-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R2AHbYBDIT/mXnfOuB/a9otuhZvoGhYOCcHMaJFW3QcJxe1jZ6iNtpGL/VhbNJgP 4SXPIsXId89yX3a/hNdIxA== 0000938492-98-000023.txt : 19980202 0000938492-98-000023.hdr.sgml : 19980202 ACCESSION NUMBER: 0000938492-98-000023 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980112 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980130 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WINSTAR COMMUNICATIONS INC CENTRAL INDEX KEY: 0000868797 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 133585278 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-10726 FILM NUMBER: 98517990 BUSINESS ADDRESS: STREET 1: 230 PARK AVE STE 2700 CITY: NEW YORK STATE: NY ZIP: 10169 BUSINESS PHONE: 2125844000 FORMER COMPANY: FORMER CONFORMED NAME: ROBERN INDUSTRIES INC DATE OF NAME CHANGE: 19930328 FORMER COMPANY: FORMER CONFORMED NAME: ROBERN APPAREL INC DATE OF NAME CHANGE: 19600201 8-K/A 1 CURRENT REPORT ON FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- AMENDMENT NO. 1 TO FORM 8-K ON FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) January 12, 1998 WINSTAR COMMUNICATIONS, INC. (Exact Name of Registrant as Specified in Charter) Delaware 1-10726 13-3585278 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 230 Park Avenue, New York, New York 10169 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (212) 584-4000 Not Applicable (Former Name or Former Address, if Changed Since Last Report) Exhibit Index -- Page 5 Page 1 of 11 Pages Item 2. Acquisition or Disposition of Assets On January 21, 1998 ("Closing Date"), WinStar Midcom Acquisition Corp. ("WMAC"), a wholly-owned subsidiary of WinStar Communications, Inc. ("Company"), consummated the acquisition (the "Midcom Acquisition") of substantially all of the assets and business ("Midcom Business") of MIDCOM Communications Inc. and certain of its subsidiaries (collectively, "Midcom") for a purchase price of $92.0 million in cash ("Purchase Price") pursuant to the Amended and Restated Asset Purchase Agreement dated as of December 17, 1997, as amended by agreement dated December 23, 1997 ("Purchase Agreement"), among the Company, WMAC and Midcom. On December 23, 1997, $9.2 million of the Purchase Price ("Initial Deposit") was placed in escrow. On the Closing Date, $48.5 million of the Purchase Price was paid in cash to Midcom and its designees and $10.8 million of the Purchase Price was placed in escrow along with the Initial Deposit to secure Midcom's obligations to indemnify WMAC and the Company in certain circumstances. In addition, $23.5 million of the Purchase Price was placed in escrow on the Closing Date to secure Midcom's obligation to refund a portion of the Purchase Price in the event of a post-closing adjustment of the Purchase Price under the Purchase Agreement. The Purchase Price was paid by the Company using a portion of the $168.3 million of net proceeds it raised in an institutional private placement of the Company's Series C 14 1/4% Senior Cumulative Exchangeable Preferred Stock in December 1997. The Midcom Business provides long distance voice and data telecommunications services primarily to small and medium-sized businesses at approximately 100,000 customer locations, most of which are in major metropolitan areas of California, Florida, Illinois, New York, Ohio and Washington. Midcom's services include basic "1 plus" and "800" long distance, frame relay data transmission and dedicated private line. During the nine months ended September 30, 1997 and 1996, Midcom generated revenues of approximately $74.3 million and $124.6 million, respectively. Midcom filed for relief under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Eastern District of Michigan (the "Bankruptcy Court") in November 1997. Accordingly, consummation of the Midcom Acquisition was subject to the approval of the acquisition by the Bankruptcy Court, which was obtained on January 7, 1998. Item 5. Other Events On January 12, 1998 ("Closing Date"), WG Acquisition Corp.("WGAC"), a wholly-owned subsidiary of the Company, consummated the acquisition of the Internet services subsidiary of Telesoft Corp. ("Telesoft"), commercially known as GoodNet ("GoodNet"), for a purchase price of approximately $22.0 million, consisting of $3.5 million cash and 732,784 shares of common stock of the Company ("Common Stock"), pursuant to a Merger and Reorganization Agreement, dated as of December 10, 1997, among the Company, WGAC, Telesoft, GoodNet and the other stockholders of GoodNet. As of the Closing Date, WGAC changed its name to WinStar GoodNet, Inc. GoodNet is a national provider of Internet services, offering high-capacity data communication services to high-bandwidth users including Internet service providers, universities and colleges, large landlords, RBOCs, cable television operators and value-added resellers, and dial-up Internet access to consumers. GoodNet possesses a national network of multi-protocol asynchronous transfer mode (ATM) switches, with points of presence in 27 cities and more than 130 peering arrangements with other U.S. and foreign Internet service providers. During the nine 2 months ended August 31, 1997 and 1996, GoodNet generated revenues of approximately $4.1 million and $1.3 million, respectively. GoodNet will operate as part of the Company's new division, WinStar Broadband Services ("WBS"), which was formed by the Company in December 1997 to facilitate the Company's expansion into the growing data communications market. WBS will develop the Company's presence in the areas of Internet services and data transport, local area and wide area network professional services and network applications. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statements of Businesses Acquired. (i) With respect to Item 2, above, the Company will file the required financial statements of Midcom within 60 days of the last date on which this Report on Form 8-K was required to be filed. (ii) With respect to Item 5, above, the Company is not required to file any financial statements for GoodNet. (b) Pro Forma Financial Information. (i) With respect to Item 2, above, the Company will file the required pro forma financial statements of Midcom within 60 days of the last date on which this Report on Form 8-K was required to be filed. (ii) With respect to Item 5, above, the Company is not required to file any pro forma financial statements for GoodNet. (c) Exhibits. 10.1 Amended and Restated Asset Purchase Agreement among WinStar Communications, Inc., WinStar Midcom Acquisition Corp. and Midcom Communications Inc., Cel-Tech International Corp. and PacNet Inc., Chapter 11 debtors in possession (previously filed). 10.2 Amendment to Amended and Restated Asset Purchase Agreement, dated December 23, 1997, among WinStar Communications, Inc., WinStar Midcom Acquisition Corp. and Midcom Communications Inc., Cel-Tech International Corp. and PacNet Inc., Chapter 11 debtors in possession (filed herewith). 10.3 Merger and Reorganization Agreement among WinStar Communications, Inc., WG Acquisition Corp., Telesoft Acquisition Corp. II (d/b/a "GoodNet"), Telesoft Corp. and the other stockholders of GoodNet (previously filed). 99.1 Press Release regarding Midcom Acquisition (filed herewith). 99.2 Press Release regarding GoodNet Acquisition (filed herewith). 3 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. Dated: January 29, 1998 WINSTAR COMMUNICATIONS, INC. ---------------------------- (Registrant) /s/ Frederic E. Rubin ----------------------------- Frederic E. Rubin Vice President and Treasurer 4 EXHIBIT INDEX Exhibit Number Description 10.2 Amendment to Amended and Restated Asset Purchase Agreement, dated December 23, 1997, among WinStar Communications, Inc., WinStar Midcom Acquisition Corp. and Midcom Communications Inc., Cel-Tech International Corp. and PacNet Inc., Chapter 11 debtors in possession. 99.1 Press Release regarding Midcom Acquisition. 99.2 Press Release regarding GoodNet Acquisition. 5 EX-10.2 2 AMENDMENT TO ASSET PURCHASE AGREEMENT EXHIBIT 10.2 December 23, 1997 Midcom Communications Inc. Cel-Tech International Corp. PacNet Inc. 26899 Northwestern Highway, Suite 120 Southfield, Michigan 48034 Re: Amended and Restated Asset Purchase Agreement -- Amendments Made December 19, 1997 in Open Court Gentlemen: This letter will confirm our agreement that in Bankruptcy Court on December 19, 1997, the following sections of the Amended and Restated Asset Purchase Agreement, dated as of December 17, 1997, were amended to read as follows: Section 1.2: (m) The stock of Ad Val, Inc. and its wholly-owned subsidiary, Ad Val Data, Inc., and all assets owned by, used in or relating to the business of these two companies. Section 7.2 Assumption of Contracts. No later than two (2) Business Days prior to the Closing, the Purchaser shall notify the Sellers in writing as to any Assumed Contracts that were listed in Section 1.1(l) of the Company Disclosure Letter as of the date hereof that the Purchaser does not desire to assume at Closing, which Contracts shall be deleted from Section 1.1(l) of the Company Disclosure Letter. At Closing, the Sellers shall deliver an updated Company Disclosure Letter pursuant to Section 2.2 hereof that shall reflect such changes to the Assumed Contracts to be assumed by the Purchaser hereunder at Closing and add such excluded Contracts to Section 1.2(c) of the Company Disclosure Letter. Section 9.4 Termination by WinStar. This Agreement may be terminated at any time on or prior to the Closing Date by action of the Board of Directors of WinStar if (a) a condition precedent to the obligations of the Purchaser and WinStar hereunder to be fulfilled by the Sellers has not been fulfilled by the time stated herein for such condition to be fulfilled or, if no such time is stated, by January 31, 1998; (b) there has been a material breach of any of the representations, warranties, covenants or agreements set forth in this Agreement on the part of the Sellers, which breach is not curable or, if curable, is not cured within ten (10) days after written notice of such breach is given by the Purchaser to the Sellers; (c) the Board of Directors of the Company has withdrawn, modified, or changed in a manner adverse to the Purchaser its approval or rec ommendation of this Agreement in order, or the Sellers otherwise determine, to approve and permit the Company to execute a definitive agreement relating to an Overbid; (d) since the date hereof, there have been one or more events causing a Company Material Adverse Effect; (e) the Closing Midcom Communications, Inc. Cel-Tech International Corp. PacNet Inc. December 23, 1997 Page 2 does not occur by January 31, 1998, except if such failure is caused by Purchaser's actions or inactions in breach of its obligations under this Agreement; or (f) the 363 Order and the 365 Order have not been entered by the Bankruptcy Court by January 31, 1998. Section 9.7(b)(ii) (A) The termination of this Agreement pursuant to Section 9.3(c) or (d) or Section 9.4 (except for Section 9.4(d) or (e) or solely because of the non-fulfillment of any of the conditions specified in Section 8.3(c), (e), (g), (i), (j), (k) or (l) which non-fulfillment is not caused by any act or omission of Sellers); or Section 10.2 Notices. All notices, claims, demands, and other communications hereunder shall be in writing and shall be deemed given upon (a) facsimile transmission, (b) confirmed delivery by a standard overnight carrier or when delivered by hand, or (c) the expiration of five (5) Business Days after the day when mailed by registered or certified mail (postage prepaid, return receipt requested), addressed to the respective parties at the following addresses (or such other address for a party as shall be specified by like notice): (a) If to the Purchaser or WinStar, to WinStar Communications, Inc. 230 Park Avenue -- Suite 2700 New York, New York 10169 Attention: Timothy R. Graham Telecopier: 212-922-1637 with copies to Graubard Mollen & Miller 600 Third Avenue New York, New York 10016-2097 Attention: David Alan Miller, Esq. Telecopier: 212-818-8881 (b) If to the Sellers, to Midcom Communications Inc. 26899 Northwestern Highway, Suite 120 Southfield, Michigan 48034 Attention: Mr. William H. Oberlin Telecopier: (248) 208-9225 Midcom Communications Inc. Cel-Tech International Corp. PacNet Inc. December 23, 1997 Page 2-A with copies to Midcom Communications Inc. 26913 Northwestern Highway, Suite 165 Southfield, Michigan 48034 Attention: Steven Goldman, Esq. Telecopier: (248) 945-1904 and Pepper Hamilton & Scheetz LLP 100 Renaissance Center, Suite 3600 Detroit, Michigan 48243 Attention: Dennis S. Kayes, Esq. Telecopier: (313) 259-7926 and Mayer, Brown & Platt 190 South LaSalle Street Chicago, Illinois 60603-3441 Attention: Lawrence K. Snider, Esq. Telecopier: (312) 701-7711 THE NEXT PAGE IS PAGE 3 Midcom Communications Inc. Cel-Tech International Corp. PacNet Inc. December 23, 1997 Page 3 Please countersign a copy of this letter to confirm your agreement to the foregoing and return it to the undersigned. Very truly yours, WINSTAR MIDCOM ACQUISITION CORP. By: /s/ Timothy R. Graham ------------------------------ Name: Timothy R. Graham Title: President WINSTAR COMMUNICATIONS, INC. By: /s/ Timothy R. Graham ------------------------------ Name: Timothy R. Graham Title: Executive Vice President AGREED: MIDCOM COMMUNICATIONS INC. By: /s/ Steven Goldman ----------------------------------------- Name: Steven Goldman Title: Vice President & General Counsel CEL-TECH INTERNATIONAL CORP. By: /s/ Steven Goldman ----------------------------------------- Name: Steven Goldman Title: Vice President & General Counsel PACNET INC. By: /s/ Steven Goldman ----------------------------------------- Name: Steven Goldman Title: Vice President & General Counsel EX-99.1 3 PRESS RELEASE EXHIBIT 99.1 WINSTAR COMPLETES ACQUISITION OF MIDCOM COMMUNICATIONS INC. NEW YORK -- JANUARY 22, 1998, WINSTAR COMMUNICATIONS, INC. (NASDAQ-WCII) said today it has completed its acquisition of the assets of Southfield, Mich.-based MIDCOM Communications Inc., a national long distance and frame relay provider that is in bankruptcy proceedings, for $92 million, as detailed in WinStar's December 17, 1997 announcement. WinStar Communications, Inc. is a national local communications company, serving business customers, long distance carriers, fiber-based competitive access providers, mobile communications companies, local telephone companies, and other customers with broadband local communications needs. The company provides its Wireless Fiber(SM) services using its licenses in the 38 GHz spectrum. The company also provides long distance, Internet and information services. Except for any historical information contained herein, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties which are described in the company's SEC reports, including the 10-K for the period ended December 31, 1996, and the 10-Q for the period ended September 30, 1997. WinStar is a registered trademark, and Wireless Fiber is a service mark of WinStar Communications, Inc. EX-99.2 4 PRESS RELEASE EXHIBIT 99.2 NEW YORK -- JANUARY 12, 1998, WINSTAR COMMUNICATIONS, INC. (NASDAQ-WCII) said today it has completed its previously announced acquisition of GoodNet, a rapidly growing Tier 1 Internet backbone provider based in Phoenix, from Telesoft Corp. (NASDAQ-TSFT) and certain members of GoodNet management. The terms were unchanged. The acquisition, announced December 11, 1997, is part of WinStar's expansion into the burgeoning data communications business, and offers significant synergies expected to result in improved utilization of WinStar's technology, network and sales force with benefits to revenue and EBITDA performance. GoodNet is one of the leading national Internet service companies in the United States, with points of presence in 27 cities. The company recently was cited by WebWeek as having the fourth-highest market share (after MCI/Uunet, Sprint and GTE/BBN) among U.S. backbone providers serving Internet service providers. Through its national network of multiprotocol asynchronous transfer mode (ATM) switches, GoodNet also offers dedicated high-speed Internet access, metropolitan and wide area network data transport services, including virtual private networks, to hundreds of commercial clients. The new WinStar unit will be known as WinStar GoodNet and become part of WinStar Broadband Services, an organization formed recently to meet increasing data communications demands. WinStar paid $3.5 million in cash and $18.5 million in WinStar common stock in consideration for the acquisition, in addition to assuming approximately $500,000 in liabilities. WinStar Communications, Inc. is a national local communications company, serving business customers, long distance carriers, fiber-based competitive access providers, mobile communications companies, local telephone companies, and other customers with broadband local communications needs. The company provides its Wireless Fiber(SM) services using its licenses in the 38 GHz spectrum. The company also provides long distance, Internet and information services. Except for any historical information contained herein, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties which are described in the company's SEC reports, including the 10-K for the period ended December 31, 1996, and the 10-Q for the period ended September 30, 1997. WinStar is a registered trademark and Wireless Fiber is a service mark of WinStar Communications, Inc. -----END PRIVACY-ENHANCED MESSAGE-----