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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): October 20, 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)
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Item 5. Other Events
LMDS Purchase Agreement
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CellularVision USA, Inc. (the "CVUSA"), CellularVision of New York,
L.P. ("CVNY") and WinStar Communications, Inc. ("WinStar") have executed an
amendment ("Amendment No. 2") to the Agreement to Purchase LMDS License, dated
as of July 10, 1998 (the "LMDS Purchase Agreement"), a copy of which is attached
hereto as Exhibit 99.1 and incorporated by reference herein. Amendment No. 2
provides for an extension of the date by which stockholder approval of the LMDS
Purchase Agreement must be obtained from October 20, 1998 to November 30, 1998.
As a result of such amendment, WinStar will not have the right to terminate the
LMDS Purchase Agreement as a result of the failure of the Company to obtain
stockholder approval of the LMDS Purchase Agreement unless such approval is not
obtained by November 30, 1998.
Pursuant to Amendment No. 2, CVUSA and CVNY agreed to an increase in
the the fee payable to WinStar in the event of a termination by WinStar of the
LMDS Purchase Agreement from $1,625,000 to $2,500,000. In addition, Amendment
No. 2 limits the ability of CVUSA and CVNY to terminate the LMDS Purchase
Agreement in the event that (i) a stay, injunction, legal process or court order
has acted to prohibit, prevent or delay WinStar from exercising its right to
terminate the LMDS Purchase Agreement or (ii) WinStar has commenced as action,
proceeding or other legal procedure seeking a determination whether the LMDS
Purchase Agreement may be specifically enforced.
Marshall Capital Management, Inc.
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On October 12, 1998, CVUSA and Marshall Capital Management, Inc.
("MCM") executed a letter agreement (the "Letter Agreement") pursuant to which
MCM agreed to refrain from converting or redeeming (the "Standstill") any of its
shares of CVUSA's Series A Convertible Preferred Stock (the "Preferred Stock")
in the event certain conditions (the "Standstill Conditions") were satisfied.
Also pursuant to the Letter Agreement, CVUSA acknowledged and confirmed that
pursuant to the Registration Rights Agreement between CVUSA and MCM, a
"Repricing Event" (as defined in the Registration Rights Agreement) has occurred
and, as a result, that the conversion price relating to all conversions of
Preferred Stock that MCM effects as a result of the failure of any Standstill
Condition to be satisfied will be $0.09375. At such a conversion price, MCM's
remaining 3,463 shares of Preferred Stock would be convertible, subject to
certain conditions and restrictions, into 36,938,666 shares of CVUSA's Common
Stock, representing approximately 68% of CVUSA's outstanding shares of Common
Stock, after giving effect to such conversion.
The Standstill Condition relating to stockholder approval of the LMDS
Purchase Agreement required that such stockholder approval be obtained by
October 20, 1998, which did not occur. Accordingly, MCM is no longer subject to
the Standstill. Accordingly, MCM is no longer subject to the Standstill.
MCM has advised CVUSA that its present intention is, rather than to
exercise its conversion right, to require CVUSA to redeem the Preferred Stock
upon consummation of the spectrum assignment contemplated by the LMDS Purchase
Agreement at a per share cash price equal to 130% of (i) the stated value
($1,000) plus (ii) accrued and unpaid dividends thereon.
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MacKenzie Partners, Inc.
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On October 21, 1998, CVUSA retained MacKenzie Partners, Inc.
("MacKenzie") for advisory, information agent and ballot solicitation services
in connection with CVUSA's Solicitation Statement, dated October 7, 1998.
MacKenzie will be paid reasonable and customary compensation and will be
reimbursed for certain reasonable out-of-pocket expenses. MacKenzie will solicit
ballots from individuals, brokers, bank nominees and other institutional
holders. CVUSA estimates that the total amount of fees and expenses payable to
MacKenzie in connection with the Solicitation Statement will be approximately
$6,000.
Item 7. Financial Statements and Exhibits.
(a)-(b) None.
(b) Exhibits.
99.1 Amendment No. 2 to Agreement to Purchase LMDS License among
WinStar Communications, Inc., CellularVision USA, Inc.
and CellularVision of New York, L.P.
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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
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Name: Shant S. Hovnanian
Title: Chief Executive Officer
October 22, 1998
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EXHIBIT INDEX
99.1 Amendment No. 2 to Agreement to Purchase LMDS License among
WinStar Communications, Inc., CellularVision USA, Inc. and
CellularVision of New York, L.P.
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Exhibit 99.1
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AMENDMENT NO. 2 TO AGREEMENT TO PURCHASE LMDS LICENSE
AMENDMENT NO. 2, dated as of October 20, 1998 (this
"Amendment"), to the Agreement to Purchase LMDS License, dated as of July 10,
1998, as amended on Ocotber 6, 1998 (the "Purchase Agreement"), among WinStar
Communications, Inc., a Delaware corporation ("Purchaser"), CellularVision USA,
Inc., a Delaware corporation ("CVUSA") and CellularVision of New York, L.P., a
Delaware limited partnership ("Seller").
WHEREAS, the parties hereto have executed and delivered the
Purchase Agreement and have agreed to amend the Purchase Agreement as set forth
in this Amendment;
NOW, THEREFORE, for good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties hereto
hereby agree as follows:
Section 1. Definitions. Capitalized terms used but not defined in this
Amendment shall have the meanings given to such terms in the Purchase Agreement.
Section 2. Termination.
a. Section 6 of the Purchase Agreement is amended to read as
follows:
"Either Party which is not then in material breach of
its obligations hereunder may terminate this Agreement without
liability by written notice to the other party if the Closing
Date shall not have occurred on or before January 31, 1999,
provided, however, that upon Purchaser's notice given at least
10 days prior to the date that termination would otherwise be
permitted, such date shall be extended to June 30, 1999 and,
thereafter, to December 31, 1999 if (i) Purchaser is not in
material breach of its obligations hereunder and (ii) on each
such occasion Purchaser makes an additional loan of $3.5
million in principal amount to the Seller on substantially the
same terms as the Loans. Notwithstanding the foregoing, unless
Purchaser is in material breach of its obligations hereunder,
Seller and CVUSA may not terminate this Agreement under the
terms of this Section 6 if: (i) a stay, injunction, legal
process or court order has acted to prohibit, prevent or delay
Purchaser from exercising its right to terminate this
Agreement under Section 13(c) hereof; or (ii) Purchaser has
commenced as
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action, proceeding or other legal procedure seeking a
determination whether this Agreement may be specifically
enforced in accordance with Section 13(c) and 14(b) hereof.
Purchaser may terminate this Agreement at any time if CVUSA
has not obtained stockholder approval of this transaction by
November 30, 1998."
b. Subsection 13(c) of the Purchase Agreement is amended by
replacing the date "October 20, 1998" appearing in the first sentence
of such subsection with the date "November 30, 1998".
c. Subsection 13(c)(ii) of the Purchase Agreement is amended
by replacing the amount "$1,625,000" appearing in the first sentence of such
subsection with the amount "$2,500,000".
Section 3. Effective Date; Purchase Agreement. This Amendment shall be effective
as of the date hereof and, except as set forth herein, the Purchase Agreement
shall remain in full force and effect, shall apply to this Amendment, and shall
be otherwise unaffected hereby.
Section 4. Headings. The section headings herein are for convenience of
reference only, do not constitute part of this Amendment and will not be deemed
to limit or otherwise affect any of the provisions hereof.
Section 5. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one and the same agreement.
Section 6. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
Section 7. Successors and Assigns. This Amendment shall be
binding upon the parties hereto and their respective successors, executors,
administrators, legal representatives, heirs and legal assigns and shall inure
to the benefit of the parties hereto and, except as otherwise provided herein,
their respective successors, executors, administrators, legal representatives,
heirs and legal assigns. No person other than the parties hereto and their
respective successors, executors, administrators, legal representatives, heirs
and legal assigns shall have any rights or claims under this Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
WINSTAR COMMUNICATIONS, INC.
By:/s/T.R. Graham
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Executive Vice President
CELLULARVISION USA, INC.
By:/s/Shant S. Hovnanian
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Chief Executive Officer
CELLULARVISION OF NEW YORK, L.P.
By: CELLULARVISION CAPITAL CORP.,
its General Partner
By:/s/Shant S. Hovnanian
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President
