SECURITIES PURCHASE AGREEMENT
among
CHARTWELL LEISURE INC.
and
THE INVESTORS LISTED HEREIN
January 31, 1997
TABLE OF CONTENTS
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Page
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SECTION 1 AUTHORIZATION OF SECURITIES....................................-1-
SECTION 2 PURCHASE AND SALE OF SECURITIES................................-1-
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................-2-
3.1 Corporate Organization...................................-2-
3.2 Business.................................................-2-
3.3 Financial Statements.....................................-3-
3.4 Capitalization...........................................-4-
3.5 Corporate Proceedings, etc...............................-4-
3.6 Consents and Approvals...................................-5-
3.7 Absence of Defaults, Conflicts, etc......................-5-
3.8 Compliance with Law......................................-6-
3.9 Pending Actions..........................................-6-
3.11 Private Offering.........................................-6-
3.12 Brokerage................................................-7-
3.13 Material Facts...........................................-7-
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS..................-7-
SECTION 5 ADDITIONAL COVENANTS OF THE PARTIES............................-8-
5.1 Resale of Securities.....................................-8-
5.2 Covenants Pending Closing................................-9-
5.3 Further Assurance........................................-9-
5.4 Rights Offering..........................................-9-
SECTION 6 INVESTORS' CLOSING CONDITIONS..................................-9-
6.1 No Material Adverse Change...............................-9-
6.2 Representations and Warranties...........................-9-
6.3 Compliance with Agreement...............................-10-
6.4 Officer's Certificate...................................-10-
6.5 Approval of Proceedings.................................-10-
6.6 Injunction..............................................-10-
6.7 Opinion.................................................-10-
SECTION 7 COMPANY'S POST-CLOSING CONDITIONS...............................-10-
7.1 Closing of Related Transactions.........................-10-
7.2 Sale Right..............................................-11-
7.3 Officer's Certificate...................................-11-
SECTION 8 COMPANY'S CLOSING CONDITIONS..................................-11-
8.1 Representations and Warranties..........................-11-
8.2 Compliance with Agreement...............................-11-
8.3 Investor Certificate....................................-12-
8.4 Injunction..............................................-12-
SECTION 9 COVENANTS......................................................-12-
9.1 Financial and Business Information......................-12-
SECTION 10 REGISTRATION RIGHTS............................................-13-
10.1 Required Registration...................................-13-
10.2 Lock-Up Agreement.......................................-14-
10.3 Registration Procedures.................................-14-
10.4 Further Information.....................................-15-
SECTION 11 INDEMNIFICATION...............................................-16-
11.1 Indemnification Generally...............................-16-
11.2 Indemnification Relating
to Registration Rights..................................-16-
11.3 Indemnification Procedures..............................-18-
SECTION 12 INTERPRETATION OF THIS AGREEMENT...............................-18-
12.1 Terms Defined...........................................-18-
12.2 Directly or Indirectly..................................-19-
12.3 Governing Law...........................................-19-
12.4 Paragraph and Section Headings..........................-20-
SECTION 13 MISCELLANEOUS.................................................-20-
13.1 Notices.................................................-20-
13.2 Expenses................................................-20-
13.3 Survival................................................-20-
13.4 Entire Agreement; Amendment and Waiver..................-21-
13.5 Counterparts............................................-21-
13.6 Successors and Assigns..................................-22-
SCHEDULES
Schedule 2 Investors
Schedule 3.4 Rights
Schedule 3.6 Consents and Approvals
PURCHASE AGREEMENT
Dear Sirs:
Chartwell Leisure Inc., a Delaware corporation (the "Company"), hereby
agrees with Quota Fund N.V. - "Brahman", Brahman Partners II, L.P., Genesis
Capital Fund - "Brahman", B-Y Partners, L.P., Brahman Institutional Partners,
L.P. and Brahman Partners II Offshore, Ltd. (individually an "Investor" and
collectively the "Investors") as follows:
SECTION 1 AUTHORIZATION OF SECURITIES
---------------------------
(a) The Company has authorized 100,000,000 shares of Common
Stock, $.01 par value (the "Common Stock"), of which 9,492,850 shares were
issued and outstanding as of the close of business on January 30, 1997 and
10,000,000 shares of Preferred Stock, $1.00 par value the ("Preferred Stock")
of which no shares were issued and outstanding as of September 30, 1996.
SECTION 2 PURCHASE AND SALE OF SECURITIES
-------------------------------
(a) Subject to the terms and conditions set forth in this
Agreement and in reliance upon the Company's and the Investors' representations
set forth below, on the Closing Date (as defined below) the Company shall sell
to the Investors, and the Investors shall purchase from the Company, the number
of shares of Common Stock set forth on Schedule 2 at $14.00 per share for
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an aggregate cash purchase price (the "Purchase Price") as set forth on
Schedule 2 (such shares, collectively, the "Shares"). Such sale and
----------
purchase shall be effected on the Closing Date by the Company executing and
delivering to the Investors, duly registered in each Investor's name, a duly
executed stock certificate evidencing the Shares being purchased by it, against
delivery by each Investor to the Company of the Purchase Price by wire transfer
of immediately available funds to such account as the Company shall designate
on the Closing Date. The Company shall maintain such funds in a segregated
interest-bearing account (the "Segregated Account") for the sole benefit of the
Investors until such time as the conditions set forth in Section 7 of this
Agreement are met or the Investors exercise their rights under Section 7.2, in
which case the funds shall immediately, but in no event more than one Business
Day after exercise of such right, be returned to the Investors against delivery
of such Shares as provided in Section 7.2.
(b) The closing (the "Closing") of such sale and purchase shall
take place at 10:00 A.M., New York City time, on January 31, 1997 or on such
other date as the Investors and the Company agree to in writing (the "Closing
Date"), at the offices of Xxxxxx & Carnelutti, 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx
Xxxx,
Xxx Xxxx, 00000, or at such other location as the Investors and the Company
shall mutually select and agree to.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to the Investors that:
3.1 Corporate Organization
----------------------
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
(b) The Company has all requisite power and authority and has all
necessary approvals, licenses, permits and authorization to own and lease its
properties and to carry on its business as now conducted, except where the
failure to have such approvals, licenses, permits or authorizations would not
have a material adverse effect on the business or financial position of the
Company and its subsidiaries, taken as a whole.
(c) The Company has filed all necessary documents to qualify to
do business as a foreign corporation in, and the Company is in good standing
under the laws of, each jurisdiction in which the conduct of the Company's
business or the nature of the property owned require such qualification, except
where the failure to so qualify would not have a material adverse affect on the
business or financial position of the Company and its subsidiaries taken as a
whole.
3.2 Business
--------
The Company has caused to be delivered to the Investors copies of the
following, without exhibits thereto (collectively, including the exhibits
thereto the "SEC Reports and Filings"):
(i) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 (File No. 0-24794) filed with the Commission on
April 1, 1996, as amended by the Company's Annual Report on Form 10-K/A filed
with the Commission on May 24, 1996, as amended by the Company's Annual Report
on Form 10-K/A filed with the Commission on July 3, 1996;
(ii) The Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1996 filed with the Commission on May 15, 1996;
(iii) The Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1996 filed with the Commission on August 8, 1996,
as amended by the Company's
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Quarterly Report on Form 10-Q/A filed with the Commission on August 9, 1996;
(iv) The Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1996 filed with the Commission on November
12, 1996;
(v) The Company's Current Report on Form 8-K, dated January
23, 1996, filed with the Commission on February 7, 1996, as amended by the
Company's Current Report on Form 8-K/A filed with the Commission on April 2,
1996, as amended by the Company's Current Report on Form 8-K/A filed with the
Commission on July 3, 1996, as amended by the Company's Current Report on Form
8-K/A filed with the Commission on July 9, 1996;
(vi) The Company's Current Report on Form 8-K, dated October
1, 1996, filed with the Commission on October 15, 1996 as amended by the
Company's Current Report on Form 8-K filed with the Commission on December 12,
1996;
(vii) The Company's registration statement on Form S-3 dated
November 22, 1996.
The SEC Reports and Filings include all filings required to be made by
the Company since January 1, 1996 under the Securities Act of 1933, as amended
(the "Securities Act) and the Exchange Act of 1934 (the "Exchange Act") and any
rules and regulations promulgated thereunder. The SEC Reports and Filings,
when filed, complied in all material respects with all applicable requirements
of the Securities Act and the Exchange Act and the rules and regulations
promulgated thereunder. None of the SEC Reports and Filings, at the time of
filing contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading in light of the circumstances in which they
were made. The Company has taken all necessary actions to ensure its continued
inclusion in, and the continued eligibility of the Common Stock for trading on
The NASDAQ Stock Market under all currently effective and, to the Company's
knowledge, currently proposed inclusion requirements. Each balance sheet
included in the SEC Reports and Filings (including any related notes and
schedules) fairly presents in all material respects the consolidated financial
position of the Company and its Subsidiaries as of its date, and each of the
other financial statements included in the SEC Reports and Filings (including
any related notes and schedules) fairly presents in all material respects the
consolidated results of operations or other information therein of Company and
its Subsidiaries for the periods or as of the dates therein set forth in
accordance with GAAP consistently applied during the periods involved (except
that the interim reports are subject to adjustments which might
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be required as a result of year end audit and except as otherwise stated
therein).
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3.3 Financial Statements
--------------------
The audited consolidated balance sheet of the Company as at December 31,
1995 and the unaudited consolidated balance sheet of the Company as at
September 30, 1996 fairly present in all material respects the consolidated
financial position of the Company as at the dates thereof, and the related
consolidated statements of operations, equity and cash flows for the year ended
December 31, 1995 and the nine months ended September 30, 1996 fairly present
the results of operations of the Company and its subsidiaries for the
respective periods indicated (except that the interim reports are subject to
adjustments which might be required as a result of year end audit and except as
otherwise stated therein). All such financial statements, including the
schedules and notes thereto, were prepared in accordance with generally
accepted accounting principles ("GAAP") applied consistently throughout the
periods involved, except as otherwise stated therein.
3.4 Capitalization
--------------
(a) As of the date hereof, the Company has authorized 100,000,000
shares of Common Stock, $.01 par value (the "Common Stock"), of which 9,492,850
shares were issued and outstanding as of the close of business on January 30,
1997 and 10,000,000 shares of Preferred Stock, $1.00 par value the ("Preferred
Stock") of which no shares were issued and outstanding as of September 30,
1996.
(b) All the outstanding shares of capital stock of the Company
have been duly and validly issued and are fully paid and non-assessable. Upon
issuance, sale and delivery as contemplated by this Agreement, the Shares will
be duly authorized, validly issued, fully paid and non-assessable shares of the
Company, free of all preemptive or similar rights.
(c) Except as set forth on Schedule 3.4 hereto, on the
------------
Closing Date there will be no shares of Common Stock issuable upon exercise or
conversion of any security of the Company nor will there be any rights, options
or warrants outstanding or other agreements to acquire shares of Common Stock
nor will the Company be contractually obligated to purchase, redeem or
otherwise acquire any of its outstanding shares of Common Stock. No
shareholder of the Company is entitled to any preemptive or similar rights to
subscribe for shares of capital stock of the Company. Except as set forth on
Schedule 3.4, no shareholders have registration rights with respect to their
shares.
3.5 Corporate Proceedings, etc.
--------------------------
The Company has authorized the execution, delivery, and performance of
this Agreement and each of the transactions and agreements contemplated hereby
(the "Related Transactions"). No other corporate action (including shareholder
approval) is necessary to authorize such execution, delivery and performance of
this Agreement or the transactions contemplated hereby (other than various
actions to be taken in connection with the Rights Offering (as defined herein)
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and the transactions contemplated by Section 10 hereof), and upon such
execution and delivery, this Agreement shall constitute the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except that such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights and general principles of equity.
3.6 Consents and Approvals
----------------------
Except for the consents and filings described in Schedule 3.6 hereto,
------------
the execution and delivery by the Company of this Agreement, the performance by
the Company of its obligations hereunder and the consummation by the Company of
the transactions contemplated hereby (other than the Rights Offering (as
defined herein) and the matters contemplated by Section 10 hereof) do not
require the Company to obtain any consent, approval or action of, or make any
filing with or give any notice to, any corporation, person or firm or any
public, governmental or judicial authority.
3.7 Absence of Defaults, Conflicts, etc.
-----------------------------------
The execution and delivery of this Agreement do not, and the fulfillment
of the terms hereof by the Company, and the issuance of the Shares will not,
result in a breach of any of the terms, conditions or provisions of, or
constitute a default under, or permit the acceleration of rights under or
termination of, any indenture, mortgage, deed of trust, credit agreement, note
or other evidence of indebtedness, or other material agreement of the Company
(collectively the "Key Agreements and Instruments"), or the Restated
Certificate of Incorporation or the Amended and Restated By-Laws of the
Company, or any rule or regulation of any court or federal or state regulatory
board or body or administrative agency having jurisdiction over the Company or
over its properties or businesses. No event has occurred and no condition
exists which, upon notice or the passage of time, would constitute a default
under any such Key Agreements and Instruments or in any material license,
permit or authorization to which the Company is a party or by which it may be
bound.
3.8 Compliance with Law
-------------------
(a) The Company is not in violation of any
laws, ordinances, governmental rules or regulations to which it is subject,
including without limitation, laws or regulations relating to the environment
or to occupational health and safety which violation would or might materially
adversely affect the properties, business, prospects, profits or condition
(financial or otherwise) of the Company.
(b) The Company has all licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its property or to
the conduct of its business, which if violated or not obtained would or be
reasonably likely to materially adversely affect the properties, business,
prospects, profits or condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole. The Company has not finally been denied any
application for any such
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licenses, permits, franchises or other governmental authorizations necessary to
its business.
3.9 Pending Actions
---------------
There is no action, suit, investigation or proceeding pending or, to the
Company's knowledge, threatened against the Company or any of its properties or
assets by or before any court, arbitrator or governmental body, department,
commission, board, bureau, agency or instrumentality, which questions the
validity of this Agreement, the Related Transactions, the issuance or validity
of the Shares or any action taken or to be taken pursuant hereto or thereto, or
which is reasonably likely to result in any material adverse change in the
business or financial condition of the Company and its subsidiaries, taken as a
whole, nor has the Company been notified that either it or any of its officers,
directors or affiliates is the subject of any investigation or inquiry,
informal or otherwise, conducted by the SEC or NASDAQ and the Company is not in
default with respect to any judgment, order, writ, injunction, decree, or award
having applicability to it or its business or properties, other than any such
defaults which would not have a material adverse effect on the business or
financial position of the Company and its subsidiaries, taken as a whole.
3.10 Private Offering
----------------
Neither the Company nor anyone acting on its behalf has sold or has
offered any of the Shares for sale to, or solicited offers to buy from, or
otherwise approached or negotiated with respect thereto with, any prospective
purchaser, other than the Investor. Neither the Company nor anyone acting on
its behalf shall offer the Shares for issue or sale to, or solicit any offer to
acquire any of the same from, anyone so as to bring the issuance and sale of
such Shares, or any part thereof, within the provisions of Section 5 of the
Securities Act. Based upon the representations of the Investors set forth in
Section 4, the offer, issuance and sale of the Shares are and will be exempt
from the registration and prospectus delivery requirements of the Securities
Act, and have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements of
all applicable state securities laws.
3.11 Brokerage
---------
There are no claims for brokerage commissions or finder's fees or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement made by or on behalf of the Company.
3.12 Material Facts
--------------
This Agreement, the schedules furnished contemporaneously herewith, and
the other agreements, documents, certificates or written statements furnished
or to be furnished to the Investors, including the SEC Reports and Filings,
through the Closing Date by or on behalf of the Company in connection with the
transactions contemplated
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hereby, do not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements contained therein or herein,
in light of the circumstances in which they were made, not misleading.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
-----------------------------------------------
Each Investor represents and warrants to the Company as follows:
(a) It is acquiring the Shares for its own account for investment
and not with a view towards the resale, transfer or distribution thereof, nor
with any present intention of distributing the Shares, but subject,
nevertheless, to any requirement of law that the disposition of the Investor's
property shall at all times be within the Investor's control, and without
prejudice to the Investor's right at all times to sell or otherwise dispose of
all or any part of such securities under a registration under the 1933 Act or
under an exemption from said registration available under the 1933 Act.
(b) It has full power and legal right to execute and deliver this
Agreement and to perform its obligations hereunder.
(c) Brahman Partners II, L.P., Brahman Institutional Partners,
L.P. and B-Y Partners, L.P., are limited partnerships, duly organized under the
laws of Delaware; and Quota Fund NV-"Brahman" and Genesis Capital Fund -
"Brahman", are investment accounts managed by Brahman Capital Corp. and Brahman
Partners, respectively; and Brahman Partners II Offshore, Ltd., is a tax-exempt
corporation organized under the laws of the Cayman Islands.
(d) It has taken all action necessary for the authorization,
execution, delivery, and performance of this Agreement and its obligations
hereunder, and, upon execution and delivery by the Company, this Agreement
shall constitute the valid and binding obligations of the Investor, enforceable
against the Investor in accordance with its terms, except that such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
general principles of equity.
(e) There are no claims for brokerage commissions or finder's
fees or similar compensation in connection with the transactions contemplated
by this Agreement based on any arrangement made by or on behalf of the
Investor.
(f) It has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of its
investment in the Company as contemplated by this Agreement, and is able to
bear the economic risk of such investment for an indefinite period of time. It
has been furnished access to such information and documents as it has requested
and has been afforded an opportunity to ask questions of and receive answers
from representatives of the Company concerning the terms and conditions of this
Agreement and the purchase of the Shares contemplated hereby and the business
and financial condition of the Company.
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(g) It is an "accredited investor" as such term is defined in
Rule 501 under the Securities Act and each, other than Quota Fund N.V. -
"Brahman", Genesis Capital Fund - "Brahman" and Brahman Partners II Offshore,
Ltd. (collectively, the "Non-Brahman QIBs"), is a Qualified Institutional Buyer
as defined under Rule 144A of the Securities Act. The Non-Brahman QIBs are
institutional investors.
(h) Each of the Investors (a) acknowledges that the Shares are
not registered under the Securities Act or under any state securities laws and
that the Shares to be acquired by it must be held indefinitely by it unless
they are subsequently registered under the Securities Act and under any
applicable state securities laws or an exemption from registration is
available, (b) is aware that any routine sales pursuant to Rule 144 promulgated
under the Securities Act of the Shares may be made only in limited amounts and
in accordance with the terms and conditions of that Rule and that in such cases
where the Rule is not applicable, compliance with some other registration
exemption will be required, (c) is aware that Rule 144 is not presently
available for use by any Investor for resale of the Shares and (d) is aware
that, except as provided in Section 10 of this Agreement, the Company is not
obligated to register under the Securities Act any sale, transfer or other
disposition of the Shares.
SECTION 5 ADDITIONAL COVENANTS OF THE PARTIES
-----------------------------------
5.1 Resale of Securities
--------------------
(a) Each Investor covenants that it will not sell or
otherwise transfer the Shares except pursuant to an effective registration
under the Securities Act or unless it delivers to the Company an opinion of
counsel, in form and substance reasonably acceptable to the Company, to the
effect that the sale or transfer qualifies as an exempt transaction under the
Securities Act and the rules and regulations promulgated thereunder.
(b) The certificates evidencing the Shares will bear the
following legend reflecting the foregoing restrictions on the transfer of such
securities:
"The securities evidenced hereby have not been registered under the
Securities Act of 1933, as amended (the "Act"), and may not be
transferred except pursuant to an effective registration under the Act or
in a transaction which, in the opinion of counsel reasonably satisfactory
to the Company, qualifies as an exempt transaction under the Act and the
rules and regulations promulgated thereunder. Prior to August 1, 1997,
the transfer of the shares represented by this certificate is restricted
pursuant to the Securities Purchase Agreement among Chartwell Leisure
Inc. and the investors listed therein, dated January 31, 1997."
5.2 Covenants Pending Closing
-------------------------
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Until the Closing, the Company will not, without each Investor's prior
written consent, take any action which would result in any of the covenants
contained in this Agreement becoming incapable of performance. The Company
will promptly advise the Investors of any action or event of which it becomes
aware which has the effect of rendering any of such covenants incapable of
performance.
5.3 Further Assurance
-----------------
Each of the parties shall execute such documents and other papers and
take such further actions as may be reasonably required or desirable to carry
out the provisions hereof and the transactions contemplated hereby. Each such
party shall use its reasonable efforts to fulfill or obtain the fulfillment of
the conditions to the Closing and the Post-Closing Conditions as promptly as
practicable.
5.4 Rights Offering
---------------
Each Investor agrees not to exercise or transfer any of the rights that
it receives in connection with the Rights Offering, and to allow such rights to
expire unexercised.
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SECTION 6 INVESTORS' CLOSING CONDITIONS
-----------------------------
The obligation of the Investors to purchase and pay for the Shares on the
Closing Date, as provided in Section 2 hereof, shall be subject to the
performance by the Company of its agreements theretofore to be performed
hereunder and to the satisfaction, prior thereto or concurrently therewith, of
the following further conditions:
6.1 No Material Adverse Change
--------------------------
There shall not have occurred any event which in the sole judgment of the
Investors has resulted in or is likely to result in a material adverse change
in the condition (financial or otherwise), business, operations, assets,
properties, financial results, prospects of the Company or market price of the
Common Stock and no facts exist which in the sole judgment of the Investors
make it inadvisable to proceed with the Closing.
6.2 Representations and Warranties
------------------------------
The representations and warranties of the Company contained in this
Agreement shall be true on and as of the Closing Date as though such
representations and warranties were made at and as of such date, except as
otherwise affected by the transactions contemplated hereby.
6.3 Compliance with Agreement
-------------------------
The Company shall have performed and complied with all agreements,
covenants and conditions contained in this Agreement which are required to be
performed or complied with by the Company prior to or on the Closing Date.
6.4 Officer's Certificate
---------------------
The Investors shall have received a certificate, dated the Closing Date,
signed by the Chief Financial Officer of the Company, certifying that the
conditions specified in the foregoing Sections 6.1, 6.2 and 6.3 hereof have
been fulfilled.
6.5 Approval of Proceedings
-----------------------
All proceedings to be taken in connection with the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
satisfactory in form and substance to the Investors and their counsel; and the
Investors shall have received copies of all documents or other evidence which
they and such counsel may request in connection with such transactions and
of all records of corporate proceedings in connection therewith in form and
substance satisfactory to the Investors and such counsel.
6.6 Injunction
----------
There shall be no effective injunction, writ, preliminary restraining
order or any order of any nature issued by a court of
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competent jurisdiction directing that the transactions provided for herein or
any of them not be consummated as herein provided.
6.7 Opinion
-------
The Investors shall receive an opinion of counsel to the Company, Battle
Xxxxxx LLP, in form and substance satisfying to Investors and their counsel.
SECTION 7 COMPANY'S POST-CLOSING CONDITIONS
---------------------------------
7.1 Closing of Related Transactions
-------------------------------
The Company shall have: (i) on or before March 15, 1997 commenced the
currently contemplated rights offering at a price of $14.00 per share (the
"Rights Offering"); and (ii) on or before April 15, 1997 consummated the sale
of an aggregate of no less than 1,071,428 shares of Common Stock to Chartwell
Leisure Associates X.X. XX and FSNL LLC at a price of no less than $14.00 per
share (collectively, the "Post-Closing Conditions").
7.2 Sale Right
----------
In the event that each of the Post-Closing Conditions are not met on or
before April 15, 1997 (the "Section 7.2 Exercise Date"), the Investors will
have the right to sell the Shares purchased herein to the Company by notifying
the Company in writing (the "Notice") of its intention to sell Shares back to
the Company and the Company shall be required to repurchase such Shares at a
price of $14.00 per share plus interest accrued in the Segregated Account from
the Investors within two (2) Business Days of receipt of such Notice. The
Investors may elect to exercise such right by notifying the Company in writing
of their intention to sell such shares to the Company. The Closing of such
sale and purchase shall take place at 10:00 a.m. at the offices of Xxxxxx &
Carnelutti, at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, within two (2)
Business Days of receipt of such Notice. The Company shall pay the purchase
price in immediately available funds against delivery of such Shares and such
certificates representing the Shares shall be duly endorsed to the Company or
accompanied by duly executed stock power naming the Company as transferee.
7.3 Officers' Certificate
---------------------
The Investors shall have received a certificate signed by the Chief
Financial Officer of the Company, certifying that the conditions specified in
Section 7.1 hereof have been fulfilled.
SECTION 8 COMPANY'S CLOSING CONDITIONS
----------------------------
The obligation of the Company to issue and deliver the Shares on the
Closing Date, as provided in Section 2 hereof, shall be subject to the
performance by the Investors of their agreements theretofore to be performed
hereunder and to the satisfaction, prior thereto or concurrently therewith, of
the following further conditions:
8.1 Representations and Warranties
------------------------------
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The representations and warranties of the Investors contained in this
Agreement shall be true on and as of the Closing Date as though such warranties
and representations were made at and as of such date, except as otherwise
affected by the transactions contemplated hereby.
8.2 Compliance with Agreement
-------------------------
The Investors shall have performed and complied with all agreements,
covenants and conditions contained in this Agreement which are required to be
performed or complied with by it prior to or on the Closing Date.
8.3 Investor Certificate
--------------------
The Company shall have received a certificate from each Investor, dated
the Closing Date, signed by a duly authorized representative of each Investor,
certifying that the conditions specified in the foregoing Sections 8.1 and 8.2
hereof have been fulfilled.
8.4 Injunction
----------
There shall be no effective injunction, writ, preliminary restraining
order or any order of any nature issued by a court of competent jurisdiction
directing that the transactions provided for herein or any of them not be
consummated as herein provided.
SECTION 9 COVENANTS
---------
9.1 Financial and Business Information
----------------------------------
From and after the date hereof, the Company shall deliver to the
Investors so long as the Investors collectively hold beneficially (within the
meaning of Rule 13d-3 under the Exchange Act) at least 25% of the Shares being
purchased by the Investors on the date hereof:
(a) Quarterly Statements - as soon as practical, and in any
--------------------
event within 50 days after the close of each of the first three fiscal quarters
of each fiscal year of the Company, a copy of the Company's Quarterly Report on
Form 10-Q for such quarter or, if the Company is not required to file such a
report with the SEC, an unaudited consolidated balance sheet and statements of
operations, stockholders' equity and cash flows of the Company and any
subsidiaries as at the close of such quarter and covering operations for such
quarter, and the portion of the Company's fiscal year ending on the last day of
such quarter, all in reasonable detail and prepared in accordance with GAAP
consistently applied, subject to audit and year-end adjustments, setting forth
in each case in comparative form the figures for the comparable period of the
previous fiscal year.
(b) Annual Statements - as soon as practical after the end of
-----------------
each fiscal year of the Company, and in any event within 105 days thereafter, a
copy of the Company's Annual Report on Form 10-K for such year or, if the
Company is not required to file such a report with the SEC duplicate copies of:
-13-
(i) consolidated balance sheets of the Company and any
subsidiaries at the end of such year; and
(ii) consolidated statements of operations, stockholders,
equity and cash flows of the Company and any subsidiaries for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and accompanied by an opinion thereon of
Deloitte & Touche LLP or such other independent certified public accountants of
recognized national standing selected by the Company, which opinion shall state
that such financial statements fairly present the financial position of the
Company and any subsidiaries on a consolidated basis and have been prepared in
accordance with GAAP consistently applied (except for changes in application in
which such accountants concur) and that the examination of such accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards, and accordingly included such tests of
the accounting records and such other auditing procedures as were considered
necessary in the circumstances.
(c) Other Reports - promptly upon their becoming available,
-------------
one copy of each financial statement, report, notice or proxy statement sent by
the Company to stockholders generally;
(d) Requested Information - with reasonable promptness, the
---------------------
Company shall furnish the Investors with such other data and information as
from time to time may be reasonably requested.
(e) Access to Data - The Investors shall be allowed
--------------
reasonable access to the Company's records, financial data and facilities and
they shall have the opportunity to discuss the Company's business, management
and financial affairs with the Company's management on a reasonable basis. The
Investors shall also have the right to ask questions of the Company's officers
on a reasonable basis and the Investors shall have the right to receive answers
to their satisfaction. As to so much of the information and other material
furnished pursuant to this subsection as constitutes or contains confidential
business, financial or other information of the Company or any subsidiary and
which is marked "Confidential" or which the Investors are notified is
confidential, each Investor, covenants for itself and its directors, officers
and partners that it will use due care to prevent its officers, directors,
partners, employees, counsel, accountants and other representatives from
disclosing such information to persons other than their respective authorized
employees, counsel, accountants, shareholders, partners, limited partners and
other authorized representatives; provided, however, that each Investor may
disclose or deliver any information or other material disclosed to or received
by it should the Investor be advised by its counsel that such disclosure or
delivery is required by law, regulation or judicial or administrative order.
For purposes of this Section 8.2, "due care" means at least the same level of
care that the Investor would use to protect the confidentiality of its own
sensitive or proprietary information, and this obligation shall survive
termination of this Agreement.
SECTION 10 REGISTRATION RIGHTS
-------------------
-14-
Investor shall have the following registration rights with respect to the
Shares purchased by it pursuant to this Agreement:
10.1 Required Registration
---------------------
The Company agrees to register the Shares together with the Common Stock
sold pursuant to the Company's Rights Offering (the "Rights Offering
Registration") or, in the alternative, the Company agrees to register all of
the Shares purchased hereunder pursuant to a registration statement on Form
S-3. In the event that the Shares are not registered in the Rights Offering
Registration, the Company undertakes to file a registration statement on Form
S-3 covering resale of the Shares (the "Shelf Registration") and to use its
best efforts to cause such registration statement to become effective within
ninety (90) days of Closing. The Company shall maintain the effectiveness of
the Rights Offering Registration or the Shelf Registration (which ever is
applicable) until such time as the investors have sold all of their Shares or
are able to sell their Shares under Rule 144 of the Securities Act without
limitation.
10.2 Lock-Up Agreement
-----------------
Investors agree not to sell, transfer or otherwise dispose of, directly
or indirectly, any of their Shares without the prior written consent of the
Company, until August 1, 1997, except pursuant to Section 7.2 hereof.
10.3 Registration Procedures
-----------------------
(a) With respect to the registration, qualification or compliance
effected by the Company subject to this Section 10, the Company shall keep
Investor advised in writing as to the initiation of such registration,
qualification and compliance and as to the completion thereof. In addition,
the Company shall at its own expense:
(i) prepare and file with the SEC such amendments and
supplements to such registration statement as may be necessary to keep such
registration, qualification or compliance effective and comply with provisions
of the Securities Act with respect to the disposition of all securities covered
thereby during such period;
(ii) update, correct, amend and supplement such
registration, qualification or compliance as necessary;
(iii) if such offering is to be underwritten, in whole or in
part, enter into a written agreement which is customary in form and substance
and reasonably satisfactory to the managing underwriter and the registering
Investor;
(iv) furnish such number of prospectuses, including
preliminary prospectuses, and other documents incident thereto as Investor may
reasonably request from time to time;
(v) register or qualify such Shares under such other
securities or blue sky laws of such jurisdictions of the United States
-15-
as Investor may reasonably request to enable it to consummate the disposition
in such jurisdiction of the Shares (provided that Company will not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this provision, or (ii) consent to
general service of process in any such jurisdiction) or otherwise take action
that would subject it to general jurisdiction of the courts of any jurisdiction
in which it is not so subject or (iii) subject itself to taxation in any
jurisdiction where it is not subject.
(vi) notify Investor at any time when a prospectus relating
to the Shares is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
any fact necessary to make the statement therein not misleading, and at the
request of Investor, the Company will prepare a supplement or amendment to such
prospectus, so that, as thereafter delivered to purchasers of such shares, such
prospectus will not contain any untrue statements of a material fact or omit to
state any fact necessary to make the statements therein not misleading;
(vii) cause all such Shares to be listed on each securities
exchange on which similar securities issued by the Company are then listed and
obtain all necessary approvals from The NASDAQ Stock Market for trading
thereon;
(viii) provide a transfer agent and registrar for all such
Shares not later than the effective date of such registration statement;
(ix) upon the sale of any Shares pursuant to such
registration statement, remove all restrictive legends from all certificates or
other instruments evidencing the Shares; and
(x) At any time when the registration statement effected
pursuant to this Section 10 is effective, upon written notice from the Company
to the Investor that the Company determines in the good faith judgment of the
Board of Directors or a committee of the Board of Directors of the Company,
with the advice of counsel, that the Investor's sale of the Shares pursuant to
the registration statement would require disclosure of non-public material
information the disclosure of which would have a material adverse effect on the
Company (an "Information Blackout"), the Investor shall suspend sales of the
Shares pursuant to such registration statement until the earlier of: (X) the
date upon which such material information is disclosed to the public or cease
to be material, or (Y) such time as the Company notifies the Investor that
sales pursuant to such registration statement be resumed, but in no event, in
either case, later than 5 days after the date of such notice.
(b) Notwithstanding anything herein to the contrary, except as
required by law, all expenses incurred by the Company in complying with this
Section 10, including but not limited to, all registration, qualification and
filing fees, printing expenses, fees and disbursements of counsel and
accountants for the Company, blue sky
-16-
fees and expenses (including fees and disbursements of counsel related to all
blue sky matters and the fees and expenses of legal counsel to the Investors)
("Registration Expenses") incurred in connection with any registration,
qualification or compliance pursuant to this Section 10 shall be borne by the
Company. All underwriting discounts and selling commissions applicable to a
sale or disposition of the Shares incurred in connection with any registration
of the Shares and all transfer taxes, if any, relating to the sale or
disposition of the Shares by the Investors shall be borne by the Investors.
10.4 Further Information
-------------------
If the Shares owned by a Investor are included in the registration, such
Investor shall furnish the Company such information regarding itself as the
Company may reasonably request and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement and
Investor shall indemnify the Company with respect thereto in accordance with
Section 10 hereof. Investors hereby represent and warrant to the Company that
it has accurately and completely provided the requested information, and
Investors agree and acknowledge that the Company may rely on such information
as being true and correct for purposes of preparing and filing the Shelf
Registration at the time of filing thereof and at the time it is declared
effective, unless Investors have notified the Company in writing to the
contrary prior to such time.
SECTION 11 INDEMNIFICATION
11.1 Indemnification Generally
-------------------------
The Company, on the one hand, and Investors, on the other hand (each an
"Indemnifying Party"), shall indemnify the other from and against any and all
losses, damages, liabilities, claims, charges, actions, proceedings, demands,
judgments, settlement costs and expenses of any nature whatsoever (including,
without limitation, attorneys' fees and expenses) or deficiencies resulting
from any breach of a representation, warranty or covenant by the Indemnifying
Party and all claims, charges, actions or proceedings incident to or arising
out of the foregoing.
11.2 Indemnification Relating to Registration Rights
-----------------------------------------------
(a) With respect to any registration, qualification or compliance
effected or to be effected pursuant to Section 10 of this Agreement, the
Company shall indemnify each Investor whose securities are included or are to
be included therein, each of such Investor's directors and officers, each
underwriter (as defined in the Securities Act) of the securities sold by such
Investor (if any), and each Person who controls (within the meaning of the
Securities Act) any such Investor or underwriter (a "Controlling Person") from
and against all losses, damages, liabilities, claims, charges, actions,
proceedings, demands, judgments, settlement costs and expenses of any nature
whatsoever (including, without limitation, reasonable attorneys' fees and
expenses) or deficiencies of any such Investor or any such underwriter or
Controlling Person concerning:
-17-
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance;
(ii) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statement
therein, in the light of the circumstances under which it was made, not
misleading; or
(iii) any violation by the Company of the Securities Act or
any rule or regulation promulgated thereunder applicable to the Company, or of
any blue sky or other state securities laws or any rule or regulation
promulgated thereunder applicable to the Company,
in each case, relating to any action or inaction required of the Company in
connection with any such registration, qualification or compliance, and subject
to Section 11 below will reimburse each such Person entitled to indemnity under
this Section 11 for all legal and other expenses reasonably incurred in
connection with investigating or defending any such loss, damage, liability,
claim, charge, action, proceeding, demand, judgment, settlement or deficiency;
provided, however, that, the foregoing indemnity and reimbursement
-------- -------
obligation shall not be applicable to the extent that any such matter arises
out of or is based on any untrue statement (or alleged untrue statement) or
omission (or alleged omission) made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Investor
or by or on behalf of such an underwriter specifically for use in such
prospectus, offering circular or other document.
(b) With respect to any registration, qualification or compliance
effected or to be effected pursuant to this Agreement, each Investor whose
securities are included or are to be included therein, shall indemnify the
Issuer from and against all losses, damages, liabilities, claims, charges,
actions, proceedings, demands, judgments, settlement costs and expenses of any
nature whatsoever (including, without limitation, reasonable attorneys' fees
and expenses) or deficiencies of the Company concerning:
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering, circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance;
(ii) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statement
therein, in the light of the circumstances under which it was made, not
misleading; or
(iii) any violation by such Investor of the Securities Act
or any rule or regulation promulgated thereunder applicable to the Company or
such Investor or of any blue sky or other
-18-
state securities laws or any rule or regulation promulgated thereunder
applicable to the Company or such Investor,
in each case, relating to any action or inaction required of such Investor in
connection with any such registration, qualification or compliance, and subject
to Section 11 below will reimburse the Company for all legal and other expenses
reasonably incurred in connection with investigating or defending any such
loss, damage, liability, claim, charge, action, proceeding, demand, judgment,
settlement or deficiency; provided, however, that, the foregoing
-------- ------- ----
indemnity and reimbursement obligation of the Investors shall only be
applicable to the extent that any such matter solely arises out of or is based
on any untrue statement (or alleged untrue statement) or omission (or alleged
omission) made in reliance upon and in conformity with written information
furnished to the Company by the Investor specifically for use in such
prospectus, offering circular or other document; and provided, further,
-------
however, that, the obligation of the Investor hereunder shall be
------- ----
limited to an amount equal to the proceeds to the Investor sold as contemplated
hereunder.
11.3 Indemnification Procedures
--------------------------
Each Person entitled to indemnification under this Section (an
"Indemnified Party") shall give notice as promptly as reasonably practicable to
each party required to provide indemnification under this Section (an
"Indemnifying Party") of any action commenced against or by it in respect of
which indemnity may be sought hereunder, but failure to so notify, an
Indemnifying Party shall not relieve such Indemnifying Party from any liability
that it may have otherwise than on account of this indemnity agreement so long
as such failure shall not have materially prejudiced the position of the
Indemnifying Party. Upon such notification, the Indemnifying Party shall
assume the defense of such action if it is a claim brought by a third party,
and after such assumption the Indemnifying Party shall not be entitled to
reimbursement of any expenses incurred by it in connection with such action
except as described below. In any such action, any Indemnified Party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
contrary or (ii) the named parties in any such action (including any impleaded
parties) include both the Indemnifying Party and the Indemnified Party and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing or conflicting interests between them. The
Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent (which shall not be unreasonably withheld
or delayed by such Indemnifying Party), but if settled with such consent or if
there be final judgment for the plaintiff, the Indemnifying Party shall
indemnify the Indemnified Party from and against any loss, damage or liability
by reason of such settlement or judgment.
-19-
SECTION 12 INTERPRETATION OF THIS AGREEMENT
--------------------------------
12.1 Terms Defined
-------------
As used in this Agreement, the following terms have the respective
meanings set forth below or set forth in the Section hereof following such
term:
Business Day: shall mean a day other than a Saturday, Sunday or
------------
other day on which banks in the State of New York are not required or
authorized to close.
Closing: shall mean the consummation of the purchase and sale of the
-------
Shares described in Section 2(a).
Common Stock: shall have the meaning set forth in Section 1.
------------
Exchange Act: shall mean the Securities Exchange Act of 1934.
------------
GAAP: shall have the meaning set forth in Section 3.3.
----
Governmental Authority: any nation or government, any state or other
----------------------
political subdivision thereof, and any entity or official exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
Person: shall mean an individual, partnership, corporation, trust or
------
unincorporated organization, and a government or agency or political
subdivision thereof.
Requirements of Law: means as to any Person, the articles of
-------------------
incorporation, bylaws or other organizational or governing documents of such
person, and any domestic or foreign and federal, state or local law, rule,
regulation, statute or ordinance or determination of any arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
property is subject.
SEC: shall mean the Securities and Exchange Commission.
---
Securities Act: shall mean the Securities Act of 1933, as amended.
--------------
Subsidiary: shall mean a corporation of which a Person owns,
----------
directly or indirectly, more than 50% of the Voting Stock.
Voting Stock: shall mean securities of any class or classes of a
------------
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
12.2 Directly or Indirectly
----------------------
Where any provision in this Agreement refers to action to be taken by any
Person, or which such Person is prohibited from taking,
-20-
such provision shall be applicable whether such action is taken directly or
indirectly by such Person.
12.3 Governing Law
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
12.4 Paragraph and Section Headings
------------------------------
The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof.
SECTION 13 MISCELLANEOUS
-------------
13.1 Notices
-------
(a) All communications under this Agreement shall be
in writing and shall be mailed by first class mail, postage
prepaid, or by overnight courier:
(i) if to the Investors, c/o Brahman Securities, Inc., 000
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, marked for attention of Mr.
Xxxxxx Xxxxx, or at such other address as the Investor may have furnished the
Company in writing, with a copy to Xxxxxx & Carnelutti, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attn: Xxxxxxx X. Xxxxx, Esq. or
(ii) if to the Company, at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, marked for the attention of the Chairman of the Board, or at such
other address as it may have furnished in writing to the Investor with a copy
to Battle Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxx
X. Xxxxxxxx, Esq.
(b) Any notice so addressed and mailed (i) by registered or
certified mail shall be deemed to be given on the third Business Day after the
date the same is so mailed or (ii) by courier shall be deemed to be given on
the date on which such notice is received.
13.2 Expenses
--------
The Company shall pay the fees and expenses of the Investors, including
the Investors' legal fees and expenses incurred in connection with the
preparation, execution and delivery of this Agreement and the transactions
contemplated hereby and the enforcement of any of the Investors' rights
hereunder.
13.3 Survival
--------
All warranties, representations, and covenants made by the Investor and
the Company herein or in any certificate or other instrument delivered by the
Investors or the Company under this Agreement shall be considered to have been
relied upon by the Company or the Investors, as the case may be, and shall
survive all deliveries to the Investors of the Shares, or payment to the
Company for such
-21-
Shares, regardless of any investigation made by the Company or the Investors,
as the case may be, or on the Company's or the Investors' behalf. All
statements in any such certificate or other instrument shall constitute
warranties and representation by the Company or the Investors, as the case may
be, hereunder.
13.4 Entire Agreement; Amendment and Waiver
--------------------------------------
This Agreement shall inure to the benefit of and shall be binding upon
the successors and assigns of each of the parties. This Agreement and the
agreements attached as Exhibits hereto constitute the entire understandings of
the parties hereto and supersede all prior agreements or understandings with
respect to the subject matter hereof between such parties. This Agreement may
be amended, and the observance of any term of this Agreement may be waived,
with (and only with) the written consent of the Company and the Investor.
13.5 Counterparts
------------
This Agreement may be executed in one or more counterparts with the same
effect as if the parties executing the counterparts had each executed one
instrument as of the day and year first above written.
-22-
13.6 Successors and Assigns
----------------------
This Agreement and all of the provisions hereof, including all of rights
of the Investors hereunder, shall inure to the benefit of the parties hereto
and their respective successors and assigns.
-23-
Very truly yours,
CHARTWELL LEISURE INC.
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
QUOTA FUND N.V. - "BRAHMAN"
By:__________________________
Name:
Title:
BRAHMAN PARTNERS II, L.P.
By: _________________________
Name:
Title:
GENESIS CAPITAL FUND - "BRAHMAN"
By:__________________________
Name:
Title:
B-Y PARTNERS, L.P.
By: _________________________
Name:
Title:
BRAHMAN INSTITUTIONAL PARTNERS, L.P.
By:__________________________
Name:
Title:
BRAHMAN PARTNERS II OFFSHORE, LTD.
By: _________________________
Name:
Title:
89247
-24-
Schedule 2
----------
Investors
---------
NUMBER OF PURCHASE
INVESTOR NAME SHARES PRICE
Quota Fund N.V. - "Brahman" 167,900 $ 2,350,600
Brahman Partners II, L.P. 204,500 2,863,000
Genesis Capital Fund - "Brahman" 19,600 274,400
B-Y Partners, L.P. 262,700 3,677,800
Brahman Institutional Partners, L.P. 253,400 3,547,600
Brahman Partners II Offshore, Ltd. 91,900 1,286,600
TOTAL 1,000,000 $14,000,000
--------- -----------
89247
-25-
Schedule 3.4
------------
Rights
(1) As of January 31, 1995, an aggregate of 3,000,000 shares of Common Stock
reserved for issuance under the Company's 1994 Stock Option Plan,
including 2,107,833 shares as to which options were then outstanding.
(2) As of January 31, 1996, 373,280 shares of Common Stock reserved for
issuance under HFS Incorporated's 1992 Incentive Stock Option Plan, as to
which 373,280 options were then outstanding.
(3) Chartwell Leisure Associates X.X. XX ("CL Associates") and FSNL LLC
("FSNL") pursuant to the Registration Rights Agreement, dated as of
August 8, 1996, between CL Associates, FSNL and Chartwell Leisure Inc.
-26-
Schedule 3.6
------------
Consents and Approvals
None.
-27-
