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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
December 20, 2000
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Date of Report (Date of earliest event reported)
Illinois Superconductor Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-22302 36-3688459
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
451 Kingston Court, Mt. Prospect, Illinois 60056
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(Address of principal executive offices) (Zip Code)
(847) 391-9400
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(Registrant's telephone number)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 20, 2000, pursuant to an agreement dated November 1, 2000
(the "LMC Agreement"), the Company, through Illinois Superconductor Canada
Corporation ("ISC Canada"), a wholly-owned subsidiary of the Company, acquired
certain assets related to the Adaptive Notch Filtering ("ANF") business unit of
Lockheed Martin Canada, Inc. ("LMC"), in exchange for 2,500,000 shares of common
stock of the Company (the "Transaction"). LMC has developed a technology
designed to monitor and suppress sources of narrow-band interference that can
reduce quality and capacity of CDMA-based wireless systems (the "ANF Business").
In connection with the Transaction, Daniel Spoor, the President of Lockheed
Martin Canada Inc., has been appointed to be a member of the Company's Board of
Directors.
Pursuant to the LMC Agreement, ISC Canada purchased inventory and
equipment, books and records and other assets necessary to operate the ANF
Business. ISC Canada also purchased all of LMC's right, title and interest in
and to certain patents, patent applications and other intellectual property
listed in the LMC Agreement or necessary for the conduct of the ANF Business.
Pursuant to the LMC Agreement, ISC Canada purchased and agreed to assume all of
LMC's rights and interests in a purchase contract with Bell Mobility Canada
("Bell Mobility"), pursuant to which ISC Canada will develop and sell ANF
products to Bell Mobility.
In connection with the Transaction, pursuant to a Registration Rights
Agreement between the Company, ISC Canada, and LMC ("Registration Rights
Agreement"), the Company has agreed to file, within 60 days of the closing of
the Transaction (the "Closing"), a registration statement with respect to the
shares of the Company's Common Stock issued to LMC, and to use commercially
reasonable best efforts to cause such registration statement to be promptly
declared effective. Each of the Company and ISC Canada, on the one hand, and
LMC, on the other, will, with limitations, indemnify and hold the other harmless
against any damages to which it becomes liable under federal or state securities
laws as a result of the other's acts or omissions. If, more than one year after
the Closing, the Company proposes to register any of its securities under the
Securities Act, and the registration form to be used may be used for the
registration of the Company's common stock for resale, the Company will promptly
notify LMC of its intention to effect such a registration and, subject to
certain limitations, will include in the registration the shares of Company
common stock issued to LMC pursuant to the LMC Agreement which may not be resold
by the holder thereof under Rule 144.
Pursuant to the LMC Agreement, LMC has agreed to indemnify ISC Canada,
the Company, their respective Affiliates (as defined in the LMC Agreement) and
their respective directors, officers, employees and agents against, and to hold
them harmless from, certain liabilities arising out of any breach by LMC of any
representation, warranty or covenant of LMC in the LMC Agreement or any other
document delivered by LMC pursuant to the LMC Agreement, to the extent that and
only for so long as such representation, warranty or covenant survives the
Closing.
The Company and ISC Canada have agreed to indemnify LMC and certain
related parties for certain liabilities arising out of the Company's or ISC
Canada's breach of any representation, warranty or covenant of the Company in
the LMC Agreement or any other document delivered by the Company or ISC Canada
pursuant to the LMC Agreement, to the extent that and only for so long as such
representation, warranty or covenant survives the Closing.
Except as described in the next following sentence, each party's
liability with respect to any breach by such party of a representation, warranty
or covenant contained in the LMC Agreement which survives the Closing shall be
limited to $3,500,000. This limitation of liability will not apply in respect of
any representation or warranty which was known by a party to be untrue as of the
date of the LMC
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Agreement or which became untrue as a result of an unlawful, grossly negligent
or intended violation of the provisions of the Agreement by such party or any of
its Affiliates.
The description of the Transaction contained herein is qualified in its
entirety by reference to the LMC Agreement and the related Exhibits and
Attachments, all of which are included as an exhibit to this current report on
Form 8-K.
The Transaction is subject to certain risks, including the risk that
the Company will not be able to successfully integrate the ANF Business into its
existing business.
ITEM 5. OTHER EVENTS.
On December 29, 2000, holders of our senior convertible notes converted
$14,354,778 in principal amount of such notes plus accrued interest into
63,283,309 shares of common stock.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired
To be filed not later than March 5, 2000.
(b) Pro Forma Financial Information
To be filed not later than March 5, 2000.
(c) Exhibits.
Exhibit 2.1 Transaction Agreement, dated November 1, 2000, by and
among the Company, Illinois Superconductor Canada
Corporation and Lockheed Martin Canada, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ILLINOIS SUPERCONDUCTOR CORPORATION
By: /s/ CHARLES WILLES
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Charles Willes, Chief Financial Officer
Dated: January 4, 2001
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INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
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2.1 Transaction Agreement, dated November 1, 2000, by and among the
Company, Illinois Superconductor Canada Corporation and Lockheed Martin
Canada, Inc.
