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UNITED STATES
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
February 23, 1996
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Date of Report (Date of earliest event reported)
HEARTLAND WIRELESS COMMUNICATIONS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-23694 73-1435149
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
903 N. Bowser, Suite 140
Richardson, Texas 75081
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(Address of Principal Executive Offices) (Zip Code)
(214) 479-9244
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
Reference is made to that Registration Statement on Form S-4
(Reg. No. 33-65357) filed by Heartland Wireless Communications,
Inc., a Delaware corporation (the "Registrant"), with the
Securities and Exchange Commission and declared effective thereby
on January 26, 1996 (the "Registration Statement").
Effective February 23, 1996, the Registrant consummated the
following five (5) separate, but related, transactions
(collectively, the "Transactions"):
(i) merger of Heartland Merger Sub, Inc., a wholly owned
subsidiary of the Registrant ("Merger Sub"), with and into
American Wireless Systems, Inc. ("AWS") pursuant to the
Amended and Restated Agreement and Plan of Merger dated as of
September 11, 1995 ("AWS Merger Agreement") by and among the
Registrant, Merger Sub and AWS;
(ii) acquisition of substantially all of the assets of
Fort Worth Wireless Cable T.V. Associates ("FTW Partnership")
pursuant to the Amended and Restated Asset Purchase Agreement
dated as of October 4, 1995 ("FTW Agreement") by and between
the Registrant and FTW Partnership;
(iii) acquisition of substantially all of the assets
of Wireless Cable TV Associates # 38 ("Minneapolis
Partnership") pursuant to the Amended and Restated Asset
Purchase Agreement dated as of October 4, 1995 ("Minneapolis
Agreement") by and between the Registrant and Minneapolis
Partnership;
(iv) merger of Heartland Merger Sub 2, Inc., a wholly
owned subsidiary of the Registrant ("Merger Sub 2") with and
into CableMaxx, Inc. ("CMAX") pursuant to the Amended and
Restated Agreement and Plan of Merger dated as of September
11, 1995 ("CMAX Merger Agreement") by and among the
Registrant, Merger Sub 2 and CMAX;
(v) acquisition of certain assets of Three Sixty Corp.
("TSC") pursuant to the Amended and Restated Asset Purchase
Agreement dated as of October 19, 1995 ("TSC Agreement") by
and among the Registrant, TSC and TechniVision, Inc., formerly
a subsidiary of TSC that has been merged with and into TSC
("TechniVision").
Effective February 23, 1996, Merger Sub was merged with and
into AWS pursuant to the terms of the AWS Merger Agreement,
whereupon AWS became a wholly owned subsidiary of the Registrant.
Under the terms of the AWS Merger Agreement, stockholders of AWS
received, in the aggregate, 1,307,692 shares of the Registrant's
common stock, par value $.001 per share ("Registrant Common
Stock"), having an aggregate exchange value of approximately $34
million. As a result, each issued and outstanding share of AWS
common stock was converted into the right to receive .22905 shares
of Registrant Common Stock having an exchange value of
approximately $5.96 per share, of which approximately .02189 shares
of
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Registrant Common Stock having an exchange value of approximately
$0.57 per share will be held in escrow as described in the AWS
Merger Agreement. The transactions contemplated by the AWS Merger
Agreement will be accounted for by the Registrant under the
"purchase method" of accounting. The assets previously held by AWS
included minority interests in the wireless cable television
systems of Minneapolis, Minnesota, and Fort Worth, Texas (the
remaining interests being held by the FTW Partnership and
Minneapolis Partnership, respectively) and certain additional
rights and properties held in connection with wireless cable
television markets located in Dallas, Texas, Los Angeles,
California and Memphis, Tennessee (collectively, the "AWS Assets").
Certain of the AWS Assets constitute plant, equipment or other
physical property. The Registrant will seek to sell directly to a
third party the Los Angeles, California market. The Memphis,
Tennessee market is subject to a pending contract of sale to
TruVision Cable, Inc. The Dallas, Texas market, and AWS' interest
in the Fort Worth, Texas and Minneapolis, Minnesota markets were
assigned by the Registrant to CS Wireless Systems, Inc. ("CS
Wireless") effective February 23, 1996 pursuant to the terms of the
Participation Agreement (the "Participation Agreement") dated
December 12, 1995 by and among the Registrant, CAI Wireless
Systems, Inc. ("CAI") and CS Wireless. The terms of the AWS Merger
Agreement were determined by arms-length negotiations between the
parties thereto and no material relationship existed between AWS
and the Registrant or any of its affiliates, any directors or
officers of the Registrant, or any associate of any such director
or officer prior to the consummation thereof.
Also on February 23, 1996, the Registrant acquired from the
FTW Partnership substantially all of the assets of the FTW
Partnership pursuant to the terms of the FTW Agreement. Consistent
with the terms of the FTW Agreement, the Registrant issued
approximately 578,260 shares of Registrant Common Stock having an
aggregate exchange value of approximately $13.3 million to the FTW
Partnership. The transactions contemplated by the FTW Agreement
will be accounted for by the Registrant under the "purchase method"
of accounting. The principal asset of the FTW Partnership
consisted of a 79.99% interest in a joint venture that owned and
operated the wireless cable television system in Fort Worth, Texas
(the "FTW Venture Interest"). Accordingly, the FTW Venture
Interest does not constitute plant, equipment or physical property.
As the owner of the FTW Venture Interest, the Registrant caused the
transfer, together with AWS, of the Fort Worth, Texas market to CS
Wireless pursuant to the terms of the Participation Agreement. The
terms of the FTW Agreement were determined by arms-length
negotiations between the parties thereto and no material
relationship existed between FTW Partnership and the Registrant or
any of its affiliates, any directors or officers of the Registrant,
or any associate of any such director or officer prior to the
consummation thereof.
Also on February 23, 1996, the Registrant acquired from the
Minneapolis Partnership substantially all of the assets of the
Minneapolis Partnership pursuant to the terms of the Minneapolis
Agreement. Consistent with the terms of the Minneapolis Agreement,
the Registrant issued approximately 805,695 shares of Registrant
Common Stock having an aggregate exchange value of approximately
$18.531 million to the Minneapolis Partnership. The transactions
contemplated by the Minneapolis Agreement will be accounted for by
the Registrant under the "purchase method" of accounting. The
principal asset of the Minneapolis Partnership
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consisted of a 75% membership interest in and to American Wireless
Systems of Minneapolis, L.L.C., a limited liability company that
owned and operated the wireless cable television system in
Minneapolis, Minnesota (the "LLC Interest"). Accordingly, the LLC
Interest does not constitute plant, equipment or other physical
property. As the owner of the LLC Interest, the Registrant caused
the transfer, together with AWS, of the Minneapolis, Minnesota
market to CS Wireless pursuant to the terms of the Participation
Agreement. The terms of the Minneapolis Agreement were determined
by arms-length negotiations between the parties thereto and no
material relationship existed between the Minneapolis Partnership
and the Registrant or any of its affiliates, any directors or
officers of the Registrant, or any associates of any such director
or officer prior to the consummation thereof.
Also on February 23, 1996, Merger Sub 2 was merged with and
into CMAX pursuant to the terms of the CMAX Merger Agreement,
whereupon CMAX became a wholly owned subsidiary of the Registrant.
Under the terms of the CMAX Merger Agreement, the stockholders of
CMAX received, in the aggregate, approximately 2,883,573 shares of
Registrant Common Stock having an aggregate exchange value of
approximately $80.8 million. As a result, each issued and
outstanding share of CMAX common stock was converted into the right
to receive .3033 shares of Registrant Common Stock having an
exchange value of approximately $8.50 per share. The transactions
contemplated by the CMAX Merger Agreement will be accounted for by
the Registrant under the "purchase method" of accounting. The
assets previously held by CMAX included certain rights and
properties held in connection with certain wireless cable
television markets throughout Texas and in Salt Lake City, Utah
(collectively, the "CMAX Assets"). Certain of the CMAX Assets
constitute plant, equipment and physical property. With the
exception of the San Antonio, Texas and Salt Lake City, Utah
markets, which the Registrant has contributed to CS Wireless
pursuant to the terms of the Participation Agreement, the CMAX
Assets will continue to be used and operated by the Registrant in
connection with its wireless cable television business. The terms
of the CMAX Merger Agreement were determined by arms-length
negotiations between the parties thereto and no material
relationship existed between CMAX and the Registrant or any of its
affiliates, any directors or officers of the Registrant, or any
associate of any such director or officer prior to the consummation
thereof. Mr. L. Allen Wheeler, a member of the Board of Directors
of the Registrant, was the holder of less than 5% of the shares of
CMAX common stock at the time of the merger of Merger Sub 2 with
and into CMAX. Mr. Wheeler abstained from participating in, or
voting on, the Registrant's deliberations regarding the CMAX Merger
Agreement.
Also on February 23, 1996, the Registrant acquired certain
assets from TSC representing substantially all of the assets
formerly held by TechniVision. Pursuant to the terms of the TSC
Agreement, the Registrant issued to TSC approximately 1,181,944
shares of Registrant Common Stock having an aggregate exchange
value of approximately $33.124 million. The transactions
contemplated by the TSC Agreement will be accounted for by the
Registrant under the "purchase method" of accounting. The assets
previously held by TSC included certain rights and properties held
in connection with wireless cable television markets in El Paso,
Texas, Corpus Christi, Texas and Dayton, Ohio (collectively, the
"TSC Assets"). Certain of the TSC Assets constitute plant,
equipment and physical property. With the exception of the Dayton,
Ohio market, which the Registrant contributed to CS Wireless
pursuant to the terms of the
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Participation Agreement, the TSC Assets will continue to be used
and operated by the Registrant in connection with its wireless
cable television business. The terms of the TSC Agreement were
determined by arms-length negotiations between the parties thereto
and no material relationship existed between TSC and the Registrant
or any of its affiliates, any directors or officers of the
Registrant, or any associate of any such director of officer prior
to the consummation thereof.
On February 23, 1996, the Registrant issued a news release
relating to the Transaction, the form of which is attached as
Exhibit 99.1 and incorporated herein by reference.
Effective February 23, 1996, immediately following the closing
of the Transactions, the Registrant, CAI and CS Wireless, a
Delaware corporation and wholly owned subsidiary of CAI,
consummated the Participation Agreement pursuant to which the
Registrant (or certain of its subsidiaries) contributed or sold to
CS Wireless the wireless cable assets and all related liabilities
of the following wireless cable television markets (the "Heartland
Contributed Assets"):
(1) Maysville, Missouri
(2) Sweet Springs, Missouri
(3) Grand Rapids/Moline, Michigan
(4) Bloom Center/Napoleon, Indiana
(5) Dallas, Texas
(6) Fort Worth, Texas
(7) San Antonio, Texas
(8) Dayton, Ohio
(9) Salt Lake City, Utah
(10) Minneapolis, Minnesota
Simultaneously with the contribution and sale of the Heartland
Contributed Assets to CS Wireless, CAI (or certain of its
subsidiaries) contributed to CS Wireless (directly or by
contribution of stock of subsidiaries) the wireless cable
television assets associated with the following markets (the "CAI
Contributed Assets"):
(1) Stockton/Modesto, California
(2) Bakersfield, California
(3) Cleveland, Ohio
(4) Charlotte, North Carolina
The combination of the Heartland Contributed Assets and the CAI
Contributed Assets in CS Wireless (the "CS Transaction") created a
company with approximately 5.7 million line-of-sight households and
approximately 55,800 subscribers.
In connection with the CS Transaction, the Registrant (or its
subsidiaries) received (i) shares of CS Wireless common stock
constituting approximately 39.76% of the outstanding shares of CS
Wireless (35.4% following dilution for certain additional stock
issuances) (ii) approximately $28.3 million in cash paid at the
closing (iii) a promissory note in the principal sum of $25,000,000
payable on or before nine (9) months from the closing and secured
by
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proceeds of a contemplated issuance by CS Wireless of senior
discount notes (which notes have been prepaid by their terms) and
(iv) a promissory note in the sum of $15,000,000 payable ten (10)
years from the closing and prepayable from asset sales and certain
other events. Following the closing, CAI and the Registrant will
complete certain post-closing net working capital calculations.
Components of such calculations include the relative accounts
payable, accounts receivable and related working capital assets of
the contributed systems, the number of granted channels represented
and actually contributed to CS Wireless for each market, increase
or decrease in the number of subscribers in each contributed system
from the number of subscribers stated in the Participation
Agreement and related factors. Following the completion of these
calculations, payments will be made to or by the parties, depending
upon such calculations.
Also, in connection with the closing of the CS Transaction,
CAI, the Registrant and CS Wireless have entered into a
stockholders agreement (the "Stockholders Agreement"). The
Stockholders Agreement provides, among other things, that the
Registrant and CAI will vote their shares of CS Wireless common
stock in favor of a Board of Directors of CS Wireless having nine
(9) members consisting of (i) up to four members designated by CAI
(provided that at least one of whom may not be an affiliate of
either CAI or the Registrant); (ii) up to three members designated
by the Registrant (provided at least one of whom may not be an
affiliate of either CAI or the Registrant); (iii) the Chief
Executive Officer of CS Wireless; and (iv) the Chief Financial
Officer of CS Wireless. The Stockholders Agreement and CS
Wireless' bylaws further provide that certain major transactions
will require the affirmative approval of at least 70% (or seven of
nine) of the directors of CS Wireless. The CS Transaction was
consummated immediately following consummation of the Transactions.
The terms of the Participation Agreement were determined by
arms length negotiations between the parties thereto and no
material relationship existed between CAI, CS Wireless and the
Registrant or any of its affiliates, any directors or officers of
the Registrant or any associates of any such director or officer
prior to the consummation thereof.
On February 23, 1996, the Registrant issued a news release
relating to the CS Transaction, the form of which is attached as
Exhibit 99.2 and incorporated herein by reference.
On February 27, 1996, the Registrant issued a supplemental
news release providing further detail on the Transactions and the
CS Transaction, the form of which is attached as Exhibit 99.3 and
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
It is impracticable to provide the financial statements
of the businesses acquired and described in Item 2 above at
this time. The Registrant intends to prepare the required
financial statements and file same under cover of Form 8-K/A
as soon as practicable, but no later than May 8, 1996.
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(b) Pro Forma Financial Information
It is impracticable to provide the pro forma financial
information required pursuant to Article 11 of Regulation S-X
with respect to the transactions described in Item 2 above at
this time. The Registrant intends to prepare the required pro
forma financial statements and file same under cover of Form
8-K/A as soon as practicable, but not later than May 8, 1996.
(c) Exhibits
Exhibit No. Document Description
2.1 Amended and Restated Agreement and
Plan of Merger, dated as of
September 11, 1995, by and among
American Wireless Systems, Inc., the
Registrant and Heartland Merger Sub,
Inc. (incorporated by reference from
Exhibit 2.22 to the Registrant's
Registration Statement on Form S-4,
File No. 33-65357 (the "Form S-4")
dated January 26, 1996).
2.2 Amended and Restated Asset Purchase
Agreement, dated as of October 4,
1995, by and between the Registrant
and Fort Worth Wireless Cable T.V.
Associates (incorporated by
reference from Exhibit 2.23 to the
Registrant's Registration Statement
on Form S-4).
2.3 Amended and Restated Asset Purchase
Agreement, dated as of October 4,
1995, by and between the Registrant
and Wireless Cable TV Associates No.
38 (incorporated by reference from
Exhibit 2.24 to the Registrant's
Registration Statement on Form S-4).
2.4 Amended and Restated Agreement and
Plan of Merger, dated as of
September 11, 1995, by and among the
Registrant, CableMaxx, Inc., and
Heartland Merger Sub 2, Inc.
(incorporated by reference from
Exhibit 2.25 to the Registrant's
Registration Statement on Form S-4).
2.5 Amended and Restated Asset Purchase
Agreement, dated as of October 19,
1995, by and among the Registrant,
Three Sixty Corp., and Technivision,
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Inc. (incorporated by reference from
Exhibit 2.26 to the Registrant's
Registration Statement on Form S-4).
2.6 Participation Agreement dated as of
December 12, 1995, by and among the
Registrant, CAI Wireless Systems,
Inc. and CS Wireless Systems, Inc.
(without exhibits except
Stockholders Agreement) (the
"Participation Agreement")
(incorporated by reference from
Exhibit 2.1 to the Registrant's
Current Report on Form 8-K, dated
December 12, 1996).
2.7 Amendment No. 1 to Participation
Agreement dated February 22, 1996
(filed herewith).
23.1 Consent of KPMG Peat Marwick LLP,
independent certified public
accountants (filed by amendment).
99.1 February 23, 1996 Heartland Wireless
Communications, Inc. News Release
(relating to the Transactions)
(filed herewith).
99.2 February 23, 1996 Heartland Wireless
Communications, Inc. News Release
(relating to CS Transaction) (filed
herewith).
99.3 February 27, 1996 Heartland Wireless
Communications, Inc. News Release
(providing further detail on the
Transactions and CS Transaction)
(filed herewith).
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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.
HEARTLAND WIRELESS COMMUNICATIONS,
INC.
Date: March 8, 1996 By: /s/ David D. Hagey
David D. Hagey,
Vice President-Controller
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EXHIBIT INDEX
Doc. No. Document Description
2.1 Amended and Restated Agreement and Plan of Merger, dated
as of September 11, 1995, by and among American Wireless
Systems, Inc., the Registrant and Heartland Merger Sub,
Inc. (incorporated by reference from Exhibit 2.22 to the
Registrant's Registration Statement on Form S-4, File No.
33-65357 (the "Form S-4") dated January 26, 1996).
2.2 Amended and Restated Asset Purchase Agreement, dated as
of October 4, 1995, by and between the Registrant and
Fort Worth Wireless Cable T.V. Associates (incorporated
by reference from Exhibit 2.23 to the Registrant's
Registration Statement on Form S-4).
2.3 Amended and Restated Asset Purchase Agreement, dated as
of October 4, 1995, by and between the Registrant and
Wireless Cable TV Associates No. 38 (incorporated by
reference from Exhibit 2.24 to the Registrant's
Registration Statement on Form S-4).
2.4 Amended and Restated Agreement and Plan of Merger, dated
as of September 11, 1995, by and among the Registrant,
CableMaxx, Inc., and Heartland Merger Sub 2, Inc.
(incorporated by reference from Exhibit 2.25 to the
Registrant's Registration Statement on Form S-4).
2.5 Amended and Restated Asset Purchase Agreement, dated as
of October 19, 1995, by and among the Registrant, Three
Sixty Corp., and Technivision, Inc. (incorporated by
reference from Exhibit 2.26 to the Registrant's
Registration Statement on Form S-4).
2.6 Participation Agreement dated as of December 12, 1995, by
and among the Registrant, CAI Wireless Systems, Inc. and
CS Wireless Systems, Inc. (without exhibits except
Stockholder Agreement) (the "Participation Agreement")
(incorporated by reference from Exhibit 2.1 to the
Registrant's Current Report on Form 8-K, dated December
12, 1996).
2.7 Amendment No. 1 to Participation Agreement dated February
22, 1996 (filed herewith).
23.1 Consent of KPMG Peat Marwick LLP, independent certified
public accountants (filed by amendment).
99.1 February 23, 1996 Heartland Wireless Communications, Inc.
News Release (relating to the Transactions) (filed
herewith).
99.2 February 23, 1996 Heartland Wireless Communications, Inc.
news Release (relating to CS Transaction) (filed
herewith).
99.3 February 27, 1996 Heartland Wireless Communications, Inc.
News Release (providing further detail on the
Transactions and CS Transaction) (filed herewith).
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Exhibit 2.7
AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT
This Amendment No. 1 (this "Amendment"), dated as of February
22, 1996, is among CAI Wireless Systems, Inc., a Connecticut
corporation ("CAI"), Heartland Wireless Systems, Inc., a Delaware
corporation ("Heartland"), and CS Wireless Systems, Inc., a
Delaware Corporation ("CS").
R E C I T A L S:
A. CAI, Heartland and CS are parties to a Participation
Agreement dated as of December 12, 1995 (the "Participation
Agreement").
B. The parties to this Amendment wish to amend the
Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Defined Terms. Except as specifically amended in this
Amendment, all defined terms in the Participation Agreement shall
have the same meanings in this Amendment.
2. Amendment of Article I of the Agreement.
(a) The definition of "CAI Company" is amended and
restated in its entirety as follows:
" "CAI Company" means any of CAI, any of the CAI
Subsidiaries named on Schedule I hereto and any
Subsidiary of any such named Subsidiary."
(b) The definition of "CAI Nominal Value" is amended and
restated in its entirety as follows:
" "CAI Nominal Value" means $102,479,000, adjusted
as of the Closing Date as follows: (a) increased by
the amount (if any) by which the Net Asset Amount
for the CAI Assets is greater than $102,479,000,
(b) reduced by the amount (if any) by which the Net
Asset Amount for the CAI Assets is less than
$102,479,000, (c) increased by the product of
$1,500 and the amount (if any) by which the CAI
Subscriber Increase is greater than the Heartland
Subscriber Increase and (d) reduced by the product
of $1,500 and the amount (if any) by which the CAI
Subscriber Decrease is greater than the Heartland
Subscriber Decrease."
(c) The definition of "Channel Deficiency Adjustment" is
amended and restated in its entirety as follows:
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" "Channel Deficiency Adjustment" means a dollar
amount determined only for each geographic market
which is not a BTA Market in which rights to
acquire Channels at the conclusion of the BTA
Auction are available conveyed to CS in which the
number of Channels actually conveyed to CS by the
CAI Companies or the Heartland Companies, as the
case may be, as part of the CAI Assets or the
Heartland Assets, on or before the True-Up Date, as
the case may be, and for which construction permits
have been granted, shall be less than 16, which
amount shall be computed separately for each of
Heartland and CAI by (1) multiplying (a) the amount
determined by multiplying (i) $60.00, by (ii) the
number of LOS Households in such geographic market
shown for that market under the heading "LOS
Households" in Exhibits 3.1(a) and 3.3(a) with
respect to Heartland and Exhibit 3.2(a) with
respect to CAI, by (b) the fraction, the numerator
of which is 16 minus the number of Channels in such
market actually conveyed to CS and for which
construction permits have been granted, and the
denominator of which is 16, and (2) aggregating the
total of such amounts for each of the Heartland
geographic markets and for each of the CAI
geographic markets, as the case may be; provided,
however, that no such adjustment shall be made
unless the total number of Channels actually
delivered, on or before the True-Up Date, to CS by
CAI or Heartland, as the case may be, in any
geographic market, and for which construction
permits have been granted, shall be less than 16."
(d) The definition of "Heartland Company" is amended and
restated in its entirety as follows:
" "Heartland Company" means any of Heartland or any
Heartland Subsidiary listed on Schedule II hereto."
(e) The definition of "Heartland Nominal Value" is amended
and restated in its entirety as follows:
" "Heartland Nominal Value" means $138,663,000,
adjusted as of the Closing Date as follows: (a)
increased by the amount (if any) by which the Net
Asset Amount for the Heartland Assets is greater
than $138,663,000, (b) reduced by the amount (if
any) by which the Net Asset Amount for the
Heartland Assets is less than $138,663,000, (c)
increased by the product of $1,500 and the amount
(if any) by which the Heartland Subscriber Increase
is greater than the CAI Subscriber Increase and (d)
reduced by the product of $1,500 and the amount (if
any) by which the Heartland Subscriber Decrease is
greater than the CAI Subscriber Decrease."
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(f) The definition of "Net Asset Amount" is amended and
restated in its entirety as follows:
" "Net Asset Amount" means
(i) for CAI, an amount equal to (A)
$102,479,000, plus (if a positive number) or
minus (if a negative number) (B) the CAI Net
Working Capital, plus (C) the original cost of
all equipment included in the CAI Assets at
the Effective Time and relating to any CAI
Operating System that has fewer than 500
Subscribers, minus (D) all Assumed CAI
Liabilities that constitute Funded
Indebtedness at the time of the Closing; and
(ii) for Heartland, an amount equal to (A)
$138,663,000, plus (if a positive number) or
minus (if a negative number) (B) the Heartland
Net Working Capital, plus (C) the original
cost of all equipment included in the
Heartland Assets at the Effective Time and
relating to any Heartland Operating System
that has fewer than 500 Subscribers, minus (D)
all Assumed Heartland Liabilities that
constitute Funded Indebtedness at the time of
the Closing.
(g) The following definitions are added to Article I, to be
placed in their correct alphabetical order:
" "Adjustment Note" means an unsecured promissory
note that evidences a payment obligation under
Sections 9.1, 9.3 or 9.6, payable to the order of
CS, with a maturity date five years following the
True-Up Date, with an interest rate equal to 10%
per annum and with provisions for (a) prepayment,
at the option of the payor, at any time, (b)
mandatory prepayment upon the receipt by the payor
of any proceeds, dividends or distributions
received by the payor in respect of its shares of
CS Common Stock (other than resulting from the
transfer of such shares to an affiliate of the
payor), such prepayment to be in an amount equal to
such proceeds, dividends or distributions, and (c)
all interest thereon to be payable in kind
(interest to accrue and be compounded annually
rather than to be payable currently), with interest
to become payable on the earlier to occur of the
maturity date or prepayment in full of such note.
"BTA Adjustment Date" means, as to either CAI or
Heartland and as to any BTA Market in which rights
to acquire Channels at the conclusion of the BTA
Auction are available, the later to occur of (a)
the Post-Closing Adjustment Date, (b) the date that
is 10 days after CAI or Heartland, as
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the case may be, is given notice that it is not the
successful bidder in the BTA Auction for such BTA
Market and (c) if CAI or Heartland, as the case may
be, is given notice it is the successful bidder in
the BTA Auction for such BTA Market, 10 days after
CAI or Heartland, as the case may be, is granted by
the FCC rights to acquire the Channels related to
such BTA Market.
"CAI Subscriber Decrease" means, as of the
Effective Time, the amount (if any) by which the
aggregate number of Basic Subscribers for the CAI
Operating Systems is less than 35,766.
"Heartland Subscriber Decrease" means, as of the
Effective Time, the amount (if any) by which the
aggregate number of Basic Subscribers for the
Heartland Operating Systems is less than 19,734."
3. Amendment to Section 2.4. Section 2.4 of the Agreement
is amended and restated in its entirety as follows:
"2.4 Expenses. CS shall reimburse CAI and/or
Heartland in full for any payments made by either
of them in engaging in the BTA Auction, including
the expenses of FCC counsel."
4. Amendment to Section 5.1. Section 5.1(f)(ii) of the
Agreement is amended and restated in its entirety as follows:
"(ii) The stations listed in Exhibit 5.1(m) are
entitled to the Protected Service Areas subject to
FCC rules except for those instances where the
protected service areas are subject to contractual
obligations listed in Exhibit 5.1(f)(ii)."
5. Amendment to Section 5.2. Section 5.2(f)(ii) of the
Agreement is amended and restated in its entirety as follows:
"(ii) The stations listed in Exhibit 5.2(m) are
entitled to the Protected Service Areas subject to
FCC rules except for those instances where the
protected service areas are subject to contractual
obligations listed in Exhibit 5.2(c)(ii)."
6. Addition of Section 6.7. The following Section 6.7 shall
be added to the Agreement:
<PAGE>
"6.7. Preservation of Subleasing Entity. Each of
Heartland and CAI agree, with respect to any entity
controlled by Heartland or CAI, which is a lessor
under any Channel Lease relating to a Channel that
is being subleased by such entity to CS after the
Closing Date (each, a "Subleasing Subsidiary"), not
to sell, or permit any Encumbrance (other than as
disclosed on Exhibit 5.1(a) or 5.2(a)) to exist
against, the stock or other ownership interest in
such Subleasing Subsidiary held by CAI or Heartland
from the Closing Date to the earlier of (i) the
True-Up Date or (ii) the date on which the lessor's
rights under such Channel Lease are assigned to
CS."
7. Addition of Section 6.8. The following Section 6.8 shall
be added to the Agreement:
"6.8. CS Initial Public Offering. CS agrees that
so long as any amount remains outstanding under the
Long Note, CS shall not consummate an initial
public offering of CS Common Stock unless the
proceeds of such initial public offering shall be
used to prepay the Long Note to the extent required
pursuant to the terms thereof."
8. Amendment to Sections 9.1 through 9.4 of the Agreement.
Section 9.1 through 9.4 of the Agreement are amended and restated
in their entirety as follows:
"9.1. Indemnities of the Heartland
Companies. Each Heartland Company hereby jointly
and severally agrees to indemnify and hold harmless
each of CS and the CAI Companies and their
respective successors and assigns against and in
respect of any and all claims, demands,
liabilities, obligations, actions, suits,
proceedings, losses, damages, costs, expenses,
assessments, judgments, recoveries and
deficiencies, including interest, penalties and
reasonably attorneys' fees, of every kind and
description, contingent or otherwise, suffered by
CS and the CAI Companies (without duplication) and
occasioned by, arising out of resulting from (a)
any breach by any Heartland Company of any material
obligation under this Agreement, (b) any breach by
an Acquired Company of any material obligation
applicable to the Heartland Companies and Heartland
Assets under Sections 6.1, 6.4 and 6.5 (excluding,
however, any such breaches disclosed to CAI in the
Officers' Certificate delivered by Heartland
pursuant to Section 6.1(h)), (c) any representation
or warranty of any Heartland Company being false or
misleading in any material respect or (d) any and
all litigation on Schedule 5.1(w) (the foregoing
hereinafter collectively referred to as "Heartland
Damages"); provided however, that (i) Heartland
Damages
<PAGE>
shall not include any amounts that would be
included in the calculation of the True-Up
Adjustment pursuant to Section 9.6 hereto, (ii)
Heartland shall not be required to make any
indemnification payment under this Section 9.1 for
any portion of the initial $500,000 of all
Heartland Damages; and (iii) in no event shall the
aggregate Heartland Damages exceed 50% of the
aggregate of the Heartland Share Consideration
(valued for this purpose as provided below) and the
Purchase Consideration. Subject to the foregoing
limitations, Heartland may, at its option, pay all
Heartland Damages payable to CS through either (I)
a combination of (A) the assignment to CS of that
number of shares of CS Common Stock whose value is
equal to 50% of the amount of the Heartland Damages
and (B) through the payment in cash (or by reducing
the principal amount of the Long Note and
thereafter, to the extent necessary, the Short
Note) or delivery of an Adjustment Note in an
amount which aggregates 50% of the amount of the
Heartland Damages; or (II) entirely as provided in
clause (B) above. Subject to the foregoing
limitations, Heartland may, at its option, pay all
Heartland Damages payable to CAI through either (I)
a combination of (A) the assignment to CAI of that
number of shares of CS Common Stock whose value is
equal to 50% of the amount of the Heartland Damages
and (B) through the payment in cash or delivery of
an Adjustment Note in an amount which aggregates
50% of the amount of the Heartland Damages; or (II)
entirely as provided in clause (B) above. For
purposes of clause (A) of each of the immediately
preceding two sentences and clause (iii) of the
next preceding sentence, the per share value of CS
Common Stock shall be determined by dividing (i)
the total number of shares of CS Common held by CAI
and Heartland immediately after the Closing into
(ii) the sum of (A) the CAI Estimated Value and (B)
the Heartland Estimated Value, less (C) the
Purchase Consideration.
9.2 Delivery of Notice to Heartland. If CS
or any CAI Company is of the opinion that any
Heartland Damages have occurred or will or may
occur, it shall deliver a notice to Heartland, and
each such notice shall specify the amount and the
circumstances of such asserted Heartland Damages.
If a claim is made against a party to be
indemnified by the Heartland Companies under
Section 9.1 above, or in the event Heartland
Damages otherwise occur, the indemnitee shall
promptly (and in any event within 30 days) after
the assertion of a claim or the discovery of any
fact upon which such indemnitee intends to base a
claim for indemnification under Section 9.1 of this
Agreement (the "Claim") notify the Heartland
Companies from whom indemnification is sought (the
"Indemnitor") of such Claim. In the event of any
Claim from a third party, the Indemnitor, at its
option, may assume (with legal counsel
<PAGE>
reasonably acceptable to the indemnitee) the
defense of any claim, demand, lawsuit or other
proceeding in connection with the indemnitee's
Claim, and may assert any defense of the indemnitee
or the Indemnitor; provided that the indemnitee
shall have the right at its own expense to
participate jointly with the Indemnitor in the
defense of any claim, demand, lawsuit or other
proceeding in connection with the indemnitee's
Claim. In the event that the Indemnitor elects to
undertake the defense of a Claim hereunder, the
indemnitee will cooperate with the Indemnitor to
the fullest extent reasonably possible with regard
to all matters relating to the Claim (including,
without limitation, corrective actions required by
applicable law, assertion of defenses and the
determination, mitigation, negotiation and
settlement of all amounts, costs, actions,
penalties, damages and the like related thereto) so
as to make the Indemnitor's management of the same
with regard to the amount of damages payable by the
Indemnitor hereunder. The Indemnitor shall have
the right to settle any Claim, and the indemnitee
shall reasonably cooperate in furtherance of such
determination by the Indemnitor; provided that the
Indemnitor shall not, without the prior written
consent of the indemnitee, settle any Claim which
does not contain a complete release of the
indemnitee from the Claim in question or which does
not involve solely the payment of money for which
the indemnitee is actually indemnified.
9.3 Indemnities of the CAI Companies. Each
CAI Company hereby jointly and severally agrees to
indemnify and hold harmless CS and the Heartland
Companies and their respective successors and
assign against and in respect of any and all
claims, demands, liabilities, obligations, actions,
suit, proceedings, losses, damages, costs,
expenses, assessments, judgments, recoveries and
deficiencies, including interest, penalties and
reasonable attorneys' fees, of every kind and
description, contingent or otherwise, suffered by
CS and the Heartland Companies (without
duplication) and occasioned by, arising out of or
resulting from (a) any breach by any CAI Company of
any material obligation under this Agreement, (b)
any representation or warranty of any CAI Company
being false or misleading in any material respect
or (c) any and all litigation listed on Schedule
5.2(w) (the foregoing hereinafter collectively
referred to as "CAI Damages"); provided, however,
that CAI Damages (i) shall not include any amounts
that would be included in the calculation of the
True-Up adjustment pursuant to Section 9.6 hereto,
(ii) CAI shall not be required to make any
indemnification payment under this Section 9.3 for
any portion of the initial $500,000 of all CAI
Damages; and (iii) in no event shall the aggregate
CAI Damages exceed 50% of the CAI Share
Consideration (valued for this purpose as provided
below). Subject
<PAGE>
to the foregoing limitations, CAI may, at its
election, pay all CAI Damages either (I) in cash or
by delivering to Heartland or CS, as the case may
be, an Adjustment Note; or (II) through a
combination of (A) the payment in cash or an
Adjustment Note and (B) the assignment to Heartland
or CS, as the case may be, of that number of shares
of CS Common Stock whose value is equal to 50% of
the amount of the CAI Damages. For purposes of the
two immediately preceding sentences, the per share
value of CS Common Stock shall be determined by
dividing (i) the total number of shares of CS
Common Stock held by CAI and Heartland immediately
after the Closing into (ii) the sum of (A) the CAI
Estimated Value and (B) the Heartland Estimated
Value, less (C) the Purchase Consideration.
9.4 Delivery of Notice to CAI. If CS or any
Heartland Company is of the opinion that any CAI
Damages have occurred or will or may occur, it
shall deliver a notice to CAI, and each such notice
shall specify the amount and the circumstances of
such asserted CAI Damages. If a claim is made
against a party to be indemnified by the CAI
Companies under Section 9.3 above, or in the event
CAI Damages otherwise occur, the indemnitee shall
promptly (and in any event within 30 days) after
the assertion of a claim or the discovery of any
fact upon which such indemnitee intends to base a
claim for indemnification under Section 9.3 of this
Agreement (the "Claim") notify the CAI Companies
form whom indemnification is sought (the
"Indemnitor") of such Claim. In the event of any
Claim from a third party, the Indemnitor, at its
option, may assume (with legal counsel reasonably
acceptable to the indemnitee) the defense of any
claim, demand, lawsuit or other proceeding in
connection with the indemnitee's Claim, and may
assert any defense of the indemnitee or the
Indemnitor; provided that the indemnitee shall have
the right at its own expense to participate jointly
with the Indemnitor in the defense of any claim,
demand, lawsuit or other proceeding in connection
with the indemnitee's Claim. In the event that the
Indemnitor elects to undertake the defense of a
Claim hereunder, the indemnitee will cooperate with
the Indemnitor to the fullest extent reasonably
possible with regard to all matters relating to the
Claim (including, without limitation, corrective
actions required by applicable law, assertion of
defenses and the determination, mitigation,
negotiation and settlement of all amounts, costs,
actions, penalties, damages and the like related
thereto) so as to make the Indemnitor's management
of the same with regard to the amount of damages
payable by the Indemnitor hereunder. The
Indemnitor shall have the right to settle any
Claim, and the indemnitee shall reasonably
cooperate in furtherance of such determination by
the Indemnitor;
<PAGE>
provided that the Indemnitor shall not, without the
prior written consent of the indemnitee, settle any
Claim which does not contain a complete release of
the indemnitee from the Claim in question or which
does not involve solely the payment of money for
which the indemnitee is actually indemnified."
9. Amendment of Section 9.5 of the Agreement. Section 9.5
of the Agreement is amended and restated in its entirety as
follows:
"9.5 Termination of Indemnification Claims.
The obligations of the Heartland Companies under
Section 9.1 relating to clause (d) thereof and the
obligations of the CAI Companies under Section 9.3
relating to clause (d) thereof shall terminate on
the second anniversary of the Closing Date. No
other obligations under Sections 9.1 and 9.3 hereof
shall apply to any matters occurring subsequent to
the Post-Closing Adjustment Date, except to the
extent that the Indemnitor has acted in bad faith
to prevent the indemnitee from becoming aware of a
fact in existence on the Post-Closing Adjustment
Date which would give rise to Heartland Damages or
CAI Damages, as the case may be."
10. Amendment of Section 9.6 of the Agreement. Section 9.6
of the Agreement is amended and restated in its entirety as
follows:
"9.6 True-Up Adjustments.
(a) On the date that is 60 days after the Closing
Date (the "First True-Up Date"), (i) CS shall pay
to CAI the amount of (a) the CAI Adjustment
Increase, if any, plus (b) the amount of the
Heartland Adjustment Decrease, if any, and (ii) CS
shall pay to Heartland the amount of (a) the
Heartland Adjustment Increase, if any, plus (b) the
amount of the CAI Adjustment Decrease, if any. The
amount payable pursuant to this Section 9.6(a)
shall be paid in cash.
(b) On the True-Up Date, each of CAI and Heartland
shall pay to CS the amount of their respective
Channel Deficiency Adjustments, if any. Such
payment shall be made, at the option of the paying
party, either (i) in a cash payment (or, in the
case of Heartland, by reducing the principal amount
of the Long Note and thereafter, to the extent
necessary, the Short Note), (ii) an Adjustment
Note, (iii) the assignment to CS of shares of CS
Common Stock owned by the paying party, valued as
set forth in the final sentences of Sections 9.1
and 9.3 or (iv) any combination of such manners of
payment; provided, however, that CAI may assign no
more
<PAGE>
shares of CS Common Stock pursuant to clause (iii)
than would result in CAI owning, after giving
effect to such assignment, at least ten percent
more of the outstanding shares of CS Common Stock
than is then owned by the next largest holder of
shares of CS Common Stock.
(c) All payments made pursuant to this Section 9.6
shall bear interest at the annual rate of 10% from
the Closing Date to, in the case of the payment due
under Section 9.6(a), the First True-Up Date, or
to, in the case of the payments or payments due
under Section 9.6(b), the True-Up Date. Except as
otherwise provided in Sections 9.1 and 9.3 hereof,
after the Closing Date there shall be no other
adjustments or indemnifications with respect to any
aspect of the transactions contemplated by the
Agreement."
11. Addition of Section 9.7. The following Section 9.7 shall
be added to the Agreement:
"9.7 BTA Market Adjustment. As to each BTA Market
in which rights to acquire Channels at the
conclusion of the BTA Auction are available, on the
later to occur of the BTA Adjustment Date or the
True-Up Date, if the number of Channels (the "BTA
Channel Number") equal to (a) the number of
Channels, relating to such BTA Market, actually
conveyed to CS by the CAI Companies or the
Heartland Companies, as the case may be, as part of
the CAI Assets or the Heartland Assets, on or
before the BTA Adjustment Date, and for which
construction permits have been granted, plus (b)
the number of Channels, relating to such BTA
Market, as to which any of the CAI Companies or any
of the Heartland Companies, as the case may be,
shall have been awarded rights to acquire such
Channels in the BTA Auction and documents
transferring such rights shall have been filed with
the FCC on or prior to the BTA Adjustment Date,
shall be less than 16, CAI or Heartland, as the
case may be, shall pay to CS an amount equal to (a)
the product of (i) the amount determined by
multiplying (x) $60.00, by (y) the number of LOS
Households in such BTA Market shown for such
market under the heading "LOS Households" in
Exhibits 3.1(a) and 3.3(a) with respect to
Heartland and Exhibit 3.2(a) with respect to CAI,
and (ii) the fraction, the numerator of which is 16
minus the BTA Channel Number, and the denominator
of which is 16. Such amount shall be paid as set
forth in the second sentence of Section 9.6(b)."
<PAGE>
12. Amendment of Exhibit 2.8, Form of Stockholders'
Agreement. Exhibit 2.8 to the Agreement is amended by substituting
therefor the Form of Stockholders' Agreement that is appended to
this Amendment as Exhibit 2.8.
13. Technical Amendments. CS, CAI and Heartland agree to
substitute pages to the Agreement correcting certain technical
errors, as indicated on the marked pages attached hereto as Exhibit
A.
14. Effective Date. This Amendment shall become effective as
of the date hereof.
15. No Other Amendments. Except as expressly provided in
this Amendment and in the other instruments and agreements being
executed and delivered in connection herewith, all of the terms and
conditions of the Agreement shall remain unchanged and in full
force and effect. In the case of any inconsistency between this
Amendment and any prior version of the Agreement, the terms of this
Amendment shall govern.
16. Miscellaneous.
(a) This Amendment shall be deemed to be a contract
under the laws of the State of Delaware and for all purposes
shall be construed in accordance with and governed by the laws
of said State.
(b) This Amendment may be executed in any number of
counterparts and by each party on separate counterparts, each
of which shall be an original but all of which shall
constitute one instrument. In making proof of this Amendment,
it shall not be necessary to produce or account for more than
one counterpart signed by each of the parties hereto.
(c) This Amendment is intended to take effect as a
sealed instrument.
IN WITNESS WHEREOF, each of the parties has caused this
Amendment to be executed and delivered by its duly authorized
officer as of the date first written above.
CS WIRELESS SYSTEMS, INC.
By: /s/ Alan Sonnenberg
Name:
Title:
<PAGE>
HEARTLAND WIRELESS COMMUNICATIONS, INC.
By: /s/ John R. Bailey
Name:
Title:
CAI WIRELESS SYSTEMS, INC.
By: /s/ James P. Ashman
Name:
Title:
<PAGE>
Exhibit 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE - Dallas - Heartland Wireless
Communications, Inc. (Nasdaq NMS: HART) today announced that it has
closed five transactions pursuant to which Heartland has acquired
American Wireless Systems, Inc. (OTC Bulletin Board: AWSY) and
CableMaxx, Inc. (Nasdaq NMS: CMAX) together with substantially all
of the assets of Fort Worth Wireless Cable T.V. Associates,
Wireless Cable TV Associates #38 and certain of the wireless cable
television assets of Three Sixty Corp. American Wireless Systems
owns wireless cable channel rights in Dallas and Los Angeles and
operates, through joint ventures, wireless cable television systems
in Fort Worth, Texas and Minneapolis, Minnesota. Fort Worth
Wireless Cable T.V. Associates is a partnership owning a joint
venture interest in American Wireless Systems' Fort Worth, Texas
wireless cable television system. Wireless Cable TV Associates #38
is a partnership owning a limited liability company interest in
American Wireless System of Minneapolis, LLC, the Minneapolis
wireless cable television system. CableMaxx owns, develops and
operates wireless cable television systems in San Antonio, Austin,
Temple/Killeen and Waco, Texas and holds wireless cable channel
rights in various other cities, including Salt Lake City, Utah,
Sherman/Denison, Lubbock, Athens and Amarillo, Texas. Three Sixty
Corp. owns and operates wireless cable television systems in Corpus
Christi, Texas and Dayton, Ohio and owns wireless cable television
channel rights in El Paso, Texas.
As a result of the transactions, each issued and outstanding
share of the Common Stock of American Wireless Systems will be
converted into .22905 (.02189 shares of which will be held in
escrow for one year subject to certain indemnification obligations)
shares of the Common Stock of Heartland and each issued and
outstanding share of CableMaxx will be converted into .3033 shares
of the Common Stock of Heartland, in each case, as a result of a
merger of a wholly owned subsidiary of Heartland with and into
American Wireless Systems or CableMaxx, respectively. Heartland
expects that trading in the Common Stock of American Wireless
Systems and in the Common Stock of CableMaxx will cease as of the
close of business on Friday, February 23, 1996.
Additional information regarding these transactions is
expected to be released by Heartland in the near future.
<PAGE>
Exhibit 99.2
FOR IMMEDIATE RELEASE
Investor Relations Contact: Company Contacts:
Jason Thompson Jared Abbruzzese John R. Bailey
Lippert/Heilshorn & Associates CEO, CAI CFO, Heartland
212/838-3777 518/462-2632 214/479-9244
CAI AND HEARTLAND CLOSE CS WIRELESS TRANSACTIONS
-$230 MILLION OF UNITS PLACED-
Albany, NY and Richardson, TX, February 23, 1996 - CAI
Wireless Systems, Inc. ("CAI") (NASDAQ NM: CAWS) and Heartland
Wireless Communications, Inc. ("Heartland") (NASDAQ NM: HART) today
jointly announced the closing of the transactions which establish
CS Wireless Systems, Inc. ("CS Wireless"). CAI and Heartland
contributed certain wireless cable assets into CS Wireless which,
as a result of such transactions, has approximately 5.7 million
line-of-sight ("LOS") households and 55,800 subscribers.
Under the terms of a participation agreement between CAI and
Heartland dated December 12, 1995, CS Wireless acquired operating
wireless cable systems or wireless channel rights held by CAI in
Bakersfield, CA, Charlotte, NC, Cleveland, OH and Stockton/Modesto,
CA and held by Heartland in Dallas, Fort Worth, and San Antonio,
TX, Dayton, OH, Maysville and Sweet Springs, MO, Minneapolis, MN,
Grand Rapids, MI and Salt Lake City, UT. CAI owns approximately
54% of CS Wireless, Heartland approximately 35%, the BANX
Partnership approximately 10% and bond holders approximately 1%.
Heartland also received approximately $28.3 million of cash and
$40.0 million of notes from CS Wireless.
The CAI assets included in the transactions consist of four of
its properties located outside the operating territories of Bell
Atlantic and NYNEX, with which CAI has agreements to provide
wireless transport service. The majority of the Heartland
contributed assets were acquired in certain acquisitions previously
announced, and which closed immediately preceding the closing of
the CS Wireless transaction, and are consistent with Heartland's
announced divestiture plans associated with these major market
acquisitions.
-more-
<PAGE>
CS Wireless also closed an offering of $400.0 million face
amount of units. The gross proceeds to CS Wireless were
approximately $230.0 million, which represents an increase from the
$150.0 million as initially set forth in the offering memorandum.
The 100,000 CS Wireless units were placed through a Rule 144A
offering led by Smith Barney Inc. Each unit consisted of four
$1,000 face amount 11.375% senior discount notes, due March 1, 2006
and 1.1 common shares of CS Wireless stock. The notes will accrete
in value for five years, and cash interest will begin in 2001.
CS Wireless will use the proceeds of the offering for capital
expenditures to build-out its systems and to add subscribers, for
certain formation costs including the cash payment for Heartland,
working capital, and general corporate purposes.
CAI currently operates six wireless cable systems in New York
City, Rochester and Albany, NY, Philadelphia, PA, Washington, D.C.,
and Norfolk/Virginia Beach, VA. In addition, CAI has a portfolio
of wireless cable channel rights in eight additional markets,
including Long Island, Buffalo and Syracuse, NY, Boston, MA,
Providence, RI, Hartford, CT, Baltimore, MD, and Pittsburgh, PA.
Heartland currently operates in excess of 30 systems and has
a portfolio of wireless cable channel rights in an additional 48
markets, principally located in the Central and Southwestern
regions of the U.S.
###
<PAGE>
Exhibit 99.3
FOR IMMEDIATE RELEASE
For further information contact:
John R. Bailey
Senior Vice President and Chief Financial Officer
214/449-9244
HEARTLAND CLOSES ANNOUNCED ACQUISITIONS AND DIVESTITURES
Dallas, Texas - February 27, 1996 - Heartland Wireless
Communications, Inc. (Nasdaq NMS -- HART) announced that it has
closed five transactions pursuant to which the Company has acquired
CableMaxx, Inc. (Nasdaq NMS -- CMAX) and American Wireless Cable
Systems, Inc. (Nasdaq Bulletin Board -- ASWY) together with
substantially all of the assets of Fort Worth Wireless Cable T.V.
Associates, Wireless Cable TV Associates #38 and certain of the
wireless cable television assets of Three Sixty Corp., formerly
TechniVision, Inc. The closing of these transactions enhances
Heartland's strategic operating plan and further enables Heartland
to benefit from economies of scale.
In connection with the five acquisitions, the Company issued
an aggregate of approximately 6.8 million shares of Heartland
Common Stock valued at approximately $180 million and assumed
approximately $20 million of obligations. Through these
acquisitions, the Company acquired operating wireless cable systems
in Austin, Corpus Christi, Fort Worth, San Antonio, Temple/Killeen
and Waco, Texas, Dayton, Ohio and Minneapolis, Minnesota; the
wireless cable markets of Dallas, El Paso and Sherman/Denison,
Texas, Salt Lake City, Utah and Memphis, Tennessee; and wireless
cable channel rights in Amarillo, Athens and Lubbock, Texas and Los
Angeles, California. These wireless cable markets combined
represent approximately 7.6 million line-of-sight households and
59,500 subscribers.
In addition to the five acquisitions, the Company and CAI
Wireless Systems, Inc. ("CAI") (Nasdaq NMS -- CAWS) announced the
completion of the contribution of certain wireless cable assets and
related liabilities to CS Wireless Systems, Inc. ("CS Wireless").
The Company contributed to CS Wireless the wireless cable markets
of Dallas, Fort Worth and San Antonio, Texas; Salt Lake City, Utah;
Minneapolis, Minnesota; Dayton, Ohio; Grand Rapids, Michigan;
Maysville and Sweet Springs, Missouri; and Napolean, Indiana. CAI
contributed to CS Wireless the wireless cable markets of
Stockton/Modesto and Bakersfield, California; Cleveland, Ohio; and
Charlotte, North Carolina. In return, the Company received from CS
Wireless approximately $28.3 million in cash, $40 million in notes,
and approximately 35% of the outstanding common stock of CS
Wireless. CAI received approximately 55% of the outstanding common
stock of CS Wireless. Bell Atlantic Corporation (NYSE -- BEL) and
NYNEX Corporation (NYSE -- NYN), through the BANX partnership,
received approximately 10% of the outstanding common stock of CS
Wireless.
<PAGE>
The formation of CS Wireless, created a company with
approximately 5.7 million line-of-sight households and 55,000
subscribers. CS Wireless has assembled an experienced management
team comprised of former CAI and Heartland executives with
significant experience in the wireless cable television industry.
The Company believes that its equity interest in CS Wireless will
provide the Company greater purchasing power and improved access to
new MMDS technology and relationships.
The net result of closing the five transactions, the
contribution of certain wireless cable markets and related
liabilities to CS Wireless and other planned dispositions, is that
Heartland acquired four operating wireless cable systems, two
wireless cable markets and wireless cable channel rights in three
markets for total net consideration of approximately $58 million.
The acquired markets represent approximately 1,000,000 line-of-
sight households and 38,900 subscribers.
Heartland Wireless Communications, Inc. develops, owns and
operates wireless cable television systems, primarily in small to
mid-size markets in the central United States. The Company has
wireless cable rights in 79 markets, representing approximately 6.8
million line-of-sight households. The Company's 79 markets include
35 markets with systems in operation, providing wireless cable
service to an aggregate of approximately 124,000 subscribers. In
addition, the Company is the largest shareholder in Wireless One,
Inc. (Nasdaq NMS -- WIRL), the largest rural wireless cable
television operator in the southeastern United States, and holds a
35% equity interest in CS Wireless Systems, Inc., one of the
largest wireless cable television companies in the United States in
terms of subscribers and line-of-sight households.
