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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
---------
The Quizno's Corporation
--------------------------------------------------------
(Name of Issuer)
Common Stock, $.001 par value per share
--------------------------------------------------------
(Title of Class of Securities)
749058103
--------------------------------------------------------
(CUSIP Number)
Arthur E. Levine
President
Levine Leichtman Capital Partners, Inc.
Beverly Hills, California 90210
(310) 275-5335
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 12, 2000
--------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule
13D, and is filing this schedule because of Sections 240.13d-1(e)
240.13d-1(f) or 240.13d-1(g), check the following box / /.
NOTE: Schedules filed in paper format shall include a signed
original and five copies of this schedule, including all exhibits.
See Section 240.13d-7 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).
POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM
DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1746 (2-98)
<PAGE>
CUSIP No. 749058103
-------------------------------------------------------------------------------
(1) Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only).
Levine Leichtman Capital Partners II, L.P.
-------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
(b)
-------------------------------------------------------------------------------
(3) SEC Use Only
-------------------------------------------------------------------------------
(4) Source of Funds (See Instructions)
00 (See Item 3)
-------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
-------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
California
-------------------------------------------------------------------------------
NUMBER OF (7) Sole Voting Power
SHARES
BENEFICIALLY --------------------------------------------------
OWNED BY (8) Shared Voting Power
EACH 516,486 (See Item 5)
REPORTING --------------------------------------------------
PERSON WITH (9) Sole Dispositive Power
--------------------------------------------------
(10) Shared Dispositive Power
516,486 (See Item 5)
-------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
516,486 (See Item 5)
-------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
-------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
18.1% (See Item 5)
-------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
PN
-------------------------------------------------------------------------------
2
<PAGE>
CUSIP No. 749058103
-------------------------------------------------------------------------------
(1) Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only).
LLCP California Equity Partners II, L.P.
-------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
(b)
-------------------------------------------------------------------------------
(3) SEC Use Only
-------------------------------------------------------------------------------
(4) Source of Funds (See Instructions)
00 (See Item 3)
-------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
-------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
California
-------------------------------------------------------------------------------
NUMBER OF (7) Sole Voting Power
SHARES
BENEFICIALLY --------------------------------------------------
OWNED BY (8) Shared Voting Power
EACH 516,486 (See Item 5)
REPORTING --------------------------------------------------
PERSON WITH (9) Sole Dispositive Power
--------------------------------------------------
(10) Shared Dispositive Power
516,486 (See Item 5)
-------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
516,486 (See Item 5)
-------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
-------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
18.1% (See Item 5)
-------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
PN
-------------------------------------------------------------------------------
3
<PAGE>
CUSIP No. 749058103
-------------------------------------------------------------------------------
(1) Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only).
Levine Leichtman Capital Partners, Inc.
-------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
(b)
-------------------------------------------------------------------------------
(3) SEC Use Only
-------------------------------------------------------------------------------
(4) Source of Funds (See Instructions)
00 (See Item 3)
-------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
-------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
California
-------------------------------------------------------------------------------
NUMBER OF (7) Sole Voting Power
SHARES
BENEFICIALLY --------------------------------------------------
OWNED BY (8) Shared Voting Power
EACH 516,486 (See Item 5)
REPORTING --------------------------------------------------
PERSON WITH (9) Sole Dispositive Power
--------------------------------------------------
(10) Shared Dispositive Power
516,486 (See Item 5)
-------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
516,486 (See Item 5)
-------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
-------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
18.1% (See Item 5)
-------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
PN
-------------------------------------------------------------------------------
4
<PAGE>
CUSIP No. 749058103
-------------------------------------------------------------------------------
(1) Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only).
Arthur E. Levine
-------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
(b)
-------------------------------------------------------------------------------
(3) SEC Use Only
-------------------------------------------------------------------------------
(4) Source of Funds (See Instructions)
00 (See Item 3)
-------------------------------------------------------------------------------
(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 of America
-------------------------------------------------------------------------------
NUMBER OF (7) Sole Voting Power
SHARES
BENEFICIALLY --------------------------------------------------
OWNED BY (8) Shared Voting Power
EACH 516,486 (See Item 5)
REPORTING --------------------------------------------------
PERSON WITH (9) Sole Dispositive Power
--------------------------------------------------
(10) Shared Dispositive Power
516,486 (See Item 5)
-------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
516,486 (See Item 5)
-------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
-------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
18.1% (See Item 5)
-------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
IN
-------------------------------------------------------------------------------
5
<PAGE>
CUSIP No. 749058103
-------------------------------------------------------------------------------
(1) Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only).
Lauren B. Leichtman
-------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
(b)
-------------------------------------------------------------------------------
(3) SEC Use Only
-------------------------------------------------------------------------------
(4) Source of Funds (See Instructions)
00 (See Item 3)
-------------------------------------------------------------------------------
(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 of America
-------------------------------------------------------------------------------
NUMBER OF (7) Sole Voting Power
SHARES
BENEFICIALLY --------------------------------------------------
OWNED BY (8) Shared Voting Power
EACH 516,486 (See Item 5)
REPORTING --------------------------------------------------
PERSON WITH (9) Sole Dispositive Power
--------------------------------------------------
(10) Shared Dispositive Power
516,486 (See Item 5)
-------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
516,486 (See Item 5)
-------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
-------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
18.1% (See Item 5)
-------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
IN
-------------------------------------------------------------------------------
6
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ITEM 1. SECURITY AND ISSUER
This statement relates to shares of the Common Stock, par value
$.001 per share (the "Common Stock") of The Quizno's Corporation, a Colorado
corporation (the "Issuer"). In addition, certain references are made in this
statement to the Class A Cumulative Convertible Preferred Stock of the Issuer
(the "Class A Preferred"), the Class C Cumulative Preferred Stock of the
Issuer (the "Class C Preferred"), the Class D Cumulative Preferred Stock of
the Issuer (the "Class D Preferred") and the Class E Cumulative Preferred
Stock of the Issuer (the "Class E Preferred"), each of which is currently
convertible into shares of Common Stock on a one-for-one basis, but is not
registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Issuer maintains its principal executive offices at 1415
Larimer Street, Denver, CO 80202.
ITEM 2. IDENTITY AND BACKGROUND
This Schedule 13D is being filed pursuant to a Joint Reporting
Agreement dated December 19, 2000, a copy of which is attached as EXHIBIT 1
hereto, among and on behalf of Levine Leichtman Capital Partners II, L.P., a
California limited partnership (the "Partnership"), LLCP California Equity
Partners II, L.P., a California limited partnership (the "General Partner"),
Levine Leichtman Capital Partners, Inc., a California corporation ("Capital
Corp."), Arthur E. Levine ("Mr. Levine") and Lauren B. Leichtman ("Ms.
Leichtman" and, together with the Partnership, the General Partner, Capital
Corp. and Mr. Levine, the "Reporting Persons").
(a) PARTNERSHIP.
The Partnership is a limited partnership formed under the
laws of the State of California. The address of the principal business or
principal office of the Partnership is 335 North Maple Drive, Suite 240,
Beverly Hills, California 90210. The principal business of the Partnership is
to seek out opportunities to invest in the securities of middle market
companies and to acquire, hold, manage and dispose of such securities in
connection with growth financings, restructurings, recapitalizations,
mergers, acquisitions and buyouts.
(b) GENERAL PARTNER.
The General Partner is the sole general partner of the
Partnership. The address of the principal business or principal office of the
General Partner is 335 North Maple Drive, Suite 240, Beverly Hills,
California 90210. The principal business of the General Partner is to act as
the general partner of the Partnership and to organize and manage the
investments made by the Partnership.
(c) CAPITAL CORP.
Capital Corp. is the sole general partner of the General
Partner. The address of the principal business or principal office of Capital
Corp. is 335 North Maple Drive, Suite 240, Beverly Hills, California 90210.
The principal business of Capital Corp. is to act as the general partner of
the General Partner and of LLCP California Equity Partners, L.P., a
California limited partnership, the sole general partner of Levine Leichtman
Capital Partners, L.P., a California limited partnership.
(d) MR. LEVINE.
Mr. Levine is a director, the President and a shareholder of
Capital Corp. The business address of Mr. Levine is 335 North Maple Drive, Suite
240, Beverly Hills, California 90210. The present principal occupation or
employment of Mr. Levine is to serve as a director and the President of Capital
Corp. Mr. Levine is a citizen of the United States of America. Mr. Levine,
together with Ms. Leichtman, are the sole directors and shareholders of Capital
Corp. Mr. Levine is also an executive officer of Capital Corp.
(e) MS. LEICHTMAN.
Ms. Leichtman is a director, the Chief Executive Officer,
Treasurer and Secretary and a shareholder of Capital Corp. The business address
of Ms. Leichtman is 335 North Maple Drive, Suite 240, Beverly Hills, California
90210. The present principal occupation or employment of Ms. Leichtman is to
serve as a director and the Chief Executive Officer, Treasurer and Secretary of
Capital Corp. Ms. Leichtman is a citizen of the United States of America. Ms.
Leichtman, together with Mr. Levine, are the sole directors and shareholders of
Capital Corp. Ms. Leichtman is also an executive officer of Capital Corp.
7
<PAGE>
During the last five years, no Reporting Person has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to
such laws.
The Reporting Persons may also be members of a "group" within
the meaning of Rule 13d-5(b)(1) for the limited purposes described in Items 4
and 6 below. The other members of the group may include Richard E. Schaden
("RES") and Richard F. Schaden ("RFS" and, together with RES, the "Principal
Shareholders"). To the extent that such a group exists, this Schedule 13D is
also being individually filed by the Reporting Persons, as members of such
group, pursuant to Rule 13d-1(k)(2) to satisfy such group's filing obligations.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to a Securities Purchase Agreement dated as of November 12,
2000 (the "Securities Purchase Agreement"), among the Issuer, certain
subsidiaries of the Issuer and the Partnership, a copy of which is attached as
EXHIBIT 2 hereto, the Issuer and certain of its subsidiaries jointly and
severally issued and sold to the Partnership a Secured Senior Note Due 2005
dated December 12, 2000, in the principal amount of $13,862,259.84 (the "Note").
As part of the same transaction, the Issuer issued and sold to the Partnership a
warrant to purchase 461,548 shares of Common Stock (the "Common Warrant"). In
addition, the Issuer issued and sold to the Partnership a warrant to purchase
23,767 shares of Class A Preferred (the "Class A Warrant"), a warrant to
purchase 9,279 shares of Class C Preferred (the "Class C Warrant"), a warrant to
purchase 12,209 shares of Class D Preferred (the "Class D Warrant") and a
warrant to purchase 9,683 shares of Class E Preferred (the "Class E Warrant"
and, together with the Common Warrant, the Class A Warrant, the Class C Warrant
and the Class D Warrant, the "Warrants"). (The Warrants together with the Note
are referred to herein as the "Securities".) The Securities were acquired by the
Partnership for an aggregate purchase price of $13,862,259.84. Copies of the
Note, Common Warrant, Class A Warrant, Class C Warrant, Class D Warrant and
Class E Warrant are attached as EXHIBITS 3 THROUGH 8 hereto, respectively.
The Partnership funded its purchase of the Securities with capital
contributions made by the partners of the Partnership in the aggregate amount of
$13,862,259.84, in response to a Call to Purchase Portfolio Securities dated
October 20, 2000.
ITEM 4. PURPOSE OF TRANSACTION
The Partnership acquired the Securities pursuant to the Securities
Purchase Agreement for investment purposes only.
In connection with the acquisition by the Partnership of the
Securities, and pursuant to the terms of an Investor Rights Agreement dated as
of December 12, 2000 (the "Investor Rights Agreement"), among the Issuer, the
Principal Shareholders and the Partnership, a copy of which is attached as
EXHIBIT 9 hereto, the Issuer has granted certain management, investment
monitoring and other rights to the Partnership. Among other rights, the
Partnership may require the Issuer, if the Partnership determines, based on the
advice of counsel, that it is required to maintain a representative of the
Purchaser on the Board of Directors of the Issuer in order to qualify as a
"venture capital operating company" for purposes of ERISA compliance, to cause a
representative designated by the Partnership (an "LLCP Representative") to be
elected or appointed as a member of the Board of Directors of the Issuer. In
addition, the Principal Shareholders have granted to the Partnership limited
voting rights with respect to the shares of Common Stock owned by the respective
Principal Shareholders. If the Partnership exercises its right to require the
Issuer to cause an LLCP Representative to be elected or appointed as a member of
the Board of Directors of the Issuer, the Principal Shareholders have agreed to
vote (or cause to be voted) the shares of Common Stock owned by them in favor of
such election or appointment. The Principal Shareholders have also granted to
the Partnership certain co-sale rights with respect to the shares of equity
securities of the Issuer owned by them, respectively, as more fully described in
the Investor Rights Agreement. While the Partnership did not acquire the
Securities with the purpose of changing or influencing control of the Issuer,
such acquisition, after giving effect to the management, investment monitoring
and other rights granted to the Partnership under the Investor Rights Agreement,
may have the effect of changing or influencing control of the Issuer within the
meaning of Rule 13d-3(d)(1)(i).
The Issuer commenced a tender offer on November 13, 2000 for shares
of its Common Stock at a purchase price of $8.00 per share which expired by its
terms on December 11, 2000 (the "Tender Offer"). The Tender Offer could result
in the de-listing of the Common Stock from the Nasdaq Small Cap Market and in
the termination of registration of the Common Stock of the Issuer under the
Exchange Act. In conjunction with the Tender Offer, the Issuer announced that
subsequent to the Tender Offer, the Board of Directors could determine to enter
into a merger or other form of corporate transaction such that any shares
8
<PAGE>
not tendered by shareholders in the Tender Offer (other than shares held by
the Principal Shareholders) would be converted into only the right to receive
the tender offer price in cash (the "Post Tender-Offer Merger").
The number of shares issuable under each of the Warrants is
subject to adjustment upon the occurrence of certain events, including a
reduction in the number of shares issuable pursuant to each Warrant in
connection with the consummation of a Post Tender-Offer Merger, all as more
fully described in each of the Warrants.
Other than as described above, none of the Reporting Persons
presently has any plans or proposals which would relate to or would result in
any of the actions described in subparagraphs (a) through (j) of Item 4 of
Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON AND
PERCENT OF CLASS:
Each Reporting Person is deemed to be the beneficial owner
(within the meaning of Rule 13d-3(a) of the Securities Exchange Act of 1934, as
amended) of 516,486 shares of Common Stock consisting of (i) 461,548 shares of
Common Stock issuable upon the exercise of the Common Warrant, (ii) 23,767
shares of Common Stock issuable upon conversion of the 23,767 shares of Class A
Preferred issuable upon the exercise of the Class A Warrant, (iii) 9,279 shares
of Common Stock issuable upon conversion of the 9,279 shares of Class C
Preferred issuable upon exercise of the Class C Warrant, (iv) 12,209 shares of
Common Stock issuable upon conversion of the 12,209 shares of Class D Preferred
issuable upon exercise of the Class D Warrant and (v) 9,683 shares of Common
Stock issuable upon conversion of the 9,683 shares of Class E Preferred issuable
upon exercise of the Class E Warrant. In addition, each Reporting Person may be
deemed to be the beneficial owner, for the limited purposes described in Item 4
above and Item 6 below, of an additional 1,551,673 shares of Common Stock owned
by the Principal Shareholders as of December 12, 2000, including (i) 778,006
shares owned by RES and (ii) 773,667 shares owned by RFS. The numbers of
outstanding shares of Common Stock owned by the Principal Shareholders were
represented by the Issuer to the Partnership under the Securities Purchase
Agreement. (The Reporting Persons have no pecuniary interest in the shares of
Common Stock owned by the Principal Shareholders.)
The aggregate number of shares of Common Stock beneficially
owned by the Reporting Persons constitutes approximately 18.1% of the shares of
such class outstanding (following the expiration of the Tender Offer and
assuming all shares tendered have been purchased) as of December 12, 2000. To
the extent that a group exists as discussed in Item 2 above, the aggregate
number of shares of Common Stock beneficially owned by the Reporting Persons,
including the shares of Common Stock owned by the Principal Shareholders, would
constitute approximately 72.4% of the shares of such class outstanding
(following the expiration of the Tender Offer and assuming all shares tendered
have been purchased) as of December 12, 2000. Such percentages are based upon a
total of 2,338,143 shares of Common Stock issued and outstanding (following the
expiration of the Tender Offer and assuming all shares tendered have been
purchased) as of December 12, 2000, as provided by the Issuer to the Partnership
in connection with the closing of the transactions contemplated by the
Securities Purchase Agreement, and was calculated in accordance with Rule
13d-3(d)(1)(i).
The Warrants may be exercised at any time beginning on
September 12, 2001 until December 12, 2010, with respect to all or any portion
of the total number of shares purchasable thereunder, except that each Warrant
shall be immediately exercisable if, prior to September 12, 2001, (i) there is a
Change of Control (as defined in each Warrant) or (ii) the Note has been
indefeasibly paid in full or otherwise satisfied in full. The exercise price of
the shares purchasable under the Warrants is $.01 per share. The number of
shares issuable under each Warrant is subject to adjustment as described in Item
4 above.
(b) VOTING AND DISPOSITIVE POWER:
The Partnership may be deemed to have (i) sole voting and
dispositive power with respect to no shares of Common Stock and (ii) shared
voting and dispositive power with all other Reporting Persons with respect to
516,486 shares of Common Stock. In addition, to the extent that a group exists
as discussed in Item 2 above, in the limited circumstances described in Item 4
above and Item 6 below, the Partnership may be deemed to have shared voting
power with all other Reporting Persons and the Principal Shareholders with
respect to an additional 1,551,673 shares of Common Stock.
By virtue of being the sole general partner of the
Partnership, the General Partner may be deemed to have (i) sole voting and
dispositive power with respect to no shares of Common Stock and (ii) shared
voting and dispositive power with all other Reporting Persons with respect to
516,486 shares of Common Stock. In addition, to the extent that a group exists
as discussed in Item 2 above, in the limited circumstances described in Item 4
above and Item 6 below, the General Partner may
9
<PAGE>
be deemed to have shared voting power with all other Reporting Persons and
the Principal Shareholders with respect to an additional 1,551,673 shares of
Common Stock.
By virtue of being the sole general partner of the General
Partner, Capital Corp. may be deemed to have (i) sole voting and dispositive
power with respect to no shares of Common Stock and (ii) shared voting and
dispositive power with all other Reporting Persons with respect to 516,486
shares of Common Stock. In addition, to the extent that a group exists as
discussed in Item 2 above, in the limited circumstances described in Item 4
above and Item 6 below, Capital Corp. may be deemed to have shared voting power
with all other Reporting Persons and the Principal Shareholders with respect to
an additional 1,551,673 shares of Common Stock.
By virtue of being the sole directors, executive officers and
shareholders of Capital Corp., each of Mr. Levine and Ms. Leichtman may be
deemed to have (i) sole voting and dispositive power with respect to no shares
of Common Stock and (ii) shared voting and dispositive power with all other
Reporting Persons with respect to 516,486 shares of Common Stock. In addition,
to the extent that a group exists as discussed in Item 2 above, in the limited
circumstances described in Item 4 above and Item 6 below, each of Mr. Levine and
Ms. Leichtman may be deemed to have shared voting power with all other Reporting
Persons and the Principal Shareholders with respect to an additional 1,551,673
shares of Common Stock.
The holders of Class A Preferred, Class C Preferred, Class D
Preferred and Class E Preferred are not entitled to any voting rights except as
required by the laws of the State of Colorado.
Each of the Reporting Persons disclaims beneficial ownership
over the 1,551,673 shares of Common Stock owned by the Principal Shareholders.
See Item 4 above and Item 6 below.
(c) OTHER TRANSACTIONS:
Not Applicable.
(d) INTERESTS OF OTHER PERSONS:
Not Applicable.
(e) DATE UPON WHICH THE REPORTING PERSON CEASED TO BE THE
BENEFICIAL OWNER OF MORE THAN FIVE PERCENT OF CLASS:
Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
The Partnership funded its purchase of the Securities with capital
contributions made by the partners of the Partnership in the aggregate amount of
$13,862,259.84, in response to a Call to Purchase Portfolio Securities dated
October 20, 2000.
On December 12, 2000, the Issuer issued and sold the Securities to
the Partnership. A copy of each of the Note, the Common Warrant, the Class A
Warrant, the Class C Warrant, the Class D Warrant and the Class E Warrant is
attached as EXHIBITS 3 THROUGH 8 hereto, respectively, which describes more
fully the payment and other terms thereof.
Pursuant to the Investor Rights Agreement, a copy of which is
attached as EXHIBIT 9 hereto, the Issuer has granted certain management,
investment monitoring and other rights to the Partnership. Among other rights,
the Partnership may require the Issuer, if the Partnership determines, based on
the advice of counsel, that it is required to maintain a representative of the
Purchaser on the Board of Directors of the Issuer in order to qualify as a
"venture capital operating company" for purposes of ERISA compliance, to cause a
representative designated by the Partnership (an "LLCP Representative") to be
elected or appointed as a member of the Board of Directors of the Issuer. In
addition, the Principal Shareholders have granted to the Partnership limited
voting rights with respect to the shares of Common Stock owned by the Principal
Shareholders, respectively. If the Partnership exercises its right to require
the Issuer to cause an LLCP Representative to be elected or appointed as a
member of the Board of Directors of the Issuer, the Principal Shareholders have
agreed to vote (or cause to be voted) the shares of Common Stock owned by them
in favor of such election or appointment. The Principal Shareholders have also
granted to the Partnership certain co-sale rights with respect to the shares of
Common Stock owned by them, respectively, as more fully described in the
Investor Rights Agreement.
10
<PAGE>
Pursuant to a Registration Rights Agreement dated as of December 12,
2000 (the "Registration Rights Agreement"), between the Issuer and the
Partnership, the Partnership has been granted certain "demand" and "piggyback"
registration rights with respect to the shares of Common Stock issuable upon
exercise of the Warrants (including, but not limited to, the right to require
the Issuer to register resales of such shares on a registration statement on
Form S-3). Such registration rights are described more fully in the Registration
Rights Agreement, a copy of which is attached as EXHIBIT 10 hereto.
The Issuer, certain subsidiaries of the Issuer and the Partnership
entered into an Amendment No. 1 to Securities Purchase Agreement dated as of
December 12, 2000 ("Amendment No. 1") pursuant to which the parties amended
certain sections of the Securities Purchase Agreement. Such amendments are
described more fully in Amendment No. 1, a copy of which is attached as EXHIBIT
11 hereto.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 Joint Reporting Agreement dated December 19, 2000, among
the Partnership, the General Partner, Capital Corp., Mr.
Levine and Ms. Leichtman.
Exhibit 2 Securities Purchase Agreement dated as of November 12,
2000, among the Issuer, certain subsidiaries of the Issuer
and the Partnership.
Exhibit 3 Secured Senior Note Due 2005, dated December 12, 2000,
issued by the Issuer and certain of its subsidiaries jointly
and severally in favor of the Partnership in the principal
amount of $13,862,259.84.
Exhibit 4 Warrant to Purchase 461,548 shares of Common Stock of the
Issuer dated December 12, 2000 issued to the Partnership.
Exhibit 5 Warrant to Purchase 23,767 shares of Class A Preferred of
the Issuer dated December 12, 2000 issued to the
Partnership.
Exhibit 6 Warrant to Purchase 9,279 shares of Class C Preferred of
the Issuer dated December 12, 2000 issued to the
Partnership.
Exhibit 7 Warrant to Purchase 12,209 shares of Class D Preferred of
the Issuer dated December 12, 2000 issued to the
Partnership.
Exhibit 8 Warrant to Purchase 9,683 shares of Class E Preferred of
the Issuer dated December 12, 2000 issued to the
Partnership.
Exhibit 9 Investor Rights Agreement dated as of December 12, 2000,
among the Issuer, the Principal Shareholders and the
Partnership.
Exhibit 10 Registration Rights Agreement dated as of December 12,
2000, between the Issuer and the Partnership.
Exhibit 11 Amendment No. 1 to Securities Purchase Agreement dated as
of December 12, 2000, among the Issuer, certain subsidiaries
of the Issuer and the Partnership.
11
<PAGE>
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: December 19, 2000 LEVINE LEICHTMAN CAPITAL PARTNERS II,
L.P., a California limited partnership
By: LLCP California Equity Partners II, L.P., a
California limited partnership, its General
Partner
By: Levine Leichtman Capital Partners,
Inc., a California corporation,
its General Partner
By: /s/ ARTHUR E. LEVINE
-------------------------------
Arthur E. Levine
President
LLCP CALIFORNIA EQUITY PARTNERS II, L.P.,
a California limited partnership
By: Levine Leichtman Capital Partners, Inc.,
a California corporation, its General
Partner
By: /s/ ARTHUR E. LEVINE
-------------------------------
Arthur E. Levine
President
LEVINE LEICHTMAN CAPITAL PARTNERS, INC.,
a California corporation
By: /s/ ARTHUR E. LEVINE
-------------------------------
Arthur E. Levine
President
/s/ ARTHUR E. LEVINE
-------------------------------
ARTHUR E. LEVINE
/s/ LAUREN B. LEICHTMAN
-------------------------------
LAUREN B. LEICHTMAN
