SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report(Date of earliest event reported): October 31, 1997
KVH Industries, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 05-0420589
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 Enterprise Center, Middletown, Rhode Island 02842
(Address of principal executive offices) (Zip code)
(401) - 847 - 3327
(Registrant's telephone number including area code)
Not applicable
(Former name and former address, if changed since last report)
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tem 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 3, 1997, the Company entered into an agreement acquiring the
tangible and intangible assets of Andrew Corporation's Sensor Products product
line. The consideration the Company paid to acquire the sensor products assets
was approximately $1.8 million in cash and warrants to purchase 50,000 shares of
the Company's common stock at a price of $8.00 per share. The assets purchased
include physical inventories, fixed assets utilized in the manufacture of both
raw fiber and sensor components and ninety patents, made up of sixty-four issued
patents and twenty-six pending patents. The consideration paid for the
acquisition of the sensor products assets was arrived at based upon the book
value of the assets acquired, as recorded by Andrew Corporation. The source of
the funds to purchase the sensor products assets was the Company's internal cash
balances. The Company intends to utilize the assets acquired to continue to
manufacture fiber optic gyroscope ("FOG") based sensor systems and components.
The acquisition of FOG technology allows the Company's to enhance current
product offerings providing improved antenna tracking and enhanced navigational
accuracy.
A copy of the purchase agreement and common stock purchase warrant are
attached hereto as Exhibit 2 and Exhibit 99 incorporated herein by reference.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The Company will provide the financial statements by amendment to the
initial filing of the Current Report on Form 8-K within sixty days of the date
of this report if it is determined that the asset acquisition meets the
"significance" test.
(C) Exhibits
Exhibit Number Exhibit
EX-2 Asset Purchase Agreement between KVH Industries,
Inc. and Andrew Corporation Dated as of
October 30, 1997
EX-99 Common Stock Purchase Warrant
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, thereunto duly authorized.
KVH Industries, Inc.
November 14, 1997 By: /S/Richard C. Forsyth
Date Richard C. Forsyth
Chief Financial and Accounting Officer
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit
EX-2 Asset Purchase Agreement between KVH Industries, Inc. and
Andrew Corporation Dated as of October 30, 1997
EX-99 Common Stock Purchase Warrant
Exhibit 2 - ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is entered into as of October 30, 1997 (the
"Agreement") between KVH Industries, Inc., a Delaware corporation ("Buyer"), and
Andrew Corporation, a Delaware corporation ("Seller").
RECITALS:
A. Seller is engaged in, among other things, the design, manufacture and
sale of optical fiber, fiber optic gyroscopes and other fiber optic products and
services using proprietary designs and equipment and proprietary optical fiber
(the "Sensor Products Business").
B. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, certain of the assets and properties of the Sensor Products Business on
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, Buyer and Seller agree as follows:
I. SALE AND PURCHASE OF SENSOR PRODUCTS BUSINESS.
1. 1. Purchased Assets. On the terms and subject to the conditions of this
Agreement, Seller shall sell to Buyer and Buyer shall purchase from Seller the
following assets and properties owned by Seller and used in connection with the
Sensor Products Business, as such assets and properties exist on the Closing
Date (collectively, the "Purchased Assets"):
(a) Tangible Assets. All machinery, equipment (including spare parts), data
processing hardware, furniture, fixtures, capital expenditures in process,
models, prototypes and similar tangible personal properties used in the conduct
of the Sensor Products Business and located in Seller's Orland Park, Illinois
and St. Petersburg, Florida facilities, including the assets identified on the
attached Schedule II(a) (the "Tangible Assets");
(b) Inventory. All inventories consisting of raw materials, work in
process, finished goods, service parts and supplies owned, produced or otherwise
acquired by Seller that are used or intended to be used in the conduct of the
Sensor Products Business, including the inventory identified on the attached
Schedule 1. 1 (b) (the "Inventory");
(c) Receivables. All trade accounts and notes receivable generated by the
conduct of the Sensor Products Business owed to Seller by third parties (but not
by Affiliates of Seller, as hereinafter defined) including the trade accounts
and notes receivable identified on the attached Schedule 1. I (c) (collectively,
the "Receivables");
(d) Proprietary Rights. The Patents and Relevant Technology described in
the Technology Rights Agreement referred to in Section 2.2(c)(i) and the
trademarks, service marks, logos and trade names listed on the attached Schedule
I. I (d) (collectively, the "Proprietary Rights"), together with all goodwill
associated therewith, and all copyrights, software (and related licenses),
technology, trade secrets, know-how, customer lists, formulas, processes,
designs, developments and confidential Sensor Products Business information,
whether or not patented or patentable, developed, acquired, used or possessed by
or for Seller in connection with the Products Business;
(e) Executoury and Other Agreements. The rights of Seller under the
agreements, contracts, leases, commitments or obligations described in the
attached Schedule 1.1(e) and the rights of Seller pursuant to any license to or
from Seller of any Proprietary Rights and all agreements under which any current
or former employee of the Sensor Products Business or any entity is obligated
not to disclose or use other than for Seller's benefit confidential information
of Seller relating to the Sensor Products Business and to disclose and transfer
to Seller inventions made by such person or entity relating to the Sensor
Products Business; and
(f) Other Assets. All other assets specifically related to the Sensor
Products Business.
1.2. Excluded Assets. Anything in Section 1. I to the contrary
notwithstanding, the Purchased Assets shall not include the following
(collectively, the "Excluded Assets"):
(a) Cash. All cash, cash equivalents, negotiable instruments, bank
accounts, certificates of deposit, investment securities, commercial paper and
any other marketable securities or similar investments of Seller;
(b) Leased Equipment. The vehicles, office equipment and other leased
equipment, the leases of which Buyer has advised Seller in writing that it does
not intend to assume;
(c) Fixtures, etc. Fixtures and general purpose business and office
equipment not specifically related to the Sensor Products Business;
(d) Corporate Records. All corporate minute books, stock transfer books,
corporate seals and other corporate rights and franchises of Seller;
(e) Prepaids. All rights in connection with any deposits and prepaid
expenses made by Seller; and
(f) Insurance Rights. All claims, rights or causes of action whatsoever
under any insurance policies maintained by or for the benefit of Seller or with
respect to the Sensor Products Business.
II. PURCHASE PRICE AND CLOSING.
2.1. Purchase Price. The purchase price ("Purchase Price") of the Purchased
Assets shall consist of:
(a) Cash. An amount in cash equal to $1,850,000, less
(i) the liability for accrued vacation benefits assumed by Buyer pursuant
to Section 3.2(b);
(ii) the amount, if any, by which salable Inventory is less than
$1,220,000;
(iii) the amount, if any, by which Receivables are less than $196,000;
(iv) the amount, if any, by which the net book value of the Tangible Assets
is less than $365,000 (the amount so determined being hereinafter referred to as
the "Cash Purchase Price"); and
(b) Warrant. A warrant in substantially the form of the attached Exhibit A
(the "Warrant") for the purchase of 50,000 shares of Buyer's common stock at an
initial exercise price of $8.00 per share.
2.2. Closing. The consummation of the transactions contemplated herein (the
"Closing") shall take place at 10:00 A.M., local time, on the date of this
Agreement at the offices of Gardner, Carton & Douglas, 321 North Clark Street,
Chicago, Illinois, or at such other time or place as shall be agreed upon by
Buyer and Seller. The time and date on which the Closing is actually held is
referred to herein as the "Closing Date." The Closing shall be effective on and
after the opening of business on the Closing Date and risk of any loss with
respect to the Purchased Assets shall pass to Buyer at such effective time. At
the Closing:
(a) Seller's Deliveries. Seller shall deliver to Buyer:
(i) Such documents as Buyer deems reasonably necessary to effectuate the
transfer of the Proprietary Rights from Seller to Buyer; and
(ii) Such other bills of sale, assignments and other instruments of
transfer or conveyance as may be necessary or as Buyer may reasonably request to
evidence and effect the sale, assignment, transfer, conveyance and delivery of
the Purchased Assets to Buyer.
(b) Buyer's Deliveries. Buyer shall deliver to Seller:
(i) Payment of the Cash Purchase Price by wire transfer of immediately
available funds to a U.S. Bank account designated by Seller;
(ii) The Warrant registered in Seller's name; and
(iii) Such documents and instruments of assumption as may be necessary or
as Seller may reasonably request to evidence and effect Buyer's performance of
its obligations hereunder.
(c) Joint Deliveries. Buyer and Seller shall enter into the following
agreements:
(i) A Technology Transfer Agreement, in substantially the form of the
attached Exhibit B, relating to the use and ownership of any intellectual
property used in the Sensor Products Business;
(ii) An occupancy agreement pursuant to which Buyer may occupy without
charge for not more than three months following the Closing ($1.25 per square
foot per month or portion of a month thereafter) the space (other than the space
described in clause (iii) below) currently occupied by the Sensor Products
Business in Andrew's facility in Orland Park, Illinois;
(iii) An occupancy agreement pursuant to which Buyer may occupy without
charge for not more than six months following the Closing ($1.25 per square foot
per month or portion of a month thereafter) the basement space in Andrew's
Orland Park, Illinois facility that is currently being used for fiber production
and testing;
(iv) An assignment or sublease of the space currently occupied by the
Sensor Products Business in Andrew's leased facility in St. Petersburg, Florida;
and
(v) A registration rights agreement (the "Registration Rights Agreement")
in substantially the form of the attached Exhibit C.
(d) Other. Seller shall receive from each of Sid Bennett and Jeffrey
Brunner a certificate substantially in the form of the attached Exhibit D.
III. ASSUMPTION OF LIABILITIES.
3.1. Excluded Liabilities. Buyer shall not assume or be obligated to pay,
perform or otherwise discharge any liability, obligation or commitment of Seller
(whether direct or indirect, matured or umnatured, known or unknown, absolute,
accrued, contingent or otherwise) not expressly assumed by Buyer pursuant to the
transactions contemplated by this Agreement (all such liabilities, obligations
or commitments not being assumed are collectively referred to herein as the
"Excluded Liabilities") and, notwithstanding anything in Section 3.2 to the
contrary, none of the following shall be "Assumed Liabilities" for purposes of
this Agreement:
(a) Taxes. Liabilities in respect of any Taxes imposed on the Seller for
all periods prior to the Closing Date;
(b) Intercompany Liabilities. Any trade or other accounts payable by Seller
to its Affiliates;
(c) Trade Payables. Any trade accounts payable by Seller to third parties;
and
(d) Personnel Liabilities. Seller's liabilities for (i) severance
compensation to employees who do not become employees of Buyer, (ii) retiree
medical or life insurance benefits, (iii) pension benefits for active or retired
employees of Seller or (iv) any compensation or benefit, other than credit for
accrued vacation, accrued or earned prior to the Closing by any employee of
Seller who becomes an employee of Buyer as of Closing.
(e) Product Liabilities. Any liability arising out of or in connection with
the sale of any product by Seller prior to the Closing Date.
(f) Environmental Liabilities. Any liability arising out of or in
connection with the use, storage, manufacture or disposal of material used in
the manufacture of the products, or the products, of the Sensor Products
Business.
(g) Other Liabilities. Any other liability, other than any Assumed
Liability, arising from the operation of the Sensor Products Business prior to
the Closing.
3.2. Assumed Liabilities. Subject to Section 3.1, at the Closing, Buyer
shall assume and agree to discharge or perform the following liabilities,
obligations and commitments of Seller, as they may exist on the Closing Date:
(a) Executory and Other Contracts. All liabilities, obligations and
commitments of Seller to be paid or performed after the Closing Date pursuant to
the contracts, agreements, leases or commitments, sales and purchase orders
listed on Schedule 1.1(e);
(b) Accrued Vacation Benefits. Seller's liability for accrued vacation
benefits for each employee of Seller listed on the attached Schedule 3.2(b).
All of the foregoing liabilities, obligations and commitments to be assumed
by Buyer are referred to herein as the "Assumed Liabilities." In no event shall
Buyer assume or otherwise become responsible for any liabilities of Seller, or
any Persons that directly or indirectly control, are controlled by, or are under
common control with, Seller (collectively, "Affiliates"), other than the Assumed
Liabilities.
IV. REPRESENTATIONS AND WARRANTIES OF SELLER.
As an inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, Seller represents and warrants to Buyer as
follows:
4.1. Origin Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Seller is duly qualified
to transact business as a foreign corporation and is in good standing in each of
the jurisdictions in which its operations relating to the Sensor Products
Business require it to qualify to transact business as a foreign corporation,
except for those jurisdictions where the failure to so qualify would not
reasonably be expected to have a material adverse effect on the Seller and its
operations taken as a whole (a "Material Adverse Effect") or the ability of
Seller to consummate the transactions contemplated by this Agreement.
4.2. Corporate Authority. Seller has the corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder and,
to the extent required, each Subsidiary has the corporate power and authority to
perform the obligations required of it hereunder. The execution, delivery and
performance of this Agreement by Seller have been duly authorized by their its
board of directors and the performance by each Subsidiary, if required, will be
duly authorized by its board of directors and by Seller as its sole stockholder.
This Agreement has been duly executed and delivered by Seller and is the legal,
valid and binding obligation of Seller, enforceable against it in accordance
with its terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
4.3. No Conflict. The execution and delivery of this Agreement by Seller
and the consummation by Seller of the transactions contemplated herein will not:
(a) Conflicts. Conflict with, result in a breach of the terms, conditions
or provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation, or result in the
creation or imposition of any lien on any of the Purchased Assets, under (i) the
charter or By-Laws of Seller, (ii) any agreement listed in Schedule 1.1(e),
(iii) any other note, instrument, agreement, mortgage, lease, license,
franchise, permit or other authorization, right, restriction or obligation to
which Seller is a party or any of the Purchased Assets is subject, (iv) any
judgment, order, award or decree of any federal, state or local court or
tribunal or any award in any arbitration proceeding (a "Court Order") to which
Seller is a party or pursuant to which the Purchased Assets are bound, or (v)
any federal, state or local laws, statutes, regulations, rules, codes or
ordinances (collectively, "Requirements of Law") enacted, adopted, issued or
promulgated by any federal, state or local governmental authority, body or
instrumentality ("Governmental Body"), the effect of which in any such case
would adversely affect the Purchased Assets, the Sensor Products Business or
Seller's ability to consummate the transactions contemplated hereby; or
(b) Approvals. Require the approval, consent, authorization or act of, or
the making by Seller of any declaration, notification, filing or registration
with, any individual, corporation, partnership, joint venture, association,
trust, unincorporated organization or Governmental Body (each, a "Person"),
except for the consent of the landlord to the assignment or sublease by Buyer of
Seller's St. Petersburg, Florida facility.
4.4. Title to and Condition of Purchased Assets. Seller has good and
marketable title to (or valid and enforceable leasehold, license or similar
interests in) all of the Purchased Assets, free and clear of all liens, claims,
charges, security interests, mortgages, pledges, easements, conditional sales or
other title retention agreements, defects in title, covenants or other
restrictions (collectively, the "Encumbrances"), other than Encumbrances that
would not reasonably be expected to impair materially the utility, value or
marketability of the Purchased
CONDITION OF ANY OF THE PURCHASED ASSETS, SUCH PURCHASED ASSETS BEING SOLD
AS IS AND WHERE IS, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, AND SELLER
EXPRESSLY EXCLUDES ALL LIABILITY FOR THE CONDITION OF ANY OF THE PURCHASED
ASSETS TO THE FULLEST EXTENT PERMITTED BY LAW.
4.5. Proprietary Rights.
(a) Notice of Claim. Seller has not received written notice of any claim
contesting the ownership, validity, license or use of the Proprietary Rights by
Seller or the sale of products and services included in the Sensor Products
Business and, to Seller's knowledge, there is no basis for any such claim;
(b) Rights. Seller owns or possesses valid and enforceable rights to use
the Proprietary Rights and has the right to manufacture and sell the products
and services currently manufactured and sold as part of the Sensor Products
Business.
(c) Licenses. Set forth on the attached Schedule 4.5(c) is a list of all
licenses (other than licenses of off-the-shelf software) to and from Seller of
any Proprietary Right;
(d) No Royalties Payable. Seller has no obligation to pay any royalties or
other fees to third parties for the use of any Proprietary Rights.
(e) No Infringement. Seller is not aware of any infringement by others of
the rights in the Proprietary Rights being transferred by Seller to Buyer.
(f) No Unauthorized Possession. To the knowledge of Seller, no person other
than Seller and its licensors has possession of any products embodying Relevant
Technology, except to the extent the same have been made available to customers
and prospective customers of Seller in the ordinary course of business.
4.6. Status of Contracts. Except as previously disclosed to Buyer in
writing:
(a) Each of the contracts, agreements and other commitments of Seller
listed in Schedule 1. I (e) (collectively, the "Seller Agreements") constitutes
a valid obligation of Seller and, to Seller's knowledge, the other parties
thereto, and is in full force and effect; Assets. SELLER'S NO REPRESENTATION OR
WARRANTY-AS TO THE:
(b) Seller has not been declared to be in material breach or material
default under any of the Seller Agreements and, to Seller's knowledge, no other
party to any of the Seller Agreements is in material breach or material default
thereunder; and
(c) to Seller's knowledge, copies of all Seller Agreements, including any
amendments thereto, have been made available to Buyer.
4.7. Purchase for Own Account. The Warrant is being acquired by Seller for
its own account for investment and Seller has no present intention of reselling
or otherwise distributing the Warrant or shares issuable upon exercise thereof
or any part thereof; provided that the disposition of Seller's property shall at
all times be and remain within its control. Seller understands that the Warrant
and shares issuable upon exercise thereof have not been registered under the
Securities Act of 1933, as amended, and may not be sold or disposed of by Seller
except pursuant to an effective registration statement or an exemption
therefrom.
4.8. No Liability to Finder. Neither Seller nor any Person acting on its
behalf has retained any broker, finder, investment banker or financial advisor
in connection with this Agreement or any transaction contemplated hereby for
which the Buyer may be directly or indirectly liable.
V. BUYER'S REPRESENTATIONS AND WARRANTIES.
As an inducement to Seller to enter into this Agreement and to consummate
the transactions contemplated hereby, Buyer represents and warrants to Seller as
follows:
5.1. Organization . Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Buyer has the
corporate power and authority to consummate the transaction contemplated by this
Agreement and to conduct the Sensors Products Business thereafter. Promptly
following the Closing, Buyer will be duly qualified to transact business as a
foreign corporation in the States of Illinois and Florida.
5.2. Corporate Authority. Buyer has the corporate power and authority to
execute and deliver this Agreement and the Warrant and to perform its
obligations hereunder and thereunder. The execution, delivery and performance of
this Agreement and the Warrant by Buyer have been duly authorized its board of
directors. This Agreement and the Warrant have been duly executed and delivered
by Buyer and are the legal, valid and binding obligations of Buyer, enforceable
against it in accordance with their terms, except as such enforceability may be
limited by (a)applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(b) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
5.3. Issuance of Shares. The shares of Buyer's common stock issuable upon
exercise of the Warrant have been duly and validly authorized and reserved for
issuance and, when issued, sold and delivered in accordance with the terms of
the Warrant, will be duly and validly issued, fully paid and nonassessable.
5.4. No Conflict. The execution and delivery of this Agreement and the
Warrant and the consummation by Buyer of the transactions contemplated herein
will not:
(a) Conflicts. Conflict with, result in a breach of the terms, conditions
or provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation, or result in the
creation or imposition of any lien on any of Buyer's assets, under (i) the
charter or By-Laws of Buyer, (ii) any material note, instrument, agreement,
mortgage, lease, license, franchise, permit or other authorization, right,
restriction or obligation to which Buyer is a party or any of its properties is
subject, (iii) any Court Order to which Buyer is a party or by which it is
bound, or (iv) any Requirements of Law affecting Buyer; or
(b) Approvals. Require the approval, consent, authorization or act of, or
the making by Buyer of any declaration, filing, notification or registration
with, any Person; except in each case, for any of the foregoing that would not
be reasonably expected to have a material adverse effect on Buyer's ability to
consummate the transactions contemplated herein.
5.5. Buyer's Investigation. Buyer and its representatives have been
provided by Seller with reasonable access during normal business hours to the
offices, properties, employees and business and financial records of Seller
relating to the Sensor Products Business, and Seller has furnished to Buyer or
its representatives such additional information concerning the Purchased Assets
and the Sensor Products Business as Buyer has requested. Buyer understands and
acknowledges that Seller is selling the Purchased Assets and the Sensor Products
Business as is and where is and that SELLER MAKES NO EXPRESS OR IMPLIED
REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OF THE PURCHASED ASSETS OR THE SENSOR PRODUCTS BUSINESS, NOR DOES IT
MAKE ANY REPRESENTATION AS TO THE COLLECTABILITY OF ANY RECEIVABLES.
5.6. No Liability to Finder. Neither Buyer nor any Person acting on its
behalf has retained any broker, finder, investment banker or financial advisor
in connection with this Agreement or any transaction contemplated hereby for
which Seller or Seller may be directly or indirectly liable.
VI. MUTUAL AGREEMENTS.
6.1. Taxes. Buyer shall pay all Taxes, recording fees, personal property,
title application fees, patent and trademark assignment registration -fees, and
any other transfer taxes and fees arising by virtue of the transfer of the
Purchased Assets from Seller to Buyer.
6.2. Access to Records After Closing. Seller and Buyer agree that after the
Closing Date they will give, or cause to be given, to the other party, their
successors and their representatives, during normal business hours and at the
requesting party's expense, such reasonable access to the properties, titles,
contracts, books, records, files and documents applicable to, and the affairs
of, the Sensor Products Business or the Purchased Assets as is reasonably
necessary to allow the requesting party to obtain information in the other
party's possession with respect to the Sensor Products Business or the Purchased
Assets.
6.3. Reasonable Efforts; Further Assurances. Each of Seller and Buyer
agrees to use its reasonable efforts to take, or cause to be taken, all action,
and to do, or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement. In case at any time after the Closing Date any further action is
necessary to carry out the purposes of this Agreement, the proper officers
and/or directors of Seller or Buyer, as the case may be, shall take such action
without any further consideration therefor.
6.4. Vacation of Seller's Facilities. Buyer will make every reasonable
effort to vacate Seller's facilities in advance of the expiration of the
occupancy rights under the agreements referred to in Section 2.2(c), consistent
with maintaining an orderly business transition. Seller will cooperate with and
support Buyer in Buyer's efforts to move efficiently the Tangible Assets and
personnel acquired by Buyer from Seller's facilities.
6.5. Seller's Noncompete Agreement. Seller agrees that, for a period of
five years from the Closing Date, Seller will not, directly or indirectly,
engage or participate in, or permit its name to be used by, or render services
for, any person or entity that is engaged in the business currently being
conducted by the Sensor Products Business; provided, however, that nothing in
this Agreement shall prevent Seller from acquiring or owning, as a passive
investment, not more than 5% of the outstanding publicly traded voting
securities of an entity engaged in such business. During the one year period
following the Closing Date, Seller shall not encourage, solicit, induce or seek
to induce any employee of the Buyer who was formerly an employee of Seller to
leave such employment for any reason.
6.6. Seller's Indemnification. Seller agrees to indemnify and hold Buyer
harmless from and against any damage, liability, loss or cost, including
reasonable attorney's fees (any such damage, liability, loss or cost being
hereinafter referred to as an "Indemnified Loss"), arising out of or resulting
from, and will pay Buyer on demand the full amount Buyer may pay or become
obligated to pay in respect of any claim, suit or proceeding based upon or
arising out of.
(a) any Excluded Liability; and
(b) any material inaccuracy in any representation or any material breach by
Seller of any warranty made by Seller in this Agreement.
Buyer shall give prompt written notice to Seller of any claim that might
give rise to an Indemnified Loss, stating the nature, basis and amount thereof,
if known, or a reasonable estimate of such amount. In case of any suit, claim,
action or proceeding to which this Section 6.6 may apply, Seller may participate
therein, and, to the extent that Seller may wish, to assume the defense thereof,
and after notice from Seller to Buyer of its election so to assume the defense,
Seller shall not be liable to Buyer for additional legal or other costs
subsequently incurred by Buyer in connection with the defense. Buyer agrees to
make available to Seller and its counsel, at all reasonable times during normal
business hours, all books and records of Buyer (including to the extent required
Proprietary Rights) relating to such suit or proceeding and to provide Seller
with such assistance (including making available former Seller employees to
testify) as Seller may reasonably require to insure a proper and adequate
defense.
6.7. Buyer's Indemnification. Buyer agrees to indemnify and hold Seller
harmless from and against any damage, liability, loss or cost, including
reasonable attorney's fees (any such damage, liability, loss or cost being
hereinafter referred to as an "Indemnified Loss"), arising out of or resulting
from, and will pay Seller on demand the full amount Seller may pay or become
obligated to pay in respect of any claim, suit or proceeding based upon or
arising out of:
(a) any Assumed Liability;
(b) any material inaccuracy in any representation or any material breach by
Buyer of any warranty made by Buyer in this Agreement;
(c) any liability for alleged discrimination arising from Buyer's not
extending an offer of employment to any employee of the Sensor Products
Business; and
(d) any liability arising from the operation of the Sensor Products
Business after the Closing.
Seller shall give prompt written notice to Buyer of any claim that might
give rise to an Indemnified Loss, stating the nature, basis and amount thereof,
if known, or a reasonable estimate of such amount. In case of any suit, claim,
action or proceeding to which this Section 6.7 may apply, Buyer may participate
therein, and, to the extent that Buyer may wish, to assume the defense thereof,
and after notice from Buyer to Seller of its election so to assume the defense,
Buyer shall not be liable to Seller for additional legal or other costs
subsequently incurred by Seller in connection with the defense. Seller agrees to
make available to Buyer and its counsel, at all reasonable times during normal
business hours, all books and records of Seller relating to such suit or
proceeding and to provide Buyer with such assistance as Buyer may reasonably
require to insure a proper and adequate defense.
VII. GENERAL PROVISIONS.
7.1. Survival The representations, warranties, covenants and agreements
provided for in this Agreement shall survive the Closing and be unaffected by
any investigation made by or on behalf of any party hereto.
7.2. Public announcement. Buyer and Seller agree that neither shall,
without the prior written approval of the other, make any additional press
release or other public announcement concerning the transactions contemplated by
this Agreement, except as and to the extent that any such party shall be so
obligated by law or by the rules and regulations of any competent regulatory
body or any securities exchange on which its securities are traded, in which
case the other party shall be advised in writing in advance, and the parties
shall use their best efforts to cause a mutually agreeable release or
announcement to be issued. Buyer and Seller have agreed to jointly issue the
press release in the form of the attached Exhibit D promptly following the
Closing.
7.3. Notices. Any notice, request, instruction or other document required
to be given hereunder shall be in writing and delivered personally or sent by
registered or certified mail, postage prepaid, by overnight courier or by
facsimile, cablegram or telex, according to the instructions set forth below.
Such notices shall be deemed given: at the time delivered by hand, if personally
delivered; at the time received if sent by registered or certified mail; one
business day after deposited with an overnight courier (provided sender obtains
written evidence of delivery from the courier); at the time when receipt is
confirmed by the receiving facsimile machine if sent by facsimile (provided
written notice by one of the other means is sent on the same day); and when
answered back if sent by cablegram or telexed.
If to Buyer, to:
Martin Kits van Heyningen
President & Chief Executive Officer
KVH Industries Inc.
50 Enterprise Center
Middletown, Rhode Island 02842
Telecopy: (401) 849-0045
Telephone: (401)847-3327
<PAGE>
with a copy to:
Adam Sonnenschein
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, Massachusetts 02109
Telecopy: (617) 832-7000
Telephone: (617) 832-1158
If to Seller, to:
James F. Petelle
Secretary and General Attorney
Andrew Corporation
10500 West 153rd Street
Orland Park, Illinois 60462
Telecopy: (708) 873-2571
Telephone: (708)-873-2570
With a copy to:
Dewey B. Crawford
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Suite 3400
Chicago, Illinois 60610-3381
Telecopy: (312) 644-3381
Telephone: (312) 245-8422
7.4. Governing Law. Except as otherwise provided herein, this Agreement
shall be governed by and construed in accordance with the internal laws of the
State of Illinois.
7.5. Expenses. Regardless of whether the transactions provided for in this
Agreement are consummated, each party shall pay its own expenses incident to
this Agreement and to preparing to consummate the transactions provided for
herein.
7.6. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto, and their successors and assigns;
provided, however, that no party may assign any or all of its rights hereunder
without the prior written consent of the other party.
7.7. Parties in Interest. Nothing in this Agreement is intended to confer
any rights or remedies under or by reason of this Agreement on any persons other
than Buyer and Seller and their respective successors and permitted assigns.
7.8. Execution in Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original agreement, but all
of which together shall constitute one and the same instrument.
7.9. Titles and Heading. Titles and headings to sections herein are for
purposes of reference only and shall in no way limit, define or otherwise affect
the provisions herein.
7. 1 0. Entire Agreement. This Agreement and the deeds, assignments and
other instruments of transfer and conveyance exchanged by the parties at the
Closing shall constitute the entire agreement among the parties with respect to
the matters covered hereby and thereby and shall supersede all previous written,
oral or implied understandings among the parties with respect to such matters.
7.1 1. Amendment and Modification. This Agreement may be amended, modified
- -or supplemented only by mutual consent set forth in a writing duly signed by
the parties hereto.
7.12. Time. Time is of the essence under this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.
KVH INDUSTRIES, INC.
By: Name:/s/Richard C. Forsyth Title: CFO
ANDREW CORPORATION
By: Name:/s/ F.L. English Title: President
Exhibit-99 COMMON STOCK PURCHASE WARRANT
This security and the Common Stock issuable thereby have not been registered
under the Securities Act of 1933, as amended, and has been and will be acquired
for investment and not with a view to distribution or resale, and may not be
sold, mortgaged, pledged, hypothecated or otherwise transferred without an
effective registration thereof, or an opinion of counsel reasonably satisfactory
to the Company and its counsel that registration is not required under such Act.
No. CSPW-1 October 30, 1997
KVH INDUSTRIES, INC.
Common Stock Purchase Warrant
This Common Stock Purchase Warrant (this "Warrant") evidences that, for
value received, Andrew Corporation, or assigns, is entitled, subject to the
terms set forth below, to purchase from KVH INDUSTRIES, INC., a Delaware
corporation (the "Company'), at any time or from time to time before 5:00 P.M.,
Rhode Island time, on October 30, 2002 (the "Expiration Date"), 50,000 fully
paid and nonassessable shares of Common Stock, par value $.01 per share, of the
Company, at a purchase price per share of eight dollars ($8.00) (such purchase
price per share as adjusted from time to time as herein provided is referred to
herein as the "Purchase Price"). The number and character of such shares of
Common Stock and the Purchase Price are subject to adjustment as provided
herein.
This Warrant is the Common Stock Purchase Warrant (the "Warrant")
evidencing the right to purchase shares of Common Stock of the Company issued in
connection with the closing of the transactions contemplated by Asset Purchase
Agreement of even date herewith between the Company and Andrew Corporation.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include KVH Industries, Inc. and any
corporation that shall succeed to, or assume, the obligations of the Company
hereunder.
(b) The term "Common Stock" includes (a) the Company's Common Stock, par
value $.01 per share, as authorized on -the date of this Warrant and (b) any
other securities into which or for which any of such Common Stock may be
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holders of this Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common-non Stock or Other
Securities pursuant to section 5 or otherwise.
1. Exercise
1.1. Full Exercise. This Warrant may be exercised in full at any time on or
prior to the Expiration Date by the holder hereof by surrender of this Warrant,
with the form of subscription at the end hereof duly executed by such holder, to
the Company at its principal office, accompanied by payment, in cash or by
cashier's, certified or official bank check payable to the order of the Company,
in the amount obtained by multiplying the number of shares of Common Stock for
which this Warrant is then exercisable by the Purchase Price then in effect.
1.2. Partial Exercise. This Warrant may be exercised in part by surrender
of this Warrant in the manner and at the place provided in subsection 1. 1
except that the amount payable by the holder on such partial exercise shall be
the amount obtained by multiplying (a) the number of shares of Common Stock
designated by the holder in the subscription at the end hereof by (b) the
Purchase Pr-ice then in effect. On any such partial exercise, the Company, at
its expense, will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant in all respects identical hereto, in the name of the holder
hereof or as such holder (upon payment by such holder of any applicable transfer
taxes) may request, calling in the aggregate on the face thereof for the number
of shares of Common Stock for which such Warrant may still be exercised.
2. Deliver etc., on Execution
As soon as practicable after the exercise of this Warrant in full or in
part, and in any event within 5 business days thereafter, the Company will cause
to be issued in the name of and delivered to the holder hereof, or as such
holder (upon payment by such holder of any applicable transfer taxes) may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock or Other Securities, as applicable, to
which such holder shall be entitled on such exercise, and, in lieu of any
fractional share to which such holder would otherwise be entitled, the holder
shall receive cash equal to such fraction multiplied by the fair market value of
one share of Common-non Stock at the time of exercise computed to the nearest
whole cent.
3. Adjustment of Common Stock I
3. 1. Adjustment of Number-of Shares. Upon each adjustment of the Purchase
Price, the number of shares of Common Stock that the registered holder of this
Warrant shall be entitled to purchase at the Purchase Price resulting from the
adjustment shall be obtained by multiplying the Purchase Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Purchase Price resulting from such adjustment.
3.2. Adjustment of Purchase Price. The Purchase Price shall initially- be
eight dollars ($8) per share, shall be adjusted and readjusted from time to time
as provided in this section 3.2 and, as so adjusted or readjusted, shall remain
in effect until a further adjustment
or readjustment thereof is required by this section 3.2. The Purchase Price
shall be subject to adjustment as follows:
(a) Subdivision or Combination of Stock. In case the Company shall at any
time subdivide its outstanding common shares into a greater number of shares (by
way of dividend, split or otherwise), the Purchase Price in effect immediately
prior to the subdivision shall be proportionately reduced, and, in case the
outstanding common shares shall be combined into a smaller number of shares (by
way of reverse split or otherwise), the Purchase Price in effect immediately
prior to the combination shall be proportionately increased.
(b) Reorganization or Reclassification. If any reorganization or
reclassification of the capital stock of the Company shall be effected in such a
way (including, without limitation, by way of consolidation or merger or a sale
of all or substantially all its assets) that holders of common shares shall be
entitled to receive stock, securities or assets with respect to or in exchange
for common-non shares, then, as a condition of the reorganization or
reclassification, lawful and adequate provisions shall be made whereby the
holder of this Warrant shall thereafter have the right to receive, in lieu of
the common shares of the Company theretofore receivable upon the conversion of
such shares, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of common shares equal to
the number of common shares theretofore so receivable had the reorganization or
reclassification not taken place, and in any such case appropriate provision
shall be made with respect to the rights and interests of the holder to the end
that the provisions of this Section 3 shall thereafter be applicable, as nearly
as may be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise of those conversion rights. In the event of a
i-merger or consolidation of the Company as a result of which a greater or
lesser number of common shares of the surviving corporation are issuable to
holders of common shares of the Company outstanding immediately prior to the
merger or consolidation, the Purchase Price in effect immediately prior to the
merger or consolidation shall be adjusted in the same manner as though there
were a subdivision or combination of the Outstanding common-non shares of the
Company in accordance with Section 3.2(a).
(c) Certain Dividends. In case the Company shall declare a dividend upon
the Common Stock payable otherwise than Out of earnings or surplus (other than
paid-in surplus) or otherwise than in Common Stock or a security convertible
into or exchangeable for Common Stock, the Purchase Price in effect immediately
prior to the declaration of such dividend shall be reduced by an amount equal,
in the case of a dividend in cash, to the amount thereof payable per share of
the Common Stock or, in the case of any other dividend, to the fair value
thereof per share of the Common Stock as determined in good faith by or pursuant
to the directions and authorization of the Board of Directors of the Company.
For the purposes of the foregoing, a dividend other than in cash shall be
considered payable out of earnings or surplus (other than paid-in surplus) only
to the extent that such earnings or surplus are charged an amount equal to the
fair value of such dividend as determined in good faith by or pursuant to the
directions and authorization of the Board of Directors of the Company. Such
reductions shall take effect as of the date on which a record is taken for the
purpose of such dividend, or, if a record is not taken, the date as of which the
holders of Common Stock of record entitled to such dividend are to be
determined.
3.4 Notice of Adjustment. Upon any adjustment of the Purchase Price or the
number of shares of Common Stock or Other Security to be issued, as applicable,
then in each such case the Company shall give written notice thereof, by first
class mail, postage prepaid, addressed to the registered holder of this Warrant
at the address of such holder as shown on the records of the Company, which
notice shall state the Purchase Price or the number of shares of Common Stock or
Other Security to be issued, as applicable, resulting from such adjustment,
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based. A copy of such notice shall also be filed
promptly by the Company with the transfer agent (if other than the Company) for
the Common Stock.
4. Registration of Stock. The Company covenants and agrees that all shares
which may be issued upon the exercise of this Warrant will, upon issuance, be
legally and validly issued, fully paid, and nonassessable and free from all
taxes, liens, and charges with respect to the issue thereof. The Company further
covenants and agrees that during the period within which this Warrant may be
converted, the Company will at all times have authorized and reserved a
sufficient number of shares of its Common Stock to provide for the exercise of
this Warrant in full.
5. Notice of Capital Change. In case:
(1) the Company shall declare a dividend on its Common Stock payable in
shares of its capital stock; or
(2) the Company shall authorize the issuance to all holders of its Common
Stock of rights or warrants to subscribe for or purchase shares of its Common
Stock or of any other subscription rights or warrants; or
(3) the Company shall authorize the distribution to all holders of its
Common Stock of evidences of its indebtedness or other property (other than cash
dividends paid out of retained earnings), or
(4) the Company shall fix a record date for approval of any subdivision,
combination, recapitalization or reclassification of its Common-non Stock, or of
any consolidation or merger to which the Company is a party and for which
approval of any stockholders of the Company is required, or of the sale,
transfer or other disposition of all or substantially all of the assets of the
Company; or
(5) the Company shall fix a record date for approval of the voluntary or
involuntary dissolution, liquidation or winding up of the Company; or
(6) the Company proposes to take any action (other than any referred to
above) which would require an adjustment of the number of shares of Common Stock
issuable upon exercise of this Warrant and the Purchase Price therefor pursuant
to the provisions of Section 3 above; or
(7) the Company shall receive notice or become aware of any purchase,
tender or exchange offer for shares of Common Stock; then, the Company shall
give the registered holder of this Warrant written notice, by registered mail,
postage prepaid, in each of said cases other than clause (7) above, of the date
on which (i) a record shall be taken for such dividend, distribution or
subscription rights or (ii) such subdivision, combination, recapitalization,
reclassification, consolidation, merger, sale, transfer, disposition,
dissolution, liquidation or winding up shall take place, as the case may be,
and, in the case of clause (7) above, containing the information communicated by
the Company to the holders of its Common Stock with respect to such purchase,
tender or exchange offer. Such notice shall also specify the date as of which
the holders of Common Stock of record shall participate in such dividend,
distribution or subscription rights, or shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such subdivision,
combination, recapitalization, reclassification, consolidation, merger, sale,
transfer, disposition, dissolution, liquidation or winding up, as the case may
be. Such written notice shall be given at least twenty (20) days prior to the
action in question and not less than ten (10) days prior to the record date in
respect thereof or, in the case of clause (7) above, at such time as the Company
communicates in writing to the holders of its Common Stock the existence of such
purchase, tender or exchange offer.
6. Replacement of Warrants. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
7. Transfer of Warrant. This Warrant is issued upon the following terms, to
all of which each holder or owner hereof by the taking hereof -consents and
agrees:
(a) (i)- title to this Warrant may be transferred by endorsement (by the
holder hereof executing the form of assignment at the end hereof) and delivery
in the same manner as in the case of a negotiable instrument transferable by
endorsement and delivery;
(ii) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and renounces all
of his equities or fights in this Warrant in favor of each such bonafide
purchaser, and each such bona fide purchaser shall acquire absolute title hereto
and to all rights represented hereby;
(iii) until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.
(b) The holder of the Warrant agrees that it will neither (i) transfer the
Warrant prior to delivery to the Company of the opinion of counsel referred to
in, and to the effect described in, subsection (c) hereof, or until registration
hereof under the Securities Act of 1933, as amended (the "Securities Act"), and
any applicable state securities or blue sky laws has become effective, nor (ii)
transfer the shares of Common Stock into which the Warrant was exercised prior
to delivery to the Company of the opinion of counsel referred to in, and to the
effect described in, subsection (c) hereof, or until registration of such shares
under the Securities Act and any applicable state securities or blue sky laws
has become effective.
(c) Except as otherwise expressly provided herein, by its acceptance hereof
the holder of the Warrant agrees that, prior to any transfer of the Warrant,
such holder will deliver to the Company a statement setting forth the intention
of such holder's prospective transferee with respect to its retention or
disposition of the Warrant together with a signed copy of the opinion of such
holder's counsel, to the effect that the proposed transfer of the Warrant i-nay
be effected without registration under the Securities Act and any applicable
state securities or blue sky laws. The holder of the Warrant shall then be
entitled to transfer the Warrant in accordance with the statement of intention
delivered by such holder to the Company.
(d) Notwithstanding any provisions contained in this Warrant to the
contrary, the sale or transfer of any shares of Common Stock into which the
Warrant may be exercised shall be subject to the provisions of the Registration
Rights Agreement.
8. Notices, etc. All notices and other communications from Company to the
holder of this Warrant shall be mailed by first class registered or certified
mail, postage prepaid, at such address as may have been furnished to the Company
in writing by such holder or, until any such holder furnishes to the Company an
address, then to, and at the address of, the last holder of this Warrant who has
so furnished an address to the Company.
9. Miscellaneous. This Warrant contains the entire agreement between the
holder hereof and the Company with respect to the Common Stock purchasable
hereunder. This Warrant and any term hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant shall be construed and enforced in accordance with and governed by the
laws of the State of Delaware. The headings in this Warrant are for purposes of
reference only, and shall not Iii-nit or otherwise affect any of the terms
hereof. The invalidity or unenforceability of any provision hereof shall in no
way affect the validity or enforceability of any other provision.
KVH INDUSTRIES, INC.
By:/s/ Richard C. Forsyth
Authorized Officer
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO KVH INDUSTRIES, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, shares of
Common Stock of KVH INDUSTRIES, INC. and herewith payment of $ therefor, and
requests that the certificates for such shares be issued in the name of, and
delivered to whose address is
Dated:
(Signature must conform-n to name of holder as specified on the face of the
Warrant)
Address
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto the right represented by the within Warrant to purchase shares of Common
Stock of KVH INDUSTRIES, INC. to which the within Warrant relates, and appoints
Attorney to transfer such right on the books of KVH INDUSTRIES, INC. with full
power of substitution in the premises.
Dated:
(Signature must conform to name of holder as specified on the face of the
Warrant)
