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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 1)
DIGITAL LIGHTWAVE, INC.
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(Name of Issuer)
COMMON STOCK, $0.0001 PAR VALUE PER SHARE
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(Title of Class of Securities)
253855100000
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(CUSIP Number)
ERIC L. BROWN, ESQ.
C/O RICHARD ROGOVIN, ESQ.
BRICKER & ECKLER LLP
100 SOUTH THIRD STREET
COLUMBUS, OHIO 43215
614 258-9595
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
FEBRUARY 29, 2000
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(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 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box:
NOT APPLICABLE
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1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only)
HBH ASSETS, LTD.
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)____NOT APPLICABLE
(b)____NOT APPLICABLE
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3) SEC Use Only
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4) Source of Funds (See Instructions)______AF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)______ NOT APPLICABLE
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6) Citizenship or Place of Organization ___ OHIO, USA
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Number of (7) Sole Voting Power______ 2 MILLION ONE HUNDRED
Shares Bene- ------------------------------------------------------------
ficially (8) Shared Voting Power_____ NOT APPLICABLE
Owned by ------------------------------------------------------------
Each (9) Sole Dispositive Power_____ 2 MILLION ONE HUNDRED
Report- ------------------------------------------------------------
ing Person (10) Shared Dispositive Power____ NOT APPLICABLE
With
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11) Aggregate Amount Beneficially Owned by Each Reporting Person ________
2 MILLION ONE HUNDRED
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)______ NOT APPLICABLE
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13) Percent of Class Represented by Amount in Row (11) _7.4%
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14) Type of Reporting Person (See Instructions) ____ OO
Item 1. SECURITY AND ISSUER
NO CHANGE.
Item 2. IDENTITY AND BACKGROUND
Name: NO CHANGE
Principal business: NO CHANGE
Address of principal business: c/o Eric L. Brown Co., LPA, P.O BOX
09770, COLUMBUS, OHIO 43209-0770
Address of principal office: SAME.
Information required by item 2(d): No.
Information required by item 2(e): No.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
NO CHANGE.
Item 4. PURPOSE OF TRANSACTION.
NO CHANGE.
Item 5. INTEREST IN SECURITIES OF THE ISSUER
NO CHANGE.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
The following summary description of the Option is qualified in its
entirety by reference to Exhibit 4.1 ATTACHED TO THE SCHEDULE 13D OF HBH ASSETS,
LTD., FILED FEBRUARY 17, 1999.
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HBH Assets, Ltd. is the holder of the Option, which was granted by Dr.
Bryan J. Zwan. Subject to the terms and conditions of PREVIOUSLY FILED Exhibit
4.1, the Option is exercisable in whole or in part, at any time or from time to
time, between November 13, 1998, and October 20, 2008, at a price of $1.00 per
share for up to 2 million shares of common stock. Shares acquired by exercise of
the Option are subject to certain restrictions as set forth in Exhibit 4.1,
including the restriction that they may not be sold, transferred or otherwise
disposed of without registration under the 1933 Act or an exemption therefrom.
The present intention of HBH Assets, Ltd. is to exercise part of the Option
from time to time and to hold the shares so acquired until they may be sold
under an applicable exemption from the 1933 Act, such as Rule 144, or until they
are registered, OR TO SELL ALL OR A PORTION OF THE SHARES SO ACQUIRED IN A
PRIVATE SALE OR OTHER TRANSACTION EXEMPT FROM REGISTRATION UNDER THE 1933 ACT,
OR TO HOLD SUCH SHARES AS A LONG TERM INVESTMENT.
HBH Assets, Ltd. received the Option by assignment effective November
13, 1998, (attached AS Exhibit 4.2 ATTACHED TO THE SCHEDULE 13D OF HBH
ASSETS, LTD., FILED FEBRUARY 17, 1999) from H. Brian Haney. Mr. Haney was the
plaintiff in the litigation HANEY VS. ZWAN & DIGITAL LIGHTWAVE, INC., USDC SD
Ohio C2-97-1218 (EAS) (THE "HANEY I LITIGATION"). As previously disclosed in
the Quarterly Report on Form 10Q filed by Digital Lightwave, Inc. on November
16, 1998, Mr. Haney received the Option effective November 13, 1998, in
settlement of the HANEY I LITIGATION (THE "SETTLEMENT AGREEMENT"). MR. HANEY
WAS ALSO THE PLAINTIFF IN THE LITIGATION HANEY VS. CREDIT SUISSE FIRST BOSTON
CORP., ELLENBURG CAPITAL CORP., GERALD D. ELLENBURG, BARRY L. HAASE, ROBERT
WEGNER, NORTON S. KARNO, AND JOHN DOES 1-20, USDC SD OHIO C2-98-555 (EAS)
(THE "HANEY II LITIGATION"). UNDER THE TERMS OF THE SETTLEMENT AGREEMENT, MR.
HANEY AGREED TO DISMISS THE HANEY I LITIGATION AND THE HANEY II LITIGATION.
ACCORDINGLY MR. HANEY STIPULATED TO DISMISSALS WITH PREJUDICE OF THE HANEY I
LITIGATION AND THE HANEY II LITIGATION ON NOVEMBER 13, 1998. THE TWO
LITIGATIONS SOUGHT TO RESTORE TO MR. HANEY 49% OF DIGITAL LIGHTWAVE, INC., OR
AN AWARD OF DAMAGES AGAINST DEFENDANTS, JOINTLY AND SEVERALLY, FOR THE FAIR
VALUE OF 49% OF DIGITAL LIGHTWAVE, INC.
ON MARCH 30, 1999, AS DULY NOTICED, MR. HANEY CAUSED HBH ASSETS, LTD. TO
TENDER PAYMENT TO BRYAN ZWAN FOR 100,000 SHARES. DR. ZWAN REFUSED TO DELIVER THE
SHARES, OSTENSIBLY FOR REASONS SET FORTH IN THE LETTER, DATED APRIL 12, 1999, OF
MICHAEL TORPEY, ESQ. ATTACHED HERETO AS EXHIBIT 99.1.
ON APRIL 21, 1999, MR. HANEY COMMENCED A NEW LAWSUIT TITLED HANEY & HBH
ASSETS, LTD. VS. ZWAN & DIGITAL LIGHTWAVE, INC., USDC SD OHIO C2-99-387 (EAS)
(THE "HANEY III LITIGATION), SEEKING SPECIFIC PERFORMANCE OF THE UNEXERCISED
PORTION OF THE OPTION AND MONEY DAMAGES FOR THE EXERCISED PORTION. AT THE SAME
TIME MR. HANEY FILED A MOTION FOR RELIEF FROM JUDGMENT UNDER FED. R. CIV. P.
60(B) IN THE HANEY I LITIGATION AND THE HANEY II LITIGATION, SEEKING TO SET
ASIDE THE NOVEMBER 13, 1998 DISMISSALS WITH PREJUDICE IN THE EVENT THE
SETTLEMENT AGREEMENT IS NOT ENFORCED BY THE COURT. SUBSEQUENTLY, MR. HANEY MOVED
TO STAY PROCEEDINGS IN CONNECTION WITH HIS RULE 60(B) MOTION UNTIL HIS CLAIMS TO
ENFORCE THE SETTLEMENT AGREEMENT IN THE HANEY III LITIGATION ARE RESOLVED.
BY ORDER OF THE COURT, ENTERED JUNE 17, 1999, PLAINTIFFS HANEY AND HBH
ASSETS, LTD., AND DEFENDANT ZWAN, ARE ORDERED TO FULLY COMPLY WITH THE TERMS OF
AN ESCROW AGREEMENT NEGOTIATED AMONG THEM UNDER WHICH 2 MILLION SHARES IN THE
NAME OF DEFENDANT ZWAN HAVE BEEN PLACED IN ESCROW WITH CITIBANK, N.A. THE ESCROW
AGREEMENT PROVIDES, AMONG OTHER THINGS, THAT THE SHARES SHALL REMAIN IN ESCROW
UNTIL ENTRY OF A FINAL APPEALABLE JUDGMENT ADJUDICATING PLAINTIFFS CLAIMS
AGAINST ZWAN FOR SPECIFIC PERFORMANCE OF THE OPTION.
ON SEPTEMBER 15, 1999, AND JANUARY 5, 2000, AS DULY NOTICED, MR. HANEY
CAUSED HBH ASSETS, LTD. TO TENDER PAYMENT TO BRYAN ZWAN FOR 400,000 ADDITIONAL
SHARES AND 500,000 ADDITIONAL SHARES, RESPECTIVELY. DR. ZWAN REFUSED TO DELIVER
THE SHARES, AND CONFIRMED HIS POSITION THAT THE OPTION IS UNENFORCEABLE BECAUSE
OF MISREPRESENTATIONS BY MR. HANEY CONCERNING SCIENTOLOGY. THE AGGREGATE NUMBER
OF SHARES FOR WHICH THE OPTION HAS CURRENTLY BEEN EXERCISED IS ONE MILLION.
ON FEBRUARY 29, 2000, THE COURT GRANTED MR. HANEY'S MOTION TO STAY
PROCEEDINGS, AND DENIED HIS MOTION FOR RELIEF FROM JUDGMENT AS MOOT, SUBJECT TO
REFILING BY THE CLERK AT THE DIRECTION OF THE COURT FOLLOWING THE COURT'S
RESOLUTION OF THE MATTERS CURRENTLY PENDING IN THE HANEY III LITIGATION.
CURRENTLY
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PENDING BEFORE THE COURT IN THE HANEY III LITIGATION, AMONG OTHER THINGS, ARE
DEFENDANTS' MOTIONS TO DISMISS, MR. HANEY'S MOTION FOR PARTIAL SUMMARY JUDGMENT
AGAINST DEFENDANT ZWAN, AND MR. HANEY'S MOTION FOR AN ATTACHMENT OF TWO MILLION
SHARES IN THE POSSESSION OF DEFENDANT ZWAN. PLAINTIFFS ARE CURRENTLY SEEKING
MONEY DAMAGES THEY ESTIMATE TO BE $149 MILLION.
MR. HANEY BELIEVES DR. ZWAN'S DEFENSE TO THE ENFORCEMENT OF THE OPTION IS
FRIVOLOUS AND THAT PLAINTIFFS WILL PREVAIL IN THE HANEY III LITIGATION.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
EXHIBIT 99.1 APRIL 12, 1999, LETTER FROM M. TORPEY, ESQ.
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.
MARCH 17, 2000 H. BRIAN HANEY, MEMBER, PRESIDENT
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Date Name/Title
/S/ H. BRIAN HANEY
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Signature
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EXHIBIT 99.1
[BROBECK PHLEGER & HARRISON LLP LETTERHEAD]
APRIL 12, 1999
VIA FACSIMILE
ERIC BROWN, ESQ.
172 E. STATE STREET
SUITE 550
COLUMBUS, OH 43215
RE: H. BRIAN HANEY
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DEAR MR. BROWN:
AS YOU MAY OR MAY NOT KNOW, A CENTRAL ISSUE IN THE SETTLEMENT BETWEEN
DR. ZWAN AND MR. HANEY CONCERNED THE ATTACKS UPON DR. ZWAN'S CHURCH, AND THE
FINANCING BY MR. HANEY OF THESE ATTACKS BY THIRD PARTIES
AT THE INITIAL STAGES OF THE NEGOTIATIONS, MR. HANEY UNEQUIVOCALLY
ASSURED DR. ZWAN THAT HE WAS NEUTRAL WITH RESPECT TO SCIENTOLOGY AND HAD NO
INTENTION OF INITIATING OR FINANCING ATTACKS UPON IT. HE DENIED THAT HE HAD
FINANCED SUCH ATTACKS IN THE PAST. MR. HANEY FURTHER REPRESENTED DURING THE
NEGOTIATIONS THAT HE WOULD NOT ENGAGE IN SUCH ACTIVITIES AND WOULD NOT FINANCE
SUCH ACTIVITIES IN THE FUTURE. IT IS CLEAR THAT SUCH REPRESENTATIONS WERE MADE
BY MR. HANEY TO INDUCE RELIANCE THEREON BY DR. ZWAN AND THEREBY PERMIT
"SETTLEMENT" OF MR. HANEY 'S CLAIMS THROUGH THE PAYMENT OF FUNDS AND STOCK
OPTIONS.
WE HAVE NOW LEARNED FROM DOCUMENTS POSTED TO THE INTERNET AND FROM
OTHER SOURCES, THAT THROUGHOUT THE PERIOD OF THE NEGOTIATIONS, MR. HANEY WAS
ACTIVELY FINANCING AND ENCOURAGING OTHERS TO ENGAGE IN THE ACTIVITIES HE
REPRESENTED THAT BE WOULD NOT. CONTRARY TO MR. HANEY'S REPRESENTATIONS, HE
CONTINUES WITH SUCH ACTIVITIES TODAY.
IT IS OUR VIEW THAT THESE ACTIVITIES CONSTITUTE MATERIAL
MISREPRESENTATIONS BY MR. HANEY. I WILL CONTACT YOU SHORTLY TO DISCUSS WHETHER
WE CAN INFORMALLY RESOLVE THESE ISSUES.
SINCERELY,
/S/
MICHAEL D. TORPEY
cc: DAVID CUPPS, ESQ.
KENDRICK I. MOXON, ESQ.
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