Robert A. Bernstein
-------------------------------------
Name: Robert A. Bernstein
Title: Principal
ADVANCE CAPITAL OFFSHORE PARTNERS, L.P.
By: Advance Capital Offshore Associates,
LDC
Page 34 of 64
<PAGE>
By: Advance Capital Associates,
L.P.
By: Advance Capital Management,
LLC
By: /s/ Robert A. Bernstein
----------------------------------------
Name: Robert A. Bernstein
Title: Principal
ADVANCE CAPITAL OFFSHORE ASSOCIATES, LDC
By: Advance Capital Associates, L.P.
By: Advance Capital Management,
LLC
By: /s/ Robert A. Bernstein
----------------------------------------
Name: Robert A. Bernstein
Title: Principal
ADVANCE CAPITAL ASSOCIATES, L.P.
By: Advance Capital Management, LLC
By: /s/ Robert A. Bernstein
------------------------------------------
Name: Robert A. Bernstein
Title: Principal
ADVANCE CAPITAL MANAGEMENT, LLC
By: /s/ Robert A. Bernstein
------------------------------------------
Name: Robert A. Bernstein
Title: Principal
PRIVATE EQUITY INVESTORS III, L.P.
By: Rohit M. Desai Associates III, LLC
General Partner
By: /s/ Rohit M. Desai
------------------------------------------
Name: Rohit M. Desai
Title: Managing Member
Page 35 of 64
<PAGE>
EQUITY-LINKED INVESTORS-II
By: Rohit M. Desai Associates-II
General Partner
By: /s/ Rohit M. Desai
------------------------------------------
Name: Rohit M. Desai
Title: Managing General Partner
DESAI CAPITAL MANAGEMENT INCORPORATED
By: /s/ Rohit M. Desai
------------------------------------------
Name: Rohit M. Desai
Title: President
/s/ Rohit M. Desai
------------------------------------------
Rohit M. Desai
LNR CANDLEWOOD HOLDINGS, INC.
By: /s/ Shelly Rubin
------------------------------------------
Name: Shelly Rubin
Title: Vice President
LEISURE COLONY MANAGEMENT CORP.
By: /s/ Shelly Rubin
------------------------------------------
Name: Shelly Rubin
Title: Vice President
LNR PROPERTY CORPORATION
By: /s/ Shelly Rubin
------------------------------------------
Name: Shelly Rubin
Title: Vice President
Page 36 of 64
<PAGE>
ALLIED CAPITAL CORPORATION
By: /s/ Kelly A. Anderson
------------------------------------------
Name: Kelly A. Anderson
Title: Principal and Treasurer
Page 37 of 64
<PAGE>
Schedule II
THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK
Executive Officers:
- -------------------
Name: Principal Occupation: Business Address:
Michael I. Roth Chief Executive Officer 1740 Broadway, New York,
New York 10019
Samuel J. Foti President and Chief Operating 1740 Broadway, New York,
Officer New York 10019
Richard Daddario Executive Vice President and 1740 Broadway, New York,
Chief Financial Officer New York 10019
Kenneth M. Levine Executive Vice President and 1740 Broadway, New York,
Chief Investment Officer New York 10019
Trustees:
- ---------
Name: Principal Occupation: Business Address:
Claude M. Ballard, Jr. Self Employed Investor 85 Broad Street, 10th Fl.
New York, New York 10004
Tom H. Barrett Self Employed One Cascade Plaza, Akron,
Ohio 44308
David L. Call Retired Professor- 108 Comstock Road, Ithaca,
Corporate Director New York 14850
G. Robert Durham Retired Chief Executive 943 Seddon Cove Way,
Officer of Walter Ind. Tampa, Florida 33602
James B. Farley Trustee of The Mutual 1740 Broadway, New York,
Life Insurance New York 10019
Company of New York
Samuel J. Foti President and Chief 1740 Broadway, New York,
Operating Officer of The New York 10019
Mutual Life Insurance
Company of New York
Page 38 of 64
<PAGE>
Robert Holland, Jr. Owner of Work Place 30800 Telegraph Biaghan
Integrators Farms, Michigan 48028
James L. Johnson Retired Chairman Emeritus One Stamford Forum,
of GTE Corp. Stamford, Connecticut
06901
Robert R. Kiley Executive, New York City One Battery Park Plaza,
Partnership, Inc. New York, New York
10004-1479
Kenneth M. Levine Executive Vice President 1740 Broadway, New York,
and Chief Investment New York 10019
Officer of The Mutual
Life Insurance Company
of New York
John R. Meyer Professor Emeritus, Harvard University
Harvard University Cambridge, Massachusetts
02138
Jane C. Pfeiffer Management Consultant 90 Field Point Circle,
Greenwich, Connecticut
06830
Michael I. Roth Chief Executive Officer 1740 Broadway, New York,
of The Mutual Life New York 10019
Insurance Company of New
York
Thomas C. Theobald Director/Investor 222 W. Adams Street,
WM Blair Capital Partners Chicago, Illinois 60606
Page 39 of 64
<PAGE>
Schedule III
PECKS MANAGEMENT PARTNERS LTD.
Executive Officers:
Name: Principal Occupation: Business Address:
Robert J. Cresci Managing Director One Rockefeller Plaza
New York, New York 10020
Arthur W. Berry Managing Director One Rockefeller Plaza
New York, New York 10020
Elaine E. Healy Vice President One Rockefeller Plaza
New York, New York 10020
Page 40 of 64
<PAGE>
Schedule IV
ADVANCE CAPITAL MANAGEMENT, LLC
Members:
Name: Principal Occupation: Business Address:
Robert A. Bernstein Investment Banking, Leeds 660 Madison Avenue, 15th
Group Inc. Floor, New York, New York
10021
Ethan A. Budin Investment Banking, Leeds 660 Madison Avenue, 15th
Group Inc. Floor, New York, New York
10021
Jeffrey T. Leeds Investment Banking, Leeds 660 Madison Avenue, 15th
Group Inc. Floor, New York, New York
10021
Select Equity Group, Money Manager 380 Lafayette Street, 6th
Inc. Floor, New York, New York
10003
Select Equity Group, Inc. is a subchapter S corporation incorporated in the
State of New York. The shareholders of Select Equity Group, Inc. are:
Name: Principal Occupation: Business Address:
George S. Loening Money Management, Select 380 Lafayette Street, 6th
Equity Group, Inc. Floor, New York, New York
10003
John Britton Money Management, Select 380 Lafayette Street, 6th
Equity Group, Inc. Floor, New York, New York
10003
Amor Towles Money Management, Select 380 Lafayette Street, 6th
Equity Group, Inc. Floor, New York, New York
10003
Page 41 of 64
<PAGE>
Schedule V
DESAI CAPITAL MANAGEMENT INCORPORATED
investment advisor to
Private Equity Investors III, L.P. and Equity-Linked Investors-II.
The business address of each of the persons listed below is 540 Madison
Avenue, 36th Floor, New York, New York 10022.
The names and principal occupations of the Executive Officers of DCMI are as
follows:
Rohit M. Desai President, Treasurer and Chairman of the
Board of DCMI, director and sole
stockholder of DCMI, managing member of
RMDA-III and managing general partner of
RMDA-II
Katharine B. Desai Secretary and Director of DCMI
Frank J. Pados, Jr. Executive Vice President
Damon H. Ball Senior Vice President
Thomas P. Larsen Senior Vice President
Timothy R. Kelleher Vice President
Andre J. McSherry Vice President
Tom W. Perlmutter Vice President
The names and principal occupations of the Directors of DCMI are as follows:
Rohit M. Desai President, Treasurer and Chairman of the
Board of DCMI, director and sole
stockholder of DCMI, managing member of
RMDA-III and managing general partner of
RMDA-II
Katharine B. Desai Secretary and Director of DCMI
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Schedule VI
LNR CANDLEWOOD HOLDINGS, INC.
Directors:
Name: Principal Occupation: Business Address:
Leonard Miller Chairman of the Board, Lennar 700 N.W. 107 Ave
Corporation Miami, Florida 33172
Stuart A. Miller Chairman of the Board, LNR 700 N.W. 107 Ave
Property Corporation; Miami, Florida 33172
President and Chief
Executive Officer, Lennar
Corporation
Steven J. Saiontz Chief Executive Officer, LNR 760 N.W. 107 Ave
Property Corporation Suite 314
Miami, Florida 33172
Executive Officers:
Name: Principal Occupation: Business Address:
Jeffrey P. Krasnoff President, LNR Property 760 N.W. 107 Ave
Corporation Suite 300
Miami, Florida 33172
Shelly Rubin Vice President-Finance, LNR 760 N.W. 107 Ave
Property Corporation Suite 300
Miami, Florida 33172
Mark A. Griffith President, Lennar Georgia 101 Marietta Street
Partners, Inc. Suite 3600
Atlanta, Georgia 30303
Ronald Schrager President, Lennar Florida 760 N.W. 107 Ave
Partners, Inc. Suite 400
Miami, Florida 33172
Thekla Blaser Chief Financial Officer, 760 N.W. 107 Ave
Lennar Florida Partners, Inc. Suite 400
Miami, Florida 33172
Mark T. Briggs Chief Financial Officer, 101 Marietta Street
Lennar Georgia Partners, Inc. Suite 3600
Atlanta, Georgia 30303
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Glenn Grossman Chief Financial Officer, LNR c/o 760 N.W. 107 Ave
Japan II, Inc. Suite 400
Miami, Florida 33172
Michelle Simon Corporate Counsel and 101 Marietta Street
Secretary, LNR Property Suite 3600
Corporation Atlanta, Georgia 30303
John T. McMickle Controller/Assistant 760 N.W. 107 Ave
Secretary, LNR Property Suite 300
Corporation Miami, Florida 33172
Margaret Jordan Treasurer, LNR Property 760 N.W. 107 Ave
Corporation Suite 300
Miami, Florida 33172
LEISURE COLONY MANAGEMENT CORP.
Directors:
- ----------
Name: Principal Occupation: Business Address:
Leonard Miller Chairman of the Board, 700 N.W. 107 Ave
Lennar Corporation Miami, Florida 33172
Stuart A. Miller Chairman of the Board, LNR 700 N.W. 107 Ave
Property Corporation; President Miami, Florida 33172
and Chief Executive Officer,
Lennar Corporation
Steven J. Saiontz Chief Executive Officer, LNR 760 N.W. 107 Ave
Property Corporation Suite 314
Miami, Florida 33172
Executive Officers;
- -------------------
Name: Principal Occupation: Business Address:
Jeffrey P. Krasnoff President, LNR Property 760 N.W. 107 Ave
Corporation Suite 300
Miami, Florida 33172
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Shelly Rubin Vice President-Finance, LNR 760 N.W. 107 Ave
Property Corporation Suite 300
Miami, Florida 33172
Mark A. Griffith President, Lennar Georgia 101 Marietta Street
Partners, Inc. Suite 3600
Atlanta, Georgia 30303
Ronald Schrager President, Lennar Florida 760 N.W. 107 Ave
Partners, Inc. Suite 400
Miami, Florida 33172
David Team President, Lennar Partners 18401 Von Karman Ave
California, Inc. Suite 540
Irvine, California 92612
Sylvia G. Bernstein Vice President, Lennar 760 N.W. 107 Ave
Florida Partners, Inc. Suite 300
Miami, Florida 33172
Thekla Blaser Chief Financial Officer, 760 N.W. 107 Ave
Lennar Florida Partners, Inc. Suite 400
Miami, Florida 33172
Mark T. Briggs Chief Financial Officer, 101 Marietta Street
Lennar Georgia Partners, Inc. Suite 3600
Atlanta, Georgia 30303
Dan Grable Chief Financial Officer, 18401 Von Karman Ave
Lennar Partners California, Suite 540
Inc. Irvine, California 92612
Glenn Grossman Chief Financial Officer, LNR c/o 760 N.W. 107 Ave
Japan II, Inc. Suite 400
Miami, Florida 33172
Michelle Simon Corporate Counsel and 101 Marietta Street
Secretary, LNR Property Suite 3600
Corporation Atlanta, Georgia 30303
John T. McMickle Controller/Assistant Secretary, 760 N.W. 107 Ave
LNR Property Corporation Suite 300
Miami, Florida 33172
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Margaret Jordan Treasurer, LNR Property 760 N.W. 107 Ave
Corporation Suite 300
Miami, Florida 33172
LNR PROPERTY CORPORATION
Directors:
- ----------
Name: Principal Occupation: Business Address:
Brian L. Bilzin Partner, Bilzin Sumberg 2500 First Union Financial
Dunn Price & Axelrod, LLP Center
Miami, Florida 33131-2336
Sue M. Cobb Managing Director and 23333 Ponce de Leon Blvd
General Counsel, Cobb Coral Gables, Florida 33134
Partners, Inc.
Carlos M. de la Cruz Chairman of the Board, 3201 N.W. 72nd Ave
Eagle Brands, Inc. Miami, Florida 33122
Leonard Miller Chairman of the Board, 700 N.W. 107 Ave
Lennar Corporation Miami, Florida 33172
Stuart A. Miller Chairman of the Board, 700 N.W. 107 Ave
LNR Property Corporation; Miami, Florida 33172
President and Chief
Executive Officer,
Lennar Corporation
Steven J. Saiontz Chief Executive Officer, 760 N.W. 107 Ave
LNR Property Corporation. Suite 314
Miami, Florida 33172
Jeffrey P. Krasnoff President, LNR Property 760 N.W. 107 Ave
Corporation Suite 300
Miami, Florida 33172
Executive Officers:
- -------------------
Name: Principal Occupation: Business Address:
Shelly Rubin Vice President-Finance, 760 N.W. 107 Ave
LNR Property Corporation Suite 300
Miami, Florida 33172
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Robert Cherry Vice President, LNR 760 N.W. 107 Ave
Property Corporation Suite 300
Miami, Florida 33172
Steven I. Engel President, LNR Japan II, c/o 760 N.W. 107 Ave
Inc. Suite 300
Miami, Florida 33172
Mark A. Griffith President, Lennar Georgia 101 Marietta Street
Partners, Inc. Suite 3600
Atlanta, Georgia 30303
David Levin Vice President, Lennar 760 N.W. 107 Ave.
Capital Services, Inc. Suite 314
Miami, Florida 33172
Ronald Schrager President, Lennar Florida 760 N.W. 107 Ave.
Partners, Inc. Suite 400
Miami, Florida 33172
David Team President, Lennar Partners 18401 Von Karman Ave.
California, Inc. Suite 540
Irvine, CA 96216
Michelle Simon Corporate Counsel and 101 Marietta Street
Secretary, LNR Suite 3600
Property Corporation Atlanta, GA 30303
John T. McMickle Controller/Assistant 760 N.W. 107 Ave.
Secretary, LNR Property Suite 300
Corporation Miami, FL 33172
Margaret Jordan Treasurer, LNR Property 760 N.W. 107 Ave.
Corporation Suite 300
Miami, FL 33172
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Schedule VII
ALLIED CAPITAL CORPORATION
Directors:
- ----------
Name: Principal Occupation: Business Address:
William L. Walton Chairman and Chief Executive 1666 K Street, NW
Officer, Allied Washington, DC 20006
George C. Williams, Jr. Managing Director, Allied 1666 K Street, NW
Washington, DC 20006
Brooks Browne President of Environmental 1901 North Moore
Enterprises, Assistance Fund Street, Suite 1004,
Arlington, Virginia
22209
John D. Firestone Chairman, Secor Investments, 1101 30th Street, NW
Inc. Washington, DC 20007
Anthony T. Garcia 20 Windsor Road,
Summit, New Jersey
07901
Lawrence I. Hebert President, Allbritton 800 17th Street, NW,
Communications Suite 301,
Washington, DC 20006
John Leahy Maryland Consulting Group 30 E. Padonia Rd.,
Suite 505
Timonium, Maryland
21093
Robert E. Long Chairman and Chief Executive 510 King Street,
Officer, Business News Network, Suite 315
Inc. Alexandria, Virginia
22314
Warren K. Montouri Montouri & Robertson 2440 Virginia Avenue,
NW, Suite D801,
Washington, DC 20037
Guy T. Steuart II President, Steuart 5454 Wisconsin Avenue,
Investment Corporation Suite 1600,
Chevy Chase, Maryland
20815
T. Murray Toomey, Esq. The Offices of T.M. Toomey 4701 Sangamore Road,
Bathesda, Maryland
20816
Laura van Roijen 8696 Rogues Road
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P.O.Box 50,
Casanova, Virginia
20139
The names and principal occupations of the Executive Officers of Allied are
as follows:
John M. Scheurer Managing Director
Joan M. Sweeney Managing Director
G. Cabell Williams, III Managing Director
Kelly A. Anderson Principal
Scott S. Binder Principal
Arthur S. Cooper Principal
Robert J. Corry Principal
Tricia Benz Daniels Principal
Jon A. DeLuca Principal
Jane M. Diven Principal
Michael J. Grisius Principal
Philip A. McNeil Principal
Mary E. Olson Principal
Suzanne V. Sparrow Principal
Thomas H. Westbrook Principal
Thomas H. Aiken Officer
John W. Benton Officer
Michael G. Carey Officer
Jerome Conner Officer
Tina L. DelDonna Officer
Chris Elbualy Officer
Mohamoud M. Garad Officer
Mark A. Hayes Officer
Stephen Hemgen Officer
B. Philip Hummelt Officer
Alexandra M. Johns Officer
Stephen P. Kerrigan Officer
Kristine M. Lansing Officer
Patrick Leahy Officer
Charles K. Mallory, IV Officer
Donna B. Natale Officer
J. Benjamin Nye Officer
Pete A. Papas Officer
Peter M. Ramsey Officer
J. David Richardson Officer
Penni Roll Officer
Ruth J. Semple Officer
James P. Shevlin Officer
Julie E. Svoboda Officer
Gay S. Truscott Officer
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David M. Wellisch Officer
The business address of each of the persons listed above is Allied Capital
Corporation's Headquarters, 1666 K Street, NW 9th Floor, Washington, DC 20006.
Richard E. Fearon, Jr. Principal
Alton M. Bathrick Officer
Peter C. Fisher Officer
The business address of each of the persons listed above is Allied Capital
Corporation's office at 401 North Michigan Avenue, Suite 1620, Chicago, Illinois
60611.
John J. Hall, Jr. Principal
Carr T. Preston Principal
Bailey S. Barnard Officer
Peter R. Hsu Officer
Robert M. Monk Officer
The business address of each of the persons listed above is Allied Capital
Corporation's office at One Maritime Plaza, Suite 1750, San Francisco,
California 94111.
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Exhibit A
RESOLUTIONS
OF
CANDLEWOOD HOTEL COMPANY, INC,
a Delaware corporation
ADOPTED AT A SPECIAL MEETING
OF THE BOARD OF DIRECTORS
ON SEPTEMBER 19, 1997
ISSUANCE AND SALE OF SERIES A PREFERRED STOCK
Issuance and Sale of Series A Preferred Stock
WHEREAS, pursuant to the Company's Restated Certificate of Incorporation,
the Company is authorized to issue Five Million (5,000,000) shares of Preferred
Stock, par value $.01 per share (the "Preferred Stock") with such rights,
preferences and powers as may be determined by the Board of Directors; and
WHEREAS, the Board of Directors (the "Board") has determined that it is in
the best interests of the Company and the stockholders of the Company that the
Company raise additional capital through the private placement and sale of a
series of Preferred Stock of the Company with substantially such terms and
conditions as are set forth on the term sheet attached hereto as Exhibit A; and
WHEREAS, the Board has determined that it is in the best interests of the
Company and the stockholders of the Company that there be designated 65,000
shares of its Preferred Stock as "Series A Cumulative Convertible Preferred
Stock" (the "Series A Preferred Stock");
NOW, THEREFORE, BE IT RESOLVED, that subject to the filing of the
Certificate of Designations with the Secretary of State of the State of
Delaware, the Company hereby designates and is hereby authorized to issue up to
65,000 shares of Series A Preferred Stock at a price no less than $1,000 per
share, in one or more closings, pursuant to the terms and conditions as
substantially set forth on the term sheet attached hereto as Exhibit A.
Stockholder Notification
WHEREAS, the NASDAQ Stock Market ("NASDAQ"), in lieu of stockholder approval
of the private placement offering at a stockholder meeting, has agreed to
accept, (i) written consent of a majority of the shares of the Company
(exclusive of shares issued in the private placement offering), (ii) approval of
the Board of Directors of the Company, and (iii) notification to the
stockholders of the Company of the private placement transaction, the terms and
conditions of the issuance of the Series A Preferred Stock, and the closing
procedures in connection with the offering;
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NOW, THEREFORE, BE IT RESOLVED, that, in conformance with the rules and
requirements of the NASDAQ, the officers of the Company are hereby authorized
and directed, for and on behalf of the Company, to send notification to the
stockholders of the Company describing the private placement transaction, the
terms and conditions of the issuance of the Series A Preferred Stock, and the
closing procedures in connection with the offering.
Filing of Certificate of Designations
RESOLVED FURTHER, that the Board hereby adopts, and officers of the Company
are hereby authorized and directed, for and on behalf of the Company, to execute
and file with the Secretary of State of the State of Delaware, the resolutions
set forth in the Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions Thereof (the '"Certificate of
Designations") the form attached hereto as Exhibit B.
Approval of Transactional Agreements
RESOLVED FURTHER, that the officers of the Company are hereby authorized and
directed, for and on behalf of the Company, to execute and deliver a Stock
Purchase Agreement, a Stockholders Agreement, a Registration Rights Agreement
and any and all other agreements to be entered into by the Company and the
purchasers of Series A Preferred Stock for the purpose of consummating the
issuance and sale of the Series A Preferred Stock to such purchasers, which
agreements shall be in the form and contain the terms and conditions as the
officer or officers of the Company executing the agreements on behalf of the
Company shall approve, the execution by such officer or officers of any such
agreements to be conclusive evidence of such approval and the authorization of
the Board granted hereby.
RESOLVED FURTHER, that the officers of the Company are hereby authorized to
execute and deliver to the purchasers temporary Series A Preferred Stock
certificates representing the number of shares of Series A Preferred Stock
purchased by such purchasers in the private placement offering until such
temporary stock certificates can be exchanged for permanent stock certificates
prepared by the Company's transfer agent.
RESOLVED FURTHER, that such shares of Series A Preferred Stock, when issued,
shall be duly authorized, validly issued, fully paid and nonassessable.
RESOLVED FURTHER, that the officers of the Company are hereby authorized and
directed, for and on behalf of the Company, to provide for the issuance of the
Series A Preferred Stock in two closings, the initial closing to involve the
sale of 25,000 shares of the Series A Preferred Stock and the second closing to
occur on the
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tenth day following the date of the notification to stockholders and to involve
the sale of 40,000 shares of the Series A Preferred Stock.
Preferred Stock Certificate
RESOLVED FURTHER, that the form of stock certificate attached hereto as
Exhibit C be, and it hereby is, approved and adopted as the Series A Cumulative
Convertible Preferred Stock Certificate of the Company.
Reservation of Shares for Issuance Upon Conversion
RESOLVED FURTHER, that effective upon the closing of the offering, the
Company hereby reserves for issuance upon conversion of the Series A Preferred
Stock 6,842, 105 of its duly authorized and unissued shares of Common Stock, par
value $.01 per share, or such lessor or greater number of shares of Common Stock
as the then outstanding shares of Series A Preferred Stock are convertible into.
RESOLVED FURTHER, that the shares of Common Stock issuable upon the
conversion of the Series A Preferred Stock, when so issued, shall be duly
authorized, validly issued, fully paid and nonassessable.
Blue Sky
RESOLVED FURTHER, that the officers of the Company be, and each of them
hereby is, authorized in the name and on behalf of the Company, to take any and
all action which they deem necessary or advisable in order to effect the
registration or qualification (or exemption therefrom) of the Series A Preferred
Stock for issue, offer, sale or trade under the Blue Sky or securities laws of
any of the States or jurisdictions of the United States of America and in
connection therewith to execute, acknowledge, verify, deliver, file or cause to
be published any applications, reports, consents to service of process,
appointments of attorneys to receive service of process and other papers and
instruments which may be required under such laws, and to take any and all
further action which they may deem necessary or advisable in order to maintain
any such registration or qualification for as long as they deem necessary or as
required by law or by the underwriters of such securities.
RESOLVED FURTHER, that there is hereby adopted the form of any and all
resolutions required by any such authority or authorities to be filed in
connection with such papers and documents if (1) in the opinion of the officers
of the Company certifying the same the adoption of such resolutions is necessary
or advisable, and (2) the Secretary of the Company evidences such adoption by
inserting in the minutes of this meeting copies of such resolutions, which
resolutions shall thereupon be deemed to be adopted by the Board and
incorporated in the minutes of this meeting as a part of this resolution, with
the same force and effect as if presented at this meeting.
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Appointment of Pricing Committee
RESOLVED FURTHER, that pursuant to the Bylaws of the Company, the Board
hereby establishes a Pricing Committee comprised of the following Board members
and representing the entire membership of the Pricing Committee: Jack P. DeBoer,
Gary E. Costley, Warren D. Fix and Richard J. Ferris.
RESOLVED FURTHER, that the Pricing Committee is hereby authorized and
directed to negotiate the final terms and conditions of the offering of the
Series A Preferred Stock, to the extent such terms are materially different from
those approved by the Board of Directors, including, without limitation (i) the
final form of the Stock Purchase Agreement, (ii) the number of shares of Series
A Preferred Stock to be included in the offering on behalf of the Company,
subject to the limits of issuance authorized by the Board, and (iii) the price
to be received by the Company for the Series A Preferred Stock to be sold, net
of expenses and the discounts and commissions payable to the placement agent.
AMENDMENT TO BYLAWS
WHEREAS, it is deemed to be in the best interests of the Company and its
stockholders that Section 3.1 of Article III of the Bylaws of the Company be
amended to increase the authorized number of directors; and
WHEREAS, it is deemed to be the best interests of the Company and its
stockholders that Section 4.7 of Article IV of the Bylaws of the Company be
amended to provide for a Chief Executive Officer as a separate officer, if
necessary;
NOW, THEREFORE, BE IT RESOLVED, that Section 3.1 of Article III of the
Bylaws of the Company is hereby amended to read in its entirety as follows:
Section 3.1 Number, Election and Tenure. The authorized number of directors
which shall constitute the Board shall not be less than seven (7) nor more than
ten (10). The exact number shall be determined from time to time by resolution
of the Board. Until otherwise determined by such resolution, the Board shall
consist of ten (10) persons. Directors shall be elected at the annual meeting of
stockholders and each director shall serve until such person's successor is
elected and qualified or until such person's death, retirement, resignation or
removal. The directors need not be stockholders. Subject to the rights, if any,
of the holders of shares of Preferred Stock then outstanding, if any, any and
all directors of the corporation may be removed from office by the holders of
the outstanding shares of Common Stock of the corporation at any annual or
special meeting of stockholders of the corporation, the notice of which shall
state that the removal of a director or directors is among the purposes of the
meeting.
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RESOLVED FURTHER, that Section 4.7 of Article IV of the Bylaws of the
Company is hereby amended to read in its entirety as follows:
Section 4.7 President. Subject to such supervisory powers, if any, as
may be given by the Board of Directors to the Chairman of the Board, if
there be such an officer, the President shall be the Chief Executive Officer
of the corporation, unless such an officer is elected separately by the
Board of Directors, and shall, subject to the control of the Board of
Directors, have general supervision, direction and control of the business
and officers of the corporation. He shall preside at all meetings of the
stockholders and, in the absence of the Chairman of the Board, or if there
be none, at all meetings of the Board of Directors. He shall be an
ex-officio member of all committees and shall have the general powers and
duties of management usually vested in the office of President and Chief
Executive Officer of corporations, and shall have such other powers and
duties as may be prescribed by the Board of Directors or these Bylaws.
RESOLVED FURTHER, that the above amendments to the Bylaws of the Company are
hereby adopted and approved.
ELECTION OF NEW DIRECTORS
WHEREAS, the Bylaws of the Company, as amended hereto, state that the
authorized number of directors which shall constitute the Board of Directors
shall not be less than seven (7) nor more than ten (10), with the exact number
to be determined from time to time by resolution of the Board. Until otherwise
determined by such resolution, the Board shall consist of ten (10) persons; and
WHEREAS, the amendment to the Bylaws setting the number of directors at ten
(10) has created three vacancies thereby; and
WHEREAS, the Bylaws of the Company provide that newly created directorships
resulting in any increase in the authorized number of directors shall be filled
solely by the affirmative vote of a majority of the directors then in office;
NOW, THEREFORE, BE IT RESOLVED, that, subject to the closing of the offering
and purchase of the $65 million of Series A Preferred Stock, Robert Cresci,
Robert Morris and Frank Pados are unanimously elected to serve as directors in
accordance with the Bylaws of the Company and until their successors are duly
elected and qualified.
GENERAL AUTHORITY AND RATIFICATION OF PRIOR ACTS
RESOLVED FURTHER, that any officer of the Company be, and each of them
hereby is, authorized and directed on behalf of the Company and in its name to
take such actions and to execute such other documents and instruments as such
officer may deem necessary or advisable to carry out the purposes of the
foregoing resolutions,
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the taking of such actions or the execution of such instruments or documents to
be conclusive evidence of the necessity or desirability thereof.
RESOLVED FURTHER, that all acts and things heretofore done by any such
officer, or by any other employee or agent of the Company, on or prior to the
date hereof, in connection with the transactions contemplated by the foregoing
resolutions be, and the same hereby are, in all respects ratified, confirmed,
approved and adopted as acts on behalf of the Company.
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Exhibit E
FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THIS SECURITIES
HAVE BEEN ISSUED OR SOLD IN RELIANCE ON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO A
REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT OR
IN A TRANSACTION WHICH IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND THE RULES AND
REGULATIONS THEREUNDER.
Warrants to Purchase Date of Issuance:
- ---------- Common Stock ----------,--------
WARRANT CERTIFICATE REPRESENTING
WARRANTS TO PURCHASE COMMON STOCK OF
CANDLEWOOD HOTEL COMPANY, INC.
FOR VALUE RECEIVED, Candlewood Hotel Company, Inc., a Delaware corporation
(the "Company"), hereby certifies that ____________________ (the "Holder"), is
the owner of the number of Warrants set forth above, each of which represents
the right to purchase, at any time, from the Company, one share of Common Stock,
par value $.01 per share (the "Common Stock"), of the Company (subject to
adjustment as provided herein at the purchase price (the "Exercise Price") of
$.01 per share of Common Stock, upon surrender hereof to the Company or its duly
authorized transfer agent of the purchase price for the shares as to which the
Warrant(s) represented by this Warrant Certificate are exercised, all subject to
the terms and conditions hereof.
These Warrants shall be subject to the following terms and conditions:
SECTION 1. Adjustments. The number of shares of Common Stock issuable upon
exercise of each Warrant shall be subject to adjustment from time to time as
follows:
(a) Stock Dividends; Stock Splits; Reserve Stock Splits;
Reclassifications. In case the Company shall (i) pay a dividend or make any
other distribution with respect to its Common Stock in shares of any class or
series of its capital stock, (ii) subdivide its outstanding Common Stock, (iii)
combine its outstanding Common Stock into a smaller number of shares or (iv)
issue any shares of its capital
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stock in a reclassification of the Common Stock (other than a reclassification
in connection with a merger, consolidation or other business combination which
will be governed by Section 1(g)), the number of shares of Common Stock
purchasable upon exercise of each Warrant immediately prior to the record date
for such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be adjusted so that the Holder of each
Warrant shall be entitled to receive the kind and number of shares of Common
Stock or other securities of the Company which such Holder would have been
entitled to receive after the happening of any of the events described above had
such Warrant been exercised immediately prior to the happening of such event or
any record date with respect thereto (with any record date requirement being
deemed to have been satisfied). An adjustment made pursuant to this Section 1(a)
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
(b) Rights; Options; Warrants. In case the Company shall issue rights,
options, warrants or convertible or exchangeable securities (other than a
convertible or exchangeable security subject to Section 1(a)) to all holders of
its Common Stock, entitling them to subscribe for or purchase Common Stock (a
"Right") at a price per share of Common Stock (determined in the case of such
rights, options, warrants or convertible or exchangeable securities, by dividing
(x) the total amount receivable by the Company in consideration of the issuance
of such rights, options, warrants or convertible or exchangeable securities, if
any, plus the total consideration payable to the Company upon exercise,
conversion or exchange thereof, by (y) the total number of shares of Common
Stock covered by such rights, options, warrants or convertible or exchangeable
securities) which is lower (at the record date for such issuance) than the then
Market Value (as defined herein) per share of Common Stock, the number of shares
of Common Stock thereafter purchasable upon exercise of each Warrant shall be
determined by multiplying the number of shares of Common Stock theretofore
purchasable upon exercise of each Warrant by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior to
the issuance of such rights, options, warrants or convertible or exchangeable
securities plus the number of additional shares of Common Stock offered for
subscription or purchase or issuable upon conversion or exchange, and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of such rights, options, warrants or
convertible or exchangeable securities plus the number of shares which the
aggregate offering price of the total number of shares of Common Stock so
offered would purchase at the then Market Value per share of Common Stock. Such
adjustment shall be made whenever such rights, options, warrants or convertible
or exchangeable securities are issued, and shall become effective retroactively
immediately after the record date for the determination of shareholders entitled
to receive such rights, options, warrants or convertible or exchangeable
securities.
(c) Issuance of Common Stock at Lower Values
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. In case the Company shall sell or issue any shares of Common Stock or Right
(excluding (i) any Right issued in any of the transactions described in Section
1(a) or (b) above and (ii) any Company Securities (as defined in the Company's
Certificate of Designation filed with the State of Delaware), then the number of
shares of Common Stock thereafter purchasable upon the exercise of each Warrant
shall be determined by multiplying the number of shares of Common Stock
theretofore purchasable upon exercise of such Warrant by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately after such sale or issuance and the denominator of which shall be
the number of shares of Common Stock outstanding immediately prior to such sale
or issuance plus the number of shares of Common Stock which the aggregate
consideration received (determined as provided below) for such sale or issuance
would purchase at such Market Value per share of Common Stock. For purposes of
this Section 1(c), the shares of Common Stock which the holder of any such Right
shall be entitled to subscribe for or purchase shall be deemed to be issued and
outstanding as of the date of such sale and issuance and the consideration
received by the Company therefor shall be deemed to be the consideration
received by the Company for such Right, plus the consideration or premiums
stated in such Right to be paid for the shares of Common Stock covered thereby.
(d) Distributions of Debt, Assets, Subscription Rights or Convertible
Securities. In case the Company shall fix a record date for the making of a
distribution to all holders of its Common Stock of evidences of its
indebtedness, assets, cash dividends or distributions (excluding dividends or
distributions referred to in Section 1(a) above and excluding distributions in
connection with the dissolution, liquidation or winding up of the Company which
will be governed by Section 1(g)(B) below) or securities (excluding those
referred to in Section 1(a), Section 1(b) or Section 1(c) above), then in each
case the number of shares of Common Stock purchasable after such record date
upon the exercise of each Warrant shall be determined by multiplying the number
of shares of Common Stock purchasable upon the exercise of such Warrant
immediately prior to such record date by a fraction, the numerator of which
shall be the Market Value per share of Common Stock immediately prior to the
record date for such distribution and the denominator of which shall be the
Market Value per share of Common Stock immediately prior to the record date for
such distribution less the then fair value (as determined in good faith by the
Board of Directors of the Company) of the portion of the assets, evidence of
indebtedness, cash dividends or distributions or securities so distributed
applicable to one share of Common Stock. Such adjustment shall be made whenever
any such distribution is made, and shall become effective on the date of
distribution retroactive to the record date for the determination of
shareholders entitled to receive such distribution.
(e) Expiration of Rights, Options and Conversion Privileges . Upon the
expiration of any rights, options, warrants or conversion or exchange privileges
that have previously resulted in an adjustment hereunder, if any thereof shall
not have been exercised, the number of shares of Common Stock issuable upon the
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exercise of each Warrant shall, upon such expiration, be readjusted and shall
thereafter, upon any future exercise, be such as they would have been had they
been originally adjusted (or had the original adjustment not been required, as
the case may be) as if (i) the only shares of Common Stock so issued were the
shares of Common Stock, if any, actually issued or sold upon the exercise of
such rights, options, warrants or conversion or exchange rights and (ii) such
shares of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the consideration, if
any, actually received by the Company for issuance, sale or grant of all such
rights, options, warrants or conversion or exchange rights whether or not
exercised; provided, that no such readjustment shall have the effect of
decreasing the number of shares issuable upon exercise of each Warrant by a
number, in excess of the amount or number of the adjustment initially made in
respect to the issuance, sale or grant of such rights, options, warrants or
conversion or exchange rights.
(f) De Minimis Adjustments . No adjustment in the number of shares of
Common Stock purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the number
of shares of Common Stock purchasable upon the exercise of each Warrant;
provided, however, that any adjustments which by reason of this Section 4.1(f)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations shall be made to the nearest
one-thousandth of a share.
(g) Consolidation, Merger, Etc. (A) Subject to the provisions of
Subsection (B) below of this Section 1(g), in case of the consolidation of the
Company with, or merger of the Company with or into, or of the sale of all or
substantially all of the properties and assets of the Company to, any Person and
in connection therewith consideration is payable to holders of Common Stock (or
other securities or property purchasable upon exercise of Warrants) in exchange
therefor, the Warrants shall remain subject to the terms and conditions set
forth in this Warrant Certificate and each Warrant shall, after such
consolidation, merger or sale, entitle the Holder to receive upon exercise the
number of shares of capital stock or other securities or property (including
cash) of the Company, or of such Person resulting from such consolidation or
surviving such merger or to which such sale shall be made, as the case may be,
that would have been distributable or payable on account of the shares of Common
Stock (or other securities or properties purchasable upon exercise of Warrants)
if such Holder's Warrants had been exercised immediately prior to such merger,
consolidation or sale (or, if applicable, the record date therefor); and in any
such case the provisions of this Agreement with respect to the rights and
interests thereafter of the Holders of Warrants shall be appropriately adjusted
by the Board of Directors of the Company in good faith so as to be applicable,
as nearly as may reasonably be, to any shares of stock or other securities or
any property thereafter deliverable on the exercise of the Warrants.
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(B) Notwithstanding the foregoing, (x) if the Company merges or consolidates
with, or sells all or substantially all of its property and assets to, another
Person and consideration is payable to holders of Common Stock in exchange for
their Common Stock in connection with such merger, consolidation or sale which
consists solely of cash, or (y) in the event of the dissolution, liquidation or
winding up of the Company, then the Holders of Warrants shall be entitled to
receive distributions on the date of such event on an equal basis with holders
of Common Stock (or other securities issuable upon exercise of the Warrants) as
if the Warrants had been exercised immediately prior to such event, less the
Exercise Price. Upon receipt of such payment, if any, the right of a Holder
shall terminate and cease and such Holder's Warrants shall expire.
(h) In addition to the foregoing adjustments, the Board of Directors of
the Company may make any other adjustment to increase the number of shares of
Common Stock or other securities or property issuable upon exercise of Warrants
as it may, in good faith, deem desirable to protect the rights and benefits of
Holders. In addition, the Company may from time to time increase the number of
shares of Common Stock or other securities or property issuable upon exercise of
Warrants, provided that any such increase must be effective for at least 30
calendar days, and must be preceded by written notice of such increase to the
Holders, which notice must be mailed at least 30 calendar days prior to the
effective date of such increase. Any such increase shall not alter or adjust the
Exercise Price.
SECTION 2. Definition of Market Value. Unless otherwise set forth in this
Warrant Certificate, "Market Value" shall mean the last reported sale price
of the applicable security as reported by National Association of Securities
Dealers, Inc. Automatic Quotation System, National Market System, or, if the
applicable security is listed or admitted for trading on a securities
exchange, the last reported sales price of the applicable security on the
principal exchange on which the applicable security is listed or admitted for
trading (which shall be for consolidated trading if applicable to such
exchange), or if neither so reported or listed or admitted for trading, the
last reported bid price of the applicable security in the over-the-counter
market. In the event that the Market Price cannot be determined as aforesaid,
the Board of Directors of the Corporation shall determine the Market Price on
the basis of such quotations as it in good faith considers appropriate. The
Market Value shall be such price averaged over a period of 20 consecutive
business days ending 2 days prior to the day as of which "Market Value" is
being determined.
SECTION 3. Stock to be Reserved. The Company will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon the exercise of Warrants as herein provided, such number of shares
of Common Stock as shall then be issuable upon the exercise of all
outstanding Warrants. The Company covenants that all shares of Common Stock
which shall be so issuable shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, free from preemptive or similar rights
on the part of the holders of any
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shares of capital stock or securities of the Company, and free from all liens
and charges with respect to the issue thereof. The Company will take all such
action as may be necessary to assure that such shares of Common Stock may be so
issued without violation by the Company of any applicable law or regulation or
agreement, or of any requirements of any domestic securities exchange upon which
the Common Stock may be listed.
SECTION 4. Closing of Books. The Company will at no time
close its transfer books against the transfer of any Warrants or of any
shares of Common Stock issued or issuable upon the exercise of any Warrants
in any manner which interferes with the timely exercise of such Warrants.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, as of the day and year first above written.
CANDLEWOOD HOTEL COMPANY, INC.
By
------------------------------
Name:
Title:
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FORM OF SUBSCRIPTION
DATE: _______________, 19___
TO: CANDLEWOOD HOTEL COMPANY, INC.
The Undersigned, the holder of the within Warrants, hereby irrevocably
elects to exercise all or part of the purchase right represented by such
Warrants for, and to purchase thereunder, __________ shares of Common Stock of
CANDLEWOOD HOTEL COMPANY, INC. (the "Company") and herewith makes payment of
$_______________ to the Company, and requests that the certificate of such
shares be issued in the name of, and be delivered to ________________________,
whose address is _________________________________________________.
(Name of Holder)
(Authorized Signatory)
(Address)
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