SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Information to be Included in Statements Filed Pursuant
to Rule 13d-1(a) and Amendments Thereto Filed Pursuant to Rule 13d-2(a)
COLLAGENEX PHARMACEUTICALS, INC.
(Name of Issuer)
COMMON STOCK, par value $0.01 per share
(Title of Class of Securities)
19419B100
(CUSIP Number)
OAKTREE CAPITAL MANAGEMENT, LLC DECHERT PRICE & RHOADS 333
South Grand Avenue, 28th Floor 4000 Bell Atlantic Tower
Los Angeles, California 90071 1717 Arch Street
Attention: Kenneth Liang, Esquire Philadelphia, PA 19103
Managing Director and General Counsel Attention: Donna E. Ostroff, Esquire
(213) 830-6300 (215) 994-4000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 12, 1999
(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 ss.ss. 240.13d-1(e), 240.13d-l(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 the schedule, including all exhibits. See ss. 240.13d-7
for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 9 Pages)
<PAGE>2
The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>3
SCHEDULE 13D
CUSIP No. 19419B100 Page 3 of 9 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oaktree Capital Management, LLC
95-452-1152
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)|_|
(b)|X|
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not Applicable.
5 CHECK BOX 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 1,609,090 shares of Common Stock issuable upon the
BENEFFICIALLY conversion of 177,000 shares of Series D Cumulative
OWNED BY EACH Convertible Preferred Stock
REPORTING PERSON
WITH 8 SHARED VOTING POWER
-0-
9 SOLE DISPOSITIVE POWER
1,609,090 shares of Common Stock issuable upon the
conversion of 177,000 shares of Series D Cumulative
Convertible Preferred Stock
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,609,090 shares of Common Stock issuable upon the conversion of
177,000 shares of Series D Cumulative Convertible Preferred Stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.8% of Common Stock, or 88.5% of Series D Cumulative Convertible
Preferred Stock
14 TYPE OF REPORTING PERSON*
OO, IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>4
SCHEDULE 13D
CUSIP No. 19419B100 Page 4 of 9 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
OCM Principal Opportunities Fund, L.P.
95-459-3041
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)|_|
(b)|X|
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO, WC
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
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,609,090 shares of Common Stock issuable upon the
BENEFICIALLY conversion of 177,000 shares of Series D
OWNED BY EACH Cumulative Convertible Preferred Stock
REPORTING
PERSON WITH 8 SHARED VOTING POWER
-0-
9 SOLE DISPOSITIVE POWER
1,609,090 shares of Common Stock issuable upon the
conversion of 177,000 shares of Series D Cumulative
Convertible Preferred Stock
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,609,090 shares of Common Stock issuable upon the conversion of
177,000 shares of Series D Cumulative Convertible Preferred Stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.8% of Common Stock, or 88.5% of Series D Cumulative Convertible
Preferred Stock
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>5
Item 1. Security and Issuer
This Schedule 13D relates to the Series D Cumulative Convertible Preferred
Stock, par value $0.01 per share ("Series D Preferred Stock") and the Common
Stock, par value $0.01 per share ("Common Stock") of CollaGenex Pharmaceuticals,
Inc., a Delaware corporation (the "Issuer"). The address of the principal
executive office of the Issuer is 301 South State Street, Newtown, Pennsylvania
18940.
Item 2. Identity and Background
This Schedule 13D is filed on behalf of :
(1) Oaktree Capital Management, LLC, a California limited
liability company ("Oaktree"), in its capacity as general partner of
the Principal Opportunities Fund (see below); and
(2) OCM Principal Opportunities Fund, L.P., a Delaware limited
partnership (the "Principal Opportunities Fund").
The principal business of Oaktree is providing investment advice and management
services to institutional and individual investors. The Principal Opportunities
Fund is a limited partnership which generally invests in entities in which there
is a potential for the fund to exercise significant influence over such
entities. Based on Oaktree's relationship with the Principal Opportunities Fund,
Oaktree may be deemed to beneficially own the shares of Common Stock held by the
Principal Opportunities Fund.
(a)-(c) & (f)
Oaktree is the general partner of the Principal Opportunities Fund. The address
of the principal business and principal office for Oaktree, the Principal
Opportunities Fund and the portfolio managers is 333 South Grand Avenue, 28th
Floor, Los Angeles, California 90071. The members and executive officers of
Oaktree and the Principal Opportunities Fund are listed below. The principal
address for each member and executive officer of Oaktree and the Principal
Opportunities Fund is 333 South Grand Avenue, 28th Floor, Los Angeles,
California 90071. Each individual listed below is a citizen of the United States
of America.
Executive Officers & Members
Howard S. Marks Chairman and Principal
Bruce A. Karsh President and Principal
Sheldon M. Stone Principal
David Richard Masson Principal
Larry W. Keele Principal
Stephen A. Kaplan Principal
Russel S. Bernard Principal
David Kirchheimer Managing Director and Chief Financial and
Administrative Officer
Kenneth Liang Managing Director and General Counsel
<PAGE>6
Portfolio Managers
Stephen A. Kaplan Principal
Bruce A. Karsh President and Principal
(d)-(e)
During the last five years, neither Oaktree, the Principal Opportunities Fund,
nor, to the best of their knowledge, any of their respective executive officers,
directors and general partners (i) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors); or (ii) has been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceedings 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.
Item 3. Source and Amount of Funds or Other Consideration
The Principal Opportunities Fund holds One Hundred Seventy-Seven Thousand
(177,000) shares of the Issuer's Series D Preferred Stock and Zero (0) shares of
the Issuer's Common Stock as of the date hereof.
The Principal Opportunities Fund, the Issuer and certain other persons entered
into a certain Stock Purchase Agreement dated March 19, 1999 (the "Purchase
Agreement"), pursuant to which the Principal Opportunities Fund agreed to
purchase from the Issuer and the Issuer agreed to sell to the Principal
Opportunities Fund One Hundred Seventy-Seven Thousand (177,000) shares of Series
D Preferred Stock, subject to the terms and conditions set forth in the Purchase
Agreement (the "Purchase Transaction"). The Principal Opportunities Fund used
Seventeen Million Seven Hundred Thousand Dollars ($17,700,000) of funds obtained
from its working capital for the acquisition of such shares of Series D
Preferred Stock (the "Purchase Price").
After May 12, 1999, the Principal Opportunities Fund shall have the right, at
its option, at any time and from time to time, to convert, in whole or in part,
the shares of Series D Preferred Stock into One Million Six Hundred Nine
Thousand Ninety (1,609,090) registered, fully paid and nonassessable shares of
Common Stock.
Item 4. Purpose of Transaction
The shares of the Issuer's Series D Preferred Stock and Common Stock described
herein will be, in either case, acquired for investment purposes, subject to the
matters set forth below.
Oaktree, as the general partner of the Principal Opportunities Fund, will
evaluate the Issuer's business and prospects, alternative investment
opportunities and all other factors deemed relevant in determining whether to
hold or to sell shares of the Issuer's Series D Preferred Stock or Common Stock
(as the case may be) or whether additional shares of the Issuer's Series D
Preferred Stock or Common Stock will be acquired by the Principal Opportunities
Fund. The investment strategy of the Principal Opportunities Fund is generally
to invest in entities in which there is a potential to exercise significant
influence over such entities, and the Principal Opportunities Fund's share
ownership, at some point, may be deemed to constitute "control" of the Issuer.
Additional
<PAGE>7
shares of Series D Preferred Stock or Common Stock may be acquired in
the open market or in privately negotiated transactions, or some or all of the
shares of the Issuer's Series D Preferred Stock or Common Stock beneficially
owned by Oaktree and the Principal Opportunities Fund may be sold. Oaktree
currently has no agreements, beneficially or otherwise, which would be related
to or would result in any of the matters described in Items 4(a)-(j) of Schedule
13D; however, as part of its ongoing review of investment alternatives, Oaktree
may consider such matters in the future and, subject to applicable law, may
formulate a plan with respect to such matters, and, from time to time, Oaktree
may hold discussions with or make formal proposals to management or the Board of
Directors of the Issuer, other shareholders of the Issuer or other third parties
regarding such matters.
Item 5. Interest and Securities of the Issuer
(a) As of the date of this Schedule 13D, the Principal Opportunities Fund owns
and has sole power to vote and dispose of One Hundred Seventy-Seven Thousand
(177,000) shares of Series D Preferred Stock (approximately Eighty-Eight and
One-Half Percent (88.5%) of the outstanding shares of Series D Preferred Stock).
As of the date of this Schedule 13D, the Principal Opportunities Fund owns and
has sole power to vote and dispose of Zero (0) shares of Common Stock of the
Issuer (Zero Percent (0%) of the outstanding shares of the Issuer's Common
Stock). If the Principal Opportunities Fund chooses to convert the shares of
Series D Preferred Stock into shares of Common Stock, the Principal
Opportunities Fund will own and have sole power to vote and dispose of One
Million Six Hundred Nine Thousand Ninety (1,609,090) shares of Common Stock
(approximately Fifteen and Eight-Tenths Percent (15.8%) of the outstanding
shares of Common Stock).
As of the date of this Schedule 13D, Oaktree, in its capacity as the general
partner of the Principal Opportunities Fund, may be deemed to beneficially own
One Hundred Seventy-Seven Thousand (177,000) shares of Series D Preferred Stock
(approximately Eighty-Eight and One-Half Percent (88.5%) of the outstanding
shares of Series D Preferred Stock).
As of the date of this Schedule 13D, Oaktree, in its capacity as the general
partner of the Principal Opportunities Fund may be deemed to own Zero (0) shares
of Common Stock of the Issuer (Zero Percent (0%) of the outstanding shares of
the Issuer's Common Stock). If the Principal Opportunities Fund chooses to
convert the shares of Series D Preferred Stock into shares of Common Stock,
Oaktree, in its capacity as the general partner of the Principal Opportunities
Fund may be deemed to beneficially own One Million Six Hundred Nine Thousand
Ninety (1,609,090) shares of Common Stock (approximately Fifteen and
Eight-Tenths Percent (15.8%) of the outstanding shares of Common Stock).
As of the date of this Schedule 13D, Stephen A. Kaplan, a Principal of Oaktree
and a portfolio manager of the Principal Opportunities Fund, individually owns
and has sole power to vote and dispose of approximately Three Thousand (3,000)
shares of Common Stock of the Issuer (Three-Hundredths of a Percent (.03%) of
the outstanding shares of the Issuer's Common Stock). Mr. Kaplan acquired these
securities in transactions prior to and unrelated to the Purchase Agreement. The
securities owned by Mr. Kaplan in his capacity as an individual are not covered
by this Schedule 13D.
<PAGE>8
(b) Oaktree has discretionary authority and control over all of the assets of
the Principal Opportunities Fund pursuant to its status as general partner,
including the power to vote and dispose of the Issuer's Series D Preferred Stock
or the Issuer's Common Stock (as the case may be). Therefore, as of the date
hereof, Oaktree has the power to vote and dispose of One Hundred Seventy-Seven
Thousand (177,000) shares of the Issuer's Series D Preferred Stock and Zero (0)
shares of the Issuer's Common Stock. Alternatively, upon the conversion of the
shares of Series D Preferred Stock into shares of Common Stock, Oaktree will
have the power to vote and dispose of One Million Six Hundred Nine Thousand
Ninety (1,609,090) shares of the Issuer's Common Stock.
(c) Oaktree, as general partner of the Principal Opportunities Fund, may be
deemed to beneficially own the shares of the Issuer's Common Stock and Series D
Preferred Stock which are acquired by the Principal Opportunities Fund. Oaktree
and each of the individuals listed in Item 2 disclaims ownership of the shares
of the Issuer's Common Stock and Series D Preferred Stock held by the reporting
person and the filing of this Schedule 13D shall not be construed as an
admission that any such person is the beneficial owner of any securities covered
by this Schedule 13D. Neither the Principal Opportunities Fund nor Oaktree and,
to the best of their knowledge, none of their respective executive officers,
directors or general partners has effected any transaction involving the
Issuer's Common Stock or Series D Preferred Stock during the last sixty (60)
days.
(d) None
(e) Not applicable
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Oaktree, as general partner of the Principal Opportunities Fund, receives a
management fee for managing the assets of the Principal Opportunities Fund and
has a carried interest in the Principal Opportunities Fund.
Except as described above and herein in this Schedule 13D, there are no other
contracts, understandings or relationships (legal or otherwise) among the
parties named in Item 2 hereto and between such persons and any person with
respect to any of the securities of the Issuer currently owned by the Principal
Opportunities Fund.
Item 7. Material to be filed as Exhibits
The following are filed herewith as Exhibits to this Schedule 13D:
Exhibit 1- A written agreement relating to the filing of the joint
acquisition statement as required by Rule 13d-1(k)(1)
under the Securities Exchange Act of 1934, as amended.
<PAGE>9
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this Schedule 13D is
true, complete and correct.
Dated as of this 19th day of May, 1999.
OAKTREE CAPITAL MANAGEMENT, LLC
By:______________________________
Kenneth Liang
Managing Director and General Counsel
OCM PRINCIPAL OPPORTUNITIES FUND, L.P.
By: Oaktree Capital Management, LLC,
its General Partner
By:_________________________________
Kenneth Liang
Managing Director and General Counsel
<PAGE>10
JOINT FILING AGREEMENT
Each of the undersigned acknowledges and agrees that the
foregoing statement on Schedule 13D is filed on behalf of the undersigned and
that all subsequent amendments to this statement on Schedule 13D shall be filed
on behalf of the undersigned without the necessity of filing additional joint
acquisition statements. Each of the undersigned acknowledges that it shall be
responsible for the timely filing of such amendments, and for the completeness
and accuracy of the information concerning it contained therein, but shall not
be responsible for the completeness and accuracy of the information concerning
the other, except to the extent that he or it knows or has reason to believe
that such information is inaccurate.
Dated as of this 19th day of May, 1999.
OAKTREE CAPITAL MANAGEMENT, LLC
By:_____________________________
Kenneth Liang
Managing Director and General Counsel
OCM PRINCIPAL OPPORTUNITIES FUND, L.P.
By: Oaktree Capital Management, LLC,
its General Partner
By:_________________________________
Kenneth Liang
Managing Director and General Counsel
