UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
Chartwell Leisure Inc.
- -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01
- -------------------------------------------------------------------------------
(Title of Class of Securities)
16139F106
- -------------------------------------------------------------------------------
(CUSIP Number)
Richard L. Fisher
299 Park Avenue
New York, New York 10171
(212) 752-5000
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
Copies to:
John N. Turitzin Kenneth N. Musen
Battle Fowler Bergman, Horowitz & Reynolds
75 East 55th Street 157 Church Street
New York, New York 10022 New Haven, Connecticut 06502
(212) 856-7000 (203) 785-1320
August 8, 1996
- -------------------------------------------------------------------------------
(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 / /
Check the following box if a fee is being paid with the statement / /. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class
of securities described in Item 1; and (2) has filed no amendme t subsequent
thereto reporting beneficial ownership of five percent or less of such class.
See Rule 13d-7.)
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 reporting 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).
395643.4
<PAGE>
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Chartwell Leisure Associates L.P. II
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
3,852,299(1)
NUMBER OF --------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 1,052,631(1)
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 3,852,299(1)
PERSON WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,052,631(1)
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,904,930(1)
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) /X/
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.89%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- -------------------------------------------------------------------------------
_____________________
(1) See Items 5 and 6 for a description of the shares for which Chartwell
Leisure Associates L.P. II is deemed to have voting and dispositive
power.
Page 2
395643.4
<PAGE>
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Chartwell Leisure Corp. II
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
3,852,299(2)
NUMBER OF --------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 1,052,631(2)
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 3,852,299(2)
PERSON WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,052,631(2)
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,904,930(2)
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) /X/
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.89%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- -------------------------------------------------------------------------------
_____________________
(2) See Items 5 and 6 for a description of the shares for which Chartwell
Leisure Corp. II is deemed to have voting and dispositive power.
Page 3
395643.4
<PAGE>
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FSNL LLC
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
Not applicable
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Connecticut
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
0(3)
NUMBER OF --------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 1,052,631(3)
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0(3)
PERSON WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,052,631(3)
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,052,631(3)
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) /X/
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.14%(3)
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
00
- -------------------------------------------------------------------------------
_____________________
(3) See Items 5 and 6 for a description of the shares for which FSNL LLC
is deemed to have voting and dispositive power. As described in Item
6, FSNL LLC disclaims beneficial ownership of 3,852,299 shares of the
Common Stock beneficially owned by Chartwell Leisure Associates L.P.
II and Chartwell Leisure Corp. II.
Page 4
395643.4
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Saidye Rosner Bronfman Ruby Trust
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
Not applicable
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Connecticut
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
0(4)
NUMBER OF --------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 1,052,631(4)
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0(4)
PERSON WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,052,631(4)
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,052,631(4)
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) /X/
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.14%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
0O
- -------------------------------------------------------------------------------
_____________________
(4) See Items 5 and 6 for a description of the shares for which The Saidye
Rosner Bronfman Ruby Trust is deemed to have voting and dispositive
power. As described in Item 6, The Saidye Rosner Bronfman Ruby Trust
disclaims beneficial ownership of 3,852,299 shares of the Common Stock
beneficially owned by Chartwell Leisure Associates L.P. II and
Chartwell Leisure Corp. II.
Page 5
395643.4
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
This statement amends and supplements the Schedule 13D, dated December 20,
1995 (the "Schedule 13D"), which was originally filed with the Securities and
Exchange Commission (the "SEC") on January 2, 1996 on behalf of Chartwell
Leisure Associates L.P. II and Chartwell Leisure Corp. II with respect to the
ownership of common stock, $0.01 par value ("Common Stock"), of Chartwell
Leisure Inc., a Delaware corporation formerly known as National Lodging Corp.
(the "Company"), as amended and supplemented by Amendment No. 1 to the Schedule
13D, dated January 24, 1996 ("Amendment No. 1"), Amendment No. 2 to the
Schedule 13D, dated February 14, 1996 ("Amendment No. 2"), Amendment No. 3 to
the Schedule 13D, dated April 11, 1996 ("Amendment No. 3"), and Amendment No. 4
to the Schedule 13D, dated May 16, 1996 ("Amendment No. 4", together with
Amendment No. 1, Amendment No. 2 and Amendment No. 3, "Amendment Nos. 1, 2, 3
and 4"), which Amendment Nos. 1, 2, 3 and 4 were filed with the SEC on January
26, 1996, February 20, 1996, April 26, 1996 and June 12, 1996, respectively, on
behalf of Chartwell Leisure Associates L.P. II, Chartwell Leisure Corp. II,
FSNL LLC and The Comet Trust, with respect to Amendment Nos. 1, 2 and 3, and
Chartwell Leisure Associates L.P. II, Chartwell Leisure Corp. II, FSNL LLC and
The Saidye Rosner Bronfman Ruby Trust, with respect to Amendment No. 4.
Item 2. Identity and Background.
The fifth paragraph of Item 2 is hereby amended and restated as follows:
FSNL was formed on January 18, 1996 and has not engaged in any business
since its creation other than that incident to its organization and its
investment in the Company. The address of the principal business and principal
office of FSNL is 157 Church Street, 19th Floor, New Haven, Connecticut 06510.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is hereby amended and supplemented by adding the following:
Chartwell L.P. and FSNL paid an aggregate of $57 million, or $14.25 per
share, to purchase an aggregate of 4 million shares of Common Stock on August
8, 1996. The $57 million used to make the Purchase described in Item 4 below
came from the working capital of Chartwell L.P., or affiliates of Chartwell
L.P., and FSNL.
Chartwell L.P. obtained its share of the funds required to make the
Purchase from capital contributions by its partners. Chartwell Corp. obtained
the funds required to make its capital contribution to Chartwell L.P. from
capital contributions by its stockholders. The Fisher Partners, Martin L.
Edelman and Gordon P. Getty obtained their funds through personal funds. FGT
obtained its funds from working capital.
FSNL obtained its share of the funds required to make the Purchase from
capital contributions by its members.
Page 6
395643.4
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
Item 4. Purpose of Transaction
Item 4 is hereby amended and supplemented by adding the following:
On August 8, 1996, pursuant to the terms of the Amended and Restated 1996
Purchase Agreement, Chartwell L.P. and FSNL purchased directly from the Company
an aggregate of 4 million shares of Common Stock for an aggregate purchase
price of $57 million, or $14.25 per share (the "Purchase"). As a result of the
Purchase, the Item 2 Persons beneficially own in the aggregate approximately
52% of the Company's outstanding Common Stock.
Also on August 8, 1996, James E. Buckman and Robert F. Smith resigned as
directors of the Company and Dr. Guido Goldman, one of the managers of FSNL,
and Rachel Robinson were elected to the Company's board of directors. Ms.
Robinson was also elected to the audit and compensation committees of the
Company's board of directors. As of August 8, 1996, designees of the Item 2
Persons constitute a majority of the Company's directors.
Item 5. Interest in the Securities of the Issuer.
(a) As of the date of this Amendment No. 5 to Schedule 13D, Chartwell L.P.
and FSNL beneficially owned a total of 4,904,930 and 1,052,631 shares of Common
Stock, respectively. Chartwell L.P. and FSNL beneficially owned approximately
51.89% and 11.14%, respectively, of the 9,452,320 shares of Common Stock
outstanding as of August 8, 1996. Chartwell L.P. and Chartwell Corp. share
voting and dispositive power with respect to the Common Stock beneficially
owned by Chartwell L.P. FSNL and Ruby share voting and dispositive power with
respect to the Common Stock beneficially owned by FSNL. Chartwell L.P. and
Chartwell Corp. also share voting and dispositive power with respect to the
Common Stock beneficially owned by FSNL.
(b) Subject to the terms of the 1995 Stock Purchase Agreement, the Amended
and Restated 1996 Purchase Agreement and the Amended and Restated Stockholders'
Agreement discussed in Item 6 below, Chartwell L.P. has sole voting and
dispositive power with respect to 3,852,299 shares of the 4,904,930 shares of
Common Stock it beneficially owns. Chartwell L.P. has shared voting and
dispositive power with respect to 1,052,631 shares of the 4,904,930 shares of
Common Stock it beneficially owns. Chartwell L.P. and Chartwell Corp. share
voting and dispositive power with respect to the Common Stock beneficially
owned by Chartwell L.P.
Subject to the terms of the Amended and Restated 1996 Purchase Agreement
and the Amended and Restated Stockholders' Agreement discussed in Item 6 below,
FSNL has shared voting and dispositive power with respect to 1,052,631 shares
of Common Stock it beneficially owns. FSNL and Ruby share voting and
dispositive power with respect to the Common Stock beneficially owned by FSNL.
Chartwell L.P. and Chartwell Corp. also share voting and dispositive power with
respect to the Common Stock beneficially owned by FSNL.
In addition, Fisher Brothers Financial and Development Company ("FBFDC")
owns 2,000 shares of Common Stock. FBFDC is a limited partnership in which
Larry Fisher, Zachary Fisher, Arnold Fisher, Richard L. Fisher and M. Anthony
Fisher are the general and limited partners. The Item 2 Persons
Page 7
395643.4
<PAGE>
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
disclaim beneficial ownership of the shares owned by FBFDC and do not affirm
the existence of a group with FBFDC with respect to those shares.
(c) On August 8, 1996, pursuant to the terms of the Amended and Restated
1996 Purchase Agreement, Chartwell L.P. and FSNL purchased directly from the
Company an aggregate of 4 million shares of Common Stock for an aggregate
purchase price of $57 million, or $14.25 per share. As a result of the
Purchase, the Item 2 Persons beneficially own in the aggregate approximately
52% of the Company's outstanding Common Stock. None of the Item 2 Persons has
effected any other transactions in Common Stock in the last 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
Item 6 is hereby amended and supplemented by adding the following:
Amended and Restated 1996 Purchase Agreement
Pursuant to the terms of the Amended and Restated 1996 Purchase Agreement,
Chartwell L.P. and FSNL have agreed to certain restrictions on their
activities.
Each of Chartwell L.P. and FSNL (Chartwell L.P. and FSNL are each
sometimes referred to in this Item 6 as a "Purchaser," and collectively as the
"Purchasers") have agreed to vote its shares of Common Stock and to use its
best efforts to elect and maintain as independent directors on the Company's
Board of Directors at least two individuals who are not employees, officers,
directors or affiliates of the Purchasers, do not have any beneficial ownership
interest in the Purchasers or any of their affiliates (other than the Company)
and are otherwise disinterested directors ("Independent Directors"). If as a
result of any sale or other transfer of shares of Common Stock by the
Purchasers, the aggregate number of shares of Common Stock held by the
Purchasers is reduced below 35% of the total number of shares of Common Stock
then outstanding, the Purchasers are required to cause a sufficient number of
their representatives on the Company's Board of Directors to resign so that the
percentage of directorships held by Independent Directors after that event is
equal to the percentage of shares of Common Stock owned by stockholders other
than the Purchasers (the "Required Percentage"); and the Purchasers are
required to cause any of their remaining representatives on the Board of
Directors to vote in favor of filling the resulting vacancies with Independent
Directors. Thereafter, the Purchasers are required to vote their shares of
Common Stock to cause the percentage of Independent Directors to be no less
than the Required Percentage.
Each of the Purchasers has agreed that none of the shares of Common Stock
purchased pursuant to the terms of the Amended and Restated 1996 Purchase
Agreement will be sold, pledged or otherwise transferred, directly or
indirectly, by it except (A) in connection with a merger or consolidation of
the Company in which all holders of Common Stock receive the same consideration
and which is (i) approved by a majority of the Independent Directors, and (ii)
is subject to the voting requirements
Page 8
395643.4
<PAGE>
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
described below; (B) after three years from August 8, 1996, in a bona fide
underwritten public offering pursuant to an effective registration under the
Securities Act of 1933, as amended (the "Securities Act"); (C) in a sale,
pledge or other transfer (a "Transfer") by either Chartwell L.P. or FSNL after
three years from August 8, 1996, if after giving effect to that Transfer the
aggregate number of shares of Common Stock held by the Purchasers and their
affiliates is equal to or greater than 35% of the total number of shares of
Common Stock then outstanding and that Transfer is approved by a majority of
the Independent Directors; (D) in a Transfer by FSNL of any of the shares it
acquired as part of the Purchase after six years from August 8, 1996, if after
giving effect to that Transfer the aggregate number of shares of Common Stock
held by the Purchasers and their affiliates is equal to or greater than 35% of
the total number of shares of Common Stock then outstanding, and that Transfer
is made in a transaction satisfying the manner of sale requirements for a
"brokers' transaction" under Rule 144 under the Securities Act, whether or not
that sale is made pursuant to Rule 144 (a "Brokers' Transaction"); (E) in a
Transfer by FSNL of any of the shares it acquired as part of the Purchase after
six years from August 8, 1996 at a time when the aggregate number of shares of
Common Stock held by the Purchasers and their affiliates is already less than
35% of the total number of shares of Common Stock then outstanding, if that
Transfer is approved by a majority of the Independent Directors and is made in
a Brokers' Transaction; (F) in a Transfer by Chartwell L.P. after six years
from August 8, 1996 at a time when Chartwell L.P. owns less than 5% of the
total number of shares of Common Stock then outstanding and has no
representatives serving on the Board of Directors of the Company, if that
Transfer is made in a Brokers' Transaction; and (G) sales or other transfers
between the Purchasers.
The Purchasers have agreed that, for so long as the Purchasers and their
affiliates continue to own, in the aggregate, at least 20% of the outstanding
shares of Common Stock of the Company, the Purchasers will not, and will not
permit any of their affiliates to, enter into any transaction or series of
related transactions, or grant or consent to, or otherwise permit, any
amendment to, supplement of or waiver under, any agreement or contract, with
the Company or any of its subsidiaries (any of the foregoing, an "Affiliate
Transaction") unless: (i) it has been determined by a committee of the
Company's Board of Directors comprised of one or more Independent Directors
(the "Independent Board Committee") that the Affiliate Transaction is in the
best interests of the Company and is on fair and reasonable terms, no less
favorable to the Company than terms that the Company and a non-affiliated
person in a similar situation would agree to in an arm's length transaction;
and (ii) if the Affiliate Transaction has a total value in excess of $10,000,
the Independent Board Committee has received a favorable fairness opinion from
an appropriate, independent party relating to the transaction. These
arrangements do not, however, limit the reasonable compensation the Company may
pay to its officers and directors, or restrict the existing arrangement between
the Company and Chartwell L.P. relating to the family entertainment center
located in Vicksburg, Mississippi, which predated the Amended and Restated 1996
Stock Purchase Agreement.
The Purchasers have agreed that, if at any time within three years after
the Closing, the Company proposes to sell all or substantially all of its
assets, to merge or consolidate with any other entity, or to cause the
liquidation or dissolution of the Company (each, a "Triggering Event"), and the
Company submits the Triggering Event to a vote of its stockholders, then each
of the Purchasers will vote all of its respective shares of Common Stock
entitled to vote on that matter in favor of and against the Triggering Event in
the same proportion as the numbers of shares of Common Stock held by
stockholders of the Company other than the Purchasers and their affiliates
("Nonaffiliated Shares") voted in favor of and against the Triggering Event
bear to the total number of Nonaffiliated Shares voted on such Triggering
Page 9
395643.4
<PAGE>
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
Event. If any party commences a proxy contest or tender offer relating to the
Triggering Event in any manner, however, these voting requirements will not
apply, and each of the Purchasers will be entitled to vote all of its shares of
Common Stock in favor of or against the Triggering Event, in its sole
discretion.
The Purchasers have agreed that neither they not any of their affiliates
will purchase or otherwise acquire any additional shares of Common Stock or any
securities exercisable for or convertible into Common Stock (other than options
granted under a stock option plan of the Company having customary terms and
constituting reasonable compensation ("Excluded Stock Options") and shares of
Common Stock issued on the exercise of Excluded Stock Options) (the "Acquired
Stock"), from any person or entity (other than the Company or any other
Purchaser Party) if the Acquired Stock would, when aggregated with all of the
other shares of Common Stock owned by all the Purchasers and their affiliates
(other than shares acquired, or subject to issuance, on the exercise of
Excluded Stock Options), and assuming the exercise or conversion of the
Acquired Stock into Common Stock, if applicable, result in the ownership by the
Purchasers and all their affiliates of shares of Common Stock representing in
excess of 55% of the then-outstanding shares of Common Stock of the Company on
a fully-diluted basis, assuming the exercise or conversion of all other
outstanding securities of the Company exercisable for or convertible into
Common Stock, unless: (i) such Purchaser of affiliate offers to purchase the
Acquired Stock from all of the holders thereof in compliance with all
applicable securities and other laws, rules and regulations, (ii) the purchase
is approved by the Independent Board Committee, and (iii) the Independent Board
Committee has received a favorable fairness opinion from an appropriate,
independent party relating to the purchase. The Purchasers have also agreed
that no Purchaser or affiliate of a Purchaser will purchase or otherwise
acquire any Acquired Stock from the Company, unless: (i) the purchase is
approved by the Independent Board Committee, and (ii) the Independent Board
Committee has received a favorable fairness opinion from an appropriate,
independent party with respect to the purchase.
The Purchasers have agreed that, for so long as the Purchaser Parties
continue to own, in the aggregate, at least 20% of the outstanding shares of
Common Stock of the Company or have any representatives serving on the
Company's Board of Directors, no Purchaser or its affiliate shall acquire any
interest in an existing hotel property or properties (including by foreclosure
on any mortgage acquired on or after January 1, 1996), or any interest in a
hotel property or properties that are under development or in any property
which the Purchaser or affiliate intends to develop as a hotel property. These
restrictions will not apply to acquisitions by any of the Purchasers or their
affiliates of hotels under development by affiliates of Chartwell L.P. on the
date of the Amended and Restated 1996 Stock Purchase Agreement, redevelopment
of hotels owned by affiliates of Chartwell L.P. on January 1, 1996, or
acquisitions of hotels on which affiliates of Chartwell L.P. had liens on
January 1, 1996.
1996 Registration Rights Agreement
On August 8, 1996, Chartwell L.P., FSNL and the Company entered into a
registration rights agreement (the "1996 Registration Rights Agreement"). At
the same time, the 1995 Registration Rights Agreement between the Company and
Chartwell L.P. was terminated. Pursuant to the 1996 Registration Rights
Agreement, each Purchaser (or its assignee) (the "Initiating Holder") has the
right at any time after three years from August 8, 1996 to make a written
request for registration (a "Demand Registration Statement") under the
Securities Act, for the resale by such Holder of all or part of such Holder's
Registrable Securities (defined below). Chartwell L.P. or its assignees has the
right to request two Demand
Page 10
395643.4
<PAGE>
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
Registration Statements and FSNL or its assignees has the right to request one
Demand Registration Statement, provided, however, that neither Chartwell L.P.
nor any of its assignees has the right to request a Demand Registration
Statement with respect to less than 5% of the number of shares of Common Stock
outstanding at the time of the request. For purposes of the 1996 Registration
Rights Agreement, the term "Registrable Securities" means (i) the 4 million
shares purchased on August 8, 1996 by Chartwell L.P. and FSNL and the 904,930
shares purchased by Chartwell in the December 1995, and (ii) any other
securities issued in exchange for, upon conversion of, as a dividend on or
otherwise in respect of any such securities, and the term "Holder" means each
Purchaser and any assignee of a Purchaser who becomes a party to the 1996
Registration Rights Agreement. The Company will pay all registration expenses
in connection with a Demand Registration Statement, whether or not it becomes
effective. However, if a Demand Registration Statement could have become
effective but does not become effective as a result of any act or omission on
the part of one or more Holders, such Holders will be required to pay such
registration expenses. After the receipt of a request for a Demand Registration
Statement, the Company must give written notice of the request to all other
Holders of Registrable Securities and use its best efforts to register for
resale the Registrable Securities of the Initiating Holder and any other Holder
that provides the Company with a written request for inclusion in such
registration. The Company may postpone for a reasonable time not to exceed 120
days the filing or effectiveness of any Demand Registration Statement if the
Board of Directors determines in good faith that the filing of the Demand
Registration Statement would be detrimental to the Company.
In addition, if the Company proposes to register any of its securities for
its own account or the account of any of its stockholders (other than certain
registrations including a registration relating solely to an employee benefit
plan and certain exchanges of securities with stockholders), the Holders have
the right (the "Incidental Registration Right"), upon a timely request, to have
the resale of their Registrable Securities covered by the registration. If, in
either a Demand Registration Statement or a registration statement filed in
connection with the exercise of an Incidental Registration Right, the shares of
Common Stock to be registered are to be distributed by means of an underwritten
offering, the underwriter may limit the number of shares of Common Stock to be
registered if in its judgment marketing factors require such a cutback.
Amended and Restated Stockholders' Agreement
On February 14, 1996, Chartwell L.P. and FSNL entered into a Stockholders'
Agreement which provides for restrictions on the transfer and voting of shares
of Common Stock owned by Chartwell L.P. and FSNL. On March 14, 1996, Chartwell
L.P. and FSNL LLC entered into an Amended and Restated Stockholders' Agreement
that amends and restates the Stockholders' Agreement in certain respects. The
Amended and Restated Stockholders' Agreement became effective as of the closing
of the Purchase described in Item 4. The Amended and Restated Stockholders'
Agreement provides that Chartwell L.P. and FSNL will vote their shares of
Common Stock to elect as a Director of the Company one nominee selected by FSNL
and any number of nominees selected by Chartwell L.P., and that FSNL will vote
its shares of Common Stock at all meetings of stockholders of the Company and
in any written consent in the manner directed by Chartwell L.P. The Amended and
Restated Stockholders' Agreement also provides for certain restrictions on the
transfer of their shares of Common Stock and on future acquisitions of shares
of Common Stock by Chartwell L.P. and FSNL. Under the terms of the Amended and
Restated Stockholders' Agreement, for a period of six years beginning on August
8, 1996, FSNL is prohibited from
Page 11
395643.4
<PAGE>
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
transferring its shares to persons other than Chartwell L.P. and certain other
permitted transferees identified in the Amended and Restated Stockholders'
Agreement. Additionally, under the Amended and Restated Stockholders'
Agreement, FSNL is afforded certain "tag-along" rights exercisable by it upon a
sale of shares by Chartwell L.P. or upon a request by Chartwell L.P. of a
Demand Registration Statement pursuant to the Registration Rights Agreement.
Chartwell L.P. may sell its shares to FSNL and certain other permitted
transferees identified in the Amended and Restated Stockholders' Agreement and
to third parties, provided that Chartwell L.P. allows for FSNL to "tag-along"
in the event of sale to any third party. Chartwell L.P. may also require FSNL
to sell its shares to a third party offering to purchase all of Chartwell L.P's
and FSNL's shares of Common Stock.
Because FSNL is required to vote its shares of Common Stock in the manner
directed by Chartwell L.P. and because of the restrictions on transfers of
Common Stock by FSNL to entities other than Chartwell L.P., Chartwell L.P. is
deemed to share voting and dispositive power with respect to the Common Stock
owned by FSNL. Although Chartwell L.P. has agreed to vote its Common Stock in
concert with FSNL on certain matters and has agreed to certain restrictions on
transfers of its Common Stock, FSNL is not deemed to share voting and
dispositive power with respect to the Common Stock owned by Chartwell L.P.
Accordingly, FSNL and Ruby disclaim beneficial ownership of 3,852,299 shares of
the shares of Common Stock owned by Chartwell L.P. and Chartwell Corp.
Page 12
<PAGE>
- ---------------------
CUSIP No. 16139F106 SCHEDULE 13D
- ---------------------
SIGNATURES
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: August 21, 1996
CHARTWELL LEISURE ASSOCIATES L.P. II
By: Chartwell Leisure Corp. II,
as general partner
By: /s/ Richard L. Fisher
-----------------------------------------
Richard L. Fisher
President
CHARTWELL LEISURE CORP. II
By: /s/ Richard L. Fisher
-----------------------------------------
Richard L. Fisher
President
FSNL LLC
By: /s/ Leonard M. Nelson
----------------------------------------
Leonard M. Nelson
Manager
THE SAIDYE ROSNER BRONFMAN RUBY TRUST
By: /s/ Leonard M. Nelson
-----------------------------------------
Leonard M. Nelson
Trustee
Page 13
395643.4
