SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13D-2(A)
(AMENDMENT NO. 2)
CERES GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.001 PER SHARE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
156772105
- --------------------------------------------------------------------------------
(CUSIP Number)
International Managed Care, LLC
c/o Insurance Partners Advisors, L.P.
54 Thompson Street
New York, New York 10012
Attention: Mr. Bradley E. Cooper
(212) 898-8700
- --------------------------------------------------------------------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
January 3, 2000
- --------------------------------------------------------------------------------
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), (f) or (g), check the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 31 Pages)
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------- --------------------------------------------------
CUSIP No. 156772105 13D Page 2 of 31 Pages
- --------------------------------------------------------- --------------------------------------------------
- ---------- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
INTERNATIONAL MANAGED CARE, LLC
- ---------- ------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO - CONTRIBUTIONS FROM MEMBERS
- ---------- ------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- ---------- ------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------- --------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- --------------------------------------------------- --------- ---------------------------------------------------------------------
8 SHARED VOTING POWER
5,149,018 (1)
- --------------------------------------------------- --------- ---------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- --------------------------------------------------- --------- ---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,149,018 (1)
- --------------------------------------------------- --------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,149,018 (1)
- ---------- ------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES [ ]
NOT APPLICABLE
- ---------- ------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
34.1%
- ---------- ------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO-LIMITED LIABILITY COMPANY
- ---------- ------------------------------------------------------------------------------------------------------------------------
(1) INCLUDES WARRANTS TO ACQUIRE AN AGGREGATE OF 1,399,733 SHARES OF COMMON STOCK.
<PAGE>
- --------------------------------------------------------- --------------------------------------------------
CUSIP No. 156772105 13D Page 3 of 31 Pages
- --------------------------------------------------------- --------------------------------------------------
- ---------- ------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
INSURANCE PARTNERS, L.P.
- ---------- ------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO - CONTRIBUTIONS FROM PARTNERS
- ---------- ------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- ---------- ------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------- --------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- --------------------------------------------------- --------- ---------------------------------------------------------------------
8 SHARED VOTING POWER
5,149,018 (1)(2)
- --------------------------------------------------- --------- ---------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- --------------------------------------------------- --------- ---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,149,018 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,149,018 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES [ ]
NOT APPLICABLE
- ---------- ------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
34.1%
- ---------- ------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ---------- ------------------------------------------------------------------------------------------------------------------------
(1) SOLELY IN ITS CAPACITY AS SOLE MANAGING MEMBER OF INTERNATIONAL MANAGED
CARE, LLC.
(2) INCLUDES WARRANTS TO ACQUIRE AN AGGREGATE OF 1,399,733 SHARES OF COMMON
STOCK.
<PAGE>
- --------------------------------------------------------- --------------------------------------------------
CUSIP No. 156772105 13D Page 4 of 31 Pages
- --------------------------------------------------------- --------------------------------------------------
- ---------- ------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
INSURANCE GENPAR, L.P.
- ---------- ------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO - CONTRIBUTIONS FROM PARTNERS
- ---------- ------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- ---------- ------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------- --------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- --------------------------------------------------- --------- ---------------------------------------------------------------------
8 SHARED VOTING POWER
5,149,018 (1)(2)
- --------------------------------------------------- --------- ---------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- --------------------------------------------------- --------- ---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,149,018 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,149,018 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 [ ]
EXCLUDES CERTAIN SHARES
NOT APPLICABLE
- ---------- ------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
34.1%
- ---------- ------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ---------- ------------------------------------------------------------------------------------------------------------------------
(1) SOLELY IN ITS CAPACITY AS SOLE GENERAL PARTNER OF INSURANCE PARTNERS,
L.P., WHICH IS THE MANAGING MEMBER OF INTERNATIONA MANAGED CARE, LLC.
(2) INCLUDES WARRANTS TO ACQUIRE AN AGGREGATE OF 1,399,733 SHARES OF COMMON
STOCK.
<PAGE>
- --------------------------------------------------------- --------------------------------------------------
CUSIP No. 156772105 13D Page 5 of 31 Pages
- --------------------------------------------------------- --------------------------------------------------
- ---------- ------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
INSURANCE GENPAR MGP, L.P.
- ---------- ------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO - CONTRIBUTIONS FROM PARTNERS
- ---------- ------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- ---------- ------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------- --------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- --------------------------------------------------- --------- ---------------------------------------------------------------------
8 SHARED VOTING POWER
5,149,018 (1)(2)
- --------------------------------------------------- --------- ---------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- --------------------------------------------------- --------- ---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,149,018 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,149,018 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES [ ]
NOT APPLICABLE
- ---------- ------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
34.1%
- ---------- ------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ---------- ------------------------------------------------------------------------------------------------------------------------
(1) SOLELY IN ITS CAPACITY AS SOLE GENERAL PARTNER OF INSURANCE GENPAR,
L.P., WHICH IS THE SOLE GENERAL PARTNER OF INSURANCE PARTNERS, L.P.,
WHICH IS THE MANAGING MEMBER OF INTERNATIONAL MANAGED CARE, LLC.
(2) INCLUDES WARRANTS TO ACQUIRE AN AGGREGATE OF 1,399,733 SHARES OF COMMON
STOCK.
<PAGE>
- --------------------------------------------------------- --------------------------------------------------
CUSIP No. 156772105 13D Page 6 of 31 Pages
- --------------------------------------------------------- --------------------------------------------------
- ---------- ------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
INSURANCE GENPAR MGP, INC.
- ---------- ------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO - CONTRIBUTIONS FROM STOCKHOLDERS
- ---------- ------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- ---------- ------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------- --------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- --------------------------------------------------- --------- ---------------------------------------------------------------------
8 SHARED VOTING POWER
5,149,018 (1)(2)
- --------------------------------------------------- --------- ---------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- --------------------------------------------------- --------- ---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,149,018 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,149,018 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES [ ]
NOT APPLICABLE
- ---------- ------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
34.1%
- ---------- ------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- ---------- ------------------------------------------------------------------------------------------------------------------------
(1) SOLELY IN ITS CAPACITY AS SOLE GENERAL PARTNER OF INSURANCE GENPAR MGP,
L.P., WHICH IS THE SOLE GENERAL PARTNER OF INSURANCE GENPAR, L.P.,
WHICH IS THE SOLE GENERAL PARTNER OF INSURANCE PARTNERS, L.P., WHICH IS
THE MANAGING MEMBER OF INTERNATIONAL MANAGED CARE, LLC.
(2) INCLUDES WARRANTS TO ACQUIRE AN AGGREGATE OF 1,399,733 SHARES OF COMMON
STOCK.
<PAGE>
- --------------------------------------------------------- --------------------------------------------------
CUSIP No. 156772105 13D Page 7 of 31 Pages
- --------------------------------------------------------- --------------------------------------------------
- ---------- ------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
INTERNATIONAL MANAGED CARE (BERMUDA), L.P.
- ---------- ------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO -CONTRIBUTIONS FROM PARTNERS
- ---------- ------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- ---------- ------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
BERMUDA
- --------------------------------------------------- --------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- --------------------------------------------------- --------- ---------------------------------------------------------------------
8 SHARED VOTING POWER
2,599,166 (1)
- --------------------------------------------------- --------- ---------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- --------------------------------------------------- --------- ---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,599,166 (1)
- ---------- ------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,599,166 (1)
- ---------- ------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES [ ]
NOT APPLICABLE
- ---------- ------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
18.0%
- ---------- ------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ---------- ------------------------------------------------------------------------------------------------------------------------
(1) INCLUDES WARRANTS TO ACQUIRE AN AGGREGATE OF 772,995 SHARES OF COMMON
STOCK.
<PAGE>
- --------------------------------------------------------- --------------------------------------------------
CUSIP No. 156772105 13D Page 8 of 31 Pages
- --------------------------------------------------------- --------------------------------------------------
- ---------- ------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
INSURANCE PARTNERS OFFSHORE (BERMUDA), L.P.
- ---------- ------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO - CONTRIBUTIONS FROM PARTNERS
- ---------- ------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- ---------- ------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
BERMUDA
- --------------------------------------------------- --------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- --------------------------------------------------- --------- ---------------------------------------------------------------------
8 SHARED VOTING POWER
2,599,166 (1)(2)
- --------------------------------------------------- --------- ---------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- --------------------------------------------------- --------- ---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,599,166 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,599,166 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES [ ]
NOT APPLICABLE
- ---------- ------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
18.0%
- ---------- ------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ---------- ------------------------------------------------------------------------------------------------------------------------
(1) SOLELY IN ITS CAPACITY AS SOLE GENERAL PARTNER OF INTERNATIONAL MANAGED
CARE (BERMUDA), L.P.
(2) INCLUDES WARRANTS TO ACQUIRE AN AGGREGATE OF 772,995 SHARES OF COMMON
STOCK.
<PAGE>
- --------------------------------------------------------- --------------------------------------------------
CUSIP No. 156772105 13D Page 9 of 31 Pages
- --------------------------------------------------------- --------------------------------------------------
- ---------- ------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
INSURANCE GENPAR (BERMUDA), L.P.
- ---------- ------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO - CONTRIBUTIONS FROM PARTNERS
- ---------- ------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- ---------- ------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
BERMUDA
- --------------------------------------------------- --------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- --------------------------------------------------- --------- ---------------------------------------------------------------------
8 SHARED VOTING POWER
2,599,166 (1)(2)
- --------------------------------------------------- --------- ---------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- --------------------------------------------------- --------- ---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,599,166 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,599,166 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES [ ]
NOT APPLICABLE
- ---------- ------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
18.0%
- ---------- ------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ---------- ------------------------------------------------------------------------------------------------------------------------
(1) SOLELY IN ITS CAPACITY AS SOLE GENERAL PARTNER OF INSURANCE PARTNERS
OFFSHORE (BERMUDA), L.P., WHICH IS THE SOLE GENERAL PARTNER OF
INTERNATIONAL MANAGED CARE (BERMUDA), L.P.
(2) INCLUDES WARRANTS TO ACQUIRE AN AGGREGATE OF 772,995 SHARES OF COMMON
STOCK.
<PAGE>
- --------------------------------------------------------- --------------------------------------------------
CUSIP No. 156772105 13D Page 10 of 31 Pages
- --------------------------------------------------------- --------------------------------------------------
- ---------- ------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
INSURANCE GENPAR (BERMUDA) MGP, L.P.
- ---------- ------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO - CONTRIBUTIONS FROM PARTNERS
- ---------- ------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- ---------- ------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
BERMUDA
- --------------------------------------------------- --------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- --------------------------------------------------- --------- ---------------------------------------------------------------------
8 SHARED VOTING POWER
2,599,166 (1)(2)
- --------------------------------------------------- --------- ---------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- --------------------------------------------------- --------- ---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,599,166 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,599,166 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES [ ]
NOT APPLICABLE
- ---------- ------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
18.0%
- ---------- ------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ---------- ------------------------------------------------------------------------------------------------------------------------
(1) SOLELY IN ITS CAPACITY AS SOLE GENERAL PARTNER OF INSURANCE GENPAR
(BERMUDA), L.P., WHICH IS THE SOLE GENERAL PARTNER OF INSURANCE
PARTNERS OFFSHORE (BERMUDA), L.P., WHICH IS THE SOLE GENERAL PARTNER OF
INTERNATIONAL MANAGED CARE (BERMUDA), L.P.
(2) INCLUDES WARRANTS TO ACQUIRE AN AGGREGATE OF 772,995 SHARES OF COMMON
STOCK.
<PAGE>
- --------------------------------------------------------- --------------------------------------------------
CUSIP No. 156772105 13D Page 11 of 31 Pages
- --------------------------------------------------------- --------------------------------------------------
- ---------- ------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
INSURANCE GENPAR (BERMUDA) MGP, LTD.
- ---------- ------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- ---------- ------------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ------------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO - CONTRIBUTIONS FROM SHAREHOLDERS
- ---------- ------------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- ---------- ------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
BERMUDA
- --------------------------------------------------- --------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- --------------------------------------------------- --------- ---------------------------------------------------------------------
8 SHARED VOTING POWER
2,599,166 (1)(2)
- --------------------------------------------------- --------- ---------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- --------------------------------------------------- --------- ---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,599,166 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,599,166 (1)(2)
- ---------- ------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES [ ]
NOT APPLICABLE
- ---------- ------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
18.0%
- ---------- ------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- ---------- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) SOLELY IN ITS CAPACITY AS SOLE GENERAL PARTNER OF INSURANCE GENPAR
(BERMUDA) MGP, L.P., WHICH IS THE SOLE GENERAL PARTNER OF INSURANCE
GENPAR (BERMUDA), L.P., WHICH IS THE SOLE GENERAL PARTNER OF INSURANCE
PARTNERS OFFSHORE (BERMUDA), L.P., WHICH IS THE SOLE GENERAL PARTNER OF
INTERNATIONAL MANAGED CARE (BERMUDA), L.P.
(2) INCLUDES WARRANTS TO ACQUIRE AN AGGREGATE OF 772,995 SHARES OF COMMON
STOCK.
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This Amendment No. 2 to Schedule 13D (this "Statement") amends and
supplements the Statement on Schedule 13D initially filed with the Securities
and Exchange Commission on July 14, 1998, as amended by Amendment No. 1 filed on
March 1, 1999, with respect to the common stock, par value $0.001 per share (the
"Common Stock") of Ceres Group, Inc., formerly known as Central Reserve Life
Corporation (the "Company"), and is being filed pursuant to Rule 13d-1 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The address of
the principal executive offices of the Company are located at 17800 Royalton
Road, Strongsville, Ohio 44136.
ITEM 2. IDENTITY AND BACKGROUND.
(a) Name of Persons Filing this Statement:
This Statement is filed by (i) International Managed Care,
LLC, a Delaware limited liability company ("IMC Delaware"), (ii) Insurance
Partners, L.P., a Delaware limited partnership ("IP Delaware"), (iii) Insurance
GenPar, L.P., a Delaware limited partnership ("Insurance GenPar"), (iv)
Insurance GenPar MGP, L.P., a Delaware limited partnership ("IMGPLP"), (v)
Insurance GenPar MGP, Inc., a Delaware corporation ("IMGPI"), (vi) International
Managed Care Bermuda, L.P., a Bermuda limited partnership ("IMC Bermuda"), (vii)
Insurance Partners Offshore (Bermuda), L.P., a Bermuda limited partnership ("IP
Bermuda"), (viii) Insurance GenPar (Bermuda), L.P., a Bermuda limited
partnership ("Insurance GenPar Bermuda"), (xi) Insurance GenPar (Bermuda) MGP,
L.P., a Bermuda limited partnership ("IBMGPLP"), and (x) Insurance GenPar
(Bermuda) MGP, Ltd., a Bermuda corporation ("IBMGPI"). IMC Delaware, IP
Delaware, Insurance GenPar, IMGPLP, IMGPI, IMC Bermuda, IP Bermuda, Insurance
GenPar Bermuda, IBMGPLP, and IBMGPI are sometimes hereinafter collectively
referred to as the "Reporting Persons." The Reporting Persons are making this
single, joint filing because they may be deemed to constitute a "group" within
the meaning of Section 13(d)(3) of the Exchange Act, although neither the fact
of this filing nor anything contained herein shall be deemed an admission by the
Reporting Persons that a group exists.
(b)-(c) Residence or Business Address and Present Principal
Occupation:
IMC DELAWARE
IMC Delaware is a Delaware limited liability company,
formed to invest in securities of insurance entities to be selected by its
investment committee. The principal business address of IMC Delaware, which also
serves as its principal office, is c/o Insurance Partners, L.P., 54 Thompson
Street, New York, New York 10012. Pursuant to Instruction C to Schedule 13D of
the Exchange Act, information with respect to IP Delaware, the sole managing
member of IMC Delaware, is set forth below.
12
<PAGE>
IP DELAWARE
IP Delaware is a Delaware limited partnership, formed to
invest in securities of insurance entities to be selected by its investment
committee. The principal business address of IP Delaware, which also serves as
its principal office, is 201 Main Street, Fort Worth, Texas 76102. Pursuant to
Instruction C to Schedule 13D of the Exchange Act, information with respect to
Insurance GenPar, the sole general partner of IP Delaware, is set forth below.
INSURANCE GENPAR
Insurance GenPar is a Delaware limited partnership, the
principal business of which is serving as the sole general partner of IP
Delaware. The principal business address of Insurance GenPar, which also serves
as its principal office, is 201 Main Street, Fort Worth, Texas 76102. Pursuant
to Instruction C to Schedule 13D of the Exchange Act, information with respect
to IMGPLP, the sole general partner of Insurance GenPar, is set forth below.
IMGPLP
IMGPLP is a Delaware limited partnership, the principal
business of which is serving as the sole general partner of Insurance GenPar.
The principal business address of IMGPLP, which also serves as its principal
office, is 201 Main Street, Fort Worth, Texas 76102. Pursuant to Instruction C
to Schedule 13D of the Exchange Act, information with respect to IMGPI, the sole
general partner of IMGPLP, is set forth below.
IMGPI
IMGPI is a Delaware corporation, the principal business of
which is serving as the sole general partner of IMGPLP. The principal business
address of IMGPI, which also serves as its principal office, is 201 Main Street,
Fort Worth, Texas 76102. Pursuant to Instruction C to Schedule 13D of the
Exchange Act, the name, residence or business address, and present occupation or
employment of each director, executive officer, and controlling person of IMGPI,
are as follows:
13
<PAGE>
<TABLE>
<CAPTION>
Residence or Principal Occupation
Name Business Address or Employment
---- ---------------- -------------
<S> <C> <C>
Robert A. Spass 54 Thompson Street Managing Partner of Insurance Partners Advisors,
New York, NY 10012 L.P.
Daniel L. Doctoroff 65 East 55th Street Managing Partner of Insurance Partners Advisors,
New York, NY 10022 L.P.
Steven B. Gruber 65 East 55th Street Managing Partner of Insurance Partners Advisors,
New York, NY 10022 L.P.
</TABLE>
Insurance Partners Advisors, L.P. is a Delaware limited
partnership, the principal business of which is performing investment banking
services for IP Delaware, IP Bermuda, and their portfolio companies. The
principal business address of Insurance Partners Advisors, L.P., is 54 Thompson
Street, New York, New York 10012.
IMC BERMUDA
IMC Bermuda is a Bermuda limited partnership, formed to
invest in securities of insurance entities to be selected by its investment
committee. The principal business address of IP Bermuda, which also serves as
its principal office, is c/o Insurance Partners Offshore (Bermuda), L.P., Cedar
House, 41 Cedar Avenue, P.O. Box HM 1179, Hamilton, HM EX, Bermuda. Pursuant to
Instruction C to Schedule 13D of the Exchange Act, information with respect to
IP Bermuda, the sole general partner of IMC Bermuda, is set forth below.
IP BERMUDA
IP Bermuda is a Bermuda limited partnership, formed to
invest in securities of insurance entities to be selected by its investment
committee. The principal business address of IP Bermuda, which also serves as
its principal office, is Cedar House, 41 Cedar Avenue, P.O. Box HM 1179,
Hamilton, HM EX, Bermuda. Pursuant to Instruction C to Schedule 13D of the
Exchange Act, information with respect to Insurance GenPar Bermuda, the sole
general partner of IP Bermuda, is set forth below.
INSURANCE GENPAR BERMUDA
Insurance GenPar Bermuda is a Bermuda limited partnership,
the principal business of which is serving as the sole general partner of IP
Bermuda. The principal business address of Insurance GenPar Bermuda, which also
serves as its principal office, is Cedar House, 41 Cedar Avenue, P.O. Box HM
1179, Hamilton, HM EX, Bermuda. Pursuant to Instruction C to Schedule 13D of the
14
<PAGE>
Exchange Act, information with respect to IBMGPLP, the sole general partner of
Insurance GenPar Bermuda, is set forth below.
IBMGPLP
IBMGPLP is a Bermuda limited partnership, the principal
business of which is serving as the sole general partner of Insurance GenPar
Bermuda. The principal business address of IBMGPLP, which also serves as its
principal office, is Cedar House, 41 Cedar Avenue, P.O. Box HM 1179, Hamilton,
HM EX, Bermuda. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to IBMGPI, the sole general partner of IBMGPLP, is set
forth below.
IBMGPI
IBMGPI is a Bermuda corporation, the principal business of
which is serving as the sole general partner of IBMGPLP. The principal business
address of IBMGPI, which also serves as its principal office, is Cedar House, 41
Cedar Avenue, P.O. Box HM 1179, Hamilton, HM EX, Bermuda. Pursuant to
Instruction C to Schedule 13D of the Exchange Act, the name, residence or
business address, and present occupation or employment of each director,
executive officer, and controlling person of IMGPI, are as follows:
<TABLE>
<CAPTION>
Residence or Principal Occupation
Name Business Address or Employment
---- ---------------- -------------
<S> <C> <C>
Robert A. Spass See above See above
Daniel L. Doctoroff See above See above
Steven B. Gruber See above See above
Kenneth E.T. Robinson Appleby, Spurling & Kempe Attorney
41 Cedar Avenue
Hamilton, HM 12, Bermuda
Jill Virgil-Smith Appleby, Spurling & Kempe Attorney
41 Cedar Avenue
Hamilton, HM 12, Bermuda
</TABLE>
Appleby, Spurling & Kempe is a law firm based in Bermuda. Its
principal business address is 41 Cedar Avenue, Hamilton, HM 12, Bermuda.
(d) Convictions in Criminal Proceedings During the Last 5
Years:
None of the entities or persons identified in this Item 2
has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
15
<PAGE>
(e) Proceedings Involving Federal or State Securities Laws:
None of the entities or persons identified in this Item 2
has, during the last five years, been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree, or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
(f) Citizenship:
All of the natural persons identified in this Item 2 are
citizens of the United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As more fully described in Item 6 below, IP Delaware contributed
3,749,285 shares of Common Stock and warrants to purchase 1,399,733 shares of
Common Stock to IMC Delaware and IP Bermuda contributed 1,826,171 shares of
Common Stock and warrants to purchase 772,995 shares of Common Stock to IMC
Bermuda. Such contributions were consummated on January 3, 2000. Both IMC
Delaware and IMC Bermuda used contributions from their respective partners to
fund such contributions.
ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons consummated the transaction described herein in
order to acquire a significant interest in the Company and for investment
purposes. The Reporting Persons intend to review continuously their position in
the Company. Depending upon future evaluations of the business prospects of the
Company and upon other developments, including, without limitation, general
economic and business conditions and stock market conditions, each of the
Reporting Persons may retain or from time to time dispose of all or a portion of
its holdings, subject to any applicable legal and contractual restrictions on
its ability to do so, including, without limitation, any restrictions set forth
in the Stockholders Agreement described in Item 6 below, the Voting Agreement
described in Item 6 below, the Amended and Restated Articles of Incorporation of
the Company, and the Code of Regulations of the Company.
In addition, the matters set forth in Item 6 below are
incorporated in this Item 4 by reference as if fully set forth herein.
As part of the contributions, each of IMC Delaware and IMC Bermuda
acquired warrants to acquire additional shares of Common Stock (as described in
Item 3 above) and will likely exercise their respective warrants in the future.
Except as set forth in this Item 4, the Reporting Persons have no present plans
16
<PAGE>
or proposals that relate to or that would result in any of the actions specified
in clauses (a) through (j) of Item 4 of Schedule 13D of the Exchange Act.
ITEM 5. INTEREST IN SECURITIES OF ISSUER.
(a) According to the most recently available filing with
the Securities and Exchange Commission by the Issuer and information known to
the Reporting Persons, there are 13,687,727 shares of Common Stock outstanding.
If IMC Delaware's warrant to acquire 1,399,733 shares of Common Stock were
exercised, 15,087,460 shares would be outstanding. If IMC Bermuda's warrant to
acquire 772,995 shares of Common Stock were exercised, 14,460,722 shares of
Common Stock would be outstanding. If both warrants were exercised, 15,860,455
shares of Common Stock would be outstanding.
IMC DELAWARE
IMC Delaware may, pursuant to Rule 13d-3 of the Exchange
Act, be deemed to be the beneficial owner of 5,149,018 shares of Common Stock,
which constitutes approximately 34.1% of the 15,087,460 shares of Common Stock
deemed outstanding pursuant to Rule 13d-3(d)(1)(i) of the Exchange Act.
IP DELAWARE
In its capacity as the managing member of IMC Delaware, IP
Delaware may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the
beneficial owner of 5,149,018 shares of Common Stock, which constitutes
approximately 34.1% of the 15,087,460 shares of Common Stock deemed outstanding
pursuant to Rule 13d-3(d)(1)(i) of the Exchange Act.
INSURANCE GENPAR
In its capacity as the sole general partner of IP Delaware,
which is the managing member of IMC Delaware, Insurance GenPar may, pursuant to
Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of
5,149,018 shares of Common Stock, which constitutes approximately 34.1% of the
15,087,460 shares of Common Stock deemed outstanding pursuant to Rule
13d-3(d)(1)(i) of the Exchange Act.
IMGPLP
In its capacity as the sole general partner of Insurance
GenPar, which is the sole general partner of IP Delaware, which is the managing
member of IMC Delaware, IMGPLP may, pursuant to Rule 13d-3 of the Exchange Act,
be deemed to be the beneficial owner of 5,149,018 shares of Common Stock, which
constitutes approximately 34.1% of the 15,087,460 shares of Common Stock deemed
outstanding pursuant to Rule 13d-3(d)(1)(i) of the Exchange Act.
17
<PAGE>
IMGPI
In its capacity as the sole general partner of IMGPLP,
which is the sole general partner of Insurance GenPar, which is the sole general
partner of IP Delaware, which is the managing member of IMC Delaware, IMGPI may,
pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner
of 5,149,018 shares of Common Stock, which constitutes approximately 34.1% of
the 15,087,460 shares of Common Stock deemed outstanding pursuant to Rule
13d-3(d)(1)(i) of the Exchange Act.
IMC BERMUDA
IMC Bermuda may, pursuant to Rule 13d-3 of the Exchange
Act, be deemed to be the beneficial owner of 2,599,166 shares of Common Stock,
which constitutes approximately 18.0% of the 14,460,722 shares of Common Stock
deemed outstanding pursuant to Rule 13d(d)(1)(i) of the Exchange Act.
IP BERMUDA
In its capacity as the sole general partner of IMC Bermuda,
IP Bermuda may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the
beneficial owner of 2,599,166 shares of Common Stock, which constitutes
approximately 18.0% of the 14,460,722 shares of Common Stock deemed outstanding
pursuant to Rule 13d(d)(1)(i) of the Exchange Act.
INSURANCE GENPAR BERMUDA
In its capacity as the sole general partner of IP Bermuda,
which is the sole general partner of IMC Bermuda, Insurance GenPar Bermuda may,
pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner
of 2,599,166 shares of Common Stock, which constitutes approximately 18.0% of
the 14,460,722 shares of Common Stock deemed outstanding pursuant to Rule
13d(d)(1)(i) of the Exchange Act.
IBMGPLP
In its capacity as the sole general partner of Insurance
GenPar Bermuda, which is the sole general partner of IP Bermuda, which is the
sole general partner of IMC Bermuda, IBMGPLP may, pursuant to Rule 13d-3 of the
Exchange Act, be deemed to be the beneficial owner of 2,599,166 shares of Common
Stock, which constitutes approximately 18.0% of the 14,460,722 shares of Common
Stock deemed outstanding pursuant to Rule 13d(d)(1)(i) of the Exchange Act.
IBMGPI
In its capacity as the sole general partner of IBMGPLP,
which is the sole general partner of Insurance GenPar Bermuda, which is the sole
general partner of IP Bermuda, which is the sole general partner of IMC Bermuda,
18
<PAGE>
IBMGPI may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the
beneficial owner of 2,599,166 shares of Common Stock, which constitutes
approximately 18.0% of the 14,460,722 shares of Common Stock deemed outstanding
pursuant to Rule 13d(d)(1)(i) of the Exchange Act.
The Reporting Persons may be deemed to beneficially own as
part of a group (as used in Section 13(d)(3) of the Exchange Act) 7,748,184
shares of Common Stock, which constitutes approximately 48.9% of the shares of
Common Stock deemed outstanding pursuant to Rule 13d-3(d)(1)(i) of the Exchange
Act.
Because each of IMC Delaware and IMC Bermuda is a party to
the Voting Agreement dated July 1, 1998 by and among the Company and the
securityholders listed on the signature pages thereof (which is incorporated
herein by reference to Exhibit 1 of the Company's Schedule 13D Statement dated
July 14, 1998), it may be deemed to beneficially own as part of a group (as used
in Section 13(d)(3) of the Exchange Act), 14,687,076* shares of Common Stock,
which constitutes approximately 79.4% of the shares of Common stock deemed
- ----------------------------
* Includes 3,749,285 shares of Common Stock and warrants to acquire 1,399,733
shares of Common Stock (which are immediately exercisable) owned by IMC
Delaware. Includes 1,826,171 shares of Common Stock and warrants to acquire
772,995 shares of Common Stock (which are immediately exercisable) owned by IMC
Bermuda. Also includes the following beneficially owned shares (collectively,
the "Disclaimed Shares"), (i) 1,204,744 shares of Common Stock, warrants (which
are immediately exercisable) to acquire 532,781 shares of Common Stock,
guarantee warrants (which are immediately exercisable) to acquire 500,000 shares
of Common Stock and options (which are immediately exercisable) to acquire
250,000 shares of Common Stock owned by Peter W. Nauert; (ii) 985,933 shares of
Common Stock, warrants (which are immediately exercisable) to acquire 360,455
shares of Common Stock and guarantee warrants (which are immediately
exercisable) to acquire 300,000 shares of Common Stock owned by Richard M.
Osborne, as Manager of Turkey Vulture Fund XIIII, Ltd.; (iii) 480,009 shares of
Common Stock and warrants (which are immediately exercisable) to acquire 181,818
shares of Common Stock owned by Medical Mutual of Ohio; (iv) 400,000 shares of
Common Stock owned by Lunn-Ceres, LLC; (v) 240,003 shares of Common Stock and
warrants (which are immediately exercisable) to acquire 90,909 shares of Common
Stock owned by LEG Partners SBIC, L.P.; (vi) 231,818 shares of Common Stock and
warrants (which are immediately exercisable) to acquire 90,909 shares of Common
Stock owned by Michael A. Cavataio; (vii) 122,885 shares of Common Stock,
warrants (which are immediately exercisable) to acquire 50,737 shares of Common
Stock, guarantee warrants (which are immediately exercisable) to acquire 100,000
shares of Common Stock and options (which are immediately exercisable) to
acquire 25,000 shares of Common Stock owned by Billy B. Hill, Jr.; (viii)
154,279 shares of Common Stock and options (which are immediately exercisable)
to acquire 75,000 shares of Common Stock owned by Val Rajic; (ix) 90,909 shares
of Common Stock and warrants (which are immediately exercisable) to acquire
45,455 shares of Common Stock owned by Howard R. Conant; (x) 90,909 shares of
Common Stock and warrants (which are immediately exercisable) to acquire 45,454
shares of Common Stock owned by Joseph Cusimano IRA; (xi) 90,875 shares of
Common Stock owned by Glen A. Laffoon; (xii) 7,177 shares of Common Stock,
warrants (which are immediately exercisable) to acquire 2,968 shares of Common
Stock and options (which are immediately exercisable) to acquire 40,000 shares
of Common Stock owned by Charles E. Miller, Jr.; (xiii) 25,000 shares of Common
Stock owned by Sally J. Krogh; (xiv) 25,000 shares of Common Stock owned by
Kenneth A. Mannino; (xv) 16,987 shares of Common Stock and warrants (which are
immediately exercisable) to acquire 7,124 shares of Common Stock owned by Bruce
(Continued...)
19
<PAGE>
outstanding pursuant to Rule 13d-3(a)(1)(i) of the Exchange Act. Each of IMC
Delaware and IMC Bermuda disclaims beneficial ownership of all of the Disclaimed
Shares as defined in the footnote below.
(b) Of the 7,748,184 shares of Common Stock which each of
the Reporting Persons may, pursuant to Rule 13d-3 of the Exchange Act, be deemed
to be the beneficial owner, each of the Reporting Persons has sole voting and
dispositive power in respect of none of such shares and shared voting and
dispositive power in respect of all such shares.
(c) Except as set forth herein or in the Exhibits filed
herewith, none of the Reporting Persons has effected any transactions in shares
of Common Stock during the past 60 days.
(d) Each of the Reporting Persons affirms that no person
other than such Reporting Person has the right to receive or the power to direct
the receipt of dividends from, or the proceeds from the sale of, the shares of
Common Stock owned by such Reporting Person.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Pursuant to the Contribution and Amendment Agreement dated as of
February 16, 1999 (the "IMC Delaware Contribution Agreement"), by and among IP
Delaware, International Managed Care Co-Investment, LLC ("IMCCI"), Peter Small,
Robert Morrison and Mark H. Tabak, IP Delaware agreed to contribute to IMC
Delaware, an aggregate of 3,749,285 shares of Common Stock and warrants to
purchase an aggregate of 1,399,733 shares of Common Stock. A copy of the IMC
- ----------------------------
Henry; (xvi) 13,082 shares of Common Stock and warrants (which are immediately
exercisable) to acquire 8,048 shares of Common Stock owned by Ralph Alexander;
(xvii) 9,000 shares of Common Stock and warrants (which are immediately
exercisable) to acquire 2,639 shares of Common Stock owned by Anthony Pino;
(xviii) 6,967 shares of Common Stock and warrants (which are immediately
exercisable) to acquire 2,273 shares of Common Stock owned by Marc C. Krantz;
(xix) 5,965 shares of Common Stock and warrants (which are immediately
exercisable) to acquire 2,272 shares of Common Stock owned by the Krantz Family
Limited Partnership; (xx) 6,000 shares of Common Stock owned by John Cochrane;
(xxi) 4,069 shares of Common Stock and warrants (which are immediately
exercisable) to acquire 1,319 shares of Common Stock owned by Richard Kusnic;
(xxii) 4,000 shares of Common Stock owned by Andrew A. Boemi; (xxiii) 2,783
shares of Common Stock and warrants (which are immediately exercisable) to
acquire 132 shares of Common Stock owned by Ronald Kolowski; (xxiv) 2,226 shares
of Common Stock and warrants (which are immediately exercisable) to acquire
1,319 shares of Common Stock owned by John Kertis; and (xxv) 1,000 shares of
Common Stock and warrants (which are immediately exercisable) to acquire 660
shares of Common Stock owned by George Gehringer.
20
<PAGE>
Delaware Contribution Agreement is attached hereto as Exhibit 1. Pursuant to the
Contribution and Amendment Agreement dated as of February 16, 1999 (the "IMC
Bermuda Contribution Agreement"), by and among IP Bermuda, IMCCI, Peter Small,
Robert Morrison and Mark H. Tabak, IP Bermuda agreed to contribute to IMC
Bermuda, an aggregate of 1,826,171 shares of Common Stock and warrants to
purchase an aggregate of 772,995 share of Common Stock. A copy of the IMC
Bermuda Contribution Agreement is attached hereto as Exhibit 2. The IMC Delaware
Contribution Agreement and the IMC Bermuda Contribution Agreement are sometimes
collectively referred to herein as the "IMC Contribution Agreements."
In connection with a Joinder Agreement dated as of January 3, 2000
(the "IMC Delaware Joinder Agreement"), between the Company and IMC Delaware, a
copy of which is attached hereto as Exhibit 3, and a Joinder Agreement dated as
of January 3, 2000 between the Company and IMC Bermuda, a copy of which is
attached hereto as Exhibit 4 (the "IMC Bermuda Joinder Agreement" and together
with the IMC Delaware Joinder Agreement, the "IMC Joinder Agreements"), IMC
Delaware and IMC Bermuda became parties to the Registration Rights Agreement
dated as of July 1, 1998 (the "Registration Rights Agreement") among the Company
and the persons signatory thereto as amended by Amendment No. 1 to Registration
Rights Agreement, dated February 16, 1999. The description of the Registration
Rights Agreement that follows is not, and does not purport to be, complete and
is qualified in its entirety by reference to the Registration Rights Agreement,
which is incorporated herein by reference to Exhibit 2 to the Company's Schedule
13D Statement dated July 14, 1998 and Amendment No. 1 to Registration Rights
Agreement which is incorporated herein by reference to Exhibit 7.3 of the
Company's Amendment to Schedule 13D Statement dated February 17, 1999.
Pursuant to the Registration Rights Agreement, as amended, the
parties thereto, who are holders of at least $5,000,000 of the then current
market value of the outstanding Common Stock, have the right, subject to certain
limitations set forth in the Registration Rights Agreement, to request that the
Company at any time register under the Securities Act of 1933, as amended (the
"Securities Act"), at the Company's expense, all or any part of the shares of
Common Stock owned by such parties (a "Demand Registration"). The Company has
agreed to pay for all registration expenses for (i) two Demand Registrations
initiated by IP Delaware, (ii) one Demand Registration initiated by the Fund,
and (ii) one Demand Registration initiated by SAP. Each of the parties to the
Registration Rights Agreement has certain piggyback registration rights in
connection with registrations by the Company under the Securities Act.
In connection with the IMC Joinder Agreements, IMC Delaware and IMC
Bermuda became parties to the Voting Agreement dated as of July 1, 1998 (the
"Voting Agreement") between the Company, IP Delaware, IP Bermuda, and each of
the security holders listed on the signature pages thereof. The description of
the Voting Agreement that follows is not, and does not purport to be, complete
and is qualified in its entirety by reference to the Voting Agreement, which is
21
<PAGE>
incorporated herein by reference to Exhibit 1 to the Company's Schedule 13D
Statement dated July 14, 1998.
Pursuant to the Voting Agreement, each of the parties thereto and
their respective transferees who execute the Voting Agreement shall cause the
Board of Directors to consist of nine directors, some or all, as applicable, of
whom shall consist of the following individuals: (i) (a) four individuals
designated by IP Delaware and IP Bermuda, so long as IP Delaware, IP Bermuda,
their respective affiliates, the respective officers, directors, and employees
of the foregoing, and the respective limited partners of IP Delaware and IP
Bermuda (collectively, the "IP Group") own Common Stock equal to at least 75% of
the Common Stock owned by the IP Group on July 3, 1998, (b) three individuals
designated by IP Delaware and IP Bermuda, so long as the IP Group owns Common
Shares equal to at least 50%, but less than 75% of the Common Stock owned by the
IP Group on July 3, 1998, (c) two individuals designated by IP Delaware and IP
Bermuda, so long as the IP Group owns Common Stock equal to at least 25%, but
less than 50%, of the Common Stock owned by the IP Group on July 3, 1998, and
(d) one individual designated by IP Delaware and IP Bermuda, so long as the IP
Group owns Common Stock equal to at least 10%, but less than 25%, of the Common
Stock owned by the IP Group on July 3, 1998; (ii) (a) two individuals designated
by Strategic Acquisition Partners, LLC ("SAP"), so long as SAP and its
affiliates (the "SAP Group") own Common Stock equal to at least 50% of the
Common Stock owned by the SAP Group on July 3, 1998, and (b) one individual
designated by SAP, so long as the SAP Group owns Common Stock equal to at least
10% but less than 50% of the Common Stock owned by the SAP Group on July 3,
1998; (iii) one individual designated by Turkey Vulture Fund XIII, Ltd. (the
"Fund"), so long as the Fund and its affiliates (the "Osborne Group"), own
Common Stock equal to at least 25% of the Common Stock owned by the Osborne
Group on July 3, 1998; (iv) John F. Novatney, Jr. until the earlier to occur of
(A) December 31, 1999 or (B) the first date as of which the Company does not
have a class of equity securities registered under the Exchange Act; (v) Fred
Lick, Jr. until the earlier to occur of (A) December 31, 1999 or (B) the first
date as of which the Company does not have a class of equity securities
registered under the Exchange Act or (C) expiration of the remaining term of his
employment agreement with the Company, as amended; provided that so long as the
Company has a class of equity securities registered under the Exchange Act, at
least two directors remaining on the Board of Directors shall be "independent"
as such term is defined under the applicable Nasdaq National Market System, Inc.
standards (such directors are referred to herein as "Independent Directors");
provided that none of IP Delaware, IP Bermuda, SAP, or the Fund shall be
required to designate an individual that constitutes an Independent Director so
long as two individuals who constitute Independent Directors are nominated to
serve as directors and IP Delaware, IP Bermuda, SAP, and the Fund vote for their
election; and provided further that the Company shall not voluntarily be
delisted from the Nasdaq National Market System, Inc. except in connection with
a going private transaction or if the Company becomes listed on another national
securities exchange. Under Nasdaq National Market System, Inc. standards, the
term "independent director" means a person other than an officer or employee of
the Company or its subsidiaries or any other individual having a relationship
22
<PAGE>
which, in the opinion of the Board of Directors, would interfere with the
exercise of independent judgment in carrying out the responsibilities of a
director. Under the Voting Agreement, each of the parties thereto and their
respective transferees who execute the Voting Agreement, granted each of IP
Delaware, SAP and the Fund a proxy to vote the shares of Common Stock held by
such person, in the event such person fails to vote its Common Stock in
accordance with the foregoing provisions of this paragraph.
The Voting Agreement further provides that no party thereto or their
transferees may effect, cause to be effected, or permit any voluntary or
involuntary sale, assignment, or transfer ("Transfer") of any shares of Common
Stock or Common Stock Equivalents (as defined therein) or any interest therein,
except for Transfers pursuant to an effective registration statement or pursuant
to Rule 144 under the Securities Act of 1933, as amended, unless the transferee
agrees to be bound by the provisions of the Voting Agreement and the
Stockholders Agreement (as hereinafter defined) and such Transfer is, where
applicable, made in compliance with the terms of the Stockholders Agreement. Any
Transfer not complying with the provisions of the Voting Agreement shall be void
ab initio, shall not be effective for any purpose, and any purported transferee
of such a Transfer shall not acquire any right or interest in such Common Stock.
In connection with the IMC Joinder Agreements, IMC Delaware and IMC
Bermuda became parties to the Stockholders Agreement dated as of July 1, 1998
(the "Stockholders Agreement") between the Company, IP Delaware, IP Bermuda, and
each of the security holders listed on the signature pages thereto. The
description of the Stockholders Agreement that follows is not, and does not
purport to be, complete and is qualified in its entirety by reference to the
Stockholders Agreement, which is incorporated herein by reference to the
Company's Schedule 13D Statement dated July 14, 1998.
Pursuant to the Stockholders Agreement, each of IP Delaware, IP
Bermuda, SAP, the Fund, and their respective transferees who become parties
thereto ("Shareholder Parties") are provided certain rights in respect of its
outstanding Common Stock in the event of certain sales of Common Stock by other
Shareholder Parties. Specifically, if IMC Delaware or IMC Bermuda dispose of
Common Stock representing more than 20% of the outstanding Common Stock , the IP
Group has the right to require each non-selling Shareholder Party (each a
"Co-Seller") to transfer a portion of its Common Stock which represents the same
percentage of the fully diluted Common Stock held by such Co-Seller as the
Common Stock being disposed of by the IP Group represent of the fully diluted
Common Stock held by the IP Group. All Common Stock transferred pursuant to the
foregoing provision of the Stockholders Agreement will be sold at the same price
and time and otherwise be treated identically with the Common Stock being sold
by the IP Group.
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<PAGE>
The Stockholders Agreement further provides that if any Shareholder
Party desires to effect a transfer of Common Stock (other than a transfer in an
underwritten public offering pursuant to an effective registration statement
under the Securities Act) representing more than 20% of the outstanding Common
Stock, then the selling Shareholder Party must make an offer to each Co-Seller
to include in the proposed sale a portion of such Co-Seller's Common Stock which
represents the same percentage of such Co-Seller's fully diluted Common Stock
being sold by the selling Shareholder Party represent of its fully diluted
Common Stock.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1 Contribution and Amendment Agreement dated as of February
16, 1999, by and among Insurance Partners, L.P.,
International Managed Care Co-Investment, LLC, Peter Small,
Robert Morrison and Mark H. Tabak.
2 Contribution and Amendment Agreement dated as of February
16, 1999, by and among Insurance Partners Offshore
(Bermuda), L.P., International Managed Care Co-Investment,
LLC, Peter Small, Robert Morrison and Mark H. Tabak.
3 Joinder Agreement dated as of January 3, 2000, by and among
Ceres Group, Inc. and International Managed Care, LLC.
4 Joinder Agreement dated as of January 3, 2000, by and among
Ceres Group, Inc. and International Managed Care (Bermuda),
L.P.
Incorporated by Form of Common Stock Purchase Warrant.
reference to
Appendix A of the
Company's Proxy
Statement dated
May 28, 1998.
Incorporated by Registration Rights Agreement dated as of July 1, 1998, by
reference to and among Central Reserve Life Corporation, Insurance
Exhibit 2 of the Partners, L.P., Insurance Partners Offshore (Bermuda), L.P.,
Company's Schedule and each of the persons and entities set forth on the
13D Statement signature pages thereto.
dated July 14,
1998.
Incorporated by Voting Agreement dated as of July 1, 1998, by and among
reference to Central Reserve Life Corporation, Insurance Partners, L.P.,
Exhibit 1 of Insurance Partners Offshore (Bermuda), L.P., and each of the
the Company's security holders listed on the signature pages thereto.
Schedule 13D
Statement dated
July 14, 1998.
24
<PAGE>
Incorporated by Stockholders Agreement dated as of July 1, 1998, by and
reference to among Central Reserve Life Corporation, Insurance Partners,
Exhibit 3 of L.P., Insurance Partners Offshore (Bermuda), L.P., and each
the Company's of the security holders listed on the signature pages
Schedule 13D thereto.
Statement dated
July 14, 1998.
Incorporated by Amendment No. 1 to the Registration Rights Agreement, dated
reference to as of February 16, 1999, by and among Ceres Group, Inc. and
Exhibit 7.3 the persons and entities set forth in the signature pages
of the Company's attached thereto.
Amendment to
Schedule 13D
Statement dated
February 17, 1999.
25
<PAGE>
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: January 3, 2000.
INTERNATIONAL MANAGED CARE, LLC, a Delaware limited liability company
By: Insurance Partners, L.P., a Delaware limited
partnership, its managing member
By: Insurance GenPar, L.P., a Delaware
limited partnership, its general partner
By: Insurance GenPar MGP, L.P.,
a Delaware limited partnership, its
general partner
By: Insurance GenPar MGP, Inc., a
Delaware corporation, its General
Partner
By: /s/ Robert A. Spass
------------------------------
Name:Robert A. Spass
Title: President
INSURANCE PARTNERS, L.P., a Delaware limited partnership
By: Insurance GenPar, L.P., a Delaware limited partnership,
its general partner
By: Insurance GenPar MGP, L.P., a Delaware limited
partnership, its general partner
By: Insurance GenPar MGP, Inc., a Delaware
corporation, its General Partner
By: /s/ Robert A. Spass
-----------------------------------------
Name:Robert A. Spass
Title: President
26
<PAGE>
INSURANCE GENPAR, L.P., a Delaware limited partnership
By: Insurance GenPar MGP, L.P., a Delaware limited
partnership, its general partner
By: Insurance GenPar MGP, Inc., a Delaware
corporation, its general partner
By: /s/ Robert A. Spass
-------------------------------------
Name:Robert A. Spass
Title: President
INSURANCE GENPAR MGP, L.P., a Delaware limited partnership
By: Insurance GenPar MGP, Inc., a Delaware corporation,
its general partner
By: /s/ Robert A. Spass
----------------------------------------------
Name:Robert A. Spass
Title: President
INSURANCE GENPAR MGP, INC., a Delaware corporation
By: /s/ Robert A. Spass
----------------------------------------------
Name: Robert A. Spass
Title: President
27
<PAGE>
INTERNATIONAL MANAGED CARE (BERMUDA), L.P., a Bermuda limited partnership
By: Insurance Partners Offshore (Bermuda), L.P., a
Bermuda limited partnership, its general partner
By: Insurance GenPar (Bermuda), L.P., a Bermuda
limited partnership, its general partner
By: Insurance GenPar (Bermuda) MGP,
L.P., a Bermuda limited partnership, its
general partner
By: Insurance GenPar (Bermuda)
MGP, Ltd., a Bermuda corporation, its
general partner
By: /s/ Robert A. Spass
------------------------------------
Name: Robert A. Spass
Title: President
INSURANCE PARTNERS OFFSHORE (BERMUDA), L.P., a Bermuda limited partnership
By: Insurance GenPar (Bermuda), L.P., a Bermuda limited
partnership, its general partner
By: Insurance GenPar (Bermuda) MGP, L.P., a Bermuda
limited partnership, its general partner
By: Insurance GenPar (Bermuda) MGP, Ltd., a
Bermuda corporation, its general partner
By: /s/ Robert A. Spass
----------------------------------------------
Name:Robert A. Spass
Title: President
28
<PAGE>
INSURANCE GENPAR (BERMUDA), L.P., a Bermuda limited partnership
By: Insurance GenPar (Bermuda) MGP, L.P., a
Bermuda limited partnership, its general partner
By: Insurance GenPar (Bermuda) MGP, Ltd., a
Bermuda corporation, its general partner
By: /s/ Robert A. Spass
-------------------------------------
Name:Robert A. Spass
Title: President
INSURANCE GENPAR (BERMUDA) MGP, L.P., a Bermuda limited partnership
By: Insurance GenPar (Bermuda) MGP, Ltd., a Bermuda
corporation, its general partner
By: /s/ Robert A. Spass
-----------------------------------------------
Name:Robert A. Spass
Title: President
INSURANCE GENPAR (BERMUDA) MGP, LTD., a Bermuda corporation
By: /s/ Robert A. Spass
--------------------------------------------------------
Name: Robert A. Spass
Title: President
29
<PAGE>
EXHIBIT INDEX
1 Contribution and Amendment Agreement dated as of February
16, 1999, by and among Insurance Partners, L.P.,
International Managed Care Co-Investment, LLC, Peter Small,
Robert Morrison and Mark H. Tabak.
2 Contribution and Amendment Agreement dated as of February
16, 1999, by and among Insurance Partners Offshore
(Bermuda), L.P., International Managed Care Co-Investment,
LLC, Peter Small, Robert Morrison and Mark H. Tabak.
3 Joinder Agreement dated as of January 3, 2000, by and among
Ceres Group, Inc. and International Managed Care, LLC.
4 Joinder Agreement dated as of January 3, 2000, by and among
Ceres Group, Inc. and International Managed Care (Bermuda),
L.P.
Incorporated by Form of Common Stock Purchase Warrant.
reference to
Appendix A of the
Company's Proxy
Statement dated
May 28, 1998.
Incorporated by Registration Rights Agreement dated as of July 1, 1998, by
reference to and among Central Reserve Life Corporation, Insurance
Exhibit 2 of the Partners, L.P., Insurance Partners Offshore (Bermuda), L.P.,
Company's Schedule and each of the persons and entities set forth on the
13D Statement signature pages thereto.
dated July 14,
1998.
30
<PAGE>
Incorporated by Voting Agreement dated as of July 1, 1998, by and among
reference to Central Reserve Life Corporation, Insurance Partners, L.P.,
Exhibit 1 of Insurance Partners Offshore (Bermuda), L.P., and each of the
the Company's security holders listed on the signature pages thereto.
Schedule 13D
Statement dated
July 14, 1998.
Incorporated by Stockholders Agreement dated as of July 1, 1998, by and
reference to among Central Reserve Life Corporation, Insurance Partners,
Exhibit 3 of L.P., Insurance Partners Offshore (Bermuda), L.P., and each
the Company's of the security holders listed on the signature pages
Schedule 13D thereto.
Statement dated
July 14, 1998.
Incorporated by Amendment No. 1 to the Registration Rights Agreement, dated
reference to as of February 16, 1999, by and among Ceres Group, Inc. and
Exhibit 7.3 the persons and entities set forth in the signature pages
of the Company's attached thereto.
Amendment to
Schedule 13D
Statement dated
February 17, 1999.
31
Exhibit 1
CONTRIBUTION AND AMENDMENT AGREEMENT
CONTRIBUTION AND AMENDMENT AGREEMENT dated as of February
16 1999 (this "Agreement") by and among Insurance Partners, L.P., International
Managed Care Co-Investment, LLC, Peter Small, Robert Morrison and Mark H. Tabak.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings ascribed to them in the Amended and Restated Limited
Liability Company Agreement of International Managed Care, LLC the "Operating
Agreement").
WHEREAS, the parties agreed in July 1998 that the Company
would make an investment in Ceres Group, Inc. (formerly Central Reserve Life
Corporation) ("Ceres");
WHEREAS, in July 1998, the Managing Member made the
investment in Ceres on behalf of the Company;
WHEREAS, the Company now desires to make an additional
investment in Ceres but is currently unable to make such an investment because
it lacks all necessary regulatory approvals;
WHEREAS, the Managing Member has agreed to make the
additional investment on behalf of the Company;
WHEREAS, the Managing Member desires to contribute both
investments to the Company; and
WHEREAS, the parties also desire to amend the Operating
Agreement (i) to reflect their agreement concerning the investment in Ceres and
(ii) to correct certain errors in the Operating Agreement.
NOW THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows.
1. Capital Contributions.
(a) Pursuant to Section 2.2 of the Operating Agreement, as
soon as the Company receives all necessary regulatory approvals, the Managing
Member shall contribute to the capital of the Company (i) 2,799,466 shares of
common stock of Ceres and warrants to purchase an additional 1,399,733 shares of
common stock of Ceres acquired on July 3, 1998 (collectively, the "Ceres Initial
Investment") and (ii) 949,818 shares of common stock of Ceres acquired on
February 16, 1999 (the "Ceres Additional Investment").
1
<PAGE>
(b) Pursuant to Section 2.2 of the Operating Agreement, the
Co-investment Company hereby contributes (i) $154,080.64 in cash to the capital
of the Company to fund the Ceres Initial Investment (and any related expenses)
and (ii) $71,222.63 in cash to the capital of the Company to fund the Ceres
Additional Investment (and any related expenses). Notwithstanding any provisions
of the Operating Agreement, the Company hereby agrees to distribute such cash to
the Managing Member and to decrease the Capital Account of the Managing Member
in accordance with Section 2.3(c) of the Operating Agreement.
(c) The Co-investment Company agrees to pay the Managing
Member $7,830.67 (representing interest on its capital contribution in respect
of the Ceres Initial Investment at the prime rate accruing from June 16, 1998).
(d) The parties agree that the Health Care Percentage for
the Ceres Initial Investment and the Ceres Additional Investment shall be 50%.
2. Amendments to Operating Agreement.
(a) In Section 1.7 of the Operating Agreement, the term
"IRR of the Members" is hereby deleted and replaced by the following:
` "IRR of the Members" means, as of any date, the internal
rate of return of IP on the disposed of Investments based
on the actual realized return of IP on the Invested Capital
relating to such disposed of Investments and Unallocated
Company Expenses. The IRR of the Members shall be
recalculated on each Vesting Date and shall take into
account all distributions to be made (including
distributions to be made to the Managing Members) as a
result of such Vesting Date. For purposes of computing the
IRR of the Members, all Capital Contributions and
distributions that are reflected in the computation shall
be taken into account (a) with respect to the CHD
Investment (including the CHD Investment Expenses) as of
March 3, 1997; (b) with respect to the Ceres Initial
Investment (including any expenses relating to the
acquisition of such investment) as of July 3, 1998; (c)
with respect to the Ceres Additional Investment (including
any expenses relating to the acquisition of such
investment) as of February 16, 1999; (d) in the case of
Start-Up Costs, as of the date set forth on Schedule 1.7B;
and (e) in all other cases (i) as of the last day of the
calendar quarter immediately preceding the date of any
Capital Contribution or distribution if such Capital
Contribution or distribution occurs during the first half
of the then current calendar quarter, or (ii) in each other
case, as of the last date of the calendar quarter during
which such Capital Contribution or distribution occurs.'
2
<PAGE>
(b) In Section 1.7 of the Operating Agreement, the term
"Preferred Return" is hereby deleted and replaced by the following:
` "Preferred Return" shall mean, as of any date, an amount
equal to Fifteen Percent (15%) per annum, compounded
annually, on the Unrecovered Capital of IP as of the last
day of the calendar quarter immediately preceding the date
of determination. For purposes of computing the Preferred
Return, all Capital Contributions and distributions that
are reflected in the computation of Unrecovered Capital of
IP shall be taken into account (a) in the case of IP, with
respect to the CHD Investment and the CHD Investment
Expenses, as of March 3, 1997; (b) in the case of IP, with
respect to the Ceres Initial Investment (including any
expenses relating to the acquisition of such investment) as
of July 3, 1998; (c) in respect of IP, with respect to the
Ceres Additional Investment (including any expenses
relating to the acquisition of such investment) as of
February 16, 1999; (d) in the case of Start-Up Costs, as of
the date set forth on Schedule 1.7B; and (e) in all other
cases (i) as of the last day of the calendar quarter
immediately preceding the date of any Capital Contribution
or distribution if such Capital Contribution or
distribution occurs during the first half of the then
current calendar quarter, or (ii) in each other case, as of
the last day of the calendar quarter during which such
Capital Contribution or distribution occurs.'
(c) The following definitions are hereby added to Section
1.7 of the Operating Agreement:
` "Ceres Additional Investment" shall mean the 949,818
shares of common stock of Ceres Group, Inc. acquired on
February 16, 1999 and contributed by IP to the capital of
the Company.'
` "Ceres Initial Investment" shall mean the 2,799,466
shares of common stock of Ceres Group, Inc. and warrants to
purchase an additional 1,399,733 shares of such common
stock acquired on July 3, 1998 and contributed by IP to the
capital of the Company.'
(d) Notwithstanding Section 3.8(iv) of the Operating
Agreement, the parties hereby agree that the remaining Items relating to the
Ceres Initial Investment and the Ceres Additional Investment after giving effect
to the allocations and distributions contemplated under Articles II and VI and
Section 3.8(iii) of the Operating Agreement (including, without limitation,
Investment Income or Loss and Investment Proceeds) shall be allocated or shared
99% by IP and 1% by the Coinvestment Company.
(e) The parties agree that, with respect to any future
Investment of the Company, the Managing Member and the Co-investment Company may
amend the terms of Section 3.8(iv) of the Operating Agreement as it applies to
and such future Investment (including, without limitation, requiring additional
3
<PAGE>
capital contributions from the Co-investment Company to fund a greater portion
of any such Investment) in a written instrument executed by each of them;
provided, that no other Member may be adversely affected by any such amendment.
(f) Schedule 1.7A of the Operating Agreement is hereby
deleted and replaced by Schedule 1.7A attached hereto.
(g) Schedule 1.7C of the Operating Agreement is hereby
amended so that (i) the heading titled "IRR of the Members" is hereby deleted
and replaced by "Specified IRR Percentage" and (ii) the heading titled
"Specified IRR Percentage for Fiscal Year" is hereby deleted and replaced by
"IRR of the Members for Fiscal Year."
(h) Mark H. Tabak is a Non-Managing Member and Management
Member for all purposes of the Operating Agreement and agrees to be bound by all
of the covenants, terms and conditions of the Operating Agreement applicable to
Non-Managing Members and Management Members.
3. Effectiveness of this Agreement. This amendments to the
Operating Agreement in Section 2 hereof shall be effective as of December 31,
1998.
4. Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by any part), hereto with out the prior written consent of the other
parties; provided, however, that this Section 4 shall not be deemed to prohibit
in an), manner and transfer or assignment of an Interest in the Company or the
Operating Agreement permitted by Article VII of the Operating Agreement.
5. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their permitted successors and
permitted assigns.
6. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
7. Ratification of the Operating Agreement. Except as otherwise
provided herein, all of the terms and conditions of the Operating Agreement are
hereby ratified and shall remain unchanged and continue in full force and
effect.
8. APPLICABLE LAW. THIS AGREEMENT, THE RELATIONS, RIGHTS AND
DUTIES OF THE MEMBERS AMONG THEMSELVES AND ALL MATTERS PERTAINING TO THE MEMBERS
AND THE COMPANY SHALL BE GOVERNED BY, CONSTRUED UNDER AND IN ACCORDANCE WITH THE
4
<PAGE>
LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS ENTERED INTO AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE.
IN WITNESS WHEREOF, the parties have executed or caused to
be executed this Agreement as of the date set forth
above.
INSURANCE PARTNERS, L.P.
By: Insurance GenPar, L.P., its General partner
By: Insurance GenPar MGP, L.P., its General partner
By: Insurance GenPar MGP, Inc., its General partner
By: /s/ Robert A. Spass
--------------------------------------------------
Name: Robert A. Spass
Title: President
INTERNATIONAL MANAGED CARE
CO-INVESTMENT, LLC
By: /s/ Mark H. Tabak
--------------------------------------------------
Name: Mark H. Tabak
Title: General Partner
/s/ Robert Morrison
--------------------------------------------------
Robert Morrison
/s/ Peter Small
--------------------------------------------------
Peter Small
/s/ Mark H. Tabak
--------------------------------------------------
Mark H. Tabak
5
Exhibit 2
CONTRIBUTION AND AMENDMENT AGREEMENT
CONTRIBUTION AND AMENDMENT AGREEMENT dated as of February
16, 1999 (this "Agreement") by and among Insurance Partners Offshore (Bermuda),
L.P., International Managed Care Co-Investment, LLC, Peter Small, Robert
Morrison and Mark H. Tabak. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings ascribed to them in the
Amended and Restated Limited Partnership Agreement of International Managed Care
(Bermuda), L.P. (the "Partnership Agreement").
WHEREAS, the parties agreed in July 1998 that the
Partnership would make an investment in Ceres Group, Inc. (formerly, Central
Reserve Life Corporation) ("Ceres");
WHEREAS, in July 1998, the General Partner made the
investment in Ceres on behalf of the Partnership;
WHEREAS, the Partnership now desires to make an additional
investment in Ceres but is currently unable to make such investment because it
lacks all necessary regulatory approvals;
WHEREAS, the General Partner has agreed to make the
investment in Ceres on behalf of the Partnership;
WHEREAS, the General Partner desires to contribute the
investments in Ceres to the Partnership; and
WHEREAS, the parties also desire to amend the Partnership
Agreement (i) to reflect their agreement concerning the investments in Ceres and
(ii) to correct certain errors in the Partnership Agreement.
NOW THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows.
1. Capital Contributions.
(a) Pursuant to Section 2.2 of the Partnership Agreement,
as soon as the Partnership receives all necessary regulatory approvals, the
General Partner shall contribute to the capital of the Partnership (i) 1,545,990
shares of common stock of Ceres and warrants to purchase an additional 772,995
shares of common stock of Ceres acquired on July 3, 1998 (collectively, the
"Ceres Initial Investment") and (ii) 280,182 shares of common stock of Ceres
acquired on February 16, 1999 (the "Ceres Additional Investment").
1
<PAGE>
(b) Pursuant to Section 2.2 of the Partnership Agreement,
the Co-investment Company hereby contributes (i) $84,919.44 in cash to the
capital of the Partnership to fund the Ceres Initial Investment (and any related
expenses) and (ii) $21,027.37 in cash to the capital of the Partnership to fund
the Ceres Additional Investments (and any related expenses). Notwithstanding any
provisions of the Partnership Agreement, the Partnership hereby agrees to
distribute such cash to the General Partner and to decrease the Capital Account
of the General Partner in accordance with Section 2.4(c) of the Partnership
Agreement.
(c) The Co-investment Company agrees to pay the General
Partner $4,315.77 (representing interest on its capital contribution in respect
of the Ceres Initial Investment at the prime rate accruing from June 16, 1998).
(d) The parties agree that the Health Care Percentage for
each of the Ceres Initial Investment and the Ceres Additional Investment shall
be 50%.
2. Amendments to Partnership Agreement.
(a) In Section 1.7 of the Partnership Agreement, the term
"IRR of the Partners" is hereby deleted and replaced by the following:
` "IRR of the Partners" means, as of any date, the internal
rate of return of IPB on the disposed of Investments based
on the actual realized return of IPB on the Invested
Capital relating to such disposed of Investments and
Unallocated Partnership Expenses. The IRR of the Partners
shall be recalculated on each Vesting Date and shall take
into account all distributions to be made (including
distributions to be made to the General Partners) as a
result of such Vesting Date. For purposes of computing the
IRR of the Partners, all Capital Contributions and
distributions that are reflected in the computation shall
be taken into account (a) with respect to the CHD
Investment (including the CHD Investment Expenses) as of
March 3, 1997; (b) with respect to the Ceres Initial
Investment (including any expenses relating to the
acquisition of such investment) as of July 3, 1998; (c)
with respect to the Ceres Additional Investment (including
any expenses relating to the acquisition of such
investment) as of February 16, 1999; (d) in the case of
Start-Up Costs, as of the date set forth on Schedule 1.7B;
(e) in all other cases W as of the last day of the calendar
quarter immediately preceding the date of any Capital
Contribution or distribution if such Capital Contribution
or distribution occurs during the first half of the then
current calendar quarter, or (ii) in each other case, as of
the last date of the calendar quarter during which such
Capital Contribution or distribution occurs.'
(b) In Section 1.7 of the Partnership Agreement, the term
"Preferred Return" is hereby deleted and replaced by the following:
2
<PAGE>
` "Preferred Return" shall mean, as of any date, an amount
equal to Fifteen Percent (15%) per annum, compounded
annually, on the Unrecovered Capital of IPB as of the last
day of the calendar quarter immediately preceding the date
of determination. For purposes of computing the Preferred
Return, all Capital Contributions and distributions that
are reflected in the computation of Unrecovered Capital of
IPB shall be taken into account (a) in the case of IPB,
with respect to the CHD Investment and the CHD Investment
Expenses, as of March 3, 1997; (b) in the case of IPB, with
respect to the Ceres Initial Investment (including any
expenses relating to the acquisition of such investment) as
of July 3, 1998; (c) in the case of IPB, with respect to
the Ceres Additional Investment (including any expenses
relating to the acquisition of such investment) as of
February 16, 1999; (d) in the case of Start-Up Costs, as of
the date set forth on Schedule 1.7B; and (e) in all other
cases (i) as of the last day of the calendar quarter
immediately preceding the date of any Capital Contribution
or distribution if such Capital Contribution or
distribution occurs during the first half of the then
current calendar quarter, or (ii) in each other case, as of
the last day of the calendar quarter during which such
Capital Contribution or distribution occurs.'
(c) The following definitions are hereby added to Section
1.7 of the Partnership Agreement:
` "Ceres Additional Investment" shall mean the 280,182
shares of common stock of Ceres Group, Inc. acquired on
February 16, 1999 and contributed by IPB to the capital of
the Partnership.'
` "Ceres Initial Investment" shall mean the 1,545,990
shares of common stock of Ceres Group, Inc, and warrants to
purchase an additional 772,995 shares of such common stock
acquired on July 3, 1998 and contributed by IPB to the
capital of the Partnership.'
(d) Notwithstanding Section 3.8(iv) of the Partnership
Agreement, the parties hereby agree that the remaining Items relating to the
Ceres Initial Investment and the Ceres Additional Investment after giving effect
to the allocations and distributions contemplated under Articles II and VI and
Section 3.8(iii) of the Partnership Agreement (including, without limitation,
Investment Income or Loss and Investment Proceeds) shall be allocated or shared
99% by IPB and 1% by the Co-investment Company.
(e) The parties agree that, with respect to any future
Investment of the Partnership, the General Partner and the Co-investment Company
may amend the terms of Section 3.8(iv) of the Partnership Agreement as it
applies to any such future Investment (including, without limitation, requiring
additional capital contributions from the Co-investment Partnership to fund a
greater portion of any such Investment) in a written instrument executed by each
3
<PAGE>
of them; provided, that no other Partner may be adversely, affected by any such
amendment.
(f) Schedule 1.7A of the Partnership Agreement is hereby
deleted and replaced by Schedule 1.7A attached hereto.
(g) Schedule 1.7C of the Partnership Agreement is hereby
amended so that (i) the heading titled "IRR of the Members" is hereby deleted
and replaced by "Specified IRR Percentage" and (ii) the heading titled
"Specified IRR Percentage for Fiscal Year" is hereby deleted and replaced by
"IRR of the Partners for Fiscal Year."
(h) Mark H. Tabak is a Limited Partner and Management
Partner for all purposes of the Partnership Agreement and agrees to be bound by
all of the covenants, terms and conditions of the Partnership Agreement
applicable to Limited Partners and Management Partners.
3. Effectiveness of this Agreement. This amendments to the
Partnership Agreement in Section 2 hereof shall be effective as of December 31,
1998.
4. Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by any party hereto with out the prior written consent of the other
parties; provided, however, that this Section 4 shall not be deemed to prohibit
in any manner and transfer or assignment of an Interest in the Partnership or
the Partnership Agreement permitted by Article VII of the Partnership Agreement.
5. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their permitted successors and
permitted assigns.
6. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
7. Ratification of the Partnership Agreement. Except as otherwise
provided herein, all of the terms and conditions of the Partnership Agreement
are hereby ratified and shall remain unchanged and continue in full force and
effect.
8. APPLICABLE LAW. THIS AGREEMENT, THE RELATIONS, RIGHTS AND
DUTIES OF THE PARTNERS AMONG THEMSELVES AND ALL MATTERS PERTAINING TO THE
PARTNERS AND THE PARTNERSHIP SHALL BE GOVERNED BY, CONSTRUED UNDER AND IN
ACCORDANCE WITH THE LAWS OF BERMUDA WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.
4
<PAGE>
IN WITNESS WHEREOF, the parties have executed or caused to
be executed this Agreement as of the date set forth
above.
INSURANCE PARTNERS OFFSHORE
(BERMUDA), L.P.
By: Insurance GenPar (Bermuda), L.P.,
its General partner
By: Insurance GenPar MGP (Bermuda), L.P.,
its General partner
By: Insurance GenPar MGP (Bermuda), Ltd.,
its General partner
By: /s/ Robert A. Spass
-------------------------------------------
Name: Robert A. Spass
Title: President
INTERNATIONAL MANAGED CARE
CO-INVESTMENT, LLC
By: /s/ Mark H. Tabak
--------------------------------------------
Name: Mark H. Tabak
Title: General Partner
/s/ Robert Morrison
--------------------------------------------
Robert Morrison
/s/ Peter Small
--------------------------------------------
Peter Small
/s/ Mark H. Tabak
--------------------------------------------
Mark H. Tabak
5
Exhibit 3
JOINDER AGREEMENT
Reference is made to (i) that certain Voting Agreement dated as of
July 1, 1998, among Central Reserve Life Corporation, an Ohio corporation (now
known as Ceres Group, Inc., a Delaware corporation, the "Company"), and the
persons signatory thereto (as amended and in effect from time to time, the
"Voting Agreement"), a copy of which is attached hereto as Exhibit A, and (ii)
that certain Stockholders Agreement dated as of July 1, 1998, among the Company
and the persons signatory thereto (as amended and in effect from time to time,
the "Stockholders Agreement"), a copy of which is attached hereto as Exhibit B.
The undersigned, International Managed Care, LLC, a Delaware limited
liability company ("IMC"), in order to become the owner or holder of 3,749,285
shares of common stock of the Company and a warrant to purchase 1,399,733 shares
of common stock of the Company, hereby agrees that by IMCs execution hereof, IMC
is a party to the Voting Agreement and the Stockholders Agreement, subject to
all of the restrictions, conditions, and obligations applicable to stockholders
set forth in such agreements. This Joinder Agreement shall take effect and shall
become a part of each such agreement immediately upon execution.
[The remainder of this page is intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, this Joinder Agreement has been duly executed and
delivered by the undersigned this 3rd day of January, 2000.
INTERNATIONAL MANAGED CARE, LLC
By: Insurance Partners, L.P.,
its managing member
By: Insurance GenPar, L.P.,
its general partner
By: Insurance GenPar MGP, L.P.,
its general partner
By: Insurance GenPar MGP, Inc.,
its general partner
By: /s/ Robert A. Spass
------------------------
Name: Robert A. Spass
Title: President
Address:
International Managed Care, LLC
c/o Insurance Partners, L.P.
One Chase Manhattan Plaza, 44th Floor
New York, New York 10005
AGREED AND ACCEPTED:
CERES GROUP, INC.
By: /s/ Charles E. Miller, Jr.
----------------------------------------------------
Name: Charles E. Miller, Jr.
Title: Executive Vice President and Chief Financial Officer
Date: January 3, 2000
Exhibit 4
JOINDER AGREEMENT
Reference is made to (i) that certain Voting Agreement dated as of
July 1, 1998, among Central Reserve Life Corporation, an Ohio corporation (now
known as Ceres Group, Inc., a Delaware corporation, the "Company"), and the
persons signatory thereto (as amended and in effect from time to time, the
"Voting Agreement"), a copy of which is attached hereto as Exhibit A, and (ii)
that certain Stockholders Agreement dated as of July 1, 1998, among the Company
and the persons signatory thereto (as amended and in effect from time to time,
the "Stockholders Agreement"), a copy of which is attached hereto as Exhibit B.
The undersigned, International Managed Care (Bermuda), L.P., a
Bermuda limited partnership ("IMC Bermuda"), in order to become the owner or
holder of 1,826,171 shares of common stock of the Company and a warrant to
purchase 772,995 shares of common stock of the Company, hereby agrees that by
IMC Bermuda's execution hereof, IMC Bermuda is a party to the Voting Agreement
and the Stockholders Agreement, subject to all of the restrictions, conditions,
and obligations applicable to stockholders set forth in such agreements. This
Joinder Agreement shall take effect and shall become a part of each such
agreement immediately upon execution.
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IN WITNESS WHEREOF, this Joinder Agreement has been duly executed and
delivered by the undersigned this 3rd day of January, 2000.
INTERNATIONAL MANAGED CARE
(BERMUDA), L.P.
By: Insurance Partners Offshore (Bermuda) L.P.,
its general partner
By: Insurance GenPar (Bermuda), L.P.,
its general partner
By: Insurance GenPar (Bermuda) MGP, L.P., its general
partner
By: Insurance GenPar (Bermuda) MGP, Ltd.,
its general partner
By: /s/ Robert A. Spass
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Name: Robert A. Spass
Title: President
Address:
International Managed Care (Bermuda), L.P.
c/o Insurance Partners, L.P.
One Chase Manhattan Plaza, 44th Floor
New York, New York 10005
AGREED AND ACCEPTED:
CERES GROUP, INC.
By: /s/ Charles E. Miller, Jr.
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Name: Charles E. Miller, Jr.
Title: Executive Vice President and Chief Financial Officer
Date: January 3, 2000
