U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15 (d) of
The Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): May 11, 2000
ANTENNA PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State of other jurisdiction of incorporation)
0-12866 75-1907070
(Commission File Number) (IRS Employer Identification No.)
1209 Orange Street
Wilmington, Delaware 19801
(Address of Principal Executive Officers) (Zip Code)
Registrant's telephone number, including area code: (302) 658-7581
Item 2. Acquisition or Disposition of Assets
Antenna Products Corporation, a Texas Corporation and wholly owned
subsidiary of Antenna Products, Inc., purchased the complete line of
commercial telecommunications antennas known as the Phazar(TM) product
line from BAE SYSTEMS Advanced Systems on May 1, 2000. The tangible
assets purchased consisted of the inventory, tooling, fixtures, radome
molds, test equipment, and demonstration equipment. The intangible
assets purchased included the patents, copyrights, trademarks,
engineering data, manufacturing drawings, manufacturing method sheets,
test procedures, quality program plans, vendor lists, customer lists,
product data sheets, Chameleon(TM), and pattern Information. No real
property was included in the sale. The product line will be moved to
the Antenna Products Corporation plant in Mineral Wells, Texas. The
inventory (valued at cost) was purchased for $360,000 cash. The
remainder, including the intangible assets valued at a substantial
discount to the seller's development costs, was purchased for 172,800
unregistered shares of Antenna Products, Inc. common stock. On May 1,
2000, the closing price on The Nasdaq SmallCap Market of Antenna
Products, Inc. common stock was $2.96875. Additionally, a 6% royalty
on the sales of the Intelligent Antenna System products is due for
seven years. The transaction was financed by drawing $360,000 on the
existing accounts receivable and inventory credit line at The Frost
National Bank, San Antonio, Texas.
Prior to the consummation of this transaction, there were no material
relationships between BAE SYSTEMS Advanced Systems and Antenna
Products, Inc. or any of their affiliates, any directors or officers,
or any associate of any such director or officer.
The product line purchased consists of eighteen models of planar single
beam (PSB) cellular antennas, two models of intelligent antenna systems
(IAS), fifteen U.S. Patents, one pending U.S. Patent Application, and
multiple corresponding Foreign Patents and pending Patent Applications.
A camouflaging system for environmental concealment of the antennas
called Chameleon(TM), was also included in the sale. This product line
complements Antenna Products Corporation's existing commercial antenna
product lines and will be produced at the plant in Mineral Wells,
Texas.
Item 7. Financial Statements and Exhibits.
Items (a) and (b) have not been submitted since this business
acquisition does not meet the SEC's definition of a significant
acquisition.
Item (c) Exhibits.
Asset purchase agreement between BAE SYSTEMS AEROSPACE INC.
Advanced Systems and Antenna Products, Inc.
Index of exhibits to asset purchase agreement between BAE SYSTEMS
AEROSPACE INC. Advanced Systems and Antenna Products Inc.
ASSET PURCHASE AGREEMENT
between
BAE SYSTEMS AEROSPACE INC.
Advanced Systems
and
ANTENNA PRODUCTS, INC.
May 1, 2000
ASSET PURCHASE AGREEMENT
This Agreement, dated as of May 1, 2000, is by and between BAE
SYSTEMS AEROSPACE INC., Advanced Systems, Greenlawn, NY 11740 ("AS"),
and ANTENNA PRODUCTS, INC., Fort Worth, TX 76121 ("AP").
R E C I T A L S:
AS desires to sell, and AP desires to purchase, certain of AS'
assets, in accordance with the Memorandum of Offer for Sale of the
Phazar(TM) Antenna Business Unit of Advanced Systems Division, Marconi
Aerospace Systems, Inc., dated December 1, 1999, and the conditional
Letter of Intent between the parties, dated March 15, 2000.
Therefore, on the terms and subject to the conditions herein set
forth, the parties hereto hereby agree as follows:
ARTICLE I
_ Purchase and Sale_
1.1(A) _Sale and Purchase of Assets_ Subject to and upon the
terms and conditions contained herein, at the Closing (as hereinafter
defined), AS shall sell, transfer, assign, convey and deliver to AP,
F.O.B. Greenlawn, New York and on an "AS IS, WHERE IS" basis, but free
and clear of all liens, claims and encumbrances, and AP shall purchase,
accept and acquire from AS on such basis, the tangible and intangible
assets listed or otherwise specifically identified in Schedule1.1
attached hereto (collectively called the "Assets") associated with the
following:
(a) The Planar Single Beam (PSB) Antenna Product Line,
The sale covers all the Assets identified in Schedule 1.1
(b) The Chameleon(TM) Coating process,
The sale covers all the Assets identified in Schedule 1.1
(c) The Intelligent Antenna Systems (IAS) for ESMR Product
Line,
The sale covers all the Assets identified in Schedule 1.1
(d) The Intelligent Antenna System (IAS) for AMPS Product Line
The sale covers all the Assets identified in Schedule 1.1
(e) Intellectual property
The sale covers all the patents and other intellectual
property identified in Schedule 1.1, and
(f) Backlog
The sale covers the backlog identified in Schedule 1.1.
1.1(B) _ Limited License to Use "Hazeltine" Name_ AS is the
owner of commercial rights in the name "Hazeltine" in the field of
electronics and has used that name in marketing products in its
Commercial Antenna Product Lines. AS hereby grants AP an exclusive,
nontransferable and limited license to use the "Hazeltine" name solely
in conjunction with marketing the existing products of the Commercial
Antenna Product Lines covered by the Assets, including variants and
derivatives of such products, (collectively the "Subject Products") and
only in the commercial wireless communications market. Upon request
from time to time by AS, AP agrees to provide AS with any reasonable
information required by AS to determine that AP's usage of the
"Hazeltine" name is in conformance with the limited license granted to
AP above and does not in any way disparage the name or otherwise
adversely affect the reputation and good will of AS.
1.1(C)_ Retained Rights_ With respect to the patents,
copyrights, trade secrets and any and all other intellectual property
rights included in the Assets, AS retains an irrevocable, royalty-free,
exclusive, transferable, divisible, worldwide and unlimited right,
together with the right to grant licenses and to enforce against past,
present or future infringers, for all uses and purposes whatsoever in
the military field (i.e., uniformed military service excluding
uniformed public safety) and an irrevocable, royalty-free,
nonexclusive, transferable, divisible, worldwide and unlimited right,
together with the right to grant licenses and to enforce against past,
present or future infringers, for all uses and purposes whatsoever in
all other fields of use excluding the field of commercial wireless
communications, in which AP shall have exclusive rights even as to AS
including the exclusive right to sell Subject Products (i.e.,
commercial wireless communication antennas) to customers in the
military field. In the event AP in the future elects to discontinue,
abandon or otherwise not fully maintain any of the intellectual
property included in the Assets, AP shall give AS not less than six (6)
months advance notice thereof in writing and, at AS' election, assign
and transfer to AS, without cost, all AP's rights, title and interest
in and to the particular intellectual property involved. Failure to
maintain a specific intellectual property right shall not affect the
remaining intellectual property rights included in the Assets.
1.2 _Closing_ The closing of the transaction contemplated hereby
(the "Closing") shall occur at 1:00 p.m. local time on May 1, 2000 (the
"Closing Date"), in the offices of AS at One Hazeltine Way, Greenlawn,
New York, or at such other time and place as shall be mutually agreed
to in writing by the parties hereto.
1.3 _ Purchase Price_ All Assets identified in Section 1.1(A)
above are included in the following Purchase Price. AP agrees to:
(a) Pay AS $360,000 cash, payable at Closing by bank cashier's
check or by bank-to-bank electronic transfer of funds to
AS' account in a bank designated by it, at AS' option;
(b) issue simultaneously to AS and any of its designees, at
Closing to 172,800 shares of AP Common Stock, the actual
Share Certificate(s) to be delivered by AP's transfer
agent within thirty (30) days of Closing. AS hereby
acknowledges and agrees that the Common Stock to be
transferred by AP shall contain a restrictive legend as
set forth on Attachment B-1 of Exhibit B hereto and shall
be issued in the form of, and shall constitute "restricted
securities," as such term is defined in Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"),
and will be issued pursuant to the exemption from
registration afforded by Section 4(2) of, or other
provisions under the Securities Act and Regulation D
promulgated thereunder;
(c) make an annual payment to AS for seven (7) successive
years, beginning on the 1st day of the month that is
thirteen (13) calendar months following the Closing and on
the same date annually for the next six (6) succeeding
years in an amount equal to 6% of the cumulative total
annual net sales of all IAS Products (as used herein, "IAS
Product" means an antenna system that adaptively changes
beam patterns to enhance wireless communications network
performance) and derivatives by AP (including any
affiliates and licensees) in the immediately preceding
twelve (12) month period. Such payment shall be made by
electronic transfer of funds to AS' account in a bank
designated by AS, and AP shall simultaneously deliver to AS
a corresponding written report providing sufficient
information to enable AS to verify AP's calculation of such
payment. AP shall maintain accurate books and records of
all such sales and annual payments, and AS shall have the
right to have such books and records audited by a mutually
acceptable independent auditor, not more often than
annually, for the sole purpose of determining the accuracy
of AP's annual reports and payments to AS. And,
(d) pay AS $60,000 for up to 1040 hours of Other Support
(inclusive of all travel and subsistence expenses incurred
by AS personnel in providing Other Support elsewhere than
on Long Island, New York provided the proportion of Other
Support requested by AP to be performed elsewhere is
reasonable) in accordance with Section 1.6 below, such sum
to be paid to AS at the rate of $10,000 per month beginning
on the last day of the month next following the Closing and
a like amount on the same day of each month for the next
five succeeding months. In addition, AP shall pay AS at
the rate of $140.00 per hour for any and all additional
support, in excess of the 1040 hours provided for above,
which AP may request and AS may agree to provide pursuant
to Section 1.6, and AP shall reimburse AS for reasonable
travel and subsistence expenses incurred by its personnel
when providing such additional Other Support to AP at other
than AS' facility in Greenlawn, New York, at AP's request.
(e) pay AS $82.00 per hour for manufacturing services (at its
facility in Greenlawn, New York) to complete the
manufacturing of any item which may be listed in the
Backlog, Attachment "K" of Schedule 1.1 and which AP may,
within 30 days following Closing, request AS to complete,
subject to the availability of the necessary Assets at AS'
facility in Greenlawn in light of AP's right to require
delivery of Assets under Section 5.7 below.
1.4 _Assumption of Liabilities_ Except as provided in Section
4.3 below with respect to warranty claims for Subject Products sold by
AS prior to the closing, AP shall not assume or agree to pay, perform
or discharge any liabilities or obligations of AS, whether accrued,
absolute, contingent or otherwise, including without limitation
liabilities based on or arising out of or in connection with (a) any
defects in products manufactured or sold by AS, (b) any implied or
express warranties relating to such products, or (c) any pension or
other benefit liability relating to AS's employees.
1.5 _ Physical Inventory_ The inventory identified in Schedule
1.1 notwithstanding, immediately preceding the Closing Date, AS and AP
shall jointly conduct a physical inventory (the "Inventory") of Assets
of the type covered by Schedule 1.1 then in AS's possession. However,
any difference in the final Inventory shall not affect the Purchase
Price to be paid by AP in accordance with Section 1.3 above.
1.6 _Transition Support_ AS agrees to provide to AP, at no cost
to AP, the exclusive consulting services of its part-time employee
Henry Bachman on a schedule to be mutually agreed between AP and Mr.
Bachman for no more than 1040 manhours over a period of eighteen (18)
months from the Closing, to facilitate the technical, manufacturing and
marketing efforts associated with the transition of the Assets to and
their use by AP. AS further agrees to update its existing strategic
plan for the IAS products and provide the updated plan to AP at no
cost. In addition to the foregoing, AS agrees to provide up to 1040
hours of technical, marketing and manufacturing support, on a mutually
convenient schedule, as may be required by AP to successfully
transition the Assets to and facilitate their use by AP (the "Other
Support"). In the event AP requests additional support in excess of
the 1040 hours of Other Support provided for above, AS will endeavor to
supply it provided that doing so shall not conflict or interfere with
AS' other business activities and obligations.
1.7 _Instruments of Transfer; Further Assurances_ In order to
consummate the transactions contemplated hereby, the following
documents shall be delivered:
(a) At the Closing, AS shall deliver to AP (i) a Bill of Sale
for the Assets in the form attached as Exhibit A, (ii) such
additional instruments as may be reasonably required by AP
to evidence or perfect the transfer of ownership of any of
the Assets to AP, and (iii) such instrument as may be
reasonably required by AP to evidence AP's license to use
the name "Hazeltine" as set forth in Section 1.1(B) above.
(b) At the Closing, AP shall deliver to AS the cash portion of
the Purchase Price as set forth in Section 1.3(a) above and
AP shall also deliver to AS an instrument in the form
attached as Exhibit B evidencing the transfer of title to
172,800 shares of AP Common Stock as set forth in Section
1.3(b) above, and AP shall instruct its Transfer Agent to
issue and deliver Certificates for such 172,800 shares of
AP Common Stock within thirty (30) days as set forth in
Section 1.3(b) above.
(c) At the Closing and at all times thereafter as may be
necessary, upon AP's reasonable request AS shall execute
and deliver to AP such other instruments of transfer as
shall be reasonably determined to be necessary or
appropriate to vest in AP good and indefeasible title to
the Assets and to otherwise comply with the purposes and
intent of this Agreement, including, but not limited to,
the execution and delivery, within thirty (30) days of
Closing, of assignments of the intellectual property rights
in the form Attached as Exhibit C and executed by the
record owner of such rights.
ARTICLE II
_AP's Representations and Warranties_
AP represents and warrants that the following are true and
correct as of this date and will be true and correct through the
Closing Date as if made on that date:
2.1 _Organization and Good Standing_ AP is a corporation duly
organized, validly existing and in good standing under the laws of the
State of its incorporation (Delaware), with all requisite power and
authority to carry on the business in which it is engaged, to own the
properties it owns, to execute and deliver this Agreement, and to
consummate the transactions contemplated hereby.
2.2 _Authorization and Validity_ The execution, delivery and
performance of this Agreement and any other agreements contemplated
hereby by AP, and the consummation of the transaction contemplated
hereby and thereby, have been duly authorized by AP. This Agreement
and any other agreement contemplated hereby have been or will be prior
to Closing duly executed and delivered by AP and constitute or will
constitute legal, valid and binding obligations of AP, enforceable
against AP in accordance with their respective terms.
2.3 _Noncontravention_ Neither the execution and delivery of
this Agreement by AP, nor the consummation by AP of the transactions
contemplated hereby, will violate (a) any provision of the Certificate
of Incorporation or Bylaws, as amended, of AP or (b) any statute,
regulation, rule, judgment, order, decree, stipulation, injunction,
charge or other restriction of any government, governmental agency or
court to which AP is subject.
2.4 _ Brokers' Fees_ AP has incurred no liability or obligation
to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement for which AS
is, will be or could become liable or obligated.
2.5 _Governmental Authorizations; Consents_ No consent, approval
or authorization of, or designation, declaration or filing with, any
governmental authority or other third party is required on the part of
AP with respect to AP's execution or delivery of this Agreement or the
consummation of the transaction contemplated hereby.
2.6 _Litigation and Proceedings_ There are no lawsuits, actions
or other proceedings at law or in equity or before or by any
governmental authority or instrumentality or before any arbitrator
pending or, to AP's knowledge, threatened, against AP seeking to
restrain, enjoin or otherwise prohibit the consummation of the
transaction contemplated by this Agreement.
2.7 _ Independent Investigation_ AP has conducted, to its
satisfaction, an independent "due diligence" investigation of the
Assets, and the operation and projected operation of AS's Commercial
Antenna Product Lines, in making its determination to proceed with the
transaction contemplated by this Agreement, and AP has relied on the
results of its own independent investigation as well as only those
representations and warranties of Seller expressly and specifically set
forth herein.
2.8 _ Acquisition of Assets_ AP has such knowledge and experience
in financial and business matters that it is capable of evaluating the
merits and risks of its purchase of the Assets and operation of the
corresponding business. AP confirms that AS has made available to AP
the opportunity to ask questions of the officers and cognizant
management employees of AS and to acquire additional information about
the business operated by AS as the Commercial Antenna Product Lines.
2.9 _ Financial Capability_ AP has adequate financing or
financial resources available to consummate the transactions
contemplated by this Agreement and to make each of the specified
payments of the Purchase Price as they come due. AP will have available
as of the Closing Date sources of funds sufficient to pay the portion
of the Purchase Price specified in Section 1.3(a) above in immediately
available cash.
ARTICLE III
Representations and Warranties of AS
AS represents and warrants that the statements contained below in
this Article are true and correct as of the date of this Agreement and
will be correct and complete as of the Closing Date, as if made on that
date.
3.1 _ Organization and Good Standing_ AS is a business unit of a
corporation duly organized, validly existing and in good standing under
the laws of its State of incorporation (Delaware), with all requisite
power and authority to carry on the business in which it is engaged and
to own the properties it owns, to execute and deliver this Agreement,
and to consummate the transactions contemplated hereby.
3.2 _Authorization and Validity_ The execution, delivery and
performance of this Agreement and any other agreements contemplated
hereby by AS, and the consummation of the transactions contemplated
hereby and thereby, have been duly authorized by AS. This Agreement
and any other agreement contemplated hereby have been or will be duly
executed and delivered by AS and constitute or will constitute legal,
valid and binding obligations of AS , enforceable against it in
accordance with its respective terms.
3.3 _Title to Assets_ AS owns the Assets free and clear of all
liens, claims and encumbrances, and upon consummation of the
transaction contemplated hereby, AP shall receive good, valid and
marketable title to the Assets.
3.4 _Commitments_ AS has not entered into nor are the Assets
secured by any partnership, marketing, distribution, security or joint
venture agreement. AS is not party to, and none of the Assets are
subject to any agreement or instrument, or any charter or other
restriction, or any judgment, order, writ, injunction, decree, rule or
regulation, that could or does materially adversely affect the Assets.
3.5 _Insurance_ All insurable properties of AS the subject of
this Agreement are self insured or insured for its benefit under valid
and enforceable policies, issued by insurers of recognized
responsibility in amounts and against such risks and losses as is
customary in AS' industry.
3.6 _Patents, Trademarks and Copyrights_ AS has no knowledge of
any claim that, or inquiry as to whether, any product, activity or
operation of AS relating to the Commercial Antenna Product Lines
infringes upon any rights of any other person, corporation or other
entity; and no proceedings have been instituted, are pending or are
threatened to the knowledge of AS which challenge the rights of AS with
respect thereto.
3.7 _No Violation_ Neither the execution and performance of this
Agreement nor any agreement contemplated hereby nor the consummation of
the transactions contemplated hereby or thereby will (a) result in a
violation or breach of the Articles of Incorporation or Bylaws of AS or
any agreement or other instrument under which AS is bound or to which
any of the Assets are subject, or result in the creation or imposition
of any lien, charge or encumbrance upon any of such Assets, or (b)
violate any applicable law or regulation or any judgment or order of
any court or governmental agency.
3.8 _Consents_ No authorization, consent, approval, permit or
license of, or filing with, any governmental or public body or
authority, any lender or lessor or any other person or entity is
required to authorize, or is required in connection with, the
execution, delivery and performance of this Agreement or the agreements
contemplated hereby on the part of AS.
3.9 _Compliance with Laws_ There are no existing violations by
AS of any applicable federal, state or local law or regulation that
could adversely affect its right to transfer to AP valid title to the
Assets in accordance with the terms and conditions of this Agreement.
3.10 _Finder's Fee_ AS has not incurred any obligation for any
finder's, broker's or agent's or advisor's in connection with the
transactions contemplated herein except to those advisors expressly
identified in the Memorandum of Offer.
3.11 _Litigation_ AS has not had any legal action or
administrative proceeding or investigation instituted or, to the best
of the knowledge of AS, threatened against or affecting, or that could
adversely affect any of the Assets. AS is not (a) subject to any
continuing court or administrative order, writ, injunction or decree
applicable specifically to the Assets, or (b) in default with respect
to any such order, writ, injunction or decree such as to adversely
affect any of the Assets. AS knows of no basis for any such action,
proceeding or investigation.
3.12 _Accuracy of Information Furnished_ All PSB and ESMR IAS
manufacturing drawings identified in Schedule 1.1 are those currently
used by AS to manufacture the corresponding commercial antenna product.
3.13 _Inventory_ The PSB and ESMR IAS inventory identified in
Schedule 1.1 is current, in good condition, and suitable for use in
manufacturing the corresponding commercial antenna product and is in
conformity with the manufacturing drawings identified in Schedule 1.1
as they existed at the time the corresponding item was acquired or
manufactured by AS.
3.14 _Books of Account_ The books of account of AS relating to
the Assets have been kept accurately in the ordinary course of its
business, the transactions entered therein represent bona fide
transactions and the revenue, expenses, assets and liabilities of AS
have been properly recorded in such books.
3.15 _Corporate ("Hazeltine") Name_ There are no actions, suits
or proceedings pending, or in the knowledge of AS threatened, against
or affecting AS which may result in any impairment of the right of AS
to grant to AP the right to use the "Hazeltine" name in accordance
with Section 1.1(B) above.
3.16 _Backlog_ The PSB Backlog identified in Schedule 1.1 will
represent AS's internal records of backlog of its unfilled orders for
PSB commercial antenna products as of the Closing.
3.17 _No Implied Representations or Warranties_ Notwithstanding
anything contained in this Agreement, it is the explicit intent of each
party hereto that AS is making no representation or warranty
whatsoever, expressed or implied, beyond those expressly given in this
Agreement, including any implied warranty or representation as to
condition, merchantability, or suitability as to any of the Assets. It
is understood that any cost estimates, projections or other predictions
contained or referred to in the Exhibits or Schedules hereof or in any
documents or information that have been provided to or reviewed by AP
in connection with this transaction or otherwise are not and shall not
be deemed to be representations or warranties of AS.
3.18 _Disclaimer of Warranty - Assets Transferred "AS IS"_ -
Except as expressly set forth in Sections 3.12, 3.13 and
3.16 above, AP ACKNOWLEDGES AND AGREES THAT THE ASSETS
PURCHASED BY IT HEREUNDER ARE BEING SOLD AND TRANSFERRED BY
AS ON AN "AS IS, WHERE IS" BASIS, AND THAT EXCEPT AS
EXPRESSLY SET FORTH IN THIS ARTICLE 3, AND AS TO TITLE, AS
IS MAKING NO REPRESENTATION OR WARRANTY OF ANY KIND,
EXPRESSED OR IMPLIED, RESPECTING THE ASSETS, AS TO
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY
OTHER MATTER.
3.19 _IAS Antenna Warranty_ Except as disclosed on Schedule 4.3,
all express warranties given by AS customers in connection with
the sale or offer for sale of the IAS Antenna Product have
expired and no implied warranties exist in connection with the
sale or offer for sale of IAS Antenna Products.
ARTICLE IV
AP's Covenants
4.1 _Consummation of Agreement_ AP agrees to use its best
efforts to cause the consummation of the transactions contemplated by
this Agreement in accordance with their terms and conditions.
4.2 _Retention of Records_ AP shall retain all books and records
of AS which AP receives from AS for the entire period required by the
Internal Revenue Service, the Department of Labor, or other authorities
or agencies for which AS is required to retain records. After the
Closing, AS and its representatives shall have reasonable access, upon
reasonable notice, to all such books and records during normal business
hours. In addition, AP shall, upon reasonable request of AS, furnish
to AS, upon payment of a reasonable charge, copies of any such books or
records.
4.3 _Post-Closing Warranty Obligations_ AP covenants and agrees
that following the Closing Date it shall fully honor and diligently
perform all of AS' existing warranty obligations identified on Schedule
4.3, and AS shall reimburse AP for actual and reasonable costs incurred
by AP in doing so in accordance with the arrangements set forth on
Schedule 4.3.
ARTICLE V
AS's Covenants
AS agrees that on or prior to the Closing:
5.1 _Business Operations_ AS shall use its best efforts to
preserve intact the Assets being sold, to retain its present relevant
customers and suppliers so that they may be available to AP after the
Closing, and to cause consummation of the transactions contemplated by
this Agreement in accordance with its terms and conditions.
5.2 _Access_ During AS' regular business hours AS shall permit
AP and its authorized representatives full access to, and make
available for inspection, all of the Assets including all patents,
documents, and other evidence of intangible Assets, and furnish AP all
available documents, records and information with respect to the Assets
as AP and its representatives may reasonably request, all for the sole
purpose of permitting AP to become familiar with the Assets and the
Commercial Antenna Product Lines and provided such access and
investigation shall not unreasonably interfere with the operation of
AS' business. AP and its representatives shall treat all such
information and documents they receive from AS as proprietary and
commercially confidential to AS and shall protect them in accordance
with the Nondisclosure Agreement between the parties dated January 18,
2000.
5.3 _Material Change_ Prior to the Closing, AS shall promptly
inform AP in writing of any material adverse change to the Assets.
Notwithstanding the disclosure to AP of any such material adverse
change, AS shall not be relieved of any liability for, nor shall the
providing of such information by AS to AP be deemed a waiver by AP of
the breach of any representation or warranty of AS contained in this
Agreement.
5.4 _Assets_ AS will not dispose of any of the Assets except in
the ordinary course of its operation of the business of its Commercial
Antenna Product Lines.
5.5 _Mortgages, Liens_ AS will not enter into or assume any
mortgage, pledge, conditional sale or other title retention agreement,
or permit any lien, encumbrance or claim of any kind to attach to any
of the Assets.
5.6 _No Disclosures or Negotiations with Others_ AS will prevent
the disclosure of any of the terms or conditions hereof to any other
person, other than to those in its corporate group having a need to
know and its legal, financial and other advisors, and so long as this
Agreement shall remain effective, AS will not negotiate with any other
person with respect to the sale of the Assets being sold pursuant to
this Agreement.
5.7 _Temporary Storage of Assets_ AS shall store at its facility
in Greenlawn, New York, under reasonable and customary conditions, all
Inventory and other tangible Assets purchased hereunder for a period
not to exceed ninety (90) days following the Closing and to pack, in
accordance with good commercial practices, all such Inventory and other
tangible Assets and make provision, within five (5) business days of
receiving AP's written request, to transport such Inventory and
tangible Assets (except that consumed or converted into another form in
the course of the manufacturing activity contemplated in Section 1.3(e)
above) to AP in Texas and using a carrier to be designated by AP (the
cost to be borne by AP). However, the risk of loss for all Assets
shall pass to AP at Closing.
ARTICLE VI
AP's Conditions Precedent
Except as may be waived in writing by AP, the obligations of AP
hereunder are subject to the fulfillment at or prior to the Closing of
each of the following conditions:
6.1 _Representations and Warranties_ The representations and
warranties of AS contained herein shall be true and correct as of the
Closing, and AP shall not have discovered any material error,
misstatement or omission therein.
6.2 _Covenants_ AS shall have performed and complied with all
covenants or conditions required by this Agreement to be performed and
complied with by them prior to the Closing.
6.3 _Proceedings_ No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing,
asserted, instituted or entered to restrain or prohibit the carrying
out of the transactions contemplated by this Agreement.
6.4 _No Material Adverse Change_ No material, adverse change in
the Assets, business operations or financial condition of AS which
would have a material effect on the Assets which are the subject of
this Agreement shall have occurred after April 19, 2000 and prior to
the Closing.
6.5 _Due Diligence_ AP's due diligence investigation shall have
been completed to its satisfaction.
6.6 _Approvals of Third Parties_ AS has secured all necessary
approvals and consents of third parties, if any, to the consummation of
the transactions contemplated by this Agreement.
ARTICLE VII
AS's Conditions Precedent
Except as may be waived in writing by AS, the obligations of AS
hereunder are subject to fulfillment at or prior to the Closing of each
of the following conditions:
7.1 _Representations and Warranties_ The representations and
warranties of AP contained herein shall be true and correct as of the
Closing, subject to any changes contemplated by this Agreement, and AS
shall not have discovered any material error, misstatement or omission
therein.
7.2 _Covenants_ AP shall have performed and complied in all
material respects with all covenants or conditions required by this
Agreement to be performed and complied with by it prior to the Closing.
7.3 _Purchase Price_ AP shall have delivered to AS that portion
of the Purchase Price required by Sections 1.3(a) and 1.3(b) as
provided therein.
7.4 _Proceedings_ No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing,
asserted, instituted or entered to restrain or prohibit the carrying
out of the transactions contemplated by this Agreement.
ARTICLE VIII
Indemnification
8.1 _AS's Indemnity_ Subject to the terms and conditions of this
Article VIII, AS hereby agrees to indemnify, defend and hold AP and its
officers, directors, agents, attorneys and affiliates harmless from any
product liability or breach of warranty claims relating to products
manufactured, sold and delivered by AS prior to the Closing, and all
general liability claims arising out of or relating to occurrences of
any nature relating to AS's business operations prior to the Closing,
whether any such claims are asserted prior to or after the Closing;
8.2 _AP's Indemnity_ Subject to the terms and conditions of this
Article VIII, AP hereby agrees to indemnify, defend and hold AS and its
officers, directors, agents, attorneys and affiliates harmless from and
against all damages asserted against or incurred by AS by reason of or
resulting from (a) a breach by AP of any representation, warranty or
covenant contained herein or in any agreement executed pursuant hereto,
and (b) AP's operation of its business following the Closing.
8.3 _Conditions of Indemnification_ The respective obligations
and liabilities of AS and AP (the "indemnifying party") to the other
(the "party to be indemnified") under Sections 8.1 and 8.2 hereof with
respect to claims resulting from the assertion of liability by third
parties shall be subject to the following terms and conditions:
(a) Within 20 days (or such earlier time as might be required
to avoid prejudicing the indemnifying party's position)
after receipt of notice of commencement of any action
evidenced by service of process or other legal pleading, or
with reasonable promptness after the assertion in writing
of any claim by a third party, the party to be indemnified
shall give the indemnifying party written notice thereof
together with a copy of such claim, process or other legal
pleading, and the indemnifying party shall have the right
to undertake the defense thereof by representatives of its
own choosing and at its own expense; provided, however,
that the party to be indemnified may participate in the
defense with counsel of its own choice and at its own
expense.
(b) In the event that the indemnifying party, by the 30th day
after receipt of notice of any such claim (or, if earlier,
by the 10th day preceding the day on which an answer or
other pleading must be served in order to prevent judgment
by default in favor of the person asserting such claim),
does not elect to defend against such claim, the party to
be indemnified will (upon further notice to the
indemnifying party) have the right to undertake the
defense, compromise or settlement of such indemnifying
party and at the indemnifying party's expense, subject to
the right of the indemnifying party to assume the defense
of such claims at any time prior to settlement, compromise
or final determination thereof.
(c) Anything in this Article VIII to the contrary
notwithstanding, the indemnifying party shall not settle
any claim without the consent of the party to be
indemnified unless such settlement involves only the
payment of money and the claimant provides to the party to
be indemnified a release from all liability in respect of
such claim. If the settlement of the claim involves more
than the payment of money, the indemnifying party shall not
settle the claim without the prior consent of the party to
be indemnified, which consent shall not be unreasonably
withheld.
(d) The party to be indemnified and the indemnifying party will
each cooperate with all reasonable requests of the other.
8.4 _Remedies Exclusive_ The remedies provided in this Article
VIII are exclusive of any and all other rights or remedies available by
one party against the other, either at law or in equity.
ARTICLE IX
Miscellaneous
9.1 _Amendment_ This Agreement may be amended, modified or
supplemented only by an instrument in writing of subsequent date which
expressly references this Agreement and is executed by the party
against which enforcement of the amendment, modification or supplement
is sought.
9.2 _Assignment This Agreement shall not be assignable by
either party hereto, except to a corporate affiliate of the assigning
party, without the prior written consent of the other party, which
consent shall not be unreasonably withheld or delayed.
9.3 _Notice_ Any notice or communication given by one party
hereto to the other party must be in writing and given by depositing
the same in the United States Postal Service mail, addressed to the
party to be notified, postage prepaid and registered or certified with
return receipt requested, or by delivering the same in person. Such
notice shall be deemed received on the date on which it is hand-
delivered or otherwise on the third business day following the date on
which it is so mailed. For purposes of notice, the addresses of the
parties shall be:
If to AS: BAE SYSTEMS Aerospace Inc.
Advanced Systems
One Hazeltine Way
Greenlawn, NY 11740
Attention: Law Department
With a copy to: Franklin and Associates
3733 Yorktown Village Pass
Annandale, VA 22003
Attn: James J. Franklin
If to AP: Antenna Products, Inc.
405 West Loop 820 South,
Suite 100
Fort Worth, Texas 76108
Attn: Gary Havener
with a copy to: Kessler & Collins, P.C.
5950 Sherry Lane
Suite 222
Dallas, Texas 75225
Attn: Gary S. Kessler
Any party may change its address for notice by written notice given to
the other parties.
9.4 _Confidentiality_ The parties shall keep this Agreement and
its terms confidential, but any party may make such disclosures before
or after the Closing as it reasonably considers are required by law,
but each party will notify the other party in advance of any such
disclosure, or as it considers necessary within its corporate group.
During the due diligence period, neither AP nor AS nor any of their
employees or advisors will discuss the proposed transaction with any
other party not in its corporate group, or otherwise promote, cooperate
in, or be involved in or encourage discussion regarding the sale of the
Assets of AS as anticipated herein. In the event that the transactions
contemplated by this Agreement are not consummated for any reason
whatsoever, the parties hereto agree not to disclose or use any
confidential information they may have concerning the affairs of the
other party except in accordance with the provisions of the existing
Nondisclosure Agreement between the parties dated January 18, 2000,
except for information which is required by law to be disclosed.
Should the transactions contemplated hereby not be consummated, nothing
contained in this Section shall be construed to prohibit the parties
from operating a business in competition with each other.
9.5 _Press Releases and Announcements_ Neither party will issue
any press release or announcement relating to the subject matter of
this Agreement without the prior written approval of the other party;
provided that either party may make any public disclosure it believes
in good faith is required by law or regulation (in which case the
disclosing party will advise the other party prior to making such
disclosure).
9.6 _Entire Agreement_ Except as incorporated or referred to
herein, this agreement and the Exhibits and Schedules hereto supersede
all prior agreements and understanding relating to the subject matter
hereof, except that the obligations of any party under any agreement
executed pursuant to this Agreement shall not be affected by this
Section.
9.7 _Costs, Expenses and Legal Fees_ Whether or not the
transactions contemplated hereby are consummated, each party hereto
shall bear its own costs and expenses (including attorneys' fees),
except that each party hereto agrees to pay the costs and expenses,
including reasonable attorneys' fees, incurred by the other parties in
successfully (a) enforcing any of the terms of this Agreement, or (b)
proving that the other parties breached any of the terms of this
Agreement.
9.8 _Severability_ If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws
effective during the term hereof, such provision shall be fully
severable and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision never comprised a part
hereof; and the remaining provisions hereof shall remain in full force
and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall
be added automatically as part of this Agreement, a provision as
similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
9.9 _Specific Performance_ AS acknowledges that a refusal by AS
to consummate the transactions contemplated hereby, will cause
irrevocable harm to AP, for which there may be no adequate remedy at
law and for which the ascertainment of damages would be difficult.
Therefore, AP shall be entitled, in addition to, and without having to
prove the inadequacy of, other remedies at law, to specific performance
of this Agreement, as well as injunctive relief (without being required
to post bond or other security).
9.10 _Governing Law_ This Agreement and the rights and
obligations of the parties hereto shall be governed, construed and
enforced in accordance with the laws of the State of Texas.
9.11 _Captions_ The captions in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
any of the terms or provisions hereof.
9.12 _Counterparts_ This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
9.13 _Taxes_ AP and AS shall share equally the cost of all
transfer taxes, including sales and use taxes, arising out of the sale
and transfer of the Assets as herein defined.
9.14 _Non-Compete Provisions_
(a) _Noncompetition_. During a period of five (5) years
commencing with the Closing Date, AS shall not, anywhere in
the world, directly or indirectly, in any capacity, market,
sell or lease any planar single beam antenna or any
intelligent antenna system in competition with AP in the
commercial wireless communications market.
(b) _Nonemployment_. During a period of five (5) years
commencing with the Closing Date, AS shall not, on its own
behalf or on behalf of any other person, partnership,
association, corporation or other entity, solicit or in any
manner attempt to influence or induce any employee employed
by AP to leave the employment of AP.
(c) _Severability_. In addition to the provisions of Section 9.8
hereof, AS agrees that the agreements set forth in this
Section 9.14 each constitute separate agreements
independently supported by good and adequate consideration
and shall be severable from the other provisions of, and
shall survive, this Agreement. The existence of any claim
or cause of action of AS against AP, whether predicated on
this Agreement or otherwise, shall not constitute a defense
to the enforcement by AP of the covenants and agreements of
AS contained in this Section 9.14.
(d) _Acknowledgments_. The parties acknowledge and recognize
that the enforcement of the provisions of this Section 9.14
is necessary to ensure preservation of the value of the
Assets purchased by AP pursuant hereto. AS further agrees
that due to the nature of such Assets, the noncompetition
restrictions set forth in this Section 9.14 are reasonable
as to time and geographic area.
9.15 _Termination of Agreement_ This Agreement shall terminate in
any of the following events:
(a) AS and AP may terminate this Agreement by mutual consent in
writing;
(b) Either party may terminate this Agreement by giving written
notice to the other party at any time prior to the Closing
in the event such other party is in material breach of any
material representation, warranty or covenant contained in
this Agreement and such party has not cured such breach to
the reasonable satisfaction of the non-breaching party
within ten (10) days after receipt of notice from the non-
breaching party;
(c) This Agreement shall terminate automatically if the Closing
of the transaction contemplated hereby does not occur on or
before May 1, 2000; or
(d) This Agreement shall terminate upon the conclusion of the
Closing.
9.16 _Effect of Termination_
(a) Upon termination of this Agreement pursuant to any of
Sections 9.15(a) through 9.15(c) above, all obligations of
the parties hereunder shall terminate without liability of
any party to the other party (except for any liability of
any party then in breach).
(b) Upon termination of this Agreement pursuant to Section
9.15(d), all obligations of the parties hereunder shall
terminate without liability of any party to the other party
(except for any liability of any party then in breach),
except that the post-closing provisions in the following
Sections (and their respective Schedules) shall survive in
accordance with their respective terms and conditions:
Sections 1.1, 1.3, 1.4, 1.6, 1.7, 3.17, 3.18, 4.1, 4.2,
4.3, all of Article VIII, Sections 9.3, 9.4, 9.5, 9.7, 9.8,
9.9, 9.10, 9.13, 9.14 and 9.16.
IN WITNESS WHEREOF, AS and AP have caused duplicate originals of
this Agreement to be duly executed by their respective duly authorized
representatives.
ANTENNA PRODUCTS, INC. (AP)
By: _______________________
Name: Gary W. Havener
Title: Chairman
BAE SYSTEMS AEROSPACE INC.
Advanced Systems (AS)
By: _______________________
Name: Raymond E. Daugherty
Title: President
Index. Exhibits to asset purchase agreement*
1. Schedule 1.1 of Asset Purchase Agreement Between AS and AP
dated May 1, 2000
(a) Patents
(b) Trademarks
(c) Existing PSB Models
(d) PSP Inventory Assets
(e) PSB Manufacturing Assets
(f) PSB Documentation
(g) PSB Demonstration Hardware
(h) Dual Polarization Omni Antenna Documentation
(i) Chameleon(TM) Coating Process Assets
(j) Existing ESMR IAS Models
(k) ESMR IAS Inventory Assets
(l) ESMR IAS Demonstration Hardware
(m) ESMR IAS Manufacturing Assets
(n) ESMR IAS Documentation
(o) Existing AMPS IAS Models
(p) AMPS IAS Demonstration Hardware
(q) AMPS IAS Documentation
2. Attachment A of Schedule 1.1
(a) Patents and Patent Rights to be Assigned to AP and
Subject to Retained Rights by AS
(b) Pending U.S. Patent Application
(c) Corresponding Foreign Patents and Pending Patent
Applications
3. Attachment B of Schedule 1.1
(a) PSB Inventory
4. Attachment B-1
(a) Purchased Material/Raw Stock
5. Attachment B-2
(a) Completed Antennas
6. Attachment B-3
(a) Planned Additional Completed Antennas
7. Attachment B-4
(a) Work-In-Process (at 4/4/2000)
8. Attachment C of Schedule 1.1
(a) PSB Intermodulation Test Equipment
9. Attachment D of Schedule 1.1
(a) PSB Radome Molds
10. Attachment E of Schedule 1.1
(a) PSB Vendor List
11. Attachment F of Schedule 1.1
(a) PSB Customer Contact List
12. Attachment G of Schedule 1.1
(a) PSB Engineering Data
13. Attachment H of Schedule 1.1
(a) PSB Manufacturing Drawings
14. Attachment I of Schedule 1.1
(a) PSB Manufacturing Operation Sheets and CNS Punch
Tapes
15. Attachment J of Schedule 1.1
(a) PSB Product Data Sheets
16. Attachment K of Schedule 1.1
(a) PSB Historical Sales and Backlog
17. Attachment L of Schedule 1.1
(a) PSB Demonstration Hardware
18. Attachment M of Schedule 1.1
(a) Chameleon(TM) Product Data
19. Attachment N of Schedule 1.1
(a) ESMR IAS Inventory
20. Attachment O of Schedule 1.1
(a) ESMR IAS Engineering Support Documentation
21. Attachment P of Schedule 1.1
(a) ESMR IAS Marketing and Product Support Documentation
22. Attachment Q of Schedule 1.1
(a) ESMR IAS Manufacturing Drawings
23. Attachment R of Schedule 1.1
(a) AMPS IAS Demonstration Hardware
24. Attachment S of Schedule 1.1
(a) AMPS IAS Marketing Documentation
25. Attachment T of Schedule 1.1
(a) AMPS IAS Manufacturing Drawings
26. Attachment U of Schedule 1.1
(a) AMPS IAS Software
27. Schedule 4.3 of Asset Purchase Agreement Between AS and AP,
Dated May 1, 2000.
28. Attachment (A) of Schedule 4.3
(a) Limited Warranty for Standard Commercial
Communication Products
29. Exhibit A of Asset Purchase Agreement Between AS and AP
Dated May 1, 2000
(a) Bill of Sale Form
30. Exhibit B of Asset Purchase Agreement Between AS and
AP Dated May 1, 2000
(a) Document Evidencing Transfer of Title to AP Common
Shares
31. Attachment B-1
32. Attachment B-2
(a) Investment Representation of AS
33. Attachment B-3
(a) Investment Representation of Franklin
34. Attachment B-4
(a) Investment Representations of Monticello
35. Exhibit C of Asset Purchase Agreement Between AS and
AP Dated May 1, 2000
(a) Confirmatory Patent Assignment
36. Bill of Sale and Assignment
37. Confirmatory Patent Assignment
(a) Exhibit A
1. Patents and Patent Rights to be Assigned to AP and
Subject to Retained Rights by AS
2. Pending U.S. Patent Application
3. Corresponding Foreign Patents and Pending Patent
applications
38. Stock Issuance Agreement
(a) Attachment B-1
1. Letter to Transfer Agent
(b) Attachment B-2
1. Investment Representation of AS
(c) Attachment B-3
1. Investment Representation of Franklin
(d) Attachment B-4
1. Investment Representation of Monticello
*Copies of the exhibits to the asset purchase agreement will be
provided to the Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Antenna Products, Inc.
Date: May 11, 2000 ____________________________________
Clark D. Wraight, Vice President and
Principal Financial Officer
