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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
October 29, 1999
Date of Report (Date of earliest event reported)
33-9030
Commission File No.
MagnaVision Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
22-2741313
(IRS Employer Identification No.)
1725 Route 35
Wall, New Jersey 07719
(Address of principal office)
(732) 449-1200
(Registrant's telephone number, including area code)
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Item 5. Other Events
On October 29, 1999, Registrant and Lamont Television Systems, Inc.
d/b/a Campus Televideo entered into a letter of intent which provides for the
possible sale of Registrant's private cable assets business to Campus Televideo.
The transactions are more fully described in the attached press release, and in
the attached copy of the letter of intent. Such sale is subject to a number of
contingencies, which are described in the attached letter of intent and the
receipt of any necessary approvals and consents.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit 2.1 -Letter of Intent by and between Lamont Television Systems, Inc.
d/b/a Campus Televideo and the Registrant
Exhibit 99.1 - Joint Press Release, dated November 3, 1999.
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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.
MAGNAVISION CORPORATION
By: /s/ Jeff Haertlein
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Jeff Haertlein
Chief Financial Officer
November 9, 1999
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EXHIBIT INDEX
Exhibit 2.1 -Letter of Intent by and between Lamont Television Systems, Inc.
d/b/a Campus Televideo and the Registrant
Exhibit 99.1 - Joint Press Release, dated November 3, 1999.
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Campus TeleVideo
subsidiary of Lamont Television Systems, Inc.
[LETTER HEAD]
October 29, 1999
Mr. Robert E. Hoffman
Chairman and Chief Executive Officer
MagnaVision Corporation
1725 Highway 35 South
Wall, NJ 07719
Dear Robert:
Re: Letter of Intent to Enter into a Transaction to Acquire MagnaVision
Corporation's Private Cable Assets
This proposed letter of intent will confirm the intentions regarding the
acquisition by Lamont Television Systems, Inc. ("Buyer") of 100% of the Private
Cable Assets from Magnavision Corporation ("MagnaVision" or "Seller").
Transaction and Consideration. Buyer proposes to acquire 100% of the Private
Cable Assets from MagnaVision. The Private Cable Assets include all contracts
and fixed assets related to Seller's private cable operations and do not include
any assets related to Seller's wireless operations. Based on the review of the
information provided to Buyer, the total consideration for the Private Cable
Assets to be provided by the Buyer will be $7.5 million ("Purchase Price")
payable in cash at closing. Private Cable Assets are to be transferred to Buyer
free and clear of any lien, claim or encumbrance except those which secure a
liability assumed by Buyer. Buyer shall not assume any of Seller's receivables
and will assume only such obligations and liabilities of Seller as it
specifically agrees to assume. Any liabilities assumed by Buyer shall reduce
dollar for dollar the purchase price to be paid by Buyer to Seller for the
assets.
Conditions to Closing. In addition to the other conditions stated herein,
Buyer's obligation to close the acquisition shall be subject to and conditioned
upon customary conditions, including without limitation: (i) satisfactory
completion of Buyer's due diligence, (ii) obtaining of necessary approvals and
consents (to include any regulatory consents and licenses) applicable to the
Private Cable Assets and the transfer of those assets as contemplated hereunder,
and (iii) the absence of any material adverse change in the financial condition
or results of operations of the Private Cable Business from the execution of
this letter of intent until the execution of a definitive agreement as defined
below. Buyer does not have any financing contingencies.
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It is understood and agreed that upon the execution of this letter of intent by
MagnaVision due diligence will begin immediately with a target date for closing
the acquisition within 30 to 45 days.
Ordinary Course of Business. From and after the date of this letter of intent
through the closing, MagnaVision shall operate its Private Cable Business in the
ordinary course and consistent with its past practices for such business.
Further MagnaVision will refrain from making any material change or engaging in
any activity outside the ordinary course of its Private Cable Business.
MagnaVision agrees to exercise reasonable efforts to maintain customer, vendor
and other business relationships presently affecting the business.
Definitive Agreement. This letter does not create and is not intended to create
an offer capable of acceptance, or (except as set forth under the heading "No
Other Agreements" below) any binding legal or contractual obligations on the
part of either the Buyer or MagnaVision, but is intended to merely provide a
basis upon which the parties can continue to consider the matter, and could
result in the preparation, execution, and delivery of a definitive agreement
containing substantially the terms provided in this letter (the "Definitive
Agreement"). The Definitive Agreement (drafts of which would be prepared by the
Seller) would be negotiated, prepared and executed as soon as possible, but in
no case later than 45 days from the date a letter of intent is executed and
would contain such terms and conditions as are typical in transactions of this
nature as negotiated by the parties including, without limitation,
indemnifications, representations, warranties, convenants and closing
conditions. The proposed transaction may be abandoned without any obligation or
liability by either party for any reason at any time prior to the execution and
delivery of the Definitive Agreement upon written notice to the other party. The
effectiveness of any Definitive Agreement is expected and anticipated by the
parties to be conditioned upon, among other items (i) express approval of the
board of directors and, if necessary, the shareholders of MagnaVision and (ii)
all necessary or appropriate approvals for the continued operations of the
Private Cable Business, such approvals to be a condition precedent to the
execution of, or incurring of, any obligations under the Definitive Agreement.
Upon execution and delivery of the Definitive Agreement, the executed letter of
intent shall be superseded thereby and the rights and obligations of the parties
with respect to the proposed transaction shall thereafter be governed by the
Definitive Agreement.
Employees. On and after the closing of the transactions contemplated hereby,
Buyer shall have the right, but not the obligation, to hire current employees of
the Private Cable Business on such terms and conditions as deemed reasonable by
Buyer.
Due Diligence and Confidentiality. Until the proposed transaction is consummated
or terminated, the Buyer, through its employees, representatives and agents,
shall have access, at reasonable times during normal business hours and with
reasonable prior notice to MagnaVision's properties, books, records and
documents to the extent reasonably related to the Buyer's interest in the
proposed transaction. Buyer's due diligence shall be conducted at its own
expense. Buyer shall have access to Seller's customers only after a second draft
of the Definitive Agreement has been delivered in a form acceptable to Seller.
The proposed transaction is conditioned on the satisfactory completion of due
diligence by Buyer as to the operational and legal aspects of the Private Cable
Business as well as the assets that make up such business. Buyer is prepared to
commence due diligence as soon as possible and would expect to complete due
diligence concurrent with preparation of the Definitive Agreement anticipated to
be completed within 30 to 45 days. If the proposed transaction is abandoned or
not consummated for any reason, including without limitation, as a result of
information learned by Buyer during due diligence, the Buyer shall return to
MagnaVision, at Buyer's expense, all books, records and other documents and
papers obtained from MagnaVision and all copies thereof, and Buyer shall not
disclose, and shall cause its employees and agents not to disclose, any
confidential data or information obtained from MagnaVision in the course of such
due diligence. This obligation is in addition to the provisions of any
confidentiality agreement already executed by Buyer.
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Non-Compete. Reference is made to the non-competition and related provisions of
that certain agreement being entered into as of this date between Buyer and
Seller.
Expenses. Buyer and Seller will bear their own respective fees and expenses
relating to the transactions contemplated herein, negotiations leading to same,
and the preparation made for carrying the same into effect, regardless of
whether or not the transactions contemplated hereby are consummated.
Disclosures. Except as and to the extent required by law, without the prior
written consent of the other party, neither the Buyer nor MagnaVision will, and
each will direct its representatives not to make, directly or indirectly, any
public comment, statement, or communication with respect to, or otherwise to
disclose or permit the disclosure of the existence of discussions regarding a
possible transaction between the parties or any of the terms, conditions or
other aspects of the transaction as proposed in this letter. If a party is
required by law to make any such disclosure, it must first provide to the other
party the content of the proposed disclosure, the reasons that such disclosure
is required by law, and the time and place that the disclosure will be made. The
parties shall cooperate with each other in making any disclosures as to the
proposed transaction and as to the form and substance of any press releases,
announcements and other disclosures.
Absence of Enforceable Agreement. Except as specifically set forth in this
section, this letter is non-binding and is merely a statement of our present
intent setting forth a general basis for the negotiation and preparation of the
Definitive Agreement. Until such time as the Definitive Agreement has been
executed and delivered, no party hereto has any legal obligation of any kind
with respect to the transaction contemplated herein, except as may be set forth
in the headings herein entitled "Due Diligence and Confidentiality,"
"Non-Compete," "Expenses," and "Disclosures," and the agreement referred to
under the heading herein entitled "Non-Compete."
No Other Agreements. Seller and Buyer agree that as of this date there are no
other oral or written representations, agreements or understandings between
Seller and Buyer concerning the subject matter of this letter or the
transactions contemplated herein, except as may be set forth in the headings
herein entitled "Due Diligence and Confidentiality," "Non-Compete," "Expenses,"
and "Disclosures," and the agreement referred to under the heading herein
entitled "Non-Compete."
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Cooperation and Exclusive Dealing: The Buyer and Seller will cooperate in good
faith and move expeditiously in the preparation of the documents and the taking
of other actions necessary to carry out the acquisition. Buyer and Seller agree
that due diligence and document preparation, baring any unforeseen
circumstances, may be completed within 45 to 60 days from the date of acceptance
of this letter by Seller. Seller agrees, during such 60 day period, not to offer
to sell the private cable assets or business to any other person or entity and
not to negotiate or accept any agreement for the sale of all or part of its
private cable assets or business with any third party and to notify Buyer of any
unsolicited offers to purchase all or any part of Seller's private cable assets
or business. An extension of this period will be granted to Buyer by Seller as
long as Buyer and Seller continue to cooperate in good faith. Seller agrees that
an extension will not be unreasonably withheld. Buyer agrees that any
obligations or representations with respect to this clause "Cooperation and
Exclusive Dealing" of the Seller are subject to the approval of the Board of
Directors of Seller, which will be forthcoming no later than Tuesday, October
26, 1999.
Very truly yours,
Edward Lamont
By: /s/ Edward Lamont , Buyer
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Confirmed and accepted this 29th day of October 1999.
By: /s/ Robert E Hoffman , Seller
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President,
Magnavision Corporation
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FOR IMMEDIATE RELEASE
Contact: Arnold Dauer
Jeffery Haertlein
MagnaVision Corporation
The Wedgewood Building
1725 Highway 35, Suite B
Wall, NJ 07719
Phone: 732-449-1200
MagnaVision Announces Proposed Sale of Private Cable Assets
WALL, N.J., November 3, 1999 - MagnaVision Corporation (OTC Bulletin Board:MAGV)
and Lamont Television Systems, Inc. (dba Campus TeleVideo) announced today that
they have entered into a non-binding Letter of Intent under which Campus
TeleVideo proposes to purchase the service contracts and related fixed assets of
MagnaVision's private cable operations for a price of $7.5 million in cash. The
transaction is subject to the completion of due diligence, necessary approvals
and consents, and the preparation and execution of a definitive agreement within
a 60 day exclusivity period, and other conditions. Daniels & Associates is
assisting MagnaVision in the transaction.
MagnaVision Corporation provides private cable television and data
services to approximately 30,000 resident students at 28 college and university
campuses throughout the eastern United States, and also provides service to
senior living facilities.
MagnaVision also has long term rights to use fixed wireless spectrum
at seven existing transmission sites in New York and an additional site in New
Jersey. MagnaVision is headquartered in Wall, NJ.
Campus TeleVideo is one of the nation's largest providers of
telecommunication services for colleges and universities, meeting the needs of
over 100 campuses and 350,000 subscribers. Since 1984, Campus TeleVideo has
provided engineering, construction, maintenance, financing, and programming to
educational and financial institutions as well as municipalities and
multi-dwelling units. Campus TeleVideo, a wholly owned subsidiary of Lamont
Television Systems, Inc. is headquartered in Greenwich, CT and maintains
engineering offices in New Castle, DE, Chicago, IL; Kent, OH; Duarte, CA and Los
Angeles, CA.
This release contains certain statements which constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements of the Company. Such
factors include among others, general economic and business conditions, which
will, among other things, impact demand for the Company's services, changes in
public taste, trends and demographic changes, which may impact the Company's
ability to generate revenue; political, social and economic conditions and laws,
rules and regulations, which may affect the Company's results of operations;
timely completion of development plans; the indebtedness of the Company; quality
of management; availability of qualified personnel; changes in, or failure to
comply with, government regulations; and other factors.
