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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. ___________)*
The Right Start, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, No Par Value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
766574107
--------------
(CUSIP Number)
Walter H. Stowell, Esq.
Testa, Hurwitz & Thibeault, LLP
125 High Street, Boston, MA 02110
(617) 248-7000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 11, 1996
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
Check the following box if a fee is being paid with the statement [ ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no 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).
SCHEDULE 13D
- ------------------------------ ------------------------------------
CUSIP NO. 766574107 Page 2 of 21 Pages
----------------- - --
- ------------------------------ ------------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Edward L. Cahill
SSN: ###-##-####
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ---------- ---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
- ---------------------------- -------- ------------------------------------------
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES -------- ------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 500,000
EACH -------- ------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------- ------------------------------------------
10 SHARED DISPOSITIVE POWER
500,000
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
500,000
- ---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
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.
SCHEDULE 13D
- ------------------------------ ------------------------------------
CUSIP NO. 766574107 Page 3 of 21 Pages
----------------- - --
- ------------------------------ ------------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David L. Warnock
SSN: ###-##-####
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ---------- ---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
- ---------------------------- -------- ------------------------------------------
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES -------- ------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 500,000
EACH -------- ------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------- ------------------------------------------
10 SHARED DISPOSITIVE POWER
500,000
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
500,000
- ---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
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.
SCHEDULE 13D
- ------------------------------ ------------------------------------
CUSIP NO. 766574107 Page 4 of 21 Pages
----------------- - --
- ------------------------------ ------------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Cahill, Warnock Strategic Partners, L.P.
IRSN: 52-1970604
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ---------- ---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware Limited Partnership
- ---------------------------- -------- ------------------------------------------
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES -------- ------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 500,000
EACH -------- ------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------- ------------------------------------------
10 SHARED DISPOSITIVE POWER
500,000
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
500,000
- ---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
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.
SCHEDULE 13D
- ------------------------------ ------------------------------------
CUSIP NO. 766574107 Page 5 of 21 Pages
----------------- - --
- ------------------------------ ------------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Cahill, Warnock Strategic Partners Fund, L.P.
IRSN: 52-1970619
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC, AF
- ---------- ---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware Limited Partnership
- ---------------------------- -------- ------------------------------------------
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES -------- ------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 500,000
EACH -------- ------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------- ------------------------------------------
10 SHARED DISPOSITIVE POWER
500,000
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
500,000
- ---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
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.
SCHEDULE 13D
- ------------------------------ ------------------------------------
CUSIP NO. 766574107 Page 6 of 21 Pages
----------------- - --
- ------------------------------ ------------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Cahill, Warnock & Company, LLC
IRSN: 52-1931617
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ---------- ---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Maryland Limited Liability Company
- ---------------------------- -------- ------------------------------------------
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES -------- ------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 500,000
EACH -------- ------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------- ------------------------------------------
10 SHARED DISPOSITIVE POWER
500,000
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
500,000
- ---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
OO
- ---------- ---------------------------------------------------------------------
*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.
SCHEDULE 13D
- ------------------------------ ------------------------------------
CUSIP NO. 766574107 Page 7 of 21 Pages
----------------- - --
- ------------------------------ ------------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Strategic Associates, L.P.
IRSN: 52-1991689
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC, AF
- ---------- ---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware Limited Partnership
- ---------------------------- -------- ------------------------------------------
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES -------- ------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 500,000
EACH -------- ------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH -------- ------------------------------------------
10 SHARED DISPOSITIVE POWER
500,000
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
500,000
- ---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
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.
ITEM 1. SECURITY AND ISSUER:
This statement relates to the Common Stock, no par value (the
"Shares"), of The Right Start, Inc., a California corporation (the "Issuer").
The address of the Issuer's principal executive offices is 5334 Sterling Center
Drive, Westlake Village, CA 91361.
ITEM 2. IDENTITY AND BACKGROUND:
This statement is being filed by (i) Cahill, Warnock Strategic Partners
Fund, L.P. ("Strategic Partners Fund"), (ii) Cahill Warnock Strategic Partners,
L.P. ("Strategic Partners"), the sole general partner of Strategic Partners
Fund, (iii) Strategic Associates, L.P. ("Strategic Associates"), (iv) Cahill,
Warnock & Company, LLC ("Cahill, Warnock & Co."), the sole general partner of
Strategic Associates, (v) Edward L. Cahill ("Cahill"), a general partner of
Strategic Partners and a member of Cahill, Warnock & Co., and (vi) David L.
Warnock ("Warnock"), a general partner of Strategic Partners and a member of
Cahill, Warnock & Co. Strategic Partners Fund, Strategic Partners, Strategic
Associates, Cahill Warnock & Co., Cahill and Warnock are sometimes referred to
collectively herein as the "Reporting Persons."
The address of the principal business and principal office of Strategic
Partners Fund, Strategic Partners, Strategic Associates and Cahill, Warnock &
Co. is 10 North Calvert Street, Suite 735, Baltimore, MD 21202. The business
address of Cahill and Warnock is 10 North Calvert Street, Suite 735, Baltimore,
MD 21202.
The state of organization for Strategic Partners Fund, Strategic
Partners and Strategic Associates is Delaware. The state of organization for
Cahill, Warnock & Co. is Maryland. Both Cahill and Warnock are citizens of the
United States of America.
The principal business of Strategic Partners Fund and Strategic
Associates is to make private equity investments in micro-cap public companies
seeking capital for expansion or undergoing a restructuring of ownership. The
principal business of Strategic Partners is to act as the sole general partner
of Strategic Partners Fund. The principal business of Cahill, Warnock & Co. is
to act as the sole general partner of Strategic Associates and Camden Partners,
L.P. ("Camden Partners") and to manage the activities of Strategic Partners
Fund, Strategic Associates and Camden Partners. The principal occupations of
Cahill and Warnock are their activities on behalf of Strategic Partners Fund,
Strategic Partners, Strategic Associates, Cahill, Warnock & Co. and Camden
Partners.
The principal business of Camden Partners is to make passive
investments in public companies. The principal office of Camden Partners in 10
North Calvert Street, Suite 735, Baltimore, MD 21202.
During the five years prior to the date hereof, none of the Reporting
Persons has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or has been a party to a civil proceeding
ending in a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding a violation with respect to such laws.
Page 8 of 21 Pages
- --
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION:
On October 11, 1996 Strategic Partners Fund acquired 2,842 units of 8%
Convertible Debentures due May 31, 2002 for a total purchase price of
$2,842,000. The acquired debentures are currently convertible into 473,666.67
shares of the Issuer's Common Stock. The working capital of Strategic Partners
Fund was the source of funds for this purchase. No part of the purchase price
was represented by funds or other consideration borrowed or otherwise obtained
for the purpose of acquiring, holding, trading or voting the securities.
On October 11, 1996 Strategic Associates acquired 158 units of 8%
Convertible Debentures due May 31, 2002 for a total purchase price of $158,000.
The acquired debentures are currently convertible into 26,333.33 shares of the
Issuer's Common Stock. The working capital of Strategic Associates was the
source of funds for this purchase. No part of the purchase price was represented
by funds or other consideration borrowed or otherwise obtained for the purpose
of acquiring, holding, trading or voting the securities.
ITEM 4. PURPOSE OF TRANSACTION:
Strategic Partners Fund and Strategic Associates acquired the Issuer's
securities for investment purposes. Depending on market conditions, their
continuing evaluation of the business and prospects of the Issuer and other
factors, Strategic Partners Fund and Strategic Associates may dispose of or
acquire additional securities of the Issuer. Except as stated below, none of the
Reporting Persons has any present plans which relate to or would result in:
(a) The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of
its subsidiaries;
(c) A sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
(d) Any change in the present board of directors or management of
the Issuer, 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 Issuer;
(f) Any other material change in the Issuer's business or
corporate structure;
(g) Changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person;
(h) Causing a class of securities of the Issuer 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 Issuer 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 any of those enumerated above.
Page 9 of 21 Pages
- --
Pursuant to a letter agreement dated October 11, 1996 among the Issuer
and Strategic Partners (attached hereto as Exhibit 2), David L. Warnock has been
invited to fill a vacancy on Issuer's Board of Directors immediately following
the Issuer's annual meeting of stockholders scheduled for November 12, 1996.
ITEM 5. INTEREST IN THE SECURITIES OF THE ISSUER:
(a) Strategic Partners Fund is the record owner of 2,842 units of 8%
Convertible Debentures due May 31, 2002 (the "Fund Debentures"). The Fund
Debentures are currently convertible into 473,666.67 shares of the Issuer's
Common Stock (the "Fund Conversion Shares"). Strategic Associates is the record
owner of 158 units of 8% Convertible Debentures due May 31, 2002 (the
"Associates Debentures"). The Associates Debentures are currently convertible
into 26,333.33 shares of the Issuer's Common Stock (the "Associates Conversion
Shares"). Because of their relationship as affiliated entities, both Strategic
Partners Fund and Strategic Associates may be deemed to own beneficially both
the Fund Conversion Shares and the Associates Conversion Shares. As general
partners of Strategic Partners Fund and Strategic Associates, respectively,
Strategic Partners and Cahill, Warnock & Co. may be deemed to own beneficially
both the Fund Conversion Shares and the Associates Conversion Shares. As the
individual general partners of Strategic Partners and as the members of Cahill,
Warnock & Co., both Cahill and Warnock may be deemed to own beneficially both
the Fund Conversion Shares and the Associates Conversion Shares.
Each of the Reporting Persons may be deemed to own beneficially 5.92%
of the Issuer's Common Stock, which percentage is calculated based upon (i)
7,949,306 shares reported outstanding in the Issuer's Form 10-Q for the period
ending August 31, 1996, and (ii) the number of shares (500,000) issuable upon
conversion of the Fund Debentures and the Associates Debentures.
In Amendment No. 1 to the Limited Partnership Agreement of Strategic
Partners Fund, dated July 26, 1996 (attached hereto as Exhibit 3), Strategic
Partners and the limited partners of Strategic Partners Fund agreed that any
securities of a particular issuer that are acquired by both Strategic Partners
Fund and Strategic Associates shall be sold or otherwise disposed of at
substantially the same time and on substantially the same terms. As a
consequence, Strategic Associates and Strategic Partners Fund may be deemed to
be members of a group pursuant to Rule 13d-5(b)(1) of the Securities Exchange
Act of 1934. Strategic Partners, Cahill, Warnock & Co., Cahill and Warnock each
disclaim membership in the aforementioned group.
(b) Number of Shares as to which each such person has
(i) Sole power to vote or direct the vote:
0 shares for each Reporting Person;
(ii) Shared power to vote or direct the vote:
500,000 shares for each Reporting Person;
(iii) Sole power to dispose or to direct the disposition:
0 shares for each Reporting Person;
(iv) Shared power to dispose or to direct the disposition:
500,000 shares for each Reporting Person.
Page 10 of 21 Pages
-- --
Strategic Partners Fund disclaims beneficial ownership of all of the
Associates Conversion Shares. Strategic Associates disclaims beneficial
ownership of all of the Fund Conversion Shares. Strategic Partners, Cahill,
Warnock & Co. and Cahill and Warnock each disclaim beneficial ownership of the
Fund Conversion Shares and the Associates Conversion Shares.
(c) Except as set forth above, none of the Reporting Persons has
effected any transaction in the Shares during the last 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 any proceeds from the sale of, the
Shares beneficially owned by any of the Reporting Persons.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER:
In Amendment No. 1 to the Limited Partnership Agreement of Strategic
Partners Fund, dated July 26, 1996 (attached hereto as Exhibit 3), Strategic
Partners and the limited partners of Strategic Partners Fund agreed that any
securities of a particular issuer that are acquired by both Strategic Partners
Fund and Strategic Associates shall be sold or otherwise disposed of at
substantially the same time and on substantially the same terms.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS:
Exhibit 1 - Agreement regarding filing of joint Schedule 13D
Exhibit 2 - Letter Agreement dated October 11, 1996 among the
Issuer and Strategic Partners regarding the appointment
of David L. Warnock to the Issuer's Board of Directors.
Exhibit 3 - Amendment No. 1 to the Limited Partnership Agreement of
Strategic Partners Fund.
Page 11 of 21 Pages
-- --
SCHEDULE 13D
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
Dated: October 21, 1996 /s/ Edward L. Cahill
--------------------
Edward L. Cahill
/s/ David L. Warnock
--------------------
David L. Warnock
CAHILL, WARNOCK STRATEGIC
PARTNERS FUND, L.P.
By: Cahill, Warnock Strategic Partners,
L.P., its Sole General Partner
By: /s/ Edward L. Cahill
-------------------------------------
Edward L. Cahill, General Partner
By: /s/ David L. Warnock
-------------------------------------
David L. Warnock, General Partner
CAHILL, WARNOCK STRATEGIC
PARTNERS, L.P.
By: /s/ Edward L. Cahill
-------------------------------------
Edward L. Cahill, General Partner
By: /s/ David L. Warnock
-------------------------------------
David L. Warnock, General Partner
STRATEGIC ASSOCIATES, L.P.
By: Cahill, Warnock & Co., LLC, its
sole General Partner
By: /s/ Edward L. Cahill
---------------------------------
Edward L. Cahill, Member
Page 12 of 21 Pages
-- --
By: /s/ David L. Warnock
---------------------------------
David L. Warnock, Member
CAHILL, WARNOCK & CO., LLC
By: /s/ Edward L. Cahill
---------------------------------
Edward L. Cahill, Member
By: /s/ David L. Warnock
----------------------------------
David L. Warnock, Member
Page 13 of 21 Pages
-- --
Exhibit 1
AGREEMENT
Pursuant to Rule 13d-1(f)(1) under the Securities Exchange Act of 1934,
the undersigned hereby agree that only one statement containing the information
required by Schedule 13D need be filed with respect to the ownership by each of
the undersigned of shares of stock of The Right Start, Inc.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
Executed this 21st day of October, 1996.
/s/ Edward L. Cahill
----------------------------------------
Edward L. Cahill
/s/ David L. Warnock
----------------------------------------
David L. Warnock
CAHILL, WARNOCK STRATEGIC
PARTNERS FUND, L.P.
By: Cahill, Warnock Strategic Partners,
L.P., its Sole General Partner
By: /s/ Edward L. Cahill
------------------------------------
Edward L. Cahill, General Partner
By: /s/ David L. Warnock
------------------------------------
David L. Warnock, General Partner
CAHILL, WARNOCK STRATEGIC
PARTNERS, L.P.
By: /s/ Edward L. Cahill
----------------------------------------
Edward L. Cahill, General Partner
By: /s/ David L. Warnock
----------------------------------------
David L. Warnock, General Partner
Page 14 of 21 Pages
-- --
STRATEGIC ASSOCIATES, L.P.
By: Cahill, Warnock & Co., LLC, its
sole General Partner
By: /s/ Edward L. Cahill
------------------------------------
Edward L. Cahill, Member
By: /s/ David L. Warnock
------------------------------------
David L. Warnock, Member
CAHILL, WARNOCK & CO., LLC
By: /s/ Edward L. Cahill
----------------------------------------
Edward L. Cahill, Member
By: /s/ David L. Warnock
----------------------------------------
David L. Warnock, Member
Page 15 of 21 Pages
-- --
Exhibit 2
THE RIGHT START, INC.
5334 Sterling Center Drive
Westlake Village, CA 91361
October 11, 1996
Mr. David L. Warnock
Cahill, Warnock Strategic Partners, L.P.
10 North Calvert Street, Suite 735
Baltimore, MD 21202
Dear David:
I am extremely pleased that Cahill, Warnock Strategic Partners, L.P.
has chosen to invest in the Right Start, Inc. This letter is intended to confirm
our intention that you will join our Board of Directors by filling a vacancy
which currently exists. As we discussed, we anticipate that your election will
take place promptly after the Company's annual meeting currently scheduled for
November 12, 1996. Additionally, prior to your formal election, we would like to
offer you the opportunity to attend all Board of Directors meetings (and receive
all materials which we distribute to our directors) as an invited guest of the
Board.
Your participation with our Board of Directors shall commence upon the
final execution of the Convertible Debenture Purchase Agreement (along with
related documents thereto) to be entered into by the Company and Cahill Warnock.
Please acknowledge your understanding of the foregoing by executing a
copy of this letter in the space provided.
Very truly yours,
THE RIGHT START, INC.
By: /s/ Jerry R. Welch
------------------------------
Jerry R. Welch
President and Chief
Executive Officer
Accepted and Agreed
this 11 day of October, 1996 by
CAHILL WARNOCK STRATEGIC PARTNERS, L.P.
By: /s/ Cahill, Warnock Strategic Partners, L.P.
--------------------------------------------
its General Partner
By: /s/ David L. Warnock
----------------------------------------
Name: David L. Warnock
Its: General Partner
Page 16 of 21 Pages
-- --
Exhibit 3
AMENDMENT NO. 1 TO
LIMITED PARTNERSHIP AGREEMENT
OF
CAHILL, WARNOCK STRATEGIC PARTNERS FUND, L.P.
AMENDMENT NO. 1 dated as of the 26th day of July, 1996, by and among
Cahill, Warnock Strategic Partners, L.P., a Delaware limited partnership, as
general partner (the "General Partner") of Cahill, Warnock Strategic Partners
Fund, L.P., a Delaware limited partnership (the "Partnership"), and the Limited
Partners of the Partnership listed on Schedule A to the Limited Partnership
Agreement of the Partnership, dated as of April 11, 1996 (the "Partnership
Agreement"), at least 66 2/3% in interest of whom have executed a counterpart
signature page to this Amendment No. 1:
WHEREAS, immediately prior to the admission on the date hereof of
additional Limited Partners to the Partnership pursuant to Section 8(c) of the
Partnership Agreement, the parties hereto desire to amend the Partnership
Agreement and approve Amendment No. 1 to the Management Agreement, the form of
which Management Agreement is attached to the Partnership Agreement as Schedule
B.
NOW, THEREFORE, the parties hereto, in consideration of the premises
and the agreements herein contained and intending to be legally bound hereby,
agree as follows:
1. Section 4(k)(2) of the Partnership Agreement is amended by
deleting the second sentence thereof in its entirety and
substituting the following:
"Notwithstanding Section 4(e)(1) to the contrary, the
Principals may organize, after the date of this
Agreement, other investment funds and client
investment vehicles for the benefit of employees,
associates and advisors of the General Partner and
the Principals and for investors who may be
strategically important to the Partnership,
specifically for the purpose of co-investing with the
Partnership; provided that the aggregate amount of
capital committed to such other investment funds and
client investment vehicles does not exceed $7
million; and provided, further, that any such
investment funds or client investment vehicles which
are managed by the General Partner or the Principals
shall sell or otherwise dispose of each such
co-investment at substantially the same time and on
substantially the same terms as the Partnership in
amounts proportionate to the relative
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size of the investments made by such investment funds
and client investment vehicles and the Partnership."
2. Section 7(a) of the Partnership Agreement is amended by
deleting the first sentence thereof in its entirety and
substituting the following:
"The Partnership shall have a Valuation Committee
which shall consist of at least three (3) but not
more than five (5) members, none of whom shall be an
officer, director, member or employee of the General
Partner, the Management Company or any affiliate
thereof, and none of whom shall be related to any
Principal."
3. Section 8(a) of the Partnership Agreement is amended by adding
the following text at the end thereof:
"Each notice for an Additional Capital Contribution
from the General Partner shall include a general
description of the purposes and uses for which the
Additional Capital Contribution is being called
including, for example, the payment of Partnership
expenses (including the Management Fee) and the
purchase of Portfolio Company Securities; provided
that the General Partner shall not be required to
identify the purposes and uses of 100% of any
Additional Capital Contribution or be required to
identify the name of any particular Portfolio Company
or proposed Portfolio Company. After the fourth
anniversary of the last admittance of any additional
Limited Partners pursuant to Section 8(c) hereof, the
General Partner shall not make any further calls for
Additional Capital Contributions for the purpose of
investing in the Securities of any entity that was
not a Portfolio Company (including as a Portfolio
Company for such purpose, any predecessor of such
entity) on such anniversary date, except with the
approval of the Valuation Committee. After the fifth
anniversary of the last admittance of any additional
Limited Partners pursuant to Section 8(c) hereof, the
General Partner shall not make any further calls for
Additional Capital Contributions for the purpose of
investing in the Securities of any entity that was a
Portfolio Company (including as a Portfolio Company
for such purpose, any predecessor of such entity) on
such anniversary date, except with the approval of
the Valuation Committee."
4. Section 11(b) of the Partnership Agreement is amended by
adding the following subsection (8) at the end thereof:
"(8) An amount equal to 50% of all distributions made
to the General Partner, other than (A) Tax
Distributions plus (B) distributions the General
Partner would have received if it had made its
Capital Contributions as a Limited Partner and did
not hold an interest as a General Partner (excluding
any Tax Distributions on account thereof which are
included in (A)), shall be used by the General
Partner immediately upon distribution thereof to
prepay any promissory notes contributed by the
General Partner to the Partnership."
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5. Section 16 of the Partnership Agreement is amended by adding
the following text at the end thereof:
"No Principal will voluntarily assign, pledge,
mortgage, hypothecate, sell or otherwise dispose of
or encumber (a "Disposition") all or any part of his
interest in the allocations made to the General
Partner of "20% of such additional Net Realized Gain"
pursuant to Section 10(b)(1)(A)(iv) (the "20% carried
interest"), except for (a) Dispositions to members of
his immediate family or trusts for the benefit of
such general partner or members of his immediate
family (and, in the case of any Dispositions to such
family members or such trusts, the transferee shall
thereafter be subject, as to further transfers, to
the same restrictions on transfer as were applicable
to the transferor), (b) Dispositions to other persons
who are associated with or employed by the General
Partner, the Principals or the Management Company,
and (c) Dispositions to another Principal; provided,
that, the Dispositions of all Principals pursuant to
clauses (a) and (b) shall not exceed in the aggregate
45% of their aggregate interests in the 20% carried
interest."
6. Section 19(c) of the Partnership Agreement is amended by
adding the following text at the end thereof:
"The General Partner shall transmit to each Partner
within sixty (60) days after the close of each fiscal
year, a report describing any fees and other
remuneration which, pursuant to Section 4(b) of the
Management Agreement, reduced the Management Fee
payable in such fiscal year. Such description will be
organized by the type of such fees and other
remuneration (e.g., director's fees and consulting
fees) and the dollar amount attributable to each such
category."
7. Pursuant to Section 7 of the Management Agreement, the Limited
Partners hereby consent to Amendment No. 1 to the Management
Agreement dated the date hereof, which amends Section 4(b) of
the Management Agreement by adding the following text at the
end thereof:
"If in any year such reductions exceed the Management
Fee otherwise payable, the excess amount of such
reductions shall be carried forward on a year-by-year
basis."
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IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1
as of the day and year first above written.
GENERAL PARTNER
CAHILL, WARNOCK STRATEGIC PARTNERS, L.P.
By: /s/ Edward L. Cahill
-------------------------------------
Edward L. Cahill, General Partner
By: /s/ David L. Warnock
-------------------------------------
David L. Warnock, General Partner
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AMENDMENT NO. 1 TO
LIMITED PARTNERSHIP AGREEMENT
OF
CAHILL, WARNOCK STRATEGIC PARTNERS FUND, L.P.
LIMITED PARTNER SIGNATURE PAGE
The undersigned Limited Partner hereby executes Amendment No. 1 to
Limited Partnership Agreement of Cahill, Warnock Strategic Partners Fund, L.P.
and hereby authorizes this signature page to be attached to a counterpart of
such document executed by the General Partner of Cahill, Warnock Strategic
Partners Fund, L.P.
Please type or print exact
name of Limited Partner *
------------------------------------------
Please sign here By
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Please type or print exact
name of signer
------------------------------------------
Please type or print
title of signer Title
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* Signature pages of the limited partners will be provided upon request.
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