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OMB APPROVAL
OMB Number: 3235-0145
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No.______)1
Audio Communications Network, Inc.
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(Name of Issuer)
Common Stock, par value $.25 per share
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(Title of Class of Securities)
0506E 10 6
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(CUSIP Number)
Mitchell Kleinhandler Stanley E. Bloch, Esq.
Suncom Communications L.L.C. Baer Marks & Upham LLP
4059 Yancey Road 805 Third Avenue
Charlotte, North Carolina 28217 New York, New York 10022
(704) 523-4893 (212) 702-5700
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(Name, Address and Telephone Number of Person(s)
Authorized to Receive Notices and Communications)
May 30, 1997
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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 which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Continued on following pages)
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(1) 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 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).
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SCHEDULE 13D
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CUSIP No. 750115305 Page 2 of 9 Pages
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1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Suncom Communications L.L.C.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS* OO, PF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
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7. SOLE VOTING POWER
0
NUMBER OF
SHARES -------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 2,697,986
OWNED BY -------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER 0
REPORTING
PERSON WITH -------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 2,697,986
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,697,986
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* See Item 6 [X]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 60.7%
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14. TYPE OF REPORTING PERSON* OO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 750115305 Page 3 of 9 Pages
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ITEM 1. SECURITY AND ISSUER
The class of equity securities to which this Statement on Schedule 13D
(the "Statement") relates is the Common Stock, par value $.25 per share (the
"Common Stock"), of Audio Communications Network, Inc. (the "Issuer"). The
principal executive offices of the Issuer are located at 1000 Legion Place,
Suite 1515, Orlando, Florida 32801.
ITEM 2. IDENTITY AND BACKGROUND
2.1 Background of Suncom. Communications L.L.C. ("Suncom") a) This
statement is being submitted by Suncom (sometimes referred to herein as the
"Reporting Person"). Suncom is a Delaware limited liability company that was in
the business of providing foreground and background subscription music service,
and all other services and products relating thereto. Suncom sold its business
to the Issuer as part of the transactions described in item 4 below and
accordingly its business now is the holding and disposition of shares of the
Issuer. The address of its principal business and principal office is 4059
Yancey Road, Charlotte, North Carolina 28217. Members of Suncom include (i)
Suncom Management, L.L.C. ("Suncom Management") (ii) Midwest Mezzanine Fund,
L.P. ("Midwest"), (iii) CMNY Capital II, L.P. ("CMNY") and (iv) CMS Interactive
Communications Partners, L.P. ("CMS" and together with Suncom Management,
Midwest and (CMNY sometimes collectively referred to herein as the "Suncom
Members"). Suncom's day-to-day operations are managed by Suncom Management,
subject to the approval of Suncom members for various actions, (without
limitation) the voting and disposition of Suncom's shares of the Issuer.
Accordingly, the control of Suncom rests with the Suncom Members; provided,
however, the approval of Suncom Members requires the consent of the holders of
common units of Suncom representing 66.6% or more of all of the common units
that are outstanding at such time. At present CMS holds 40% of Suncom's common
units; therefore no approval of Suncom Members to any such action can be made
without the consent of CMS to such actions. Mr. David Unger ("Unger") is the
Chairman of the Board of the Directors and Mr. Mitchell Kleinhandler
("Kleinhandler") is the President of Suncom.
2.2 Background of Suncom's Members
(a) Suncom Management. Suncom Management is a Delaware limited
liability company that is in the business of being a member and the manager of
Suncom. The address of its principal business and principal office is 4059
Yancey Road, Charlotte, North Carolina 28217. Members of Suncom Management are
(i) Global Communications I, L.L.C., a Delaware limited liability company
("Global") controlled by its Managing Member, Mr. Kleinhandler and (ii) Creative
Media Music Enterprises, L.L.C., a Delaware limited liability company
("Creative") controlled by its Managing Member, Mr. Unger. The management
and control of Suncom Management rests
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CUSIP No. 750115305 Page 4 of 9 Pages
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exclusively with Global and Creative. Notwithstanding the foregoing, the
day-to-day operations are managed by Global.
Mr. Kleinhandler is the President and a director of the Issuer; the
President and a member, indirectly through Suncom Management, of Suncom; and a
member, indirectly through Global, of Suncom Management. Accordingly, Mr.
Kleinhandler may be deemed to be a "beneficial owner" of the shares of Common
Stock owned by Suncom within the meaning of that term as it is defined in Rule
13d-3 promulgated under the Exchange Act. Mr. Kleinhandler is a citizen of the
United States of America with a business address c/o Audio Communications
Network, Inc. 1000 Legion Place, Suite 1515, Orlando, Florida 32801.
Mr. Unger is the Executive Vice President and a director of the Issuer;
the Chairman of the Board and a member, indirectly through Suncom Management, of
Suncom; and a member, indirectly through Creative, of Suncom Management.
Accordingly, Mr. Unger may be deemed to be a "beneficial owner" of the shares of
Common Stock owned by Suncom within the meaning of that term as it is defined in
Rule 13d-3 promulgated under the Exchange Act. Mr. Unger is the record owner of
6,000 shares of the Issuer's Common Stock. Mr. Unger is a citizen of the United
States of America with a business address c/o Audio Communications Network, Inc.
1000 Legion Place, Suite 1515, Orlando, Florida 32801.
(b) Midwest. Midwest Mezzanine Fund, L.P. is an Illinois limited
partnership that is in the business of making, holding and disposing of
investments. The address of its principal business and principal office is 208
S. LaSalle St., Suite 510, Chicago, Illinois 60604. The general partner of
Midwest is TCC Mezzanine Management I, L.P. ("TCC Mezzanine"). TCC Mezzanine is
a Delaware limited partnership whose sole business is being the general partner
of Midwest. The address of its principal business and principal office is also
208 S. LaSalle St. Suite 510, Chicago, Illinois 60604. TCC Mezzanine is
ultimately controlled by ABN AMRO N.V., a Dutch bank holding company.
(c) CMNY. CMNY is a Delaware limited partnership that is a small
business investment company licensed by the United States Small Business
Administration. The address of its principal business and principal office is
135 East 57th Street, New York, New York 10022. The general partner of CMNY are
Robert Davidoff, Howard Davidoff, Mark L. Claster and Andrew M. Boas. The
business address of each general partner is 135 East 57th Street, New York, New
York 10022. Mr. Robert Davidoff's principal occupation is a general partner of
CMNY, Vice President of CMCO, Inc. ("CMCO"), an affiliate of CMNY. Mr. Robert
Davidoff is also a director of the Issuer. Mr. Howard Davidoff's principal
occupation is a general partner of CMNY Mr. Claster's principal occupation is
Vice President of CMCO. Mr. Boas' principal occupation is Vice President of
CMCO.
(d) CMS. CMS is a Delaware limited partnership that is in the
business of making, holding and disposing of investments. The address of its
principal business and principal office is 1020 Grenoble Road, Ivyland,
Pennsylvania 18974. The general partners of CMS are (i) CMS 1994 Investment
Partners L.P. ("1994 Investment Partners") and (ii) CMS/ICP Associates, L.P.
("CMS/ICP"), both of which are Delaware limited partnerships that are in the
business of making, holding and disposing of investments with an address of
their principal business and principal office of 1020 Grenoble Road, Ivyland,
Pennsylvania 18974. The sole general partner of 1994 Investment Partners is
CMS 1994, Inc., a Delaware corporation, and the sole general partner of
CMS/ICP is MSPS/ICP, Inc., a Delaware corporation, each of which is in the sole
business of acting as general partner of the limited partnership of which it is
the general partner. The address of the principal business and principal office
of each of CMS 1994, Inc. and MSPS/ICP, Inc. is 1020 Grenoble Road, Ivyland,
Pennsylvania 18974. These entities are ultimately affiliated with Capital
Management Systems, Inc. and CMS Investment Resources, Inc., both of which are
Pennsylvania corporations in the financial services business (collectively
"CMS Companies") CMS Investment Business, Inc. is an NASD registered broker
dealer and a registered investment advisor. Messrs. Mark I. Solomon and Paul
Silberberg are the Chairman of the Board and President, respectively of each of
the CMS Companies. Messrs. Solomon and Silberberg are U.S. citizens with an
address of their principal business and principal office at 1926 Arch Street,
Philadelphia, Pennsylvania 19103.
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CUSIP No. 750115305 Page 5 of 9 Pages
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2.3 Additional information concerning Suncom, Suncom Management,
Midwest, CMNY, CMS and the individuals identified above.
Neither Suncom, any of Suncom Members nor Kleinhandler, Unger, Robert
Davidoff, Howard Davidoff, Mark L. Claster, Andrew M. Boas, Mark I. Solomon,
Paul Silberberg and to the best of TCC Mezzanine's knowledge ABN AMRO N.V.,
during the last five years, has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) 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, United States federal or state securities laws or finding
any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On May 30, 1997, the Issuer consummated, through its wholly-owned
subsidiary Suncom, Inc., the acquisition of substantially all of the assets and
the assumption of the liabilities of Suncom in accordance with the terms of an
Asset Purchase Agreement dated as of November 19, 1996 between the Issuer and
Suncom (the "Asset Purchase Agreement"). In addition to the assumption of the
liabilities of Suncom, the Issuer issued 2,100,000 shares of its Common Stock as
consideration for the acquisition. See Item 4.
Concurrent with the consummation of the transactions provided for in
the Asset Purchase Agreement, Suncom purchased 597,986 shares of Common Stock of
the Issuer from A.J. Schell, the Issuer's Chairman and former Chief Executive
Officer, for cash consideration of $3,750,000. Suncom obtained the cash funds
for the purchase of Mr. Schell's shares from additional capital contributions
from the Suncom Members.
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CUSIP No. 750115305 Page 6 of 9 Pages
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ITEM 4. PURPOSE OF TRANSACTION
Pursuant to the Asset Purchase Agreement, the Issuer acquired through
its wholly-owned subsidiary Suncom, Inc., substantially all of the assets and
assumed the liabilities of Suncom. In addition to the assumption of the
liabilities of Suncom, the Issuer issued 2,100,000 shares of its Common Stock as
consideration for the acquisition, representing approximately 47.5% of the
Issuer's Common Stock. In accordance with the terms of the Asset Purchase
Agreement, concurrent with the consummation of the acquisition contemplated
thereby, four members of the Issuer's eight-person Board of Directors resigned
effective as of the date of the closing, and four designees of Suncom were
selected to replace the resigning Directors. At the 1997 annual meeting, the
Issuer's shareholders voted in favor of a proposal to increase the size of the
Board to nine, with the ninth member being nominated by Suncom. Accordingly, the
transactions contemplated by the Asset Purchase Agreement had the effect of
changing the control of the Issuer's Board of Directors. Also, pursuant to
employment agreements entered into as of the date of the closing of the Asset
Purchase Agreement, Kleinhandler and Unger have been appointed President and
Executive Vice President, respectively, of the Issuer.
Concurrent with the consummation of the transactions provided for in
the Asset Purchase Agreement, Suncom purchased 597,986 shares of the Issuer's
Common Stock from Mr. Schell. Suncom's ownership of an aggregate of 2,697,986
shares of Common Stock represents approximately 60.7% of the Issuer's
outstanding shares, giving Suncom effective control over the Issuer's
shareholders' actions.
The Asset Purchase Agreement also provided for an Option Agreement
between the Issuer and Suncom, pursuant to which the Issuer granted Suncom an
option to acquire up to 1,000,000 shares of Common Stock at an exercise price of
$6.00 per share (the "Option"). The Option becomes exercisable upon the
consummation of a public or private offering of Common Stock, or securities
convertible into such stock, but only with respect to the number of shares
issued in such offering. In the event that the offering is of securities
convertible into Common Stock, the exercise price of the Option increases to
$9.00 per share. The Option expires three years from grant or from the
completion of an offering of convertible securities.
The purpose of the issuance of the 2,100,000 shares of Common Stock to
Suncom was to pay for the assets of Suncom. The purpose of Suncom's purchase of
597,986 shares of Common Stock from Mr. Schell was to consumate the sale of
Suncom's assets (as the purchase of Mr. Schell's shares was a condition
precedent to the assets closing) and gain a majority equity interest in the
Issuer. As of the date of filing of this Statement, the Reporting Person has not
determined whether it will effect a transaction to acquire any or all of the
remaining outstanding Common Stock or what form of transaction any such further
acquisition would take, if at all. The Reporting Person intends to promptly file
an Amendment to this Statement if and when it makes any such determination.
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CUSIP No. 750115305 Page 7 of 9 Pages
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Except as set forth in this Item 4, the Reporting Person has no plans
or proposals which relate to or would result in any of the actions specified in
clauses (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Suncom is the record owner of 2,697,986 shares of Common
Stock, representing approximately 60.7% of the total number of shares of Common
Stock outstanding (based upon the Issuer's Quarterly Report on Form 10-QSB for
the period ended June 30, 1997). This number excludes 1,000,000 shares of Common
Stock issuable upon exercise of the Option, which is not currently exercisable.
See Item 4.
(b) The Suncom Members share voting and dispositive power with
Suncom with respect to the 2,697,986 shares of Common Stock owned by Suncom to
the extent of their respective pecuniary interest in Suncom; See Item 2.
(c) Suncom has not been involved in transactions in the
securities of the Issuer during the past 60 days.
(d) Other than as described above, no person has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the Shares.
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CUSIP No. 750115305 Page 8 of 9 Pages
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(e) Not applicable.
ITEM 6. CONTRACT, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Pursuant to the Asset Purchase Agreement the then directors of
the Issuer including Mr. Schell each granted an Irrevocable Proxy to Suncom to
vote all their shares of the Issuer, owned or acquired (aggregating 184,823
shares of Common Stock) (i) in favor of the election of all of Suncom's nominees
to the Issuer's Board of Directors, and (ii) for the approval of the amendment
to the By-Laws of the Issuer to increase the size of the Board of Directors to
nine, at the 1997 annual meeting of shareholders.
Other than as described above, there are no contracts,
arrangements, understandings or relationships (legal or otherwise) among the
persons named in Item 2 or between such persons and any other person with
respect to any securities of the Issuer, including but not limited to transfer
or voting of any securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss
or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A - Asset Purchase Agreement dated as of November 19, 1996
between the Issuer and Suncom.*
Exhibit B - Stock Purchase Agreement dated as of November 19, 1996
between Suncom and A.J. Schell.
Exhibit C - Option Agreement dated as of May 30, 1997 between the
Issuer and Suncom.
Exhibit D - Form of Irrevocable Proxy.
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* Incorporated by reference to the Issuer's Current Report on Form 8-K, dated
November 19, 1996.
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CUSIP No. 750115305 Page 9 of 9 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify the information set forth in this Statement is true, complete and
correct.
Dated: November 10, 1997
Suncom Communications L.L.C.
Suncom Management L.L.C.
BY: /s/ Mitchell Kleinhandler
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Mitchell Kleinhandler
Managing Member
BY: Global Communications L.L.C.
and
BY: Creative Media Music Enterprises L.L.C.
BY: /s/ David Unger
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David Unger
Managing Member
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Exhibit B
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Stock Purchase Agreement
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of November 19, 1996 (the "Stock
Purchase Agreement") between Suncom Communications L.L.C., a Delaware limited
liability company ("Buyer") and A.J. SCHELL ("Seller").
WITNESSETH:
WHEREAS, Seller is the beneficial and record holder of 572,986
shares of common stock, par value $0.25 per share ("Common Stock") of Audio
Communications Network, Inc., a Florida corporation ("ACN") and upon the
exercise of certain options, will be the beneficial and record holder of 2S,000
additional shares of Common Stock (such shares, together with the 572,986
shares, are collectively referred to herein as the "Shares"); and
WHEREAS, Seller wishes to sell and Buyer wishes to purchase the
Shares upon the terms of this Stock Purchase Agreement;
NOW, THEREFORE, in reliance upon the representations and
warranties made herein and in consideration of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE 1
SALE AND PURCHASE OF SHARES
1.1 Sale of Shares. At the Closing provided for in Section 2.1,
Seller shall sell the Shares to Buyer and Buyer shall purchase the Shares for
the purchase price provided in Section 1.2.
1.2 Purchase Price; Delivery of Purchase Price and Share
Certificates.
(a) Purchase Price. The purchase price for the Shares is
$3,750,000 (the "Purchase Price").
(b) Payment of Purchase Price. The Purchase Price shall be paid by
Buyer in immediately available funds by wire transfer to an account designated
by Seller at least one business day prior to Closing (as hereinafter defined).
(c) Delivery of Share Certificates. At the Closing, Seller will
deliver to Buyer stock certificate(s), in form suitable for transfer, registered
in the name of Seller, evidencing the Shares, endorsed in blank or with an
executed blank stock transfer power attached.
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ARTICLE 2
CLOSING
2.1 Closing. The closing of the transactions provided for herein
(the "Closing") will take place at the offices of Venable, Baetjer and Howard,
LLP, Suite 1800, Two Hopkins Plaza, Baltimore, Maryland 21201 at 10:00 A.M.
(local time) on January 30, 1997 (the "Closing Date") or at such other place,
time and date as may be agreed upon by Buyer and Seller. It shall be a condition
precedent to the obligations of each party to this Stock Purchase Agreement that
the Closing shall occur simultaneously with the closing of the transactions
contemplated by the Asset Purchase Agreement dated as of even date herewith by
and between Buyer and ACN. In the event that the Asset Purchase Agreement
terminates, this Stock Purchase Agreement shall terminate.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
3.1 Due Execution; Enforceability. This Stock Purchase Agreement
has been duly executed and delivered by Seller and (assuming due execution and
delivery by Buyer) this Stock Purchase Agreement constitutes a valid and binding
obligation of Seller, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally or by general equitable
principles.
3.2 Ownership of Shares. Seller is the lawful record and
beneficial owner of 572,986 of the Shares and of options to purchase 25,000
shares of Common Stock, and at the Closing will be the lawful record and
beneficial owner of all of the Shares, all of which will be validly issued,
fully paid, and non-assessable. Seller shall exercise such options at or prior
to the Closing. Seller owns 572,986 of the Shares and said options, and at the
Closing will own all of the Shares, free and clear of all encumbrances, except
for restrictions on transfer under federal and state securities laws. Other than
the Shares, at the Closing, Seller will own or control, directly or indirectly,
no other equity securities of ACN except for (a) options to purchase 30,000
shares of Common Stock, and (b) shares of Common Stock which may be issued to
Seller in December 1996 which will represent $1,000 worth of Common Stock for
each Meeting of the Board of Directors of ACN attended by Seller since January
1, 1996.
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3.3 No Violation. Seller is not subject to or bound by any
provision of:
(a) any law, statute, rule, regulation or judicial or
administrative decision,
(b) any mortgage, deed of trust, lease, note, shareholders'
agreement, bond, indenture, other instrument or agreement, license, permit,
trust, custodianship, other restriction, or
(c) any judgment, order, writ, injunction or decree of any court,
governmental body, administrative agency or arbitrator,
that would prevent or be violated by, or under which there would be a default as
a result of, the execution, delivery and performance by Seller of this Stock
Purchase Agreement and the consummation of the transactions contemplated hereby.
No consent, approval or authorization of or declaration or filing with any
person is required for the valid execution, delivery and performance by Seller
of this Stock Purchase Agreement and the consummation of the transactions
contemplated hereby.
3.4 Title. Upon delivery at the Closing of one or more
certificates evidencing the Shares either in the name of the Buyer or with duly
endorsed stock powers (signature guaranteed), such delivery shall be sufficient
to convey good title to all of the Shares, free and clear of all liens, claims
and encumbrances, except for restrictions on transfer under federal and state
securities laws. Seller hereby warrants and defends the sale of the Shares
against each and every person(s) whomsoever claim or may claim an interest in
any or all of the Shares.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that:
4.1 Organization. Buyer is a limited liability company duly
organized and validly existing and in good standing under the laws of the State
of Delaware.
4.2 Corporate Authority. Buyer has full corporate power and
authority to enter into this Stock Purchase Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Buyer of this Stock Purchase Agreement have been duly authorized pursuant to the
Seller LLC Agreement and the Delaware Limited Liability Company Act. This Stock
Purchase Agreement has been duly executed and delivered by Buyer, and (assuming
due execution and delivery by Seller) this Stock Purchase Agreement constitutes
a valid and binding obligation of
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Buyer, enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally or by general equitable principles.
4.3 No Violation. Buyer is not subject to or bound by any
provision of:
(a) any law, statute, rule, regulation or judicial or
administrative decision,
(b) any articles of incorporation or by-laws,
(c) any mortgage, deed of trust, lease, note, shareholders'
agreement, bond, indenture, other instrument or agreement, license, permit,
trust, custodianship, other restriction, or
(d) any judgment, order, writ, injunction or decree of any court,
governmental body, administrative agency or arbitrator,
that would prevent or be violated by, or under which there would be a default as
a result of, the execution, delivery and performance by Buyer of this Stock
Purchase Agreement and the consummation of the transactions contemplated hereby.
No consent, approval or authorization of or declaration or filing with any
person is required for the valid execution, delivery and performance by Buyer of
this Stock Purchase Agreement and the consummation of the transactions
contemplated hereby.
4.4 Investment Intent. Buyer is acquiring the Shares for its own
account for investment and not with a view to any distribution thereof. Buyer
agrees that the Shares may not be sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of without registration under the Securities
Act of 1933, as amended (the "Act"), and under applicable state securities laws,
or except pursuant to an exemption from registration available under such laws.
(a) Buyer represents and warrants that it is an "accredited
investor" as such term is defined in Rule 501(a)(1),(2),(3), or (7) of
Regulation D under the Act.
(b) Buyer understands that the Shares are being offered and sold
to it in reliance on specific exemptions from or non-application of the
registration requirements of federal and state securities laws and that Seller
is relying upon the truth and accuracy of the representations, warranties,
agreement, acknowledgements and understandings of the Buyer set forth herein in
order to determine the applicability of such exemptions and the suitability of
the Buyer to acquire the Shares.
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ARTICLE 5
MISCELLANEOUS
5.1 Cooperation. Each of the parties hereto shall use its
reasonable efforts to take or cause to be taken all actions, to cooperate with
the other party hereto, with respect to all actions, and to do or cause to be
done all things necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Stock Purchase Agreement. Without limiting
the generality of the foregoing, Seller will cause the delivery at or
immediately prior to Closing of an appropriate opinion of counsel to its
transfer agent, if necessary or desirable, in order to more fully give effect to
the sale and transfer of the Shares contemplated hereby. So long as this Stock
Purchase Agreement is in effect, Buyer and Seller agree with each other to
provide each other with drafts within a reasonable amount of time prior to
filing for review and discussion thereof, of any filings with the Security and
Exchange Commission or any other Governmental Authority (as such term is defined
in the Asset Purchase Agreement) to be made by either of them at or prior to
Closing with respect to the transactions contemplated by this Stock Purchase
Agreement.
5.2 Waiver. Any failure of Seller to comply with any of its
obligations or agreements herein contained may be waived only in writing by
Buyer. Any failure of Buyer to comply with any of its obligations or agreements
herein contained may be waived only in writing by Seller.
5.3 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given upon receipt of: hand
delivery; certified or registered mail, return receipt requested; overnight mail
or telecopy transmission with confirmation of receipt:
(i) If to Seller, to:
A.J. Schell
1719 Barcelona Way
Winter Park, Florida 32789
Telecopier: (407) 644-7434
(ii) If to Buyer, to
4059 Yancey Road
Charlotte, North Carolina 28217
Attention: David Unger and Mitchell Kleinhandler
Telecopier No.: (704) 523-4893
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With a copy to:
Baer, Marks & Upham LLP
805 Third Avenue
New York, New York 10022-7513
Attention: Anne E. Pitter, Esq.
Telecopier No.: (212) 702-5810
Such names and addresses may be changed by written notice to each person listed
above.
5.4 Governing Law. This Stock Purchase Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware, without
giving effect to its principles or rules regarding conflicts of laws.
5.5 Counterparts. This Stock Purchase Agreement may be executed in
two counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
5.6 Amendment and Modification. This Stock Purchase Agreement may
be amended or modified only by written agreement of the parties hereto.
5.7 Binding Effect: Benefits. This Stock Purchase Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns; nothing in this Stock Purchase Agreement,
express or implied, is intended to confer on any Person other than the parties
hereto and their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Stock Purchase Agreement.
5.8 Assignability. This Stock Purchase Agreement shall not be
assignable by any party hereto without the prior written consent of the other
party hereto, provided that Seller may assign his rights to receive payment
under this Stock Purchase Agreement without restriction and provided further
that Buyer may assign its rights hereunder to an affiliate of Buyer upon prior
written notice to Seller; provided further, that in the event of such assignment
by Buyer, such affiliate of Buyer shall agree in writing to be bound by all
terms and conditions of this Stock Purchase Agreement, including, without
limiting the generality of the foregoing, the representations and warranties
contained in Section 4.4 hereof. Any purported assignment in violation of this
Section 5.8 shall be void.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Stock Purchase Agreement as of the date first above written.
SUNCOM COMMUNICATIONS L.L.C.
By: /s/ David W. Unger
--------------------------
Name: David W. Unger
Title: Chairman
------------------------------
A.J. Schell
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Stock Purchase Agreement as of the date first above written.
SUNCOM COMMUNICATIONS L.L.C.
By:
----------------------------
Name:
Title:
/s/ A.J. SCHELL
-------------------------------
A.J. Schell
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Exhibit C
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Option Agreement
OPTION AGREEMENT
This Option Agreement (the "Option Agreement") is made as of May
30, 1997, by and between Suncom Communications L.L.C., a Delaware limited
liability company (the "Optionee") and Audio Communications Network, Inc., a
Florida corporation (the "Company").
RECITALS:
1. Optionee and the Company have entered into an Asset Purchase
Agreement ("Purchase Agreement") dated as of November 19, 1996 pursuant to which
the Company will acquire substantially all of the assets of Optionee in exchange
for a specified amount of the common stock, par value $0.25 per share ("Common
Stock") of the Company. Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed to them in the Purchase Agreement.
2. Pursuant to Section 6.1(d) of the Purchase Agreement, the Company has
agreed to grant Optionee an Option to acquire up to one million (1,000,000)
shares of Common Stock of the Company upon and in accordance with such terms and
conditions as are set forth herein.
AGREEMENTS:
In consideration of the foregoing and of the covenants and
agreements contained herein, Optionee and the Company, intending to be legally
bound, agree as follows:
1. GRANT OF OPTION
The Company hereby grants to the Optionee, as of the date hereof
(the "Grant Date"), an irrevocable option (the "Option") to acquire up to one
million (1,000,000) shares of the Common Stock ("Option Stock") upon the
exercise of such Option in accordance with the terms and conditions set forth
herein.
(a) Exercise Price. Except as otherwise provided in paragraph
l(b) below, the Option shall be exercisable at $6.00 per share (the "Exercise
Price").
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(b) Option Term. Subject to the fulfillment of the conditions set
forth in this Section 1, the Option shall be immediately exercisable for all or
any portion of the Option Stock from the Option Commencement Date to the
Termination Date as those terms are defined below:
(1) Commencement Date. The Option shall become exercisable
upon the consummation of a public or private offering of the Company's
securities for cash and only with respect to that number of shares of Common
Stock which are issued in such offering. In the event that the Company
consummates such an offering consisting of securities convertible into Common
Stock ("Convertible Securities") and in the event that any of such Convertible
Securities are converted into Common Stock, the Option shall become exercisable
with respect to the number of shares of Common Stock so converted; provided,
that in such event, the Exercise Price of the Option shall be $9.00 per share.
The date upon which the Option becomes exercisable pursuant to this Section
l(b)(1) is referred to herein as the "Option Commencement Date."
(2) Termination Date. The Option shall terminate on the
earlier of (i) the exercise of the Option in its entirety; or (ii) the date
which is three years from the date hereof; provided, that in the event that the
Company consummates an offering consisting of Convertible Securities within
three years of the date of this Option Agreement, this Option shall terminate on
the date which is three years from the date of the consummation of such
offering. The date provided by this Section 1(b)(2) is referred to herein as
the "Termination Date."
(c) Representations and Warranties. The Company represents and
warrants that:
(1) the Option constitutes a valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally or by
general equitable principles; and
(2) upon due exercise in accordance with the terms of this
Option Agreement, the shares of Common Stock issuable upon such exercise shall
be validly issued, fully paid and non-assessable.
(3) The Company has adequate authorized but unissued
shares of Common Stock for issuance to the Optionee in accordance with the terms
and provisions hereof and the Company has set aside and reserved 1,000,000
shares of Common Stock with respect thereto.
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2. PAYMENT; CONDITIONS TO EXERCISE
(a) The exercise of the Option shall be effected by the Optionee's
executing and delivering to the Company a notice stating the Optionee's intent
to exercise the Option and the number of shares of Option Stock to be acquired
pursuant to such exercise.
(b) Payment of the aggregate exercise price for the portion of
Option Stock to be acquired by exercise of the Option shall become due within 15
business days after delivery of the notice described above in Section 2(a) and
immediately upon the consummation of such exercise and shall be paid in cash for
such aggregate amount.
3. CAPITAL ADJUSTMENTS
(a) In the event any change is made to the Common Stock (whether by
reason of (i) a recapitalization or (ii) a stock dividend, stock split,
combination of shares, exchange of shares or other change in capital structure
effected without receipt of consideration), then, appropriate adjustments shall
be made to the number of shares and price per share of the stock subject to this
Option. In the event of such a change, the Company shall provide Optionee with
prior written notice thereof and a calculation of the adjustment required
thereby.
(b) If the Company is the surviving entity in any merger or other
business combination then this Option, if outstanding immediately after such
merger or other business combination, shall be appropriately adjusted to apply
and pertain to the number and class of securities that would be issuable to the
Optionee in the consummation of such merger or business combination if the
Option were exercised immediately prior to such merger or business combination,
and appropriate adjustments shall also be made to the exercise price payable per
share.
4. INVESTMENT REPRESENTATION; LIMITATION ON TRANSFER
Optionee is acquiring the Option and will acquire the Option Stock
for investment and for its own account and not with a view toward, or for sale
in connection with, any distribution thereof, or with any present intention of
the distribution or sale of the shares or any part thereof. Optionee agrees that
neither the Option nor the Option Stock may be sold, transferred, offered for
sale, hypothecated, pledged or otherwise disposed of without registration under
the Securities Act of 1933, as amended, and applicable state securities laws,
except pursuant to an exemption from such registration available under such law.
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5. LEGENDS
All certificates representing any Option Stock shall have endorsed
thereon the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAWS."
6. MISCELLANEOUS
(a) The provisions of this Option Agreement shall inure to the
benefit of, and be binding upon, the parties and their successors,
administrators, heirs, legal representatives and assigns.
(b) This Option Agreement shall be governed by and construed under
the laws of the State of Florida as applied to agreements among Florida
residents entered into and to be performed entirely within Florida.
(c) This Option Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(d) Any notice required to be given or delivered to the Company or
the Optionee under the terms of this Option Agreement shall be in writing and
addressed to the Company or the Optionee, as the case may be, in care of its
Secretary at its corporate offices. All notices shall be deemed to have been
given or delivered upon personal delivery or upon the second business day after
the date of either delivery to a certified courier service or deposit in the
U.S. mail, postage prepaid, or overnight mail, and properly addressed to the
party to be notified.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have executed this Option
Agreement as of the date first above written.
AUDIO COMMUNICATIONS
NETWORK, INC.
By: /s/ A.J. Schell
--------------------------------
Name:
Title:
--------------------------
SUNCOM COMMUNICATIONS L.L.C.
By: /s/ David W. Unger
--------------------------------
Name: David W. Unger
Title: Chairman
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Exhibit D
---------
Form of Irrevocable Proxy
IRREVOCABLE PROXY
AUDIO COMMUNICATIONS NETWORK, INC.
THE UNDERSIGNED HEREBY IRREVOCABLY APPOINTS MITCHELL KLEINHANDLER AND DAVID
UNGER, AS PROXIES, EACH WITH THE POWER TO APPOINT HIS SUBSTITUTE; AND HEREBY
AUTHORIZES THEM, OR ANY OF THEM, TO REPRESENT AND VOTE ALL THE SHARES OF COMMON
STOCK OF AUDIO COMMUNICATIONS NETWORK, INC., A FLORIDA CORPORATION, HELD OF
RECORD BY THE UNDERSIGNED AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
DURING 1997, AT A SPECIAL MEETING OF STOCKHOLDERS TO BE HELD FOR THE PURPOSE OF
CONSIDERING THE MATTER SET FORTH IN ITEM 2 BELOW, OR ANY ADJOURNMENT THEREOF;
THIS PROXY SHALL APPLY TO ALL SUCH SHARES HELD OF RECORD BY THE UNDERSIGNED AS
OF THE DATE HEREOF AND TO ALL SUCH SHARES HELD OF RECORD BY THE UNDERSIGNED AS
OF THE RECORD DATES(S) FOR SUCH MEETINGS(S).
1. On the ELECTION OF DIRECTORS X FOR all Corporation nominees
--
-- WITHOUT AUTHORITY to vote
for all Corporation nominees
2. To approve the amendment to the By-Laws of Audio Communications Network, Inc.
to increase the size of the board of directors to nine.
X FOR AGAINST ABSTAIN
---- ---- ----
THE SHARES REPRESENTED BY THIS PROXY, WHEN PROPERTY EXECUTED, WILL BE VOTED AS
SPECIFIED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). THIS PROXY IS COUPLED WITH
AN INTEREST AND IS IRREVOCABLE.
------------------------------
------------------------------
Signature(s) of Stockholder(s)
Dated __________________, 1997
