<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 22, 1998
CELLULARVISION USA, INC.
(Exact name of registrant as specified in charter)
Delaware 000-27582 13-3853788
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
140 58th Street, Loft 7E 11220
Brooklyn, New York (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (718) 489-1200
Not Applicable
(Former name or former address, if changed from last report)
<PAGE>
Item 5. Other Events
Subordinated Exchange Notes
On September 30, 1998, CellularVision USA, Inc. (the "Company") failed
to make an interest payment of $271,200 then due on its Subordinated Exchange
Notes. As a result of such failure, the Company is in default of the terms of
the Subordinated Exchange Notes and the holders have the right to demand payment
of (i) $6,026,675, which represents the full outstanding principal amount due
under such Subordinated Exchange Notes, (ii) $271,200 of overdue interest and
(iii) penalty interest at a rate of 8% above the prime rate on such amounts. As
of the filing of this Form 8-K, Morgan Guaranty Trust Company of New York, the
holder of all such Subordinated Exchange Notes, has not notified the Company of
its intention to exercise any remedies in respect of such interest payment
default.
Boston Financial Leasing Arrangements
On September 22, 1998, as a result of the continuing failure by
CellularVision of New York, L.P. ("CVNY"), the Company's wholly-owned operating
subsidiary, to make required lease payments under a leasing arrangement, Boston
Financial & Equity Corporation ("Boston Financial"), the lessor of certain
equipment used by CVNY, filed a verified complaint in the Supreme Court of the
State of New York, County of New York (the "Complaint"), seeking a judgment
against CVNY in the principal amount of $380,346, which represents late charges,
balance of lease payments, and sales taxes, plus interest thereon from September
21, 1998. In addition, the Complaint requests a judgment against CVNY in an
amount equal to at least $150,000, representing the purported cost of such
equipment. The Company has not yet answered the Complaint.
Metromedia Fiber Network
On September 30, 1998, CVNY failed to make a payment of $366,457 to
Metromedia Fiber Network ("MFN"), which amount represents all principal and
interest due on the September 30, 1997 promissory note issued by CVNY to MFN
(the "MFN Note"). All principal and interest on the MFN Note became due and
payable on September 30, 1998, the maturity date of the MFN Note.
WinStar Loan
As a result of the failure by the Company and CVNY to make the payments
described above, the Company is in default of the terms of the $3.5 million loan
made by WinStar Communications, Inc. ("WinStar"), giving WinStar the right to
demand payment of $3.5 million, which represents the principal amount of such
loan, and all accrued and unpaid interest. As of the filing of this Form 8-K,
WinStar has not notified the Company of its intention to exercise any remedies
in respect of such cross default.
<PAGE>
Assignment of 850 Mhz of LMDS Spectrum
Subject to the conditions set forth below, the Company expects to
complete the assignment of 850 MHz of its LMDS spectrum to WinStar (the
"Spectrum Assignment") in the fourth quarter of 1998. The Spectrum Assignment is
subject to stockholder approval and regulatory approval. In addition, the
Company does not expect to receive stockholder approval of the Spectrum
Assignment on or before October 10, 1998, thereby allowing WinStar to terminate
its obligation to consummate the Spectrum Assignment. Therefore, in order to
consummate the Spectrum Assignment, the Company will need a waiver from WinStar
of its right to terminate the underlying agreement in the event that stockholder
approval is not obtained by such date.
While there can be no assurance that the Company will obtain the
necessary stockholder approval, regulatory approval or waiver from WinStar
discussed above, in the event that the Spectrum Assignment is consummated, the
Company anticipates liquidity sufficient to allow for the repayment all of the
Company's and CVNY's outstanding obligations.
M/A-COM v. CellularVision USA, Inc. et al. Arbitration
On October 2, 1998, the Company made a motion in United States district
court in New Jersey (the "Court") requesting a preliminary injunction to enjoin
the arbitration proceeding commenced against the Company and certain other
parties (the "Respondents") by M/A-COM, a division of AMP Incorporated, on the
ground that no Respondent is a party to any arbitration agreement with M/A-COM.
The Court denied such motion and granted M/A-COM's motion to stay further
proceedings in the action before the Court pending the decision of the Supreme
Court of the State of New York (the "NY Court") in connection with the NY
Court's order to show cause for order of attachment and temporary restraining
order issued on September 3, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CELLULARVISION USA, INC.
By:/s/Shant S. Hovnanian
---------------------
Name: Shant S. Hovnanian
Title: Chief Executive Officer
October 2, 1998