UNITED STATES
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)
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
NEWSTAR MEDIA INC. (f/k/a DOVE ENTERTAINMENT, INC.)
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
652503 10 3
(CUSIP Number)
Mr. Terrence A. Elkes Jonathan Klein, Esq.
500 Fifth Avenue Gordon Altman Weitzen
Suite #3520 Shalov & Wein LLP
New York, New York 10110 114 West 47th Street, 20th
Floor
New York, New York 10036
(212) 626-0800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 19, 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 Rule 13d- 1(e), 13d-1(f) or 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 Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18
1
<PAGE>
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).
2
<PAGE>
13D
CUSIP No. 652503103
1 Name of Reporting Person
Media Equities International, LLC
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
00
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
New York
7 Sole Voting Power
7,642,042 shares
8 Shared Voting Power
0 shares
9 Sole Dispositive Power
7,642,042 shares
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
7,642,042 shares
12 Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
27.5%
14 Type of Reporting Person*
OO
3
<PAGE>
13D
CUSIP No. 652503103
1 Name of Reporting Person
Apollo Partners LLC
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
OO
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
Connecticut
7 Sole Voting Power
0 shares
8 Shared Voting Power
0 shares
9 Sole Dispositive Power
0 shares
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
0 shares
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
0%
14 Type of Reporting Person*
OO
4
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
Terrence A. Elkes
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
OO
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
4,596,515 shares (1)
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
4,596,515 shares (1)
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
12,238,557 shares (1)
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
43.8%
14 Type of Reporting Person*
IN
- ---------------
(1) See Item 5.
5
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
Kenneth F. Gorman
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
OO
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
4,596,514 shares (1)
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
4,596,514 shares (1)
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
12,238,556 shares (1)
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
43.8%
14 Type of Reporting Person*
IN
- ---------------
(1) See Item 5.
6
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
H.A.M. Media Group, LLC
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
OO
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
New York
7 Sole Voting Power
0 shares
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
0 shares
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
7,642,042 shares
12 Check Box if the Aggregate Amount in Row (11) excludes Certain Shares*
/ /
13 Percent of Class Represented by Amount in Row (11)
27.5%
14 Type of Reporting Person*
OO
7
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
John T. Healy
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
PF, OO
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
75,000 shares (1)
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
75,000 shares (1)
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
7,717,042 shares (1)
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
27.7%
14 Type of Reporting Person*
IN
- ---------------
(1) See Item 5.
8
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
Bruce Maggin
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
PF, OO
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
70,000 shares (1)
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
70,000 shares (1)
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
7,712,042 shares (1)
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
27.7%
14 Type of Reporting Person*
IN
- ---------------
(1) See Item 5.
9
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
Ronald Lightstone
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
PF,00
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
1,379,798 shares (1)
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
1,379,798 shares (1)
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
9,021,840 shares (1)
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
31.9%
14 Type of Reporting Person*
IN
- ---------------
(1) See Item 5.
10
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
Elkes Limited Partnership
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
4,426,515 shares
8 Shared Voting Power
0 shares
9 Sole Dispositive Power
4,426,515 shares
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
4,426,515 shares
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
20.5%
14 Type of Reporting Person*
PN
11
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
Gorman Limited Partnership
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
00
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
4,476,514 shares
8 Shared Voting Power
0 shares
9 Sole Dispositive Power
4,476,514 shares
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
4,476,514 shares
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
20.7%
14 Type of Reporting Person*
PN
12
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
MDJ Investments, Limited
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
00
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
0 shares
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
0 shares
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
7,642,042 shares
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
27.5%
14 Type of Reporting Person*
CO
13
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
Joseph J. Bradley
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
00
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
0 shares
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
0 shares
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
7,642,042 shares
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
27.5%
14 Type of Reporting Person*
IN
14
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
Mitzi Elkes
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
00
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
0 shares
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
0 shares
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
7,642,042 shares
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
27.5%
14 Type of Reporting Person*
IN
15
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
David Elkes
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
00
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
0 shares
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
0 shares
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
7,642,042 shares
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
27.5%
14 Type of Reporting Person*
IN
16
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
Joseph Macdonell
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
00
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
0 shares
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
0 shares
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
7,642,042 shares
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
27.5%
14 Type of Reporting Person*
IN
17
<PAGE>
13D
CUSIP
No. 652503103
1 Name of Reporting Person
Maura Nash Gorman
I.R.S. Identification Nos. of Above Persons (Entities Only)
2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) / /
3 SEC Use Only
4 Source of Funds*
00
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
0 shares
8 Shared Voting Power
7,642,042 shares
9 Sole Dispositive Power
0 shares
10 Shared Dispositive Power
7,642,042 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
7,642,042 shares
12 Check Box if the Aggregate Amount in Row (11) excludes
Certain Shares* / /
13 Percent of Class Represented by Amount in Row (11)
27.5%
14 Type of Reporting Person*
IN
18
<PAGE>
AMENDMENT NO. 5 TO SCHEDULE 13D
This statement, dated February 2, 2000 constitutes Amendment No. 5 to the
Schedule 13D, dated March 28, 1997, regarding the reporting persons' ownership
of certain securities of NewStar Media Inc. (formerly known as Dove
Entertainment, Inc.) (the "Issuer").
ITEM 1. Security and Issuer
(a) Common Stock, $0.01 par value per share (CUSIP No.
652503 10 3) ("Common Stock").
(b) Warrants ("Warrant") entitling the holder to purchase
an aggregate of 3,000,000 shares of Common Stock,
exercisable immediately upon issuance, pursuant to
which the following exercise prices and expiration
dates are applicable, respectively, with respect to
three equal tranches of the underlying shares of Common
Stock: (i) $2.00 per share with an expiration date of
March 27, 2000; (ii) $2.50 per share with an expiration
date of March 27, 2000; and (iii) $3.00 per share with
an expiration date of March 27, 2001.
(c) Series B Preferred Stock, $0.01 par value (the "Series
B Preferred Stock") entitling the holder to convert one
share of Series B Preferred Stock into 500 shares of
Common Stock (subject to adjustment),following the date
of six months after issuance, at a conversion price of
$2.00 per share, and redeemable at the option of the
Issuer, in whole or in part, at any time after the
fifth anniversary of the date of the Certificate of
Determination relating to the issuance of the Series B
Preferred Stock, subject to certain conditions. The
holders of the Series B Preferred Stock are entitled to
vote as a single class together with all other voting
classes and stock on all actions to be taken by the
stockholders of the Issuer except with respect to
voting for the election of directors, in which case, so
long as the reporting persons hereunder own at least
750,000 shares of Common Stock (assuming for these
purposes that the shares of Series B Preferred Stock
were converted in their entirety) and so long as Media
Equities holds a majority of the initially issued
shares of Series B Preferred Stock, the holders of the
Series B Preferred Stock are entitled to elect one
third of the directors of the Issuer.
(d) Series C Preferred Stock, $0.01 par value (the "Series
C Preferred Stock") entitling the holder to convert one
share of Series C Preferred Stock into 500 shares of
Common Stock (subject to adjustment), following the
date of six months after issuance, at a conversion
price of $2.00 per share, and redeemable at the option
of the Issuer, in whole or in part, at any time after
the fifth anniversary of the date of the Certificate of
Determination relating to the issuance of the Series C
19
<PAGE>
Preferred Stock, subject to certain conditions. The holders of
the Series C Preferred Stock are entitled to vote as a single
class together with all other voting classes and stock on all
actions to be taken by the stockholders of the Issuer.
(e) Series D Preferred Stock, $0.01 par value (the "Series
D Preferred Stock") entitling the holder to convert one
share of Series D Preferred Stock into 1.20497 shares
of Common Stock, at a conversion price of $3.31958 per
share, and redeemable at the option of the Issuer, in
whole or in part, at any time after the fifth
anniversary of the date of the Certificate of
Determination relating to the issuance of the Series D
Preferred Stock, subject to certain conditions. The
holders of the Series D Preferred Stock are entitled to
vote as a single class together with all other voting
classes and stock on all actions to be taken by the
stockholders of the Issuer. The Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred
Stock are sometimes referred to herein as the
"Preferred Stock".
(f) Stock Options granted pursuant to the Stock Option Plan,
adopted by the Board of Directors of the Issuer on July 21,
1999 and approved by the shareholders on January 18, 2000.
(g) NewStar Media Inc.
8955 Beverly Boulevard
Los Angeles, California 90048
ITEM 2. Identity and Background
1.
(a) Media Equities International, LLC ("Media Equities"), a
limited liability company organized under the limited
liability company laws of the State of New York.
(b) Address: 500 5th Avenue, Suite #3520, New York, NY
10110
(c) Principal Business: Investments and consulting.
(d) Within the last five (5) years, Media Equities has not been
convicted in any criminal proceeding.
(e) Within the last five (5) years, Media Equities has not
been a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
20
<PAGE>
The members of Media Equities are H.A.M. Media Group LLC and
Ronald Lightstone.
2.
(a) Apollo Partners LLC ("Apollo"), a limited liability company
organized under the Limited Liability Company Act of the State
of Connecticut, and a member of Media Equities.
(b) Address: 500 5th Avenue, Suite #3520, New York, NY
10110
(c) Principal Business: Investments
(d) Within the last five (5) years, Apollo has not been convicted
in any criminal proceeding.
(e) Within the last five (5) years, Apollo has not been a
party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
Terrence A. Elkes and Kenneth F. Gorman are the members and
managers of Apollo.
3.
(a) Terrence A. Elkes
(b) Address: Apollo Partners, 500 5th Avenue, Suite #3520,
New York, NY 10110
(c) Principal occupation: Investor
(d) Within the last five (5) years, Terrence Elkes has not been
convicted in any criminal proceeding (excluding traffic
violations and similar misdemeanors, if any).
(e) Within the last five (5) years, Terrence Elkes has not
been a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
(f) Citizenship: United States.
Terence A. Elkes is a manager of Media Equities, a member and
manager of Apollo, the managing general partner of Elkes Limited
21
<PAGE>
Partnership, and the Chairman of the Board of Directors of the Issuer.
4.
(a) Kenneth F. Gorman
(b) Address: Apollo Partners, 500 5th Avenue, Suite #3520,
New York, NY 10110
(c) Principal occupation: Investor
(d) Within the last five (5) years, Kenneth Gorman has not been
convicted in any criminal proceeding (excluding traffic
violations and similar misdemeanors, if any).
(e) Within the last five (5) years, Kenneth Gorman has not
been a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
(f) Citizenship: United States.
Kenneth F. Gorman is a manager of Media Equities, a member and manager of
Apollo, the managing general partner of Gorman Limited Partnership, and the
Vice-Chairman of the Board of Directors of the Issuer.
5.
(a) H.A.M. Media Group LLC ("H.A.M. Media"), a limited liability
company organized under the Limited Liability Company Law of
the State of New York and a member of Media Equities.
(b) Address: 305 Madison Avenue, Suite 3016, New York, New
York 10017
(c) Principal business: Investments
(d) Within the last five (5) years, H.A.M. Media has not been
convicted in any criminal proceeding.
(e) Within the last five (5) years, H.A.M. Media has not
been a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
22
<PAGE>
John T. Healy and Bruce Maggin are the members and managers of
H.A.M. Media.
6.
(a) John T. Healy
(b) Address: H.A.M. Media Group, 305 Madison Avenue, Suite
3016, New York, New York 10017
(c) Principal occupation: Investor
(d) Within the last five-(5) years, John Healy has not been
convicted in any criminal proceeding (excluding traffic
violations and similar misdemeanors, if any).
(e) Within the last five (5) years, John Healy has not been
a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
(f) Citizenship: United States.
John T. Healy is a manager of Media Equities, a member and manager of H.A.M.
Media, and a director of the Issuer.
7.
(a) Bruce Maggin
(b) Address: H.A.M. Media Group, 305 Madison Avenue, Suite
3016, New York, New York 10017
(c) Principal occupation: Investor
(d) Within the last five (5) years, Bruce Maggin has not been
convicted in any criminal proceeding (excluding traffic
violations and similar misdemeanors, if any).
(e) Within the last five (5) years, Bruce Maggin has not
been a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
(f) Citizenship: United States.
Bruce Maggin is a manager of Media Equities, a member and manager of H.A.M.
Media, and a director of the Issuer.
23
<PAGE>
8.
(a) Ronald Lightstone
(b) Address: NewStar Media Inc., 8955 Beverly Boulevard,
Los Angeles, California 90048
(c) Principal occupation: Consultant
(d) Within the last five (5) years, Ronald Lightstone has not been
convicted in any criminal proceeding (excluding traffic
violations and similar misdemeanors, if any).
(e) Within the last five (5) years, Ronald Lightstone has
not been a party to any civil proceeding of a judicial
or administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
(f) Citizenship: United States.
Ronald Lightstone is a member and manager of Media Equities, and is the
President and Chief Executive Officer and a director of the Issuer.
9.
(a) Elkes Limited Partnership ("ELP"), a limited partnership
organized under the limited partnership laws of the State of
Delaware.
(b) Address: c/o Apollo Partners, 500 5th Avenue, Suite #3520, New
York, NY 10110
(c) Principal Business: Investments
(d) Within the last five (5) years, ELP has not been convicted in
any criminal proceeding.
(e) Within the last five (5) years, GLP has not been a
party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
The managing general partner of ELP is Terrence A. Elkes.
10.
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(a) Gorman Limited Partnership ("GLP"), a limited partnership
organized under the limited partnership laws of the State of
Delaware.
(b) Address: c/o Apollo Partners, 500 5th Avenue, Suite #3520, New
York, NY 10110
(c) Principal Business: investments
(d) Within the last five (5) years, GLP has not been convicted in
any criminal proceeding.
(e) Within the last five (5) years, GLP has not been a
party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
The managing general partner of GLP is Kenneth F. Gorman.
11.
(a) MDJ Investments, Limited ("MDJ"), a corporation organized
under the laws of the State of Delaware.
(b) Address: MDJ Investments, Limited, C/O J. Bradley & Co., 130
West 42nd Street, New York, NY 10036.
(c) Principal Business: Investments
(d) Within the last five (5) years, MDJ has not been convicted in
any criminal proceeding.
(e) Within the last five (5) years, MDJ has not been a
party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
12.
(a) Joseph J. Bradley
(b) Address: Joseph Bradley, C/O J. Bradley & Co., 130 West 42nd
Street, New York, NY 10036.
(c) Principal Occupation: Accountant
(d) Within the last five (5) years, Joseph J. Bradley has not been
convicted in any criminal proceeding.
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(e) Within the last five (5) years, Joseph J. Bradley has
not been a party to any civil proceeding of a judicial
or administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
Joseph Bradley is a director, president, secretary, and shareholder of
MDJ Investments, Limited.
13.
(a) Mitzi Elkes
(b) Address: Mitzi Elkes, C/O J. Bradley & Co., 130 West 42nd
Street, New York, NY 10036.
(c) Principal Business: Consultant
(d) Within the last five (5) years, Mitzi Elkes has not been
convicted in any criminal proceeding.
(e) Within the last five (5) years, Mitzi Elkes has not
been a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
Mitzi Elkes is the Vice President, Treasurer, and a shareholder of MDJ
Investments, Limited.
14.
(a) David Elkes
(b) Address: David Elkes, C/O J. Bradley & Co., 130 West 42nd
Street, New York, NY 10036.
(c) Principal Business: Banker
(d) Within the last five (5) years, David Elkes has not been
convicted in any criminal proceeding.
(e) Within the last five (5) years, David Elkes has not
been a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
15.
(a) Joseph Macdonell
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(b) Address: Joseph Macdonell, 24 Fawn Hill Road, Mahwah,
New Jersey 07430
(c) Principal Business: Computer Services
(d) Within the last five (5) years, Joseph Macdonell has not been
convicted in any criminal proceeding.
(e) Within the last five (5) years, Joseph Macdonell has
not been a party to any civil proceeding of a judicial
or administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
16.
(a) Maura Nash Gorman
(b) Address: Maura Nash Gorman,20 Andover Road, Port
Washington, New York 10050
(c) Principal Business: Investor
(d) Within the last five (5) years, Joseph Macdonell has not been
convicted in any criminal proceeding.
(e) Within the last five (5) years, Joseph Macdonell has
not been a party to any civil proceeding of a judicial
or administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or a finding of a violation with
respect to such laws.
ITEM 3. Source and Amount of Funds or Other Consideration.
(a) Media Equities obtained funds for the purchase of the securities from its
working capital, which in turn was obtained from contributions from the
individual reporting persons from personal funds. The amount of funds used in
making each of the purchases, respectively, pursuant to each of the Stock
Purchase Agreement, the Securities Purchase Agreement, the First Securities
Purchase Agreement, and the Second Securities Purchase Agreement, respectively
(see Item 4 herein), is set forth below:
NAME AMOUNT OF CONSIDERATION
Media Equities $4,002,000
Media Equities $3,086,000
Media Equities $ 100,000
Media Equities $ 250,000
In addition to the securities purchased pursuant to each of the Stock Purchase
Agreement, the Securities Purchase Agreement, the
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<PAGE>
First Securities Purchase Agreement and the Second Securities Purchase
Agreement, Media Equities has acquired (i) 308,028 shares of Common Stock from
the Issuer as payment of the consulting fees payable by the Issuer to Media
Equities pursuant to the Consulting Agreement (including those payments which
were to have been made in cash) (see Item 4 herein), (ii) 34,014 shares of
Common Stock from the Issuer as payment of a guarantee fee payable by the Issuer
to Media Equities and (iii) 582,000 shares of Common Stock as payment of accrued
dividends on the referred Stock. The amount of the consideration for the
acquisition of such securities is set forth below:
NAME AMOUNT OF CONSIDERATION
Media Equities $300,000
Media Equities $ 50,000
Media Equities $695,552
(b) ELP obtained funds for the purchase of shares from its working capital,
which in turn was obtained from contributions from its partners (Terrence Elkes
and Kenneth Gorman), from personal funds. The amount of funds used in making the
purchases pursuant to each of the First Elkes/Gorman/Lightstone Purchase
Agreement and the Second Elkes/Gorman/Lightstone Purchase Agreement and on
December 31, 1998, respectively (see Item 4 herein) is set forth below:
NAME AMOUNT OF CONSIDERATION
Elkes Limited Partnership $2,500,000
Elkes Limited Partnership $ 153,000
Elkes Limited Partnership $ 250,000
On May 25, 1999, ELP purchased 416,667 shares of Common Stock for $500,000, with
funds obtained from its working capital, which in turn was obtained from
contributions from its Partners.
(c) GLP obtained funds for the purchase of shares from its working capital,
which in turn was obtained from contributions from its partners (Kenneth Gorman
and Terrence Elkes), from personal funds. The amount of funds used in making the
purchases pursuant to each of the First Elkes/Gorman/Lightstone Purchase
Agreement and the Second Elkes/Gorman/Lightstone Purchase Agreement and on
December 31, 1998, respectively (see Item 4 herein), is set forth below:
NAME AMOUNT OF CONSIDERATION
Gorman Limited Partnership $2,500,000
Gorman Limited Partnership $ 153,000
Gorman Limited Partnership $ 250,000
On May 24, 1999, GLP purchased 416,667 shares of Common Stock for $500,000, with
funds obtained from its working capital, which in turn was obtained from
contributions from its Partners. On August 23, 1999, GLP purchased 50,000 shares
of Common Stock for
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$40,600, with funds obtained from its working capital, which in turn was
obtained from contributions from its Partners.
(d) Pursuant to his employment agreement with the Issuer, Ronald Lightstone is
to receive 400,000 shares of Common Stock. As of the date of this filing,
200,000 of such shares have vested and 22,222 will vest within the next 60 days.
Ronald Lightstone, pursuant to the First Elkes/Gorman/Lightstone Purchase
Agreement, purchased 347,705 shares of Common Stock from the Issuer for
$500,000, which funds were his personal funds. On December 31, 1998, Mr.
Lightstone acquired an additional 347,705 shares of Common Stock to effect a
change in the purchase price of the 347,705 shares previously purchased. Ronald
Lightstone, pursuant to the Second Elkes/Gorman/Lightstone Purchase Agreement,
purchased 47,288 shares of Common Stock from the Issuer for $34,000, which funds
were his personal funds. Pursuant to a Stock Option Plan adopted by the Board of
Directors of the Issuer on July 21, 1999, Ronald Lightstone was granted options
to purchase 400,000 shares of Common Stock at a purchase price of $1.20 per
share. Ronald Lightstone received Options to purchase 10,000 shares at a
purchase price of $1.313 for his services as a Director of the Issuer for the
term from 1997-1998 and 10,000 shares at $0.875 for his services as a Director
of the Issuer for the term from 1998-1999.
(e) On August 23, 1999, Terrence Elkes used personal funds in the amount of
$40,600 for the purchase of 50,000 shares. Terrence Elkes received Options to
purchase 10,000 shares at a purchase price of $1.313 for his services as a
Director of the Issuer for the term from 1997-1998 and 10,000 shares at $0.875
for his services as a Director of the Issuer for the term from 1998-1999.
Pursuant to a Stock Option Plan adopted by the Board of Directors of the Issuer
on July 21, 1999, Terrence Elkes was granted options to purchase 100,000 shares
of Common Stock at a purchase price of $1.20 per share.
(f) Kenneth Gorman received Options to purchase 10,000 shares at a purchase
price of $1.313 for his services as a Director of the Issuer for the term from
1997-1998 and 10,000 shares at $0.875 for his services as a Director of the
Issuer for the term from 1998-1999. Pursuant to a Stock Option Plan adopted by
the Board of Directors of the Issuer on July 21, 1999, Kenneth Gorman was
granted options to purchase 100,000 shares of Common Stock at a purchase price
of $1.20 per share.
ITEM 4. Purpose of Transaction.
The reporting persons acquired their shares for purposes of investment.
By virtue of the transactions described herein, Media Equities may be deemed to
control the Issuer.
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On March 27, 1997, Media Equities entered into the Stock Purchase
Agreement (the "Stock Purchase Agreement") pursuant to which it became
obligated, subject to the terms and conditions therein, to purchase the Series B
Preferred Stock and Warrants of the Issuer. The transaction contemplated two
closings for the purchase of the securities. The first closing occurred March
28, 1997 pursuant to which Media Equities purchased (a) 3,000 shares of Series B
Preferred Stock and (b) a Warrant to purchase 1,500,000 shares of Common Stock,
of the Issuer. The second closing occurred in two parts, the first on May 15,
1997 pursuant to which Media Equities purchased (a) 250 shares of Series B
Preferred Stock, and (b) a Warrant to purchase 125,000 shares of Common Stock,
of the Issuer, and the second on June 3, 1997 pursuant to which Media Equities
purchased (a) 750 shares of Series B Preferred Stock, and (b) a Warrant to
purchase 375,000 shares of Common Stock, of the Issuer.
Media Equities and certain other purchasers entered into a pledge
agreement, dated March 27, 1997, with the Issuer pursuant to which it agreed to
pledge certain of the shares of Series B Preferred Stock as collateral to secure
the payment for the securities to be purchased in the second closing, described
above. The Pledge Agreement was terminated upon completion of the second
closing.
Pursuant to the terms of the Stock Purchase Agreement and the terms of
the Series B Preferred Stock, so long as Media Equities owns 750,000 shares of
Common Stock of the Issuer (assuming for these purposes that the shares of
Preferred Stock were converted in their entirety), (i) so long as Media Equities
holds a majority of the initially issued shares of Series B Preferred Stock, the
holders of the Series B Preferred Stock have the right to elect one third of the
board of directors, and (ii) if Media Equities no longer owns a majority of the
initially issued shares of the Series B Preferred Stock, Media Equities has the
right to nominate, and the Issuer is obligated to use its best efforts to have
elected as management nominees, one third of the Board of Directors of the
Issuer. The Stock Purchase Agreement fixes the number of directors at nine. In
addition, in the event of the default by the Issuer in the observance of certain
covenants enumerated in the Stock Purchase Agreement, Media Equities has the
right to appoint two additional directors, effectively giving Media Equities the
right to nominate a majority of the Board of Directors, which directors shall
continue to serve until the earlier of the next occurring annual meeting of the
shareholders of the Issuer following the cure of any default or until Media
Equities no longer owns at least 750,000 shares of Common Stock (assuming for
these purposes that the shares of Series B Preferred Stock were converted in
their entirety).
In connection with the transaction pursuant to the Stock Purchase
Agreement, in order to fulfill the Issuer's obligations, the number of directors
constituting the Board was increased from six to nine, and Messrs. Gorman,
Maggin and Lightstone were elected to the Board of Directors of the Issuer.
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The Stock Purchase Agreement also provides that one of the Media
Equities' nominee directors shall be a member of the Executive Committee. The
current nominee to the executive committee of the Board of Directors is Ronald
Lightstone.
Concurrently with the initial closing under the Stock Purchase
Agreement, Media Equities entered into a shareholders voting agreement (the
"Shareholders Voting Agreement"), dated March 27, 1997, among Media Equities,
Michael Viner ("Viner") and Deborah Raffin ("Raffin", and together with Viner,
"Viner") pursuant to which Viner has agreed to vote, and to use his reasonable
best efforts to cause all of his affiliates to vote, all of the shares of Common
Stock of the Issuer beneficially owned thereby and entitled to vote thereon for
the election of the requisite number of director designees of Media Equities
then required pursuant to Section 6.3 or 7.2 of the Stock Purchase Agreement,
and to take all actions to cause the election of such designees, including
seeking the resignation of current directors of the Issuer.
Pursuant to the Stock Purchase Agreement, Media Equities entered into a
three-year consulting agreement (the "Consulting Agreement"), dated as of April
1, 1997, between Media Equities and the Issuer, pursuant to which Media Equities
will provide substantial general management consulting advice relating to the
business of Media Equities, in exchange for which the Issuer will pay Media
Equities annual compensation in the amount of $300,000 per year as follows:
$200,000 in cash payable quarterly in advance and $100,000 in Common Stock of
the Issuer valued at current market value on the date of payment, payable
quarterly in arrears.
Pursuant to the Stock Purchase Agreement, Media Equities was also
granted registration rights under a registration rights agreement (the
"Registration Rights Agreement"), dated March 27, 1997 among the Issuer, Media
Equities, Viner and Raffin. Pursuant to the Registration Rights Agreement, the
Issuer has agreed to prepare and file with the Securities and Exchange
Commission, by not later than July 31, 1997, one or more registration statements
providing, among other things, for the sale by Media Equities or its principal,
of the shares of Common Stock issuable upon exercise of the Warrants, upon
conversion of the Series B Preferred Stock or Series C Preferred Stock and upon
issuance of the shares of Common Stock pursuant to the Consulting Agreement.
On June 13, 1997, Media Equities consummated the transactions
contemplated by a Securities Purchase Agreement dated June 10, 1997 (the
"Securities Purchase Agreement") between Media Equities, Viner and Raffin
pursuant to which Media Equities purchased from Viner and Raffin (i) Warrants to
purchase 825,000 shares of Common Stock, (ii) 1,570 shares of Series C Preferred
Stock, (iii) 214,113 shares of Series D Preferred Stock and (iv) 500,000 shares
of Common Stock of the Issuer. Pursuant to the terms of the Securities Purchase
Agreement, Media Equities was also granted a right of first refusal for the
three year period ending on the third anniversary of the date of the Securities
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Purchase Agreement, to purchase from Viner and Raffin any shares of Common Stock
which they desire to transfer, including shares of Common Stock which they
propose to sell through market transactions. Additionally, pursuant to the
Securities Purchase Agreement, Viner and Raffin have assigned all of their
respective rights under the Registration Rights Agreement to Media Equities.
Concurrently with the closing under the Securities Purchase Agreement, Viner and
Raffin entered into an Employment Termination Agreement under which each
resigned as an officer and director of the Issuer. Following such resignation,
Terrence A. Elkes and John T. Healy were elected to the Board of Directors of
the Issuer. As a result, representatives of Media Equities constitute five
directors out of the entire Board which consists of seven directors.
Additionally, Ronald Lightstone was appointed Chief Executive Officer of the
Issuer.
By virtue of the transactions consummated pursuant to the Securities
Purchase Agreement certain of the ancillary agreements described above
previously entered into by the reporting persons pursuant to the Stock Purchase
Agreement may have been rendered inapplicable with respect to certain securities
of the Issuer held by such reporting persons.
On August 15, 1997, Media Equities consummated the transactions
contemplated by a Securities Purchase Agreement, dated August 15, 1997 (the
"First Securities Purchase Agreement") between Media Equities and Howard Gittis
("Gittis") pursuant to which Media Equities purchased from Gittis (i) Warrants
to purchase 50,000 shares of Common Stock and (ii) 100 shares of Series C
Preferred Stock.
On August 22, 1997, Media Equities consummated the transactions
contemplated by a Securities Purchase Agreement dated August 22, 1997 (the
"Second Securities Purchase Agreement") between Media Equities and Al Bussen
("Bussen"), pursuant to which Media Equities purchased from Bussen (i) Warrants
to purchase 125,000 shares of Common Stock and (ii) 250 shares of Series C
Preferred Stock, of the Issuer.
Pursuant to guaranty agreements, each dated as of November 4, 1997,
each of Messrs. Elkes, Gorman, Healy, Lightstone and Maggin have agreed to
guaranty the obligations of the Issuer under the Issuer's credit facility with
the Chase Manhattan Bank, in an amount not to exceed the lesser of $4,000,000
and the outstanding principal of and any interest on all loans made under such
credit facility in excess of the borrowing base (which borrowing base will be
equal to or less than $6,000,000). The Issuer is not permitted to borrow any
amounts under such credit facility in excess of the borrowing base without the
prior written approval of Media Equities. The Issuer has agreed to pay Media
Equities a fee of $50,000 for such guaranty by its principals.
On July 8, 1998, Media Equities agreed to accept payment of accrued
dividends on the Preferred Stock for year ended December 31, 1997 in the form of
Common Stock. On July 30, 1998, Media Equities agreed to accept payment of
accrued dividends on the
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Preferred Stock for the quarter ended March 31, 1998 and June 30, 1998 in the
form of Common Stock. The aggregate amount of accrued dividends (plus accrued
interest) was $588,897. On August 17, 1998 Media Equities acquired 392,854,
shares of Common Stock as payment of such accrued dividends. On November 11,
1998, Media Equities agreed to accept payment of accrued dividends on the
Preferred Stock for the quarter ended September 30, 1998. The aggregate amount
of accrued dividends was $106,655. In December 1998, Media Equities acquired
189,146 shares of Common Stock as payment of such accrued dividends.
Ronald Lightstone and the Issuer are parties to an employment
agreement, dates as of February 4, 1998. Mr. Lightstone is employed as the
President and Chief Executive Officer of the Issuer. The term of Mr.
Lightstone's employment agreement commenced on June 10, 1997 and ends on June
10, 1999. Pursuant to the agreement Mr. Lightstone was granted 400,000 shares of
Common Stock, ownership of which will vest over a three year period (1/36 of
such shares vesting each month), commencing July 1997. As of the date of this
filing 200,000 shares of such employment agreement shares have vested and an
additional 22,222 will vest within 60 days.
On August 31, 1998, Ronald Lightstone, ELP, and GLP consummated the
transactions contemplated by a Stock Purchase Agreement dated as of July 30,
1998 among the Issuer, Apollo and Mr. Lightstone (the "First
Elkes/Gorman/Lightstone Purchase Agreement") pursuant to which (i) ELP, as
assignee of Apollo, purchased 1,738,526 shares of Common Stock from the Issuer
for a cash purchase price of $2,500,000, (ii) GLP, as assignee of Apollo,
purchased 1,738,526 shares of Common Stock from the Issuer for a cash purchase
price of $2,500,000 and (iii) Mr. Lightstone purchased 347,705 shares of Common
Stock from the Issuer for a cash purchase price of $500,000. In the event of the
default by the Issuer in the observance of certain covenants enumerated in the
First Elkes/Gorman/Lightstone Purchase Agreement, ELP, GLP, and Mr. Lightstone
have the right to appoint two additional directors, which directors shall
continue to serve until the earlier of the next occurring annual meeting of the
shareholders of the Issuer following the cure of any default or until they no
longer own at least 750,000 shares of Common Stock. Pursuant to the First
Elkes/Gorman/Lightstone Stock Purchase Agreement, ELP, GLP and Mr. Lightstone
were also granted registration rights pursuant to which the Issuer has agreed to
prepare and file with the Securities and Exchange Commission one or more
registration statements providing for the sale of the shares purchased pursuant
to such agreement.
On November 16, 1998, Ronald Lightstone, ELP, and GLP consummated the
transactions contemplated by a Stock Purchase Agreement dated as of November 12,
1998 among the Issuer, Apollo and Mr. Lightstone (the "Second
Elkes/Gorman/Lightstone Purchase Agreement") pursuant to which (i) ELP, as
assignee of Apollo, purchased 212,796 shares of Common Stock from the Issuer for
a cash purchase price of $153,000, (ii) GLP, as assignee of Apollo, purchased
212,795 shares of Common Stock from the Issuer for a cash purchase price of
$153,000 and (iii) Mr. Lightstone
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purchased 47,288 shares of Common Stock from the Issuer for a cash purchase
price of $34,000. In the event of the default by the Issuer in the observance of
certain covenants enumerated in the Second Elkes/Gorman/Lightstone Purchase
Agreement, ELP, GLP, and Mr. Lightstone have the right to appoint two additional
directors, which directors shall continue to serve until the earlier of the next
occurring annual meeting of the shareholders of the Issuer following the cure of
any default or until they no longer owns at least 750,000 shares of Common
Stock. Pursuant to the Second Elkes/Gorman/Lightstone Stock Purchase Agreement,
ELP, GLP and Mr. Lightstone were also granted registration rights pursuant to
which the Issuer has agreed to prepare and file with the Securities and Exchange
Commission one or more registration statements providing for the sale of the
shares purchased pursuant to such agreement.
The Second Elkes/Gorman/Lightstone Purchase Agreement provides that
ELP, GLP and Lightstone have the option to adjust the purchase price of the
Common Stock purchased by them under the First Elkes/Gorman/Lightstone Purchase
Agreement to a price equal to $0.719 per share. Such right was effective during
the period November 16, 1998 to January 10, 1999. In December, 1998, ELP, GLP,
and Mr. Lightstone elected to exercise their right to adjust the purchase price.
Accordingly, to effect such adjustment in the purchase price, on December 31,
1998, ELP, received 1,738,526 shares of Common Stock, GLP received 1,738,526
shares of Common Stock and Ronald Lightstone received 347,705 shares of Common
stock.
On December 31, 1998, ELP purchased from the Issuer 320,000 shares of
Common Stock for $250,000. On December 31, 1998, GLP purchased from the Issuer
320,000 shares of Common Stock for $250,000.
On May 24, 1999, GLP purchased from the Issuer 416,667 shares of Common
Stock for $500,000. On May 25, 1999, ELP purchased from the Issuer 416,667
shares of Common Stock for $500,000.
On December 19, 1999 Apollo sold its entire interest in MEI as follows:
(i) 50% to MDJ Investments, Limited ("MDJ"), the shareholders of which are
Joseph Bradley, Mitzi Elkes, and David Elkes (the "MDJ Parties") for a purchase
price of $364,918.32, of which $72,983.66 was paid in cash and the remainder in
the form of a three (3) year promissory note with interest payable semiannually
in arrears at the annual rate of six percent (6%); (ii) 25% to Joseph Macdonell
("Macdonell"), for a purchase price of $182,459.16, of which $36,491.83 was paid
in cash, and the remainder in the form of a three (3) year promissory note with
interest payable semiannually in arrears at the annual rate of six percent (6%)
and (iii) 25% to Maura Nash Gorman (together with the MDJ Parties and Macdonell,
the "Purchasers"), for a purchase price of $182,459.16, of which $36,491.83 was
paid in cash, and the remainder in the form of a three (3) year promissory note
with interest payable semiannually in arrears at the annual rate of six percent
(6%). As a result of transaction
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the Purchasers may be deemed to beneficially indirectly own the
securities of the Issuer.
ITEM 5. Interests in Securities of the Issuer.
The following list sets forth the aggregate number and percentage of
outstanding shares of Common Stock owned beneficially (within the meaning of
Rule 13d-3 and the Securities Exchange Act of 1934) by each reporting person
named in Item 2, as of February 2, 2000:
NAMES SHARES OF PERCENTAGE OF SHARES
COMMON STOCK OF COMMON STOCK
BENEFICIALLY BENEFICIALLY OWNED(3)
OWNED (1)(2)
Media Equities (4) 7,642,042 27.5%
Apollo 0 0.0%
Terrence A. Elkes (5) 12,238,557 (6)(7) 43.8%
Kenneth F. Gorman (5) 12,238,556 (6)(7) 43.8%
H.A.M. Media (5) 7,642,042 27.5%
John T. Healy (8) 7,717,042 (6)(9) 27.7%
Bruce Maggin (10) 7,712,042 (6)(9) 27.6%
Ronald Lightstone(11) 9,021,840 (6)(12) 31.9%
Elkes Limited Partnership(13) 4,426,515 20.5%
Gorman Limited Partnership(14) 4,476,514 20.7%
MDJ Investments, Limited (5) 7,642,042 27.5%
Joseph Bradley (5) 7,642,042 27.5%
Mitzi Elkes (5) 7,642,042 27.5%
David Elkes (5) 7,642,042 27.5%
Joseph Macdonell (5) 7,642,042 27.5%
Maura Nash Gorman (5) 7,642,042 27.5%
(1) (a) Media Equities owns directly (i) 1,424,042 shares of
Common Stock, (ii) 3,000,000 shares of Common Stock issuable
upon exercise of Warrants, (iii) the equivalent of 2,000,000
shares of Common Stock issuable upon conversion of Series B
Preferred Stock, calculated based on a conversion ratio of
500 shares of Common Stock to one share of Series B
Preferred Stock, (iv) the equivalent of 960,000 shares of
Common Stock issuable upon conversion of Series C Preferred
Stock, calculated based on a conversion ratio of 500 shares
of Common Stock to one share of Series C Preferred Stock and
(v) 258,000 shares of Common Stock issuable upon conversion
of Series D Preferred Stock, calculated based on a
conversion ratio of 1.20497 shares of Common Stock to one
share of Series D Preferred Stock.
(b) ELP owns directly 4,426,515 shares of Common Stock.
(c) GLP owns directly 4,426,514 shares of Common Stock.
(d) Ronald Lightstone owns directly 1,379,798 shares of Common Stock.
This includes 559,798 shares currently held and Mr. Lightstone's right
to receive 400,000 shares on Common Stock pursuant to his Employment
Agreement and
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420,000 shares issuable upon exercise of options currently exercisable.
(e) Bruce Maggin owns directly 70,000 shares of Common Stock, which
includes 70,000 shares of Common Stock issuable upon exercise of
options currently exercisable.
(f) John T. Healy owns directly 75,000 shares of Common Stock, which
includes 70,000 shares of Common Stock issuable upon exercise of
options currently exercisable.
(2) Does not include shares of Common Stock to be acquired by Media
Equities pursuant to the Consulting Agreement referred to in Item 6(g),
the amount of which is indeterminable as of the date hereof.
(3) Percentages set forth are based upon 21,612,058 shares of Common Stock
outstanding as of November 15, 1999, adjusted in each case for
contingently issuable Common Stock.
(4) Media Equities, disclaims beneficial ownership of the shares of Common
Stock referred to in note (1)(b),(c),(d),(e), and (f).
(5) Each of H.A.M., Terrence Elkes, Kenneth Gorman, MDJ, Joseph Bradley,
Mitzi Elkes, David Elkes, Joseph Macdonell and Maura Nash Gorman
disclaim beneficial ownership of the shares of Common Stock referred to
in note (1).
(6) Includes Options to purchase 10,000 shares of Common Stock at a
purchase price of $1.313 for services as a Director of the Issuer for
the term from 1997-1998 and 10,000 shares of Common Stock at $0.875 for
his services as a Director of the Issuer for the term from 1998-1999.
(7) Includes Options to purchase 100,000 shares of Common Stock at $1.20
per share, granted pursuant to a Stock Option Plan, approved by the
Board of Directors on July 21, 1999 and the shareholders on January 18,
2000.
(8) John T. Healy disclaims beneficial ownership of the shares of Common
Stock referred to in note (1) (a),(b),(c),(d), and (e).
(9) Includes Options to purchase 50,000 shares of Common Stock at $1.20 per
share, granted pursuant to a Stock Option Plan, approved by the Board
of Directors on July 21, 1999 and the shareholders on January 18, 2000.
(10) Bruce Maggin disclaims beneficial ownership of the shares of Common
Stock referred to in note (1) (a),(b),(c),(d), and (f).
(11) Ronald Lightstone disclaims beneficial ownership of the shares of
Common Stock referred to in note (1) (a),(b),(c),(e), and (f).
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(12) Includes Options to purchase 400,000 shares of Common Stock
at $1.20 per share, granted pursuant to a Stock Option Plan,
approved by the Board of Directors on July 21, 1999 and the
shareholders on January 18, 2000. Also includes options to
purchase 400,000 shares, whether or not vested, issued
pursuant to Mr. Lightstone's employment agreement with the
Issuer.
(13) ELP disclaims beneficial ownership of the shares of Common Stock
referred to in note (1) (a),(c),(d),(e), and (f).
(14) GLP disclaims beneficial ownership of the shares of Common Stock
referred to in note (1) (a),(b),(d),(e), and (f).
(b) Media Equities has sole power to cast all votes and sole power
to dispose of all shares, with respect to the Common Stock
referred to under note (1)(a) in the foregoing chart.
By virtue of being a manager of Media Equities, Terrence A.
Elkes may be deemed to have shared power to cast all votes to
which Media Equities has the right to cast, and may be deemed
to have shared power to dispose of all shares of Common Stock
beneficially owned by Media Equities. In addition, by virtue
of being the managing general partner of ELP, Mr. Elkes has
sole power to cast all votes to which ELP has the right to
cast and has sole power to dispose of all shares of Common
Stock directly owned by ELP (i.e. those shares referred to in
note (1)(b) of the foregoing chart).
By virtue of being a manager of Media Equities, Kenneth F.
Gorman may be deemed to have shared power to cast all votes to
which Media Equities has the right to cast, and may be deemed
to have shared power to dispose of all shares of Common Stock
beneficially owned by Media Equities. In addition, by virtue
of being the managing general partner of GLP, Mr. Gorman has
sole power to cast all votes to which GLP has the right to
cast and has sole power to dispose of all shares of Common
Stock directly owned by GLP (i.e. those shares referred to in
note (1)(c) of the foregoing chart).
By virtue of being a member of Media Equities, H.A.M. Media
may be deemed to have shared power to cast all votes to which
Media Equities has the right to cast, and may be deemed to
have shared power to dispose of all shares of Common Stock
beneficially owned by Media Equities.
By virtue of being a member and a manager of H.A.M. Media and
a manager of Media Equities, John T. Healy may be deemed to
have shared power to cast all votes to which Media Equities
has the right to cast, and may be deemed to have shared power
to dispose of all shares of Common Stock beneficially owned by
Media Equities.
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John T. Healy has sole power to vote and dispose of 5,000
shares of the Common Stock, representing less than 0.1% of the
outstanding Common Stock.
By virtue of being a member and manager of H.A.M. Media and a
manager of Media Equities, Bruce Maggin may be deemed to have
shared power to cast all votes to which Media Equities has the
right to cast, and may be deemed to have shared power to
dispose of all shares of Common Stock beneficially owned by
Media Equities. Bruce Maggin has sole power to vote and
dispose of 32,500 shares of the Common Stock, representing
less than 0.1% of the outstanding Common Stock.
By virtue of being a member and a manager of Media Equities,
Ronald Lightstone may be deemed to have shared power to cast
all votes to which Media Equities has the right to cast, and
may be deemed to have shared power to dispose of all shares of
Common Stock beneficially owned by Media Equities. Ronald
Lightstone has sole power to vote and dispose of all shares
Common Stock. referred to in note (1)(d) of the foregoing
chart.
ELP has the sole power to cast all votes and sole power to
dispose of all shares, with respect to the Common Stock
referred to in note (1)(b) in the foregoing chart.
GLP has the sole power to cast all votes and sole power to
dispose of all shares, with respect to the Common Stock
referred to in note (1)(c) in the foregoing chart.
By virtue of being a member of Media Equities, MDJ, and its
controlling shareholders Joseph Bradley, Mitzi Elkes and David
Elkes, may be deemed to have shared power to cast all votes to
which Media Equities has the right to cast, and may be deemed
to have shared power to dispose of all shares of Common Stock
beneficially owned by Media Equities.
By virtue of being a member of Media Equities, Joseph
Macdonell may be deemed to have shared power to cast all votes
to which Media Equities has the right to cast, and may be
deemed to have shared power to dispose of all shares of Common
Stock beneficially owned by Media Equities.
By virtue of being a member of Media Equities, Maura Nash
Gorman may be deemed to have shared power to cast all votes to
which Media Equities has the right to cast, and may be deemed
to have shared power to dispose of all shares of Common Stock
beneficially owned by Media Equities.
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(c) On May 24, 1999 Gorman Limited Partnership purchased 416,667
shares of Common Stock of the Issuer for a purchase price of
$1.20 per share.
On May 25, 1999 Elkes Limited Partnership purchased 416,667
shares of Common Stock of the Issuer for a purchase price of
$1.20 per share.
On December 19, 1999 Apollo sold its entire interest in MEI as
follows: (i) 50% to MDJ Investments, Limited ("MDJ"), the
shareholders of which are Joseph Bradley, Mitzi Elkes, and
David Elkes (the "MDJ Parties") for a purchase price of
$364,918.32, of which $72,983.66 was paid in cash and the
remainder in the form of a three (3) year promissory note with
interest payable semiannually in arrears at the annual rate of
six percent (6%); (ii) 25% to Joseph Macdonell ("Macdonell"),
for a purchase price of $182,459.16, of which $36,491.83 was
paid in cash, and the remainder in the form of a three (3)
year promissory note with interest payable semiannually in
arrears at the annual rate of six percent (6%) and (iii) 25%
to Maura Nash Gorman (together with the MDJ Parties and
Macdonell, the "Purchasers"), for a purchase price of
$182,459.16, of which $36,491.83 was paid in cash, and the
remainder in the form of a three (3) year promissory note with
interest payable semiannually in arrears at the annual rate of
six percent (6%). As a result of transaction the Purchasers
may be deemed to beneficially indirectly own the securities of
the Issuer.
Pursuant to Rule 13d-1(k)(1) this Schedule 13D is being filed on behalf
of each of Media Equities, Apollo, H.A.M. Media, Terrence A. Elkes, Kenneth F.
Gorman, Bruce Maggin, John T. Healy, Ronald Lightstone, Elkes Limited
Partnership, Gorman Limited Partnership, MDJ Investments, Limited, Joseph
Bradley, Mitzi Elkes, David Elkes, Joseph Macdonell and Maura Nash Gorman. By
their signatures on this Schedule 13D, each of Media Equities, Apollo, H.A.M.
Media, Terrence A. Elkes, Kenneth F. Gorman, Bruce Maggin, John T. Healy, Ronald
Lightstone, Elkes Limited Partnership, Gorman Limited Partnership, MDJ
Investments, Limited, Joseph Bradley, Mitzi Elkes, David Elkes, Joseph Macdonell
and Maura Nash Gorman agrees for itself, himself, or herself, that this Schedule
13D is filed on behalf of each of them.
[SIGNATURES ON FOLLOWING PAGE]
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<PAGE>
Signature
After reasonable inquiry and to the best of their knowledge and belief,
each of the undersigned hereby certifies that the information set forth in this
Schedule is true, complete, and correct.
Date: February 2, 2000
MEDIA EQUITIES INTERNATIONAL, LLC
By: /s/ RONALD LIGHTSTONE
Name: Ronald Lightstone
Title: Member
APOLLO PARTNERS LLC
By: /S/ KENNETH F. GORMAN
Name: Kenneth F. Gorman
Title: Member
/S/ TERRENCE A. ELKES
Terrence A. Elkes
/S/ KENNETH F. GORMAN
Kenneth F. Gorman
H.A.M. MEDIA GROUP LLC
By: /S/ BRUCE MAGGIN
Name: Bruce Maggin
Title: Vice President
/S/ BRUCE MAGGIN
Bruce Maggin
/S/ JOHN T. HEALY
John T. Healy
/S/ RONALD LIGHTSTONE
Ronald Lightstone
ELKES LIMITED PARTNERSHIP
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<PAGE>
By: /S/ TERRENCE A. ELKES
Name: Terrence A. Elkes
Title: Managing General Partner
GORMAN LIMITED PARTNERSHIP
By: /S/ KENNETH F. GORMAN
Name: Kenneth F. Gorman
Title: Managing General Partner
MDJ Investments, Limited
By: /S/ Joseph J. Bradley
Name: Joseph Bradley
Title: President and Secretary
/S/ Mitzi Elkes
Mitzi Elkes
/S/ David Elkes
David Elkes
/S/ Joseph J. Bradley
Joseph J. Bradley
/s/ Joseph Macdonell
Joseph Macdonell
/s/ Maura Nash Gorman
Maura Nash Gorman
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT
CONSTITUTE FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
41
