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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 2
to
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Allou Health & Beauty Care, Inc.
--------------------------------
(Name of Issuer)
Class A Common Stock, $0.001 par value per share
------------------------------------------------
(Title of Class of Securities)
019782101
---------
(CUSIP Number)
RFE Investment Partners VI, L.P.
36 Grove Street
New Canaan, CT 06840
Telephone: (203) 966-2800
Attention: Mr. Howard C. Landis
with a copy to:
Finn Dixon & Herling LLP
One Landmark Square
Stamford, CT 06901
Telephone: (203) 325-5000
Attention: Charles J. Downey III, Esq.
--------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
September 26, 2000
------------------
(Date of Event which Requires Filing of this Statement)
1
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Cusip No. 019782101 SCHEDULE 13D
1 Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
RFE Investment Partners VI, L.P.
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
WC
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
Number of (7) Sole Voting Power 1,700,000, upon the exercise
Shares Bene- of the Warrants described
ficially Owned herein
by Each
Reporting (8) Shared Voting Power 0
Person With
(9) Sole Dispositive Power 1,700,000, upon the exercise
of the Warrants described
herein
(10) Shared Dispositive Power 0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2
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1,700,000, upon the exercise of the Warrants described herein
12 Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
23.28% of the Class A Common upon exercise of Warrants
14 Type of Reporting Person (See Instructions)
PN
3
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Cusip No. 019782101 SCHEDULE 13D
1 Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
RFE Associates VI, LLC
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
Number of (7) Sole Voting Power 1,700,000, upon the exercise
Shares Bene- of the Warrants described
ficially Owned herein
by Each
Reporting (8) Shared Voting Power 0
Person With
(9) Sole Dispositive Power 1,700,000, upon the exercise
of the Warrants described
herein
(10) Shared Dispositive Power
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,700,000, upon the exercise of the Warrants
4
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12 Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
23.28% of the Class A Common Stock upon the exercise of the Warrants
14 Type of Reporting Person (See Instructions)
OO - LLC
5
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Cusip No. 019782101 SCHEDULE 13D
1 Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
RFE Management Corporation
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
Number of (7) Sole Voting Power 0
Shares Bene-
ficially Owned
by Each
Reporting (8) Shared Voting Power 1,700,000, upon the exercise
Person With of the Warrants described
herein
(9) Sole Dispositive Power 0
(10) Shared Dispositive Power 1,700,000, upon the exercise
of the Warrants described
herein
11 Aggregate Amount Beneficially Owned by Each Reporting Person
6
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1,700,000, upon the exercise of the Warrants
12 Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
23.28% of the Class A Common Stock upon the exercise of the Warrants
14 Type of Reporting Person (See Instructions)
IA
7
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Cusip No. 019782101 SCHEDULE 13D
1 Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
A. Dean Davis
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Number of (7) Sole Voting Power 0
Shares Bene-
ficially Owned
by Each
Reporting (8) Shared Voting Power 1,700,000, upon the exercise
Person With of the Warrants described
herein
(9) Sole Dispositive Power 0
(10) Shared Dispositive Power 1,700,000, upon the exercise
of the Warrants described
herein
11 Aggregate Amount Beneficially Owned by Each Reporting Person
8
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1,700,000, upon the exercise of the Warrants
12 Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
23.28% of the Class A Common Stock upon the exercise of the Warrants
14 Type of Reporting Person (See Instructions)
IN
9
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Cusip No. 019782101 SCHEDULE 13D
1 Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Michael J. Foster
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States
Number of (7) Sole Voting Power 0
Shares Bene-
ficially Owned
by Each
Reporting (8) Shared Voting Power 1,700,000, upon the exercise
Person With of the Warrants described
herein
(9) Sole Dispositive Power 0
(10) Shared Dispositive Power 1,700,000, upon the exercise
of the Warrants described
herein
11 Aggregate Amount Beneficially Owned by Each Reporting Person
10
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1,700,000, upon the exercise of the Warrants
12 Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
23.28% of the Class A Common Stock upon the exercise of the Warrants
14 Type of Reporting Person (See Instructions)
IN
11
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Cusip No. 019782101 SCHEDULE 13D
1 Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Howard C. Landis
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States
Number of (7) Sole Voting Power 0
Shares Bene-
ficially Owned
by Each
Reporting (8) Shared Voting Power 1,700,000, upon the exercise
Person With of the Warrants described
herein
(9) Sole Dispositive Power 0
(10) Shared Dispositive Power 1,700,000, upon the exercise
of the Warrants described
herein
11 Aggregate Amount Beneficially Owned by Each Reporting Person
12
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1,700,000, upon the exercise of the Warrants
12 Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
23.28% of the Class A Common Stock upon exercise of the Warrants
14 Type of Reporting Person (See Instructions)
IN
13
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Cusip No. 019782101 SCHEDULE 13D
1 Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
James A. Parsons
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States
Number of (7) Sole Voting Power 0
Shares Bene-
ficially Owned
by Each
Reporting (8) Shared Voting Power 1,700,000, upon the exercise
Person With of the Warrants described
herein
(9) Sole Dispositive Power 0
(10) Shared Dispositive Power 1,700,000, upon the exercise
of the Warrants described
herein
11 Aggregate Amount Beneficially Owned by Each Reporting Person
14
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1,700,000, upon the exercise of the Warrants
12 Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
23.28% of the Class A Common Stock upon exercise of the Warrants
14 Type of Reporting Person (See Instructions)
IN
15
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Cusip No. 019782101 SCHEDULE 13D
1 Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Andrew J. Wagner
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States
Number of (7) Sole Voting Power 0
Shares Bene-
ficially Owned
by Each
Reporting (8) Shared Voting Power 1,700,000, upon the exercise
Person With of the Warrants described
herein
(9) Sole Dispositive Power 0
(10) Shared Dispositive Power 1,700,000, upon the exercise
of the Warrants described
herein
11 Aggregate Amount Beneficially Owned by Each
16
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Reporting Person
1,700,000, upon the exercise of the Warrants
12 Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
23.28% of the Class A Common Stock upon exercise of the Warrants
14 Type of Reporting Person (See Instructions)
IN
17
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AMENDMENT NO. 2 TO STATEMENT ON SCHEDULE 13D
This Amendment No. 2 amends the Statement on Schedule 13D, as
previously amended, filed by the reporting persons identified on the signature
pages hereto with respect to the Class A Common Stock, $.001 par value per share
(the "Class A Common Stock"), of Allou Health & Beauty Care, Inc., a Delaware
corporation ("Allou").
Items 3, 4, 5, 6, and 7 are hereby amended and restated in their
entirety as set forth below:
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
RFE Partners is a private investment limited partnership funded by its
partners for the purpose of making investments. No portion of the purchase price
of the Class A Common Stock Purchase Warrants described herein was funded by
borrowings from third parties for the specific purpose of acquiring, holding,
trading or voting these securities.
ITEM 4. PURPOSE OF TRANSACTION.
On July 25, 2000, RFE Partners, Allou, and the other subsidiaries of
Allou which are also Borrowers named therein, entered into a Subordinated Note
and Warrant Purchase Agreement ("Purchase Agreement") pursuant to which RFE
Partners purchased a 12% Senior Subordinated Promissory Note in the face amount
of Eleven Million Four Hundred Seventy Thousand Five Hundred Eighty Eight
Dollars ($11,470,588.00), issued by Allou and the other Borrowers named therein,
dated as of July 25, 2000 ("Note"), and received a Class A Common Stock Warrant
issued by Allou, dated as of July 25, 2000 ("Warrant"), which is exercisable for
One Million Three Hundred Thousand (1,300,000) shares of Class A Common Stock.
The exercise price of the Warrant is initially $4.50 per share, but is subject
to adjustment based upon earnings per share and EBITDA criteria, and is further
subject to anti-dilution adjustment, all as set forth in the Warrant. The
Purchase Agreement contemplated that RFE Partners might purchase an additional
note or notes and an additional Warrant or Warrants exercisable for additional
shares of Class A Common Stock, which additional shares may number from Four
Hundred Thousand (400,000) to Six Hundred Eighty Three Thousand Three Hundred
Thirty Three (683,333).
On September 26, 2000, RFE Partners, Allou, and the other subsidiaries
of Allou which are also Borrowers named therein, entered into Amendment No. 1 to
the Purchase Agreement, pursuant to which RFE Partners purchased a 12% Senior
Subordinated Promissory Note in the face amount of Three Million Five Hundred
Twenty Nine Thousand Four Hundred Twelve Dollars ($3,529,412.00), issued by
Allou and the other Borrowers named therein, dated as of September 26, 2000
("Second Note"), and received a Class A Common Stock Warrant issued by Allou,
dated as of September 26, 2000 ("Second Warrant"), which is exercisable for Four
18
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Hundred Thousand (400,000) shares of Class A Common Stock. The terms and
conditions which govern the Second Note and the Second Warrant are the same as
those which govern the initial Note and the initial Warrant, respectively.
(This section does not provide a complete description of the Purchase
Agreement, the Note or the Warrant, and is qualified in its entirety by
reference to the respective agreement or document, which is listed as an exhibit
hereto and incorporated by reference from Allou's filing on Form 8-K with the
SEC dated August 2, 2000.)
RFE Partners purchased the Note, the Second Note, the Warrant and the
Second Warrant for investment purposes only.
ITEM 5. INTEREST IN THE SECURITIES OF THE ISSUER.
(a) and (b) RFE Partners: Pursuant to the terms of the Purchase
Agreement and the Warrant and the Second Warrant (together, the "Warrants"), RFE
Partners may exercise the Warrants and thereby acquire up to 1,700,000 shares of
Class A Common Stock, representing 23.28% of the outstanding shares of the Class
A Common Stock (calculated on the basis of the 5,602,903 shares outstanding, as
reported by Allou in its 10Q-A filed September 8, 2000, plus the shares issuable
upon exercise of the Warrants). RFE Partners does not own of record any shares
of Class A Common Stock or any shares of the Class B Common Stock, $.001 par
value per share, of the Company (the "Class B Common Stock" and, together with
the Class A Common Stock, the "Common Stock").
RFE Associates: By virtue of its position as the general partner of RFE
Partners, RFE Associates may be deemed to have the power to vote or direct the
voting of and to dispose or direct the disposition of, the shares of Class A
Common Stock over which RFE Partners may be deemed to have the power to vote or
direct the voting and to dispose or direct the disposition. RFE Associates does
not own of record any shares of Class A Common Stock or Class B Common Stock.
RFE Management: By virtue of its function as investment advisor to RFE
Partners, RFE Management may be deemed to share the power to vote or direct the
voting of and to dispose or direct the disposition of, the shares of Class A
Common Stock over which RFE Partners may be deemed to have the power to vote or
direct the voting and to dispose or direct the disposition. RFE Management
disclaims any beneficial ownership of all such shares of Class A Common Stock.
RFE Management does not own of record any shares of Class A Common Stock or
Class B Common Stock.
Each of the individuals identified in ITEM 2, by virtue of his position
as a managing member of RFE Associates, and, with respect to Messrs. Landis,
Foster and Parsons, by virtue of
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his ownership interest in RFE Management, may be deemed to share the power to
vote or direct the voting of and to dispose or direct the disposition of the
shares of Class A Common Stock deemed to be beneficially owned by certain of the
Reporting Persons. Each such individual disclaims beneficial ownership of all
such shares of Class A Common Stock. No such individual owns of record any
shares of Common Stock.
See also ITEM 6.
(c) Except as described in this Statement, none of the entities or
persons named in ITEM 2 has effected any transaction in the Company's securities
in the past 60 days.
(d) No other person is known to have the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale of, the
securities that are the subject of this Statement.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERTAKINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
On July 25, 2000, RFE Partners, Allou and other Borrowers entered into
the Purchase Agreement pursuant to which RFE Partners purchased the Note and the
Warrant. On September 26, 2000, RFE Partners purchased the Second Note and the
Second Warrant.
According to the terms of the Purchase Agreement, if Allou has
understated the number of shares of capital stock outstanding as of the date of
the Purchase Agreement, Allou is obligated to issue RFE Partners an additional
Warrant(s), exercisable for additional shares of Class A Common, where the
number of such additional shares is a function of the number of shares actually
outstanding as of the date of the Purchase Agreement. Also, pursuant to the
Purchase Agreement and the initial Note and the Second Note (the initial Note
and the Second Note together, the "Notes"), Allou and the other Borrowers are
obligated to offer to repurchase the Notes and the Warrants upon certain
"Mandatory Repurchase Events," (as defined in the Purchase Agreement) including
any transaction or series of transactions pursuant to which Victor Jacobs,
Herman Jacobs and Jack Jacobs (collectively, the "Jacobs") cease to hold at
least 40% of the total voting interest of all outstanding equity of Allou, on a
fully-diluted basis. The terms and conditions of the Purchase Agreement include
usual and customary Events of Default (as described in the Purchase Agreement);
the occurrence of a Mandatory Repurchase Event is also an Event of Default.
According to the terms of the Notes, Allou may, in certain
circumstances, issue shares of Class A Common Stock in lieu of up to four
interest payments due to RFE Partners pursuant to
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the Notes.
Under the terms of the Warrants, if Allou fails to achieve certain
earnings, earnings per share or daily trading volume thresholds, the holders of
a majority of the outstanding Warrants may, at any time from and after July 25,
2005, require Allou to purchase all of the remaining Warrants at a price of
$8.00 per Warrant, as adjusted for splits, reverse splits, stock dividends and
the like.
In conjunction with the transaction contemplated by the Purchase
Agreement, RFE Partners, Allou, and the Jacobs entered into a Co-Sale, Voting
and Preemptive Rights Agreement ("Voting Agreement"). The Voting Agreement
grants certain rights to holders of the Warrants, and the underlying shares of
Class A Common Stock, to participate in certain transactions with the Jacobs,
should the Jacobs enter into any transaction to sell shares of Allou's capital
stock. In particular, each of the Jacobs has agreed pursuant to the Voting
Agreement that, except in the case of a DE MINIMUS transfer of shares of Common
Stock of Allou or transfers to family members or family-related entities (which
family members are bound to comply with the Voting Agreement), he shall provide
a right to the holders of the Warrants and the shares of Class A Common Stock
issuable pursuant to the Warrants to transfer a PRO RATA portion of shares of
Class A Common Stock on the same terms and conditions.
Further, under certain circumstances, Allou has granted the holders of
the Warrants and the shares of Class A Common Stock issuable pursuant to the
Warrants certain preemptive rights in the event that Allou issues additional
shares of capital stock.
Also in conjunction with the transaction contemplated by the Purchase
Agreement, Allou and RFE Partners entered into a Registration Rights Agreement,
dated July 25, 2000 ("Registration Rights Agreement"), pursuant to which Allou
granted certain rights to the holders of the Warrants and the shares of Class A
Common Stock issuable pursuant to the Warrants to demand registration of its
shares, to have shares of Class A Common Stock included should Allou initiate a
registration of Class A Common Stock, and to sell shares of Common Stock from
time to time pursuant to registration statements on Form S-3.
This ITEM 6 does not provide a complete description of the Purchase
Agreement, the Note, the Warrant, the Voting Agreement or the Registration
Rights Agreement, and is qualified in its entirety by reference to the
respective agreement or document, which is listed as an exhibit hereto and
incorporated by reference from Allou's filing on Form 8-K with the SEC dated
August 2, 2000. Further, this ITEM 6 does not provide a complete description of
the Second Note or the Second Warrant and is qualified by reference to the
applicable document, which is attached as an exhibit hereto.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
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Exhibit A Agreement among the Reporting Persons regarding filing of
Schedule 13D
Exhibit B Senior Subordinated Note and Warrant Purchase Agreement
Exhibit C 12% Senior Subordinated Note
Exhibit D Class A Common Stock Purchase Warrant
Exhibit E Co-Sale, Voting and Preemptive Rights Agreement
Exhibit F Registration Rights Agreement
Exhibit G Second Note (filed herewith)
Exhibit H Second Warrant (filed herewith)
Exhibits B, C, D, E, and F have been filed by Allou as part of its
filing on Form 8-K dated August 2, 2000, and are incorporated herein by this
reference.
22
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 26, 2000
RFE Investment Partners VI, L.P.
By: RFE Associates VI, LLC,
its General Partner
By: /s/ Michael J. Foster
-----------------------------------
Title: Managing Member
RFE Associates VI, LLC
By: /s/ Michael J. Foster
-----------------------------------
Title: Managing Member
/s/ A. Dean Davis
---------------------------------------
A. Dean Davis
/s/ Michael J. Foster
---------------------------------------
Michael J. Foster
/s/ Howard C. Landis
---------------------------------------
Howard C. Landis
/s/ James A. Parsons
---------------------------------------
James A. Parsons
/s/ Andrew J. Wagner
---------------------------------------
Andrew J. Wagner
23
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RFE Management Corporation
By: /s/ Michael J. Foster
-----------------------------------
Title: Vice President and Secretary
24
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EXHIBIT A
Each of the undersigned hereby agrees that the Amendment No.2 to
Schedule 13D filed on the date hereof with respect to the shares of Class A
Common Stock of Allou Health & Beauty Care, Inc. has been filed on behalf of the
undersigned.
SIGNATURE:
Dated: September 26, 2000
RFE Investment Partners VI, L.P.
By: RFE Associates VI, LLC,
its General Partner
By: /s/ Michael J. Foster
-----------------------------------
Title: Managing Member
RFE Associates VI, LLC
By: /s/ Michael J. Foster
-----------------------------------
Title: Managing Member
/s/ A. Dean Davis
---------------------------------------
A. Dean Davis
/s/ Michael J. Foster
---------------------------------------
Michael J. Foster
/s/ Howard C. Landis
---------------------------------------
Howard C. Landis
/s/ James A. Parsons
---------------------------------------
James A. Parsons
/s/ Andrew J. Wagner
---------------------------------------
Andrew J. Wagner
25
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RFE Management Corporation
By: /s/ Michael J. Foster
-----------------------------------
Title: Vice President and Secretary
26
