<PAGE> 1
Page 1 of 55
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
Champion Healthcare Corporation
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
15850B104
-------------------------------------------------------
(CUSIP Number)
Christopher Hilbert, Esq. 101 Park Avenue
Morgan, Lewis & Bockius LLP New York, NY 10178 (212) 309-6830
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communicaitons)
December 31, 1995
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP No. 15850B104 Page 2 of 55 Pages
---------------- ---- -----
- -------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
Rohit Mojilal Desai
###-##-####
- -------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a)/ /
(b)/X/
- -------------------------------------------------------------------------------
SEC USE ONLY
3
- -------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
AF
- -------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e) / /
- -------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
USA
- -------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER 7
0
OF --------------------------------------------------
SHARES SHARED VOTING POWER
8
BENEFICIALLY 1,038,612 shares
--------------------------------------------------
OWNED BY
SOLE DISPOSITIVE POWER
EACH 9
0
REPORTING --------------------------------------------------
PERSON SHARED DISPOSITIVE POWER
10
WITH 1,038,612 shares
- -------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
11
1,038,612 shares
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
8.17%
- -------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- -------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 3
SCHEDULE 13D
CUSIP No. 15850B104 Page 3 of 55 Pages
---------------- --- -----
- -------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
Desai Capital Management Incorporated
13-3229933
- -------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a)/ /
(b)/X/
- -------------------------------------------------------------------------------
SEC USE ONLY
3
- -------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
AF
- -------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL
5 PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) / /
- -------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
New York
- -------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER 7
0
OF --------------------------------------------------
SHARES SHARED VOTING POWER
8
BENEFICIALLY 1,038,612 shares
--------------------------------------------------
OWNED BY
SOLE DISPOSITIVE POWER
EACH 9
0
REPORTING --------------------------------------------------
PERSON SHARED DISPOSITIVE POWER
10
WITH 1,038,612 shares
- -------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
11
1,038,612 shares
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
8.17%
- -------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IA, CO
- -------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 4
SCHEDULE 13D
CUSIP No. 15850B104 Page 4 of 55 Pages
----------------- ---- -----
- -------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
Rohit M. Desai Associates
13-3240237
- -------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a)/ /
(b)/X/
- -------------------------------------------------------------------------------
SEC USE ONLY
3
- -------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
AF
- -------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL
5 PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) / /
- -------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
New York
- -------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER 7
0
OF --------------------------------------------------
SHARES SHARED VOTING POWER
8
BENEFICIALLY 604,047 shares
--------------------------------------------------
OWNED BY
SOLE DISPOSITIVE POWER
EACH 9
0
REPORTING --------------------------------------------------
PERSON SHARED DISPOSITIVE POWER
10
WITH 604,047 shares
- -------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
11
604,047 shares
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
4.75%
- -------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- -------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 5
SCHEDULE 13D
CUSIP No. 15850B104 Page 5 of 55 Pages
-------------- ---- -----
- -------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
Rohit M. Desai Associates-II
13-3426754
- -------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a)/ /
(b)/X/
- -------------------------------------------------------------------------------
SEC USE ONLY
3
- -------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
AF
- -------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL
5 PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) / /
- -------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
New York
- -------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER 7
0
OF --------------------------------------------------
SHARES SHARED VOTING POWER
8
BENEFICIALLY 434,565 shares
--------------------------------------------------
OWNED BY
SOLE DISPOSITIVE POWER
EACH 9
0
REPORTING --------------------------------------------------
PERSON SHARED DISPOSITIVE POWER
10
WITH 434,565 shares
- -------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
11
434,565 shares
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
3.42%
- -------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
_
- -------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 6
SCHEDULE 13D
CUSIP No. 15850B104 Page 6 of 55 Pages
---------------- ---- -----
- -------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
Equity-Linked Investors, L.P.
13-3240235
- -------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a)/ /
(b)/X/
- -------------------------------------------------------------------------------
SEC USE ONLY
3
- -------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- -------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL
5 PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) / /
- -------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
New York
- -------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER 7
0
OF --------------------------------------------------
SHARES SHARED VOTING POWER
8
BENEFICIALLY 604,047 shares
--------------------------------------------------
OWNED BY
SOLE DISPOSITIVE POWER
EACH 9
0
REPORTING --------------------------------------------------
PERSON SHARED DISPOSITIVE POWER
10
WITH 604,047 shares
- -------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
11
604,047 shares
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
4.75%
- -------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IV, PN
- -------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 7
SCHEDULE 13D
CUSIP No. 15850B104 Page 7 of 55 Pages
-------------- ---- -----
- -------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
Equity-Linked Investors-II
13-3427026
- -------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a)/ /
(b)/X/
- -------------------------------------------------------------------------------
SEC USE ONLY
3
- -------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- -------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL
5 PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) / /
- -------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
New York
- -------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER 7
0
OF --------------------------------------------------
SHARES SHARED VOTING POWER
8
BENEFICIALLY 434,565 shares
--------------------------------------------------
OWNED BY
SOLE DISPOSITIVE POWER
EACH 9
0
REPORTING --------------------------------------------------
PERSON SHARED DISPOSITIVE POWER
10
WITH 434,565 shares
- -------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
11
434,565 shares
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
3.42%
- -------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IV, PN
- -------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 8
CUSIP NO. 15850B104 Page 8 of 55
This Amendment and Restatement No. 1 amends and restates a
Schedule 13D dated December 6, 1994 filed by Equity-Linked Investors, L.P.
("ELI-I"), Equity-Linked Investors-II ("ELI-I"), Rohit M. Desai Associates
("RMDA-I"), Rohit M. Desai Associates-II ("RMDA-II"), Desai Capital Management
Incorporated ("DCMI") and Rohit M. Desai.
Item 1. Security and Issuer.
This statement relates to the Common Stock, $.01 par value, of
Champion Healthcare Corporation, a Delaware corporation (the "Company"). The
address of the Company's principal executive offices is 14340 Torrey Chase,
Suite 320, Houston, Texas 77014.
Item 2. Identity and Background.
This Statement is filed by Equity-Linked Investors, L.P.
("ELI-I"), Equity-Linked Investors-II ("ELI-II"), Rohit M. Desai Associates
("RMDA-I"), Rohit M. Desai Associates-II ("RMDA-II"), Desai Capital Management
Incorporated ("DCMI") and Rohit M. Desai, each of whom may be deemed to be the
beneficial owners of securities owned directly by ELI-I and ELI-II.
ELI-I and ELI-II are each New York limited partnerships whose
principal business is investing in a portfolio of debt and equity securities.
RMDA-I is a New York general partnership and is the general
partner of ELI-I. RMDA-II is a New York general partnership and is the
general partner of ELI-II. RMDA-I has no business activities other than acting
as ELI-I's general partner. RMDA-II has no business activities other than
acting as ELI-II's general partner. The partners of RMDA-I and RMDA-II are
Rohit M. Desai, Katharine B. Desai and the Rohit M. Desai Family Trust (of
which Katharine B. Desai and Joseph F. McDonald are the trustees under a trust
agreement dated July 1, 1987).
DCMI is a New York corporation whose principal business is
that of an investment adviser. DCMI acts as investment adviser to ELI-I and
ELI-II. The sole stockholder of DCMI is Rohit M. Desai. The directors of DCMI
are Rohit M. Desai and Katharine B. Desai. Rohit M. Desai, Katharine B. Desai,
Frank J. Pados, Carlos A. Gonzalez, Antoine G. Treuille, Damon H. Ball, Thomas
P. Larsen, Daniel G. Pine, Timothy R. Kelleher, Noah J. Walley, Tom W.
Perlmutter, Kathy T. Abramson and Catherine K.
<PAGE> 9
CUSIP NO. 15850B104 Page 9 of 55
Janson (collectively, the "DCMI Persons" and from time to time each
individually referred to as a "DCMI Person") are officers of DCMI.
The address of the principal business and principal office of
DCMI is 540 Madison Avenue, 36th Floor, New York, New York 10022.
The present principal occupation and employment of Rohit M.
Desai, who is a citizen of the United States, is as the president, treasurer
and chairman of the board of directors of DCMI and as the managing general
partner of RMDA-I, the general partner of ELI-I, and as the managing general
partner of RMDA-II, the general partner of ELI-II. The present principal
occupation and employment of Katharine B. Desai, who is a United States
citizen, is as the secretary and director of DCMI. The present principal
occupation and employment of Joseph F. McDonald, who is a United States
citizen, is as a member of the law firm of Morgan, Lewis & Bockius LLP. The
present principal occupation and employment of Frank J. Pados, who is a United
States citizen, is as executive vice president of DCMI. The present principal
occupation and employment of Carlos A. Gonzalez, who is a United States
citizen, is as senior vice president of DCMI. The present principal occupation
and employment of Antoine G. Treuille, who is a United States citizen, is as
senior vice president of DCMI. The present principal occupation and employment
of Damon H. Ball, who is a United States citizen, is as senior vice president
of DCMI. The present principal occupation and employment of Daniel G. Pine, who
is a United States citizen, is as senior vice president of DCMI. The present
principal occupation and employment of Thomas P. Larsen, who is a United
States citizen, is as senior vice president of DCMI. The present principal
occupation and employment of Timothy R. Kelleher, who is a United States
citizen, is as vice president of DCMI. The present principal occupation and
employment of Noah J. Walley, who is a United States citizen, is as vice
president of DCMI. The present principal occupation and employment of Tom W.
Perlmutter, who is a United States citizen, is as vice president of DCMI. The
present principal occupation and employment of Kathy T. Abramson, who is a
United States citizen, is as vice president of DCMI. The present principal
occupation and employment of Catherine K. Janson, who is a United States
citizen, is as vice president of DCMI. The business address of each of these
individuals, except Joseph F. McDonald, is the same as that of DCMI. The
business address of Joseph F. McDonald is c/o Morgan, Lewis & Bockius LLP, 101
Park Avenue, New York, New York 10178.
During the last five years neither ELI-I, RMDA-I, ELI-II,
RMDA-II, DCMI, the Rohit M. Desai Family Trust nor any of the
<PAGE> 10
CUSIP NO. 15850B104 Page 10 of 55
DCMI Persons has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors). During the last five years, neither
ELI-I, RMDA-I, ELI-II, RMDA-II, DCMI, the Rohit M. Desai Family Trust, nor any
of the DCMI Persons has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction resulting in a judgment, decree
or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or a finding of any
violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Initial Purchases
Pursuant to the terms of the Series D Note and Stock Purchase
Agreement dated December 31, 1993 among Champion and the Purchasers (as such
term is defined therein) as amended (the "D Stock Purchase Agreement"), on
January 5, 1994, ELI-I purchased the following securities:
(a) 11% Senior Subordinated Notes of Champion due December 31,
2003 (the "Senior Subordinated Notes") in the principal amount
of $3,810,000,
(b) warrants to purchase 114,30O shares of the Common Stock of
Champion, and
(c) 109,070 shares of Series D Cumulative Convertible Preferred
Stock of Champion.
Pursuant to the terms of the D Stock Purchase Agreement, on
January 5, 1994, ELI-II purchased the following securities:
(a) $2,741,000 principal amount of the Senior Subordinated Notes,
(b) warrants to purchase 82,230 shares of the Common Stock of
Champion, and
(c) 78,469 shares of Series D Cumulative Convertible Preferred
Stock of Champion.
In making these purchases, ELI-I used working capital from its
operating account, which is funded by capital contributions from ELI-I's
limited partners and gains and proceeds from ELI-I's investment portfolio, and
ELI-II used
<PAGE> 11
CUSIP NO. 15850B104 Page 11 of 55
working capital from its operating account, which is funded by capital
contributions from ELI-II's limited partners and gains and proceeds from
ELI-II's investment portfolio.
Merger
Champion Healthcare Corporation, a Texas corporation
("Champion") merged into AmeriHealth, Inc., a Delaware corporation, which
changed its name to Champion Healthcare Corporation and is referred to herein
as the Company, as more fully described below, pursuant to the merger ELI-I and
ELI-II, were issued in exchange for their respective holdings of securities of
Champion comparable holdings of securities of the Company:
On December 6, 1994, ELI-I received:
(a) 11% Senior Subordinated Notes of the Company due December 31,
2003 (the "Senior Notes") in the principal amount of
$3,810,000 in exchange for Senior Subordinated Notes in the
principal amount of $3,810,000,
(b) warrants to purchase 114,300 shares of the Company's Common
Stock in exchange for warrants to purchase 114,300 shares of
the Common Stock of Champion, and
(c) 109,070 shares of Series D Cumulative Convertible Preferred
Stock of the Company in exchange for 109,070 shares of Series
D Cumulative Convertible Preferred Stock of Champion.
On December 6, 1994, ELI-II received:
(a) $2,741,000 principal amount of the Senior Notes in exchange
for $2,741,000 principal amount of the Senior Subordinated
Notes,
(b) warrants to purchase 82,230 shares of the Company's Common
Stock in exchange for warrants to purchase 82,230 shares of
the Common Stock of Champion, and
(c) 78,469 shares of Series D Cumulative Convertible Preferred
Stock of the Company in exchange for 78,469 shares of Series D
Cumulative Convertible Preferred Stock of Champion.
Subsequent Purchases
<PAGE> 12
CUSIP NO. 15850B104 Page 12 of 55
On December 30, 1994, as a result of the exercise by the
Company of an option set forth in the D Stock Purchase Agreement, ELI-I
purchased the following additional securities:
(a) $2,006,000 principal amount of the Senior Notes,
(b) warrants to purchase 60,180 shares of the Company's Common
Stock, and
(c) 52,482 shares of Series D Convertible Preferred Stock of the
Company; and
ELI-II purchased the following additional securities:
(a) $1,443,000 principal amount of the Senior Notes,
(b) warrants to purchase 43,290 shares of the Company's Common
Stock, and
(c) 37,757 shares of Series D Convertible Preferred Stock of the
Company.
In making these purchases, ELI-I used working capital from its
operating account, which is funded by capital contributions from ELI-I's
limited partners and gains and proceeds from ELI-I's investment portfolio, and
ELI-II used working capital from its operating account, which is funded by
capital contributions from ELI-II's limited partners and gains and proceeds
from ELI-II's investment portfolio.
Recapitalization
On December 31, 1995, the Company consummated the
recapitalization transaction (the "Recapitalization") contemplated by that
certain Recapitalization Agreement dated as of December 31, 1995 by and between
the Company and the stockholders named therein (the "Recapitalization
Agreement"). The terms and effect of the Recapitalization Agreement are
described in Item 4 hereto and such description is incorporated by reference in
this Item 3 in its entirety. Pursuant to the Recapitalization, the
stockholders named in the Recapitalization Agreement received shares of Common
Stock of the Company on account of (i) the conversion of the outstanding shares
of the Series A, A-1 and BB Convertible Preferred Stock of the Company, (ii)
waiver of accrued dividends and certain future dividends on the outstanding
shares of the Series A, A-1 and BB Convertible Preferred Stock of the Company
and (iii) waiver of accrued dividends and certain future dividends on the
outstanding shares of the Series C and D Convertible Preferred Stock of the
Company,
<PAGE> 13
CUSIP NO. 15850B104 Page 13 of 55
respectively. On December 31, 1995, as a result of the transactions
contemplated by the Recapitalization Agreement, ELI-I received 106,463 shares
of Common Stock of the Company and ELI-II received 76,593 shares of Common
Stock of the Company.
Item 4. Purpose of Transaction.
Each of ELI-I and ELI-II have acquired securities of the
Company in the ordinary course of their respective businesses solely for
investment purposes.
Each of ELI-I and ELI-II and other investors listed therein
are parties to the D Stock Purchase Agreement pursuant to which ELI-I and
ELI-II each received Senior Subordinated Notes of Champion, warrants to
purchase Champion Common Stock and Series D Convertible Preferred Stock of
Champion (the "Initial Holdings"). On December 6, 1994, Champion merged with
and into the Company. As a result of said merger, holders of Champion
securities became holders of substantially similar securities of the company.
The terms of the D Stock Purchase Agreement provided the
Company with the right to require each of ELI-I and ELI-II to purchase
additional securities of the Company (the "Additional Securities"), which right
was exercised by the Company on December 30, 1994. The Initial Holdings and
the Additional Securities are subject to the terms and conditions set forth in
the D Stock Purchase Agreement which are herein incorporated by reference in
their entirety.
The Company and each of ELI-I, ELI-II and other holders of
Common Stock of the Company and/or any class of Preferred Stock of the Company
are party to the D Stockholders Agreement, dated December 31, 1993, as amended
(the "D Stockholders Agreement"). The D Stockholders Agreement contains a
voting agreement, restrictions on transfers of stock and limited preemptive
rights regarding the future issuance and sale of Common Stock of the Company.
Each of ELI-I and ELI-II are subject to the terms and conditions the D
Stockholders Agreement which are herein incorporated by reference in their
entirety.
The D Stock Purchase Agreement and the D Stockholders
Agreement were previously filed by the Company as Exhibits 10.5 and 10.6
respectively to the Schedule 8-K filed by the Company on December 12, 1994 and
are incorporated herein by reference.
The Company and each of ELI-I, ELI-II and other holders of
Common Stock of the Company and/or any class of Preferred
<PAGE> 14
CUSIP NO. 15850B104 Page 14 of 55
Stock of the Company are party to the Recapitalization Agreement. The primary
purpose of the Recapitalization Agreement for the Company (according to the
Company) was to reduce the complexity of the Company's capital structure and to
eliminate a $5,736,650 preferred dividend deduction from net income in
calculating earnings per share beginning in 1996 and thereafter. The
Recapitalization Agreement contains an agreement among the holders of all of
the outstanding Preferred Stock of the Company to vote in favor of a proposed
amendment (the "Proposed Amendment") to the Company's Certificate of
Incorporation with in connection with the Recapitalization. The
Recapitalization Agreement also provides for the temporary reduction in the
exercise price of the warrants to purchase Common Stock of the Company held by
ELI-I, ELI-II and other holders from $9.00 to $7.00 until 90 days after the
Company's stockholders approve the Proposed Amendment.
The Recapitalization Agreement was previously filed as Exhibit
10.1 to the Schedule 8-K filed by the Company on January 4, 1996, and is
incorporated herein by reference. The Proposed Amendment was previously filed
as Attachment II to the Preliminary Proxy Statement filed on Schedule 14A by
the Company on January 4, 1996, and is incorporated herein by reference.
Except as described above and as may be provided in the D
Stock Purchase Agreement, the D Stockholders Agreement and the Recapitalization
Agreement, neither ELI-I, ELI-II, RMDA-I, RMDA-II, DCMI, the Rohit M. Desai
Family Trust, nor any DCMI Person has any plans or proposals (other than as may
be provided in the agreements described above) which relate to or would result
in:
(a) the acquisition by any person of additional securities
of the Company or the disposition of securities of the Company, except that
ELI-I and/or ELI-II may from time to time and in furtherance of their
respective investment programs, obtain one or more shares of the Company's
Common Stock through the exercise of the warrants or the conversion of the
Series D Convertible Preferred Stock of the Company, and/or acquire (for
investment) or dispose of the Senior Notes, the warrants, the Series D
Convertible Preferred Stock of the Company or any other securities of the
Company;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its
subsidiaries;
(c) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries;
<PAGE> 15
CUSIP NO. 15850B104 Page 15 of 55
(d) any change in the present board of directors or management
of the Company (except as may be provided in the Company's charter or by-laws),
including any plans or proposals to change the number or term of directors or
to fill any existing vacancies on the board;
(e) any material change in the present capitalization or
dividend policy of the Company;
(f) any other material change in the Company's business or
corporate structure;
(g) any change in the Company's charter or by-laws;
(h) causing a class of securities of the Company to be
delisted from a national securities exchange or to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national securities
association;
(i) a class of equity securities of the Company becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934; or
(j) any action similar to those enumerated above.
Item 5. Interest in Securities of the Issuer.
ELI-I directly owns:
(a) $5,816,000 principal amount of the Senior Notes,
(b) warrants to purchase 174,480 shares of the
Company's Common Stock,
(c) 161,552 shares of Series D Convertible Preferred
Stock of the Company, and
(d) 106,463 shares of Common Stock of the Company.
Such holdings would enable ELI-I to directly control approximately 604,047
shares of the Company's Common Stock, subject to adjustment, which would
constitute beneficial ownership of approximately 4.75% of the outstanding
shares of the Company's Common Stock.
ELI-II directly owns:
<PAGE> 16
CUSIP NO. 15850B104 Page 16 of 55
(a) $4,184,000 principal amount of the Senior Notes,
(b) warrants to purchase 125,520 shares of the
Company's Common Stock,
(c) 116,226 shares of Series D Convertible Preferred
Stock of the Company, and
(d) 76,593 shares of Common Stock of the Company.
Such holdings would enable ELI-II to directly control approximately 434,565
shares of the Company's Common Stock, subject to adjustment, which would
constitute beneficial ownership of approximately 3.42% of the outstanding
shares of the Company's Common Stock.
As of such date, each of DCMI and Rohit M. Desai could be
deemed to be the beneficial owner, for purposes of this Schedule 13D, of the
entire 1,038,612 shares of the Company's Common Stock if all of the holdings of
ELI-I and ELI-II were combined, which would constitute beneficial ownership of
approximately 8.17% of the outstanding shares of the Company's Common Stock.
The power to vote, to convert, or to dispose of or to direct
the voting, conversion, or disposal of Common Stock of the Company held by
ELI-I or that might be obtainable upon the conversion of the Series D
Convertible Preferred Stock of the Company held by ELI-I and/or the exercise of
the warrants to purchase Common Stock of the Company held by ELI-I is vested in
RMDA-I as general partner of ELI-I, but such decisions (and similar decisions
with respect to the rest of ELI-I's investment portfolio) may also be made by
DCMI under an investment and advisory agreement between ELI-I and DCMI. The
power to vote, to convert, to dispose of, or to direct the voting, conversion
or disposal of, any Common Stock of the Company held by ELI-II or that might be
obtainable upon the conversion of the Series D Convertible Preferred Stock of
the Company held by ELI-II and/or the exercise of the warrants to purchase
Common Stock of the Company held by ELI-II is vested in RMDA-II as general
partner of ELI-II, but such decisions (and similar decisions with respect to
the rest of ELI-II's investment portfolio) may also be made by DCMI under an
investment and advisory agreement between ELI-II and DCMI. Rohit M. Desai is
the managing general partner of RMDA-I and RMDA-II and the sole stockholder,
chairman of the board of directors, president and treasurer of DCMI. Katharine
B. Desai is the secretary and a director of DCMI, a general partner of RMDA-I
and RMDA-II and a trustee of the Rohit M. Desai
<PAGE> 17
CUSIP NO. 15850B104 Page 17 of 55
Family Trust. The Rohit M. Desai Family Trust is a general partner of RMDA-I
and RMDA-II. Joseph F. McDonald is a trustee of the Rohit M. Desai Family
Trust. Frank J. Pados is executive vice president of DCMI. Carlos A.
Gonzalez, Antoine G. Treuille, Damon H. Ball, Thomas P. Larsen and Daniel G.
Pine are senior vice presidents of DCMI. Timothy R. Kelleher, Noah J. Walley,
Tom W. Perlmutter, Kathy T. Abramson and Catherine K. Janson are vice
presidents of DCMI.
Accordingly for purposes of Schedule 13D, ELI-I, ELI-II,
RMDA-I, RMDA-II, DCMI and Rohit M. Desai may each be deemed to share the power
to vote or to direct the vote and may be deemed to share the power to dispose
or to direct the disposition with respect to the securities held by ELI-I and
ELI-II.
Pursuant to Rule 13d-4 under the Securities Exchange Act of
1934, DCMI, RMDA-I, RMDA-II, the Rohit M. Desai Family Trust, and each of the
DCMI Persons hereby declare that the filing of this Statement shall not be
construed as an admission that any person other than ELI-I or ELI-II is the
beneficial owner of any securities covered by this Statement, or that ELI-I or
ELI-II is the beneficial owner of any securities held by the other.
ELI-I and ELI-II are each party to the D Stockholders
Agreement between the Company and certain stockholders of the Company (the
"Stockholders"). Within the meaning of Rule 13(d)(5) under the Securities
Exchange Act of 1934, as amended (the "Act"), the terms of the D Stockholders
Agreement could be deemed to provide for an agreement amongst the Stockholders
to act together for the purpose of voting equity securities of the Company.
Accordingly each of the Stockholders could be deemed to be members of a "group"
and could be deemed to be beneficial owners of all of the securities held by
such group. Each of the Stockholders denies the existence of such a group and
each disclaims beneficial ownership of the securities held by another
Stockholder, provided that ELI-I and ELI-II do not disclaim beneficial
ownership of the securities held directly by them.
ELI-I and ELI-II are each party to the Recapitalization
Agreement between the Company and the stockholders named therein (the
"Preferred Stock and Warrant Holders"). Within the meaning of Rule 13(d)(5)
under the Securities Exchange Act of 1934, as amended (the "Act"), the terms of
the Recapitalization Agreement could be deemed to provide for an agreement
amongst the Preferred Stock and Warrant Holders to act together for the purpose
of voting equity securities of the Company. Accordingly each of the Preferred
Stock and Warrant Holders should be deemed to be members
<PAGE> 18
CUSIP NO. 15850B104 Page 18 of 55
of a "group" and could be deemed to be beneficial owners of all of the
securities held by such group. Each of the Preferred Stock and Warrant Holders
denies the existence of such a group and each disclaims beneficial ownership of
the securities held by another Preferred Stock and Warrant Holder, provided
that ELI-I and ELI-II do not disclaim beneficial ownership of the securities
held directly by them.
No other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale
of, the securities covered by this Statement.
During the sixty days preceding the filing of this Schedule,
no transactions in the class of securities reported, other than the acquisition
of securities on December 31, 1995 pursuant to the Recapitalization Agreement
were effected by any persons reporting on this Statement.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of
the Issuer.
Neither ELI-I, ELI-II, RMDA-I, RMDA-II, DCMI, the Rohit M.
Desai Family Trust, nor any DCMI Person is party to any other contract,
arrangement, understanding or relationship specifically relating to any
securities of the Company other than (i) the D Stock Purchase Agreement as
amended between the Company and ELI-I and ELI-II and the other parties listed
therein (and related documents) regarding the purchase of the Senior Notes,
warrants to purchase Common Stock of the Company and the Series D Convertible
Preferred Stock of the Company (and related matters), (ii) the D Stockholders
Agreement which sets forth certain rights and obligations of the parties
thereto with respect to the Common Stock and corporate governance of the
Company, including, without limitation, certain transfer restrictions on shares
of Common Stock, certain put and call rights and obligations relating to the
Common Stock and agreements relating to the composition of the Board of
Directors of the Company, (iii) the Series D Stock Registration Agreement
among the holders of the Common Stock and Preferred Stock of Champion and the
Company, dated December 31, 1993, as amended, providing certain registration
rights to the holders of the Company's securities and (iv) the Recapitalization
Agreement regarding the issuance of Common Stock in exchange for the waiver of
certain accrued dividends and future dividends, including certain agreements to
vote in favor of a Proposed Amendment to the Certificate of Incorporation of
the Company and the temporary reduction of the exercise price of the warrants
to
<PAGE> 19
CUSIP NO. 15850B104 Page 19 of 55
purchase Common Stock of the Company until 90 days after the Company's
stockholders approve the Proposed Amendment.
ELI-I and ELI-II have each contracted with DCMI for DCMI to
provide investment advisory and other services to each of ELI-I and ELI-II.
Pursuant to their respective investment and advisory contracts, DCMI may
exercise investment power and voting power with respect to the
investment portfolios of ELI-I and ELI-II. For its services under these
investment and advisory agreements DCMI receives a management fee from each of
ELI-I and ELI-II generally based on the value of their respective portfolios.
Item 7. Material to be Filed as Exhibits.
1. Joint Filing Agreement regarding the filing of this
Statement.
2. Investment and Advisory Agreement between ELI-I and
DCMI, as amended.
3. Investment and Advisory Agreement between ELI-II and
DCMI.
4. Series D Note and Stock Purchase Agreement, dated
December 31, 1993 among the Company and the Purchasers listed therein, as
amended, filed with the Securities and Exchange Commission as Exhibit 10.5 to
the Company's Form 8-K (File No. 011851), is incorporated herein by reference.
5. D Stockholders Agreement, dated December 31, 1993,
among the Company and the Stockholders listed therein, as amended, filed with
the Securities and Exchange Commission as Exhibit 10.6 to the Company's Form
8-K (File No. 0-11851), is incorporated herein by reference.
6. Recapitalization Agreement, dated as of December 31,
1995 by and between the Company and the stockholders named therein, as amended,
filed with the Securities and Exchange Commission as Exhibit 10.1 to the
Company's Form 8-K filed by the Company on January 4, 1996, is incorporated
herein by reference.
<PAGE> 20
CUSIP NO. 15850B104 Page 20 of 55
After reasonable inquiry and to the best of their knowledge and
belief, each of the undersigned certifies that the information set forth in
this Amendment and Restatement No. 1, is true, complete and correct.
Date: January 23, 1996 EQUITY-LINKED INVESTORS, L.P.
By Rohit M. Desai Associates
General Partner
By /s/ Frank J. Pados, Jr.
---------------------------
Frank J. Pados, Jr.
Attorney-in-fact for
Rohit M. Desai
Managing General Partner
EQUITY-LINKED INVESTORS-II
By Rohit M. Desai Associates-II
General Partner
By /s/ Frank J. Pados, Jr.
---------------------------
Frank J. Pados, Jr.
Attorney-in-fact for
Rohit M. Desai
Managing General Partner
ROHIT M. DESAI ASSOCIATES
By /s/ Frank J. Pados, Jr.
---------------------------
Frank J. Pados, Jr.
Attorney-in-fact for
Rohit M. Desai
Managing General Partner
<PAGE> 21
CUSIP NO. 15850B104 Page 21 of 55
ROHIT M. DESAI ASSOCIATES-II
By /s/ Frank J. Pados, Jr.
---------------------------
Frank J. Pados, Jr.
Attorney-in-fact for
Rohit M. Desai
Managing General Partner
DESAI CAPITAL MANAGEMENT
INCORPORATED
By /s/ Frank J. Pados, Jr.
---------------------------
Frank J. Pados, Jr.
Attorney-in-fact for
Rohit M. Desai, President
/s/ Frank J. Pados, Jr.
------------------------------
Frank J. Pados, Jr.
Attorney-in-fact for
Rohit M. Desai
<PAGE> 22
CUSIP NO. 15850B104 Page 22 of 55
INVESTMENT AND ADVISORY AGREEMENT
INVESTMENT AND ADVISORY AGREEMENT, dated as of the 7th day of
June, 1984, by and between EQUITY-LINKED INVESTORS, L.P., a New York limited
partnership (the "Fund"), and DESAI CAPITAL MANAGEMENT INCORPORATED, a New York
corporation (the "Management Company").
W I T N E S S E T H:
In consideration of the mutual covenants, agreements and
conditions hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
Section 1. Services to be Rendered by the Management
Company to the Fund.
(a) The Management Company will provide the Fund with
assistance in organizing and conducting an offering of limited partnership
interests in the Fund in the manner requested by Rohit M. Desai, the general
partner of the Fund (Mr. Desai (or any general partnership of which Mr. Desai
is the managing general
<PAGE> 23
CUSIP NO. 15850B104 Page 23 of 55
partner) acting as general partner of the Fund being referred to herein as the
"General Partner").
(b) After investor limited partners have made aggregate
capital subscriptions to the Fund of at least $100,000,000 and have become
limited partners thereof, the Management Company will assist the Fund in
providing the limited partners of the Fund with a managed investment in
equity-linked securities as discussed in the Fund's Private Placement
Memorandum. The Management Company will provide the Fund with investment and
other advice and assistance in managing such a portfolio. The Management
Company will act as investment adviser for the Fund's investments. The
Management Company will locate, secure information with respect to and evaluate
and analyze prospective equity-linked investment opportunities and will make
recommendations as to which equity-linked securities should be purchased and on
what terms. The Management Company will also structure and negotiate
investments on behalf of the Fund and review and assist in the preparation of
all documentation and closings. After an investment is made by the Fund, the
Management Company will monitor investments, where appropriate will meet with
and provide advice to the management of portfolio companies and will make
2
<PAGE> 24
CUSIP NO. 15850B104 Page 24 of 55
recommendations to the Fund as to which securities should be held and which
should be sold. Subject always to the direction and control of the General
Partner of the Fund, the Management Company will perform the day to day
investment and administrative operations of the Fund and will supervise the
management of the Fund's business, operations and affairs, including management
of its investments and matters incidental thereto. The Management Company will
also furnish to the Fund such office space, office supplies and equipment, and
such bookkeeping, recordkeeping and clerical services as the Fund may require
for its reasonable needs. In the performance of its duties, the Management
Company will use its best efforts to promote the interests of the Fund;
however, the Management Company shall at all times be an independent contractor
and nothing in this Agreement shall be construed to constitute the Management
Company an agent or a partner of the Fund or of the General Partner.
(c) The Management Company will assume and pay all expenses
that relate to its services under paragraph (b) above, including without
limitation expenses on account of rent, utilities, insurance, office supplies,
office equipment, travel, entertainment
3
<PAGE> 25
CUSIP NO. 15850B104 Page 25 of 55
and salaries, other compensation, fringe benefits and expenses of the
Management Company's officers, directors, employees and agents; provided,
however, that the Management Company shall not be required to pay (and if paid
by the Management Company, shall be reimbursed by the Fund for payments of) (i)
taxes on the business, investments or operations of the Fund, (ii) professional
fees and expenses related to the business, investments or operations of the
Fund, including without limitation legal, auditing, accounting and investment
banking fees and expenses, (iii) custodian, commission or brokerage fees, (iv)
interest on borrowings by the Fund, (v) registration expenses regarding any of
the Fund's securities, (vi) fees to Advisory Board members and (vii) litigation
and other extraordinary expenses of the Fund. In addition, the Management
Company shall be reimbursed by the Fund for out-of-pocket expenses incurred in
working with portfolio investments in extraordinary circumstances such as
work-outs, mergers and acquisitions in an amount not exceeding in any year one
half of one percent of the product of (x) the aggregate capital subscriptions
of all limited partners of the Fund as of the beginning of such year times (y)
the amount by which the Inflation Adjustment (as defined
4
<PAGE> 26
CUSIP NO. 15850B104 Page 26 of 55
in Section 3(d) hereof) exceeds one (1). The Management Company shall not be
obligated to pay any expenses of or for the Fund not contemplated to be paid
by the Management Company by this Section 1.
Section 2. Other Interests of the Management Company,
the Fund and Others.
(a) It is understood that (i) any partner of the Fund (a
"Partner") or any partner of the General Partner may be a stockholder,
director, officer, employee or agent of, or be otherwise interested in, the
Management Company, any organization in which the Management Company may have
an interest or any organization which may have an interest in the Management
Company, (ii) any stockholder, director, officer, employee or agent of the
Management Company may be a partner of, or otherwise have an interest in, the
General Partner or the Fund and (iii) any stockholder, director, officer,
employee or agent of the Management Company, any Partner, any partner of the
General Partner and any employees of a Partner or of a partner of the General
Partner, may act as directors of or provide consulting or other services to one
or more of the
5
<PAGE> 27
CUSIP NO. 15850B104 Page 27 of 55
entities in which the Fund may have an investment from time to time.
(b) The Management Company may render management and
investment advice of the type described in Section 1 hereof, and the Management
Company may offer equity-linked securities investment opportunities, to any
other person, including without limitation any corporation, partnership,
association, business, trust, individual or other entity (a "Person").
However, at any time that 100% of the capital contributed to the Fund is not
invested in equity-linked securities, (i) the Management Company shall first
offer all equity-linked securities investment opportunities to the Fund and (ii)
the Management Company shall have the right to offer such investment
opportunities to other Persons only to the extent that the Fund is unable or
declines to make the investment.
Section 3. Payments to be Made by the Fund.
(a) As full compensation for the services rendered and
expenses borne by the Management Company pursuant to Section 1(a) hereof, the
Fund shall pay fees ("Initial Fees") to the Management Company in an
6
<PAGE> 28
CUSIP NO. 15850B104 Page 28 of 55
aggregate amount of up to $1,100,000. It is understood that the Initial Fees
shall aggregate at least $600,000 and may be any aggregate amount up to
$1,100,000 as the Management Company may request (with the concurrence of the
General Partner). Initial Fees shall be paid to the Management Company
promptly upon demand.
(b) As full compensation for the services rendered and expenses borne
by the Management Company pursuant to Section 1(b) hereof, the Fund shall pay
the Management Company management fees ("Management Fees") calculated and paid
as provided below in paragraphs (c), (d) and (e).
(c) The quarterly Management Fee will be the amount equal to the
product of (I) the Inflation Adjustment (as defined in paragraph (d) below)
times (II) the greater of (i) .25% per annum of the net asset value (based on
the Fund's valuations) of the assets invested by the Fund as of the last day of
the preceding calendar quarter or (ii) the lesser of (A) $500,000 or (B) .25%
per annum of the total assets contributed or subscribed to the Fund as of the
first day of such calendar quarter.
(d) The "Inflation Adjustment" shall be one (1) for the 1985 and 1986
calendar years and for each
7
<PAGE> 29
CUSIP NO. 15850B104 Page 29 of 55
year thereafter shall be equal to a fraction the numerator of which is equal to
the revised Consumer Price Index of the Bureau of Labor Statistics for All
Urban Consumers, New York - Northeastern New Jersey Area (1967=100) (the
"Index") for December of the preceding year, and the denominator of which shall
be equal to the Index for December 1985. Appropriate modification to the
Inflation Adjustment shall be made if the index shall cease to be updated as of
calendar year-end.
(e) Management Fees shall begin accruing as of the date (the "Closing
Date") when investor limited partners with capital subscriptions of at least
$50,000,000 are admitted to the Fund. The Management Fee for the calendar
quarter in which the Closing Date occurs shall be computed as set forth above
but shall be pro rated according to the number of days from the Closing Date to
the end of such calendar quarter; such Initial Management Fee shall be due and
payable in full on the Closing Date. Subsequently, the quarterly Management
Fee shall be paid in full on the first business day of each January, April,
July and October of each year during the term of this Agreement; provided,
however, that payments on any such payment date may be estimated based on the
most recent available Inflation
8
<PAGE> 30
CUSIP NO. 15850B104 Page 30 of 55
Adjustment or the most recent available Fund asset valuation as of the end of a
calendar quarter, subject to appropriate adjustment (by payments to the
Management Company or the Fund, as the case may be) as soon as the proper
Inflation Adjustment or Fund-asset valuation becomes available.
(f) The amount of the Management Fees payable by the Fund pursuant to
this Section 3 shall not be reduced by the amount of any fees paid to any
stockholder, director, officer, employee or agent of the Management Company or
any of their affiliates by any Person (including, without limitation, any
Person in which the Fund has made an investment), including without limitation
directors' fees, investment banking fees and financial consulting fees.
Section 4. Effective Period and Termination
of this Agreement.
This Agreement shall become effective as of the date hereof and shall
remain in effect until the Fund is terminated and wound-up unless it is sooner
unilaterally terminated by the General Partner on behalf of the Fund by giving
not less than six months' prior written notice to the Management Company.
9
<PAGE> 31
CUSIP NO. 15850B104 Page 31 of 55
Section 5. Indemnification and Liability.
(a) Neither the Management Company nor any stockholder, officer,
director employee or agent thereof shall be liable to the Fund or any Partner
for (i) mistakes of judgment or for any act or omission suffered or taken by it
or him (or her), or for losses due to any such mistakes, action or inaction,
except to the extent of willful misfeasance, bad faith or gross negligence of
such Person or (ii) for the willful misfeasance, gross negligence, bad faith or
other conduct of any officer, employee, representative, consultant, independent
contractor, broker or agent of such Person, provided that such officer,
employee, representative, consultant, independent contractor, broker or agent
was selected, engaged or retained in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the Fund.
(b) The Management Company and its stockholders, officers,
directors, employees and agents shall be fully protected and are hereby
indemnified, to the fullest extent permitted by applicable law, by the Fund out
of Fund assets against any and all liabilities, losses, damages and expenses
(including without
10
<PAGE> 32
CUSIP NO. 15850B104 Page 32 of 55
limitation (1) legal fees and expenses and (2) any amounts paid in respect of
judgments, fines or settlement of litigation) suffered or incurred in any
actual or threatened claim, action or proceeding as a result or by reason of
this Agreement or employment by the fund; provided, that the foregoing
indemnity shall not apply to the extent that any action or inaction by such
indemnified person is determined by a final judgment to have constituted gross
negligence, willful misfeasance or bad faith.
(c) The Management Company and its stockholders, officers, directors,
employees and agents may consult with legal counsel or accountants selected by
such Person and any action or omission suffered or taken in good faith in
reliance and in accordance with the opinion or advice of any such counsel or
accountants (provided it, she or he has been selected with reasonable care)
shall be full protection and justification with respect to the action or
omission so suffered or taken.
(d) The provisions of this Section 5 shall survive any termination of
this Agreement.
11
<PAGE> 33
CUSIP NO. 15850B104 Page 33 of 55
Section 6. Binding Nature.
All covenants and agreements contained herein shall be binding upon,
and inure to the benefit of, the parties and their respective permitted
successors and permitted assigns; provided that neither party may assign this
Agreement without the written consent of the other party.
Section 7. Notices.
Unless otherwise expressly specified or permitted by the terms hereof,
all notices, requests, demands and instructions hereunder shall be in writing
and shall be delivered by hand or shall be mailed by registered or certified
mail, postage prepaid, to the following addresses:
(i) if to the Fund,
Equity-Linked Investors, L.P.
654 Madison Avenue
New York, NY 10021
Attn: Rohit M. Desai
12
<PAGE> 34
CUSIP NO. 15850B104 Page 34 of 55
(ii) if to the Management Company,
Desai Capital Management
Incorporated
654 Madison Avenue
New York, NY 10021
Attn: President
or at such other address as any of the foregoing parties may from time to time
designate in writing to the other parties to this Agreement. Whenever any
notice is required to be given hereunder, such notice shall be deemed given and
such requirement satisfied only when such notice is delivered or, if mailed,
when received, unless otherwise expressly specified or permitted by the terms
hereof.
Section 8. Severability.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive
13
<PAGE> 35
CUSIP NO. 15850B104 Page 35 of 55
any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
Section 9. Requirement of Writing.
No term or provision of this Agreement may be amended, waived,
discharged or terminated orally, but only by an instrument in writing signed by
both Parties.
Section 10. Headings.
The headings of the various sections herein are for convenience of
reference only and shall not define, limit or otherwise affect any of the terms
or provisions hereof.
Section 11. Governing Law.
This Agreement and all rights hereunder shall be construed in
accordance with and governed by the laws of the State of New York (without
regard to any rules or principles of conflicts of laws that might look to any
jurisdiction outside of New York).
14
<PAGE> 36
CUSIP NO. 15850B104 Page 36 of 55
Section 12. Entire Agreement.
This Agreement supersedes any and all oral or written agreements or
understandings heretofore made, and contains the entire agreement of the
parties, with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective partner or officer, as the case may be, thereunto
duly authorized as of the day and year first above written.
DESAI CAPITAL MANAGEMENT
INCORPORATED
By /s/ ROHIT M. DESAI
---------------------
Rohit M. Desai,
President
EQUITY-LINKED INVESTORS, L.P.
By /s/ ROHIT M. DESAI
---------------------
Rohit M. Desai,
General Partner
15
<PAGE> 37
CUSIP NO. 15850B104 Page 37 of 55
AMENDMENT dated as of January 1, 1985
to the Investment and Advisory Agreement
AMENDMENT dated as of January 1, 1985 between the undersigned.
Reference is made to the Investment and Advisory Agreement dated as of
June 7, 1984 (the "Investment and Advisory Agreement") between Equity-Linked
Investors, L.P. (the "Fund") and Desai Capital Management Incorporated (the
"Management Company").
The undersigned hereby amend the Investment and Advisory Agreement in
the following respects:
a. The words "per annum" in the fourth line and the eighth
line of Section 3(c) of the Investment and Advisory Agreement
are superfluous and are hereby deleted.
b. The phrase "as of the first day of such calendar quarter"
at the end of Section 3(c) of the Investment and Advisory
Agreement is hereby amended to read "as of the first business
day (being a day, other than a Saturday, Sunday or legal
holiday in New York, on which Bankers Trust Company is open
for business in New York, New York) of such calendar quarter".
c. The following is hereby added at the end of Section 3(c) of
the Investment and Advisory Agreement; "If additional
contributions or subscriptions are made by existing or
additional partners of the Fund during a calendar quarter
(after the first business day thereof), then the Management
Fee for such quarter shall be recalculated. Such
recalculation shall use the formula contained in the first
sentence of this Section 3(c) except that the following amount
shall be used for item II(ii)(B) of such formula: .25% of the
average daily amount during such calendar quarter of the total
assets contributed or subscribed to the Fund. If such
recalculation results in an increased Management Fee then such
additional unpaid amount shall be promptly paid to the
Management Company".
<PAGE> 38
CUSIP NO. 15850B104 Page 38 of 55
d. The following is hereby added at the end of Section 6
of the Investment and Advisory Agreement: "provided, further,
that the Management Company may not assign this Agreement
without the consent referred to in Section 205(2) of the
Investment Advisers Act of 1940".
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their duly authorized representatives as of
the day and year first above written.
Equity-Linked Investors, L.P.
By: Rohit M. Desai Associates,
General Partner
By: /s/ ROHIT M. DESAI
--------------------------
Rohit M. Desai,
Managing General Partner
Desai Capital Management
Incorporated
By: /s/ ROHIT M. DESAI
--------------------------
Rohit M. Desai, President
-2-
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CUSIP NO. 15850B104 Page 39 of 55
AMENDMENT dated as or June 16, 1986
to the Investment and Advisory Agreement
AMENDMENT dated as of June 16, 1986 between the undersigned.
Reference is made to the Investment and Advisory Agreement dated as of
June 7, 1984, as amended (the "Investment and Advisory Agreement") between
Equity-Linked Investors, L.P. (the "Fund") and Desai Capital Management
Incorporated (the "Management Company").
The undersigned hereby amend the Investment and Advisory Agreement in
the following respect:
The following is hereby added at the end of Section 5(a) of the
Investment and Advisory Agreement: "The federal securities laws impose
liabilities under certain circumstances on persons who act in good faith, and
therefore nothing herein shall in any way constitute a waiver or limitation of
any rights which may exist under any federal securities laws."
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their duly authorized representatives as of
the day and year first above written.
Equity-Linked Investors, L.P.
By: Rohit M. Desai Associates,
General Partner
By: /s/ ROHIT M. DESAI
--------------------------
Rohit M. Desai,
Managing General Partner
Desai Capital Management
Incorporated
By: /s/ ROHIT M. DESAI
--------------------------
Rohit M. Desai, President
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CUSIP NO. 15850B104 Page 40 of 55
INVESTMENT AND ADVISORY AGREEMENT
INVESTMENT AND ADVISORY AGREEMENT, dated as of the 1st day of October,
1987, by and between EQUITY-LINKED INVESTORS-II, a New York limited partnership
(the "Fund"), and DESAI CAPITAL MANAGEMENT INCORPORATED, a New York corporation
(the "Management Company").
W I T N E S S E T H:
In consideration of the mutual covenants, agreements and conditions
hereinafter set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
Section 1. Services to be Rendered by the Management
Company to the Fund.
(a) The Management Company will provide the Fund with assistance
in organizing and conducting an offering of limited partnership interests in
the Fund in the manner requested by Rohit M. Desai Associates-II, the general
partner of the Fund (the "General Partner").
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CUSIP NO. 15850B104 Page 41 of 55
(b) Upon the formation of the Fund, the Management Company will assist
the Fund in providing the limited partners of the Fund with a managed
investment in equity-linked securities as discussed in the Fund's private
placement memorandum. The Management Company will provide the Fund with
investment and other advice and assistance in managing such a portfolio. The
Management Company will act as investment adviser for the Fund's investments.
The Management Company will locate, secure information with respect to and
evaluate and analyze prospective equity-linked investment opportunities and
will make recommendations as to which equity-linked securities should be
purchased and on what terms. The Management Company will also structure and
negotiate investments on behalf of the Fund and review and assist in the
preparation of all documentation and closings. After an investment is made by
the Fund, the Management Company will monitor investments and will make
recommendations to the Fund as to which securities should be held and which
should be sold. Subject always to the direction and control of the General
Partner of the Fund, the Management Company will perform the day-to-day
investment and administrative operations of the Fund and will supervise the
management of the Fund's
2
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CUSIP NO. 15850B104 Page 42 of 55
business, operations and affairs, including management of its investments and
matters incidental thereto. The Management Company will also furnish to the
Fund such office space, office supplies and equipment, and such bookkeeping,
recordkeeping and clerical services as the Fund may require for its reasonable
needs. In the performance of its duties, the Management Company will use its
best efforts to promote the interests of the Fund; however, the Management
Company shall at all times be an independent contractor and nothing in this
Agreement shall be construed to constitute the Management Company an agent or a
partner of the Fund or of the General Partner.
(c) The Management Company will assume and pay all expenses that
relate to its services under paragraph (b) above, including without limitation
expenses on account of rent, utilities, insurance, office supplies, office
equipment, travel, entertainment and salaries, other compensation, fringe
benefits and expenses of the Management Company's officers, directors,
employees and agents; provided, however, that the Management Company shall not
be required to pay (and if paid by the Management Company, shall be reimbursed
by the Fund for payments of) (i) taxes on the business,
3
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CUSIP NO. 15850B104 Page 43 of 55
investments or operations of the Fund, (ii) professional fees and expenses
related to the business, investments or operations of the Fund, including
without limitation legal, auditing, accounting and investment banking fees and
expenses, (iii) custodian, commission or brokerage fees, (iv) interest on
borrowings by the Fund, (v) registration expenses regarding any of the Fund's
securities, (vi) fees to Advisory Board members and (vii) litigation and other
extraordinary expenses of the Fund. In addition, the Management Company shall
be reimbursed by the Fund for out-of-pocket expenses incurred in working with
portfolio investments in extraordinary circumstances work-outs, mergers and
acquisitions in an amount exceeding in any year one half of one percent of the
product of (x) the aggregate capital subscriptions of all limited partners of
the Fund as of the beginning of such year times (y) the amount by which the
Inflation Adjustment (as defined in Section 3(d) hereof) exceeds one (1). The
Management Company shall not be obligated to pay any expenses of or for the
Fund not contemplated to be paid by the Management Company by this Section 1.
4
<PAGE> 44
CUSIP NO. 15850B104 Page 44 of 55
Section 2. Other Interests of the Management Company,
the Fund and Others
(a) It is understood that (i) any partner of the Fund (a "Partner") or
any partner of the General Partner may be a stockholder, director, officer,
employee or agent of, or be otherwise interested in, the Management Company,
any organization in which the Management Company may have an interest or any
organization which may have an interest in the Management Company, (ii) any
stockholder, director, officer, employee or agent of the Management Company may
be a partner of, or otherwise have an interest in, the General Partner or the
Fund and (iii) any stockholder, director, officer, employee or agent of the
Management Company, any Partner, any partner of the General Partner and any
employees of a Partner or of a partner of the General Partner, may act as
directors of or provide consulting or other services to one or more of the
entities in which the Fund may have an investment from time to time.
(b) The Management Company may render management and investment advice
of the type described
5
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CUSIP NO. 15850B104 Page 45 of 55
in Section 1 hereof, and the Management Company may offer equity-linked
securities investment opportunities, to any other person, including without
limitation any corporation, partnership, association, business, trust,
individual or other entity (a "Person").
Section 3. Payments to be Made by the Fund.
(a) As full compensation for the services rendered and expenses borne
by the Management Company pursuant to Section 1(a) hereof, the Fund shall pay
fees ("Organizational and Initial Fees") to the Management Company in an amount
equal to 1% of the capital contributed to the Fund (other than as reinvestment
of Fund ordinary income distributions). This fee will be payable to the
Management Company on January 2, 1988, with respect to capital contributions
through that date, and upon each subsequent capital contribution, provided that
Mr. Desai is alive on January 2, 1988. The Organizational and Initial Fee will
be paid to the Management Company regardless of the extent to which the
Management Company incurs expenses and no accounting from the Management
Company to the Fund will be required in this connection.
6
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CUSIP NO. 15850B104 Page 46 of 55
(b) As full compensation for the services rendered and expenses
borne by the Management Company pursuant to Section 1(b) hereof, the Fund shall
pay the Management Company management fees ("Management Fees") calculated and
paid as provided below in paragraphs (c), (d) and (e).
(c) The quarterly Management Fee will be the amount equal to the
product of (I) the Inflation Adjustment (as defined in paragraph (d) below)
times (II) the greater of (i) .25% of the net asset value (based on the Fund's
valuations) of the assets of the Fund as of the first business day (being a
day, other than a Saturday, Sunday or legal holiday in New York, on which
Bankers Trust Company is open for business in New York, New York) of such
calendar quarter or (ii) the lesser of (A) $500,000 or (B) .25% of the total
assets contributed or subscribed to the Fund as of the first business day
(being a day, other than a Saturday, Sunday or legal holiday in New York, on
which Bankers Trust Company is open for business in New York, New York) of such
calendar quarter. If additional contributions or subscriptions are made by
existing or additional partners of the Fund during a calendar quarter (after
the first business day thereof), then the Management Fee
7
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CUSIP NO. 15850B104 Page 47 of 55
for such quarter shall be recalculated. Such recalculation shall use the
formula contained in the first sentence of this Section 3(c) except that the
following amount shall be used for item II(ii)(B) of such formula: .25% of the
average daily amount during such calendar quarter of the total assets
contributed or subscribed to the Fund. If such recalculation results in an
increased Management Fee, then such additional unpaid amount shall be promptly
paid to the Management Company.
(d) The "Inflation Adjustment" shall be one (1) for the 1988 and 1989
calendar years and for each year thereafter shall be equal to a fraction the
numerator of which is equal to the revised Consumer Price index of the Bureau
of Labor Statistics for All Urban Consumers, New York - Northeastern New Jersey
Area (1967=100) (the "Index") for December of the preceding year, and the
denominator of which shall be equal to the Index for December 1988.
Appropriate modification to the Inflation Adjustment shall be made if the Index
shall cease to be updated as of calendar year-end.
(e) Management Fees shall begin accruing as of the date hereof. The
Management Fee for the calendar quarter in which the date hereof occurs shall
be
8
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CUSIP NO. 15850B104 Page 48 of 55
computed as set forth above but shall be pro rated according to the number of
days from the date hereof to the end of such calendar quarter; such initial
Management Fee shall be due and payable in full on the date hereof.
Subsequently, the quarterly Management Fee shall be paid in full on the first
business day (being a day, other than a Saturday, Sunday or legal holiday in
New York, on which Bankers Trust Company is open for business in New York, New
York) of each January, April, July and October of each year during the term of
this Agreement; provided, however, that payments on any such payment date may be
estimated based on the most recent available Inflation Adjustment or the most
recent available Fund asset valuation as of the first business day of a
calendar quarter, subject to appropriate adjustment (by payments to the
Management Company or the Fund, as the case may be) as soon as the proper
Inflation Adjustment or Fund asset valuation becomes available.
(f) The amount of the Management Fees payable by the Fund pursuant
to this Section 3 shall not be reduced by the amount of any fees paid to any
stockholder, director, officer, employee or agent of the Management Company or
any of their affiliates by any
9
<PAGE> 49
CUSIP NO. 15850B104 Page 49 of 55
Person (including, without limitation, any Person in which the Fund has made an
investment), including without limitation directors' fees, investment banking
fees and financial consulting fees.
Section 4. Effective Period and Termination
of this Agreement.
This Agreement shall become effective as of the date hereof and shall
remain in effect until the Fund is terminated and wound-up unless it is sooner
unilaterally terminated by the General Partner on behalf of the Fund by giving
not less than six months' prior written notice to the Management Company.
Section 5. Indemnification and Liability.
(a) Neither the Management Company nor any stockholder, officer,
director, employee or agent thereof shall be liable to the Fund or any Partner
for (i) mistakes of judgment or for any act or omission suffered or taken by it
or him (or her), or for losses due to any such mistakes, action or inaction,
except to the extent of willful misfeasance, bad faith or gross
10
<PAGE> 50
CUSIP NO. 15850B104 Page 50 of 55
negligence of such Person or (ii) for the willful misfeasance, gross
negligence, bad faith or other conduct of any officer, employee,
representative, consultant, independent contractor, broker or agent of such
Person, provided that such officer, employee, representative, consultant,
independent contractor, broker or agent was selected, engaged or retained in
good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the Fund. The federal securities laws impose liabilities
under certain circumstances on persons who act in good faith, and therefore
nothing herein shall in any way constitute a waiver or limitation of any rights
which may exist under any federal securities laws.
(b) The Management Company and its stockholders, officers, directors,
employees and agents shall be fully protected and are hereby indemnified, to
the fullest extent permitted by applicable law, by the Fund out of Fund assets
against any and all liabilities, losses, damages and expenses (including
without limitation (1) legal fees and expenses and (2) any amounts paid in
respect of judgments, fines or settlement of litigation) suffered or incurred
in any actual or threatened claim, action or proceeding as a
11
<PAGE> 51
CUSIP NO. 15850B104 Page 51 of 55
result or by reason of this Agreement or employment by the Fund; provided, that
the foregoing indemnity shall not apply to the extent that any action or
inaction by such indemnified person is determined by a final judgment to have
constituted gross negligence, willful misfeasance or bad faith.
(c) The Management Company and its stockholders, officers, directors,
employees and agents may consult with legal counsel or accountants
selected by such Person and any action or omission suffered or taken in good
faith in reliance and in accordance with the opinion or advice of any such
counsel or accountants (provided it, she or he has been selected with
reasonable care) shall be full protection and justification with respect to the
action or omission so suffered or taken.
(d) The provisions of this Section 5 shall survive any termination of
this Agreement.
Section 6. Binding Nature.
All covenants and agreements contained herein shall be binding upon,
and inure to the benefit of, the parties and their respective permitted
successors and
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CUSIP NO. 15850B104 Page 52 of 55
permitted assigns; provided that neither party may assign this Agreement
without the written consent of the other party; provided, further, that the
Management Company may not assign this Agreement without the consent referred
to in Section 205(2) of the Investment Advisers Act of 1940.
Section 7. Notices.
Unless otherwise expressly specified or permitted by the terms hereof,
all notices, requests, demands and instructions hereunder shall be in writing
and shall be delivered by hand or shall be mailed by registered or certified
mail, postage prepaid, to the following addresses;
(i) if to the Fund,
Equity-Linked Investors-II
540 Madison Avenue
New York, NY 10022
Attn: Rohit M. Desai
(ii) if to the Management Company,
Desai Capital Management
Incorporated
540 Madison Avenue
New York, NY 10022
Attn: President
or at such other address as any of the foregoing parties
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<PAGE> 53
CUSIP NO. 15850B104 Page 53 of 55
may from time to time designate in writing to the other parties to this
Agreement. Whenever any notice is required to be given hereunder, such notice
shall be deemed given and such requirement satisfied only when such notice is
delivered or, if mailed, when received, unless otherwise expressly specified or
permitted by the terms hereof.
Section 8. Severability.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by applicable law, the parties
hereby waive any provision of law which renders any provision hereof prohibited
or unenforceable in any respect.
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CUSIP NO. 15850B104 Page 54 of 55
Section 9. Requirement of Writing.
No term or provision of this Agreement may be amended, waived,
discharged or terminated orally, but only by an instrument in writing signed by
both Parties.
Section 10. Headings.
The headings of the various sections herein are for convenience of
reference only and shall not define, limit or otherwise affect any of the terms
or provisions hereof.
Section 11. Governing Law.
This Agreement and all rights hereunder shall be construed in
accordance with and governed by the laws of the State of New York (without
regard to any rules or principles of conflicts of laws that might look to any
jurisdiction outside of New York).
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CUSIP NO. 15850B104 Page 55 of 55
Section 12. Entire Agreement.
This Agreement supersedes any and all oral or written agreements or
understandings heretofore made, and contains the entire agreement of the
parties, with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective partner or officer, as the case may be, thereunto
duly authorized as of the day and year first above written.
DESAI CAPITAL MANAGEMENT
INCORPORATED
By /s/ ROHIT M. DESAI
--------------------------
Rohit M. Desai,
President
EQUITY-LINKED INVESTORS-II
By Rohit M. Desai Associates-II,
General Partner
By /s/ ROHIT M. DESAI
--------------------------
Rohit M. Desai,
Managing General Partner
16
