-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HuaL6qteGdVtBizMX5VltmjI3YtYUoHPBb3TTmOb29UUqWAiAR1LCFBe7qC9P9a8 9u6iNS5bjzrTxfQHHYAbjA== 0001144204-05-029210.txt : 20050919 0001144204-05-029210.hdr.sgml : 20050919 20050919154858 ACCESSION NUMBER: 0001144204-05-029210 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20050919 DATE AS OF CHANGE: 20050919 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HORIZON OFFSHORE INC CENTRAL INDEX KEY: 0001051431 STANDARD INDUSTRIAL CLASSIFICATION: OIL, GAS FIELD SERVICES, NBC [1389] IRS NUMBER: 760487309 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-53849 FILM NUMBER: 051091395 BUSINESS ADDRESS: STREET 1: HORIZON OFFSHORE INC STREET 2: 2500 CITY WEST BLVD., STE. 2200 CITY: HOUSTON STATE: TX ZIP: 77042 BUSINESS PHONE: 7133612600 MAIL ADDRESS: STREET 1: HORIZON OFFSHORE INC STREET 2: 2500 CITY WEST BLVD., STE. 2200 CITY: HOUSTON STATE: TX ZIP: 77042 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FALCON MEZZANINE INVESTMENTS LLC CENTRAL INDEX KEY: 0001284307 IRS NUMBER: 223741750 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: 60 KENDRICK ST CITY: NEEDHAM STATE: MA ZIP: 02494 SC 13D/A 1 v025799_sc13d-a.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- SCHEDULE 13D/A (Amendment No.1) Horizon Offshore, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $1.00 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 44043J105 - -------------------------------------------------------------------------------- (CUSIP number) William J. Kennedy Jr. Managing Director Falcon Mezzanine Investments, LLC 60 Kendrick Street Needham, Massachusetts 02494 (781) 247-7200 - -------------------------------------------------------------------------------- (Name, address and telephone number of person authorized to receive notices and communications) September 15, 2005 - -------------------------------------------------------------------------------- (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 Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. |_| (Continued on following pages) (Page 1 of 11) - -------------------------------------------------------------------------------- CUSIP No. 44043J105 13D Page 2 of 11 Pages - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) FALCON MEZZANINE INVESTMENTS, LLC I.R.S IDENTIFICATION NO. 22-3741750 - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) |_| (b) |X| - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - ------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) |_| - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - ------------------------------------------------------------------------------- 7. Sole Voting Power Number of Shares 0 Beneficially ----------------------------------------------------------------- Owned by Each 8. Shared Voting Power Reporting Person With 74,519,048 - ------------------------------------------------------------------------------- 9. Sole Dispositive Power 0 - ------------------------------------------------------------------------------- 10. Shared Dispositive Power 74,519,048 - ------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 74,519,048 - ------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) |_| - ------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 11.5% - ------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) OO - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CUSIP No. 44043J105 13D Page 3 of 11 Pages - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) FALCON MEZZANINE PARTNERS, LP I.R.S IDENTIFICATION NO. 22-3742731 - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) |_| (b) |X| - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - ------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) |_| - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - ------------------------------------------------------------------------------- 7. Sole Voting Power Number of Shares 0 Beneficially ----------------------------------------------------------------- Owned by Each 8. Shared Voting Power Reporting Person With 74,519,048 - ------------------------------------------------------------------------------- 9. Sole Dispositive Power 0 - ------------------------------------------------------------------------------- 10. Shared Dispositive Power 74,519,048 - ------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 74,519,048 - ------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) |_| - ------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 11.5% - ------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) PN - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CUSIP No. 44043J105 13D Page 4 of 11 Pages - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) FALCON INVESTMENT ADVISORS, LLC I.R.S IDENTIFICATION NO. 22-3734765 - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) |_| (b) |X| - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - ------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) |_| - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - ------------------------------------------------------------------------------- 7. Sole Voting Power Number of Shares 0 Beneficially ----------------------------------------------------------------- Owned by Each 8. Shared Voting Power Reporting Person With 74,519,048 - ------------------------------------------------------------------------------- 9. Sole Dispositive Power 0 - ------------------------------------------------------------------------------- 10. Shared Dispositive Power 74,519,048 - ------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 74,519,048 - ------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) |_| - ------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 11.5% - ------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IA - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CUSIP No. 44043J105 13D Page 5 of 11 Pages - -------------------------------------------------------------------------------- INTRODUCTION This Amendment No. 1 amends a Statement on Schedule 13D filed on April 11, 2005. Falcon Mezzanine Investments, LLC, a Delaware limited liability company (the "General Partner"), hereby files this Amendment No. 1 to Statement on Schedule 13D (the "Statement") on behalf of the Reporting Persons identified in Item 2 of this Statement. The General Partner is the general partner of Falcon Mezzanine Partners, LP, a Delaware limited partnership (the "Fund"). Falcon Investment Advisors, LLC, a Delaware limited liability company (the "Advisor"), provides investment and administrative services to the General Partner pursuant to an investment management agreement. Pursuant to a Recapitalization Letter Agreement (the "Recap Agreement"; filed as Exhibit 7(a) hereto), dated March 31, 2005, among Horizon Offshore, Inc., a Delaware corporation (the "Issuer"), the Fund and the other holders of the Issuer's subordinated notes (the "Subordinated Notes"), the holders (including the Fund) of the Subordinated Notes agreed to exchange $84,972,823 aggregate principal amount of Subordinated Notes and 1,400 shares of the Issuer's outstanding Series A redeemable participating preferred stock (the "Series A Preferred Stock") for 60 million shares of the Issuer's common stock, par value $1.00 per share (the "Common Stock") and one million shares of a new series of the Issuer's Series B mandatorily convertible preferred stock (the "Series B Preferred Stock"). The Series B Preferred Stock was not entitled to any dividend or voting rights (except as required by the Delaware General Corporation Law), but was mandatorily convertible into shares of Common Stock upon the amendments to the Issuer's certificate of incorporation as described below. The shares of Common Stock and Series B Preferred Stock were issued on June 10, 2005. The shares of Common Stock and Series B Preferred Stock were also issued in consideration of the holders of the Subordinated Notes having consented to a new $70 million term loan senior secured financing agreement (the "Financing Agreement"), dated as of March 31, 2005, among the Issuer, each of its subsidiaries party thereto, Manchester Securities Corp., as collateral and administrative agent, and the other lenders specified therein, release of all of the collateral securing the Subordinated Notes, amending the terms of the $25 million of Subordinated Notes that are expected to remain outstanding following the closing of the recapitalization transactions to extend their maturity to March 2010 and reducing their interest rate to 8% per annum payable-in-kind, and, if applicable, participating in the financing transaction as a lender. In addition, certain of the holders of the Subordinated Notes, including the Fund, participated in the Financing Agreement as lenders. The Fund agreed to provide $4.15 million of the $70 million pursuant to the Financing Agreement. In consideration for the above, the Fund received 7,280,340 shares of Common Stock and 121,338.99 shares of Series B Preferred Stock on June 10, 2005. The Issuer agreed to call a meeting of its stockholders, which was held on September 13, 2005, to amend the Issuer's certificate of incorporation to increase the number of authorized shares of Common Stock to accommodate the conversion of the Series B Preferred Stock described above and to reduce or eliminate any par value for the shares of Common Stock. Upon these amendments to the Issuer's certificate of incorporation, which were effective on September 15, 2005, the Series B Preferred Stock was automatically converted into shares of Common Stock. The conversion rate was set such that the total outstanding Common Stock issued in the recapitalization transactions (the initial 60 million shares plus the shares issued upon conversion of the Series B Preferred Stock) represented an aggregate of 95% of the Issuer's Common Stock on a fully diluted basis (which calculation excluded out-of-the-money director and employee stock options), pro forma for the recapitalization transactions and certain other - -------------------------------------------------------------------------------- CUSIP No. 44043J105 13D Page 6 of 11 Pages - -------------------------------------------------------------------------------- transactions described in the Recap Agreement. Each party to the Recap Agreement agreed to exercise any voting power it may have had to approve the amendments to the Issuer's certificate of incorporation, and to execute such documentation and take such other action as may have reasonably been required in connection therewith. The parties to the Recap Agreement held a sufficient number of shares to ensure adoption of the amendments to the Issuer's certificate of incorporation. The Fund received 67,238,708 shares of Common Stock upon conversion of its Series B Preferred Stock. The Issuer also entered into a registration rights agreement covering resales of the remaining Subordinated Notes and all Common Stock issued in the recapitalization transactions. Item 1. Security and Issuer The class of equity securities to which this Statement relates is the Common Stock of the Issuer, the principal executive offices of which are located at 2500 CityWest Boulevard, Suite 2200, Houston, Texas 77042. Item 2. Identity and Background This Statement is filed on behalf of the Fund, the General Partner and the Advisor. The Fund, the General Partner and the Advisor are each referred to herein as a "Reporting Person" and are collectively referred to herein as the "Reporting Persons." a. The Fund. The principal business of Falcon Mezzanine Partners, LP, a Delaware limited partnership (the "Fund"), is making investments in subordinated debt and equity securities. The general partner of the Fund is Falcon Mezzanine Investments, LLC, which is described in Item 2.b. below. b. The General Partner. Falcon Mezzanine Investments, LLC, a Delaware limited liability company (the "General Partner"), is the general partner of the Fund. The principal business of the General Partner is to manage and operate the Fund's activities. The General Partner is a wholly-owned subsidiary of Falcon Partners Holdings, LLC, a Delaware limited liability company ("Holdco"). The members of Holdco are Alva Falconer Holdings, LLC, a Delaware limited liability company ("Alva"), Rafael Fogel, William J. Kennedy Jr., Eric Y. Rogoff and John S. Schnabel. Alva is the Managing Member and holds a controlling interest in Holdco. Alva is controlled by Mr. Sandeep D. Alva. c. The Advisor. Falcon Investment Advisors, LLC (the "Advisor") is a Delaware limited liability company, the principal business of which is to manage the Fund. The Advisor is a wholly-owned subsidiary of Holdco, which is described in Item 2.b. above. The principal executive office of each of the Fund, the General Partner, Holdco, Alva, Mr. Alva and the Advisor is located at 60 Kendrick Street, Needham, Massachusetts 02494. During the last five years, none of the Reporting Persons, nor any of the executive officers, managers or managing directors of any of the Reporting Persons, has been convicted in a criminal proceeding (excluding traffic - -------------------------------------------------------------------------------- CUSIP No. 44043J105 13D Page 7 of 11 Pages - -------------------------------------------------------------------------------- violations or similar misdemeanors) nor has any such person been 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. Item 3. Source and Amount of Funds or Other Consideration Pursuant to the Recap Agreement, the Fund exchanged approximately $22.5 million aggregate principal amount of Subordinated Notes for a portion of the Common Stock and Series B Preferred Stock received by the Fund. In addition, the Fund provided $4.15 million under the senior secured financing agreement with the Issuer. These funds were received by the Fund as a result of a capital call from the limited partners in the Fund, in respect of previously made commitments. Item 4. Purpose of Transaction The Reporting Persons are acquiring and intend to hold the shares of Common Stock for investment purposes. The Reporting Persons intend to review on a continuing basis their investment in the Issuer and the Issuer's business affairs, financial position and prospects. Based on such evaluation and review, other investment opportunities available to the Reporting Persons, general economic and industry conditions, and other factors that the Reporting Persons may deem relevant, the Reporting Persons may consider from time to time various courses of action, including, among other things, (i) the sale of all or a portion of the shares held by the Reporting Persons on the open market, in privately negotiated transactions, through a public offering or otherwise or (ii) the acquisition of shares through open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise. Other than as described above and in "Introduction" above, none of the Reporting Persons has any plans or proposals which relate to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer (a) and (b) The aggregate number of shares and percentage of Common Stock of the Issuer (based upon the 92,323,139 shares of Common Stock outstanding on August 9, 2005, as reported in the Issuer's proxy statement relating to the meeting of stockholders referred to above plus the 554,139,356 shares of Common Stock issued upon conversion of the Series B Preferred Stock, for a total of 646,462,495 shares of Common Stock outstanding) beneficially owned by each person named in Item 2 of this Statement, as well as the number of shares of Common Stock as to which such person is deemed to have sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or direct the disposition, is set forth in the following table.
- ---------------------------------------------------------------------------------------------------------------------- Reporting Person No. of Shares Percentage Power to Vote Power to Dispose Beneficially Owned of Class Shared Sole Shared Sole - ---------------------------------------------------------------------------------------------------------------------- The Fund 74,519,048 11.5% 74,519,048 0 74,519,048 0 - ---------------------------------------------------------------------------------------------------------------------- The General Partner 74,519,048 11.5% 74,519,048 0 74,519,048 0 - ---------------------------------------------------------------------------------------------------------------------- The Advisor 74,519,048 11.5% 74,519,048 0 74,519,048 0 - ----------------------------------------------------------------------------------------------------------------------
Each of the Fund, the General Partner and the Advisor share power to vote and to dispose of the 74,519,048 shares of Common Stock beneficially owned by them with each other. Although the Reporting Persons had interests which may have been generally aligned with other parties to the Recap Agreement (and - -------------------------------------------------------------------------------- CUSIP No. 44043J105 13D Page 9 of 11 Pages - -------------------------------------------------------------------------------- all such parties agreed to vote their shares in a particular manner), the Reporting Persons disclaim any beneficial interest in the shares held by any other parties to the Recap Agreement. (c) None of the Reporting Persons, described in paragraph (a) of this Item 5, has effected any transaction in the Common Stock of the Issuer during the past 60 days. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer a. The Recap Agreement. The Recap Agreement is described/referred to in the Introduction and Items 3 and 5 of this Schedule 13D. b. The Financing Agreement. Pursuant to the Financing Agreement, the lenders under the Financing Agreement extended credit to the Issuer consisting of (a) a $30 million senior secured term loan A facility bearing interest at 15% per annum, payable monthly 10% in cash and 5% paid-in-kind, maturing on March 31, 2007, and requiring a monthly principal payment of $500,000 beginning July 2005 and (b) a $40 million senior secured term loan B facility, bearing interest at 10% per annum, payable monthly 8% in cash and 2% paid-in-kind and maturing on March 31, 2007. The Issuer paid a $1.4 million closing fee in connection with the Financing Agreement, and is required to pay quarterly, in cash, a loan servicing fee of 0.5% per annum based upon the aggregate unpaid principal balance of the loans. Upon an event of default under the Financing Agreement, the interest rate on each loan increases 2%, payable in cash on demand. The loans under the Financing Agreement are collateralized by the pledge of the Issuer's equity interests in its subsidiaries that are loan parties to the Financing Agreement, the Issuer's accounts receivable, first or second mortgages on all of the Issuer's vessels, second liens on the Issuer's Port Arthur and Sabine marine facilities, the cash securing the letter of credit under the Issuer's contract with the Israel Electric Corporation, the Issuer's outstanding claims and receivables from Pemex and Williams, and our future assets. The term loan A is repaid from the collateral securing the new senior secured credit facility in priority to the term loan B. The holders of the Subordinated Notes agreed to release the collateral that secured the Subordinated Notes in favor of the lenders under the Financing Agreement. The Financing Agreement has covenants that, among other things, subject to a few limited exceptions, require the Issuer to grant the lenders a security interest in any property the Issuer acquires and restrict the Issuer's ability to issue additional capital stock, create additional liens, incur additional indebtedness, enter into affiliate transactions, dispose of assets, make any investments, pay dividends, make payments and settle its Pemex claims without the consent of the lenders under the Financing Agreement. The Financing Agreement also has the same financial covenants as the Issuer's existing credit facilities, which were amended in connection with the recapitalization and financing transactions described above. In addition, any events of default under the Financing Agreement could result in acceleration of the Issuer's indebtedness. The descriptions of the Recap Agreement and the Financing Agreement contained in this Schedule 13D are qualified in their entirety by the complete text of the documents, copies of which are filed as exhibits to this Schedule 13D. Item 7. Material to be Filed as Exhibits. - -------------------------------------------------------------------------------- CUSIP No. 44043J105 13D Page 10 of 11 Pages - -------------------------------------------------------------------------------- Exhibit 7(a). Recapitalization Letter Agreement, dated as of March 31, 2005, by and among the Issuer and the holders of Subordinated Notes specified therein (incorporated by reference to Exhibit 10.2 to the Issuer's current report on Form 8-K filed on April 5, 2005). Exhibit 7(b). Financing Agreement, dated as of March 31, 2005, by and among the Issuer, Horizon Offshore Contractors, Inc. and Horizon Vessels, Inc., as borrowers, the guarantors specified therein, Manchester Securities Corp., as agent, and the other lenders specified therein (incorporated by reference to Exhibit 10.1 to the Issuer's current report on Form 8-K filed on April 5, 2005). Exhibit 7(c). Joint Filing Agreement, dated as of April 11, 2005, among Falcon Mezzanine Investments, LLC, Falcon Mezzanine Partners, LP and Falcon Investment Advisors, LLC. - -------------------------------------------------------------------------------- CUSIP No. 44043J105 13D Page 11 of 11 Pages - -------------------------------------------------------------------------------- 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. Date: September 19, 2005 FALCON MEZZANINE INVESTMENTS, LLC By: /s/ William J. Kennedy Jr. ----------------------------------------------------- Name: William J. Kennedy Jr. Title: Managing Director FALCON MEZZANINE PARTNERS, LP By: Falcon Mezzanine Investments, LLC, its General Partner By: /s/ William J. Kennedy Jr. ----------------------------------------------------- Name: William J. Kennedy Jr. Title: Managing Director FALCON INVESTMENT ADVISORS, LLC By: /s/ William J. Kennedy Jr. ----------------------------------------------------- Name: William J. Kennedy Jr. Title: Managing Director JOINT FILING AGREEMENT In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing by Falcon Mezzanine Investments, LLC on behalf of all of the undersigned of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the Common Stock, par value $1.00 per share, of Horizon Offshore, Inc., and further agree that this Agreement shall be included as an Exhibit to such joint filings. The undersigned further agree that each party hereto is responsible for the timely filing of such Statement on Schedule 13D and any amendments thereto, and for the accuracy and completeness of the information concerning such party contained therein; provided, however, that no party is responsible for the accuracy or completeness of the information concerning any other party, unless such party knows or has reason to believe that such information is inaccurate. This Agreement may be signed in counterparts with the same effect as if the signature on each counterpart were upon the same instrument. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of April 11, 2005. FALCON MEZZANINE INVESTMENTS, LLC By: /s/ William J. Kennedy Jr. ----------------------------------------------------- Name: William J. Kennedy Jr. Title: Managing Director FALCON MEZZANINE PARTNERS, LP By: Falcon Mezzanine Investments, LLC, its General Partner By: /s/ William J. Kennedy Jr. ----------------------------------------------------- Name: William J. Kennedy Jr. Title: Managing Director FALCON INVESTMENT ADVISORS, LLC By: /s/ William J. Kennedy Jr. ----------------------------------------------------- Name: William J. Kennedy Jr. Title: Managing Director -----END PRIVACY-ENHANCED MESSAGE-----