TECHNOLOGY ASSET PURCHASE AGREEMENT
Exhibit
10.48
right,
title and interest in and to any and all causes of action, rights of recovery
and releases related to past infringement of any of the Scheduled Intellectual
Property and/or any Purchased Asset.
is
competitive with the Business Conducted by Buyer and/or CMC (as defined in
the
Asset Purchase Agreement) within the United States, France, the United Kingdom,
the Netherlands, Germany, Italy, Japan, Taiwan, the People’s Republic of China,
Korea, Malaysia, and Singapore.
required
by the Seller that incurs actual out-of-pocket costs above and beyond costs
incurred in the use of Seller’s own resources, such as employee
time.
Seller’s
knowledge, BSI has complied, and is in compliance, in all material respects,
with all applicable laws, statutes, orders, rules, regulations and requirements
promulgated by governmental or other authorities relating to the Scheduled
Intellectual Property and the Seller has received no notice of any sort of
alleged violation of any such law, statute, order, rule, regulation or
requirement. Except as set forth in Schedule
8.01(g)(i),
no
licenses, sublicenses, covenants or agreements have been granted or entered
into
by the Seller or any other person or entity for the Seller in respect of
any of
the Scheduled Intellectual Property;
the
Technology is not subject to any judgment, order or decree of any court or
governmental agency. The Seller has not received any opinion or memorandum
or
legal advice from legal counsel retained by the Seller to the effect that
it is
exposed, from a legal standpoint, to any liability which may be material
to the
Technology. The Seller is not engaged in any legal action with respect to
the
Technology to recover monies due it or for damages sustained or incurred
by it,
nor does Seller have any such damages due it, or sustained or incurred by
it.
Schedule 8.01(k)
sets
forth a list of all litigation, claims and similar matters to which the
Technology (or the Seller with respect to the Technology) was a party during
the
five (5) years preceding the date hereof, the date such litigation was commenced
or concluded, and the nature of the resolution thereof (including amounts
paid
in settlement or judgment).
applicable
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to creditor's rights generally and are subject to general principles of
equity.
Shareholder
acknowledges and agrees that Purchaser may join them as defendants in connection
with any indemnifiable claim under Section 9.01(a) without the necessity
of a
finding that Damages will or will likely exceed the BSI Indemnity Cap. QED
and
each QED Shareholder acknowledges and agrees that upon execution of this
Agreement and at Closing, QED and the QED Shareholders will directly benefit
from this Agreement. QED and each QED Shareholder acknowledges and agrees
that
the benefit conferred upon each of them in connection with this Agreement
constitutes adequate consideration for their joint and several indemnification
obligations hereunder. QED and each QED Shareholder further acknowledges
and
agrees that this Agreement is a Contemplated Transaction (as defined in the
Asset Purchase Agreement).
determination
made in such Third-Party Claim or any compromise or settlement effected
by the
Indemnified Person.
Indemnified
Person on demand or, in the case of any notice in which the amount of
the claim
(or any portion thereof) is estimated, on such later date when the amount
of
such claim (or such portion thereof) becomes finally determined. If the
Indemnifying Person has timely disputed its liability with respect to
such
claim, as provided above, the Indemnifying Person and the Indemnified
Person
shall proceed in good faith to negotiate a resolution of such dispute
and, if
not resolved through negotiations, such dispute shall be resolved pursuant
to
Section 9.03(g).
THIS
TECHNOLOGY ASSET PURCHASE AGREEMENT (this “Agreement”)
is
made as of June 15, 2006 by and among Cabot
Microelectronics Corporation, a Delaware Corporation having a place of business
at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (“CMC”
or
the
“Parent”),
QED
Technologies International, Inc., a Delaware corporation having a place of
business at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Purchaser”),
and
Byelocorp Scientific, Inc., a New York corporation having a place of business
at
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (“BSI”
or
the
“Seller”).
RECITALS
WHEREAS,
BSI owns certain technology and certain rights to that technology, including
patents solely owned by BSI (the “BSI
Patents”)
and
other patents co-owned by BSI and the University of Rochester (“Rochester”)
(the
“BSI/Rochester
Patents”),
that
relate to shape forming, finishing, polishing and metrology of optical elements
and other work pieces including magnetorheological methods, devices, fluids,
compositions and related deterministic surface finishing processes (the
“Technology”);
WHEREAS,
BSI also has an exclusive license under Rochester’s ownership interest in the
BSI/Rochester Patents, pursuant to an Exclusive License Agreement between BSI
and Rochester, dated June 12, 2006 (the “BSI/Rochester
Exclusive License”);
WHEREAS,
BSI has granted MR Finishing Systems, LLC, the predecessor to QED Technologies,
Inc., a New York corporation (“QED”),
an
exclusive license under the BSI Patents and under BSI’s ownership interest in
the BSI/Rochester Patents, pursuant to a License Agreement, dated July 25,
1996
(the “BSI/QED
Exclusive License”);
WHEREAS,
QED, Purchaser, CMC, ▇▇▇ ▇▇▇▇▇▇ (“▇▇▇▇▇▇”)
and
▇▇▇▇▇▇ ▇▇▇▇▇ (“▇▇▇▇▇”
and,
together with ▇▇▇▇▇▇, the “QED
Shareholders”)
have
entered into an Asset Purchase Agreement, dated June 14, 2006 (the “Asset
Purchase Agreement”),
pursuant to which QED is selling to the Purchaser and the Purchaser is acquiring
from QED, substantially all of the assets of QED (the “Asset
Purchase Transaction”);
WHEREAS,
the BSI/QED Exclusive License will be terminated on the Closing Date
simultaneous with the Asset Purchase Transaction;
WHEREAS,
▇▇▇▇▇ and certain members, and trusts for the benefit of members, of ▇▇▇▇▇’▇
family own 100% of the capital stock and all voting and equity interests in
BSI,
and, pursuant to voting trust agreements, ▇▇▇▇▇ has the exclusive right to
vote
100% of the voting interests of BSI;
WHEREAS,
▇▇▇▇▇ and certain members, and trusts for the benefit of members, of ▇▇▇▇▇’▇
family own 50% of the Class A Common Stock of QED and 50% of the voting
interests in QED; and
WHEREAS,
as part of the Asset Purchase Transaction and simultaneously with the Closing
thereunder, the Seller desires to sell and transfer to the Purchaser, and the
Purchaser desires to acquire from the Seller, certain assets used in or relating
to the Technology, including the BSI Patents, BSI’s ownership interest in the
BSI/Rochester Patents, and BSI’s rights and obligations under the BSI/Rochester
Exclusive License.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants,
representations and warranties contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Purchaser and the Seller hereby agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Specific
Definitions.
As used
in this Agreement, "Scheduled
Intellectual Property"
means:
(i) all patents and patent applications, together with any patents that may
issue based thereon, which are listed on Exhibit
A
attached
hereto (including the BSI Patents and the BSI/Rochester Patents), and all
priority applications or patents and continuing applications or patents,
reissues, re-examinations and renewals thereof; (ii) all foreign applications
based on the foregoing referenced U.S. patents and patent applications, together
with all patents which may issue based thereon, which are also listed on
Exhibit
A
attached
hereto; (iii) copyrights, trademarks and service marks which are applicable
to,
or utilized in connection with the Technology and which are listed on
Exhibit
B
attached
hereto; and (iv) all confidential business information, financial, marketing
and
business data, databases, know-how, trade secrets, formulas, inventions,
invention disclosures, discoveries, ideas, data, processes, drawings, and
designs now owned or controlled by the Seller which are related to the matters
referenced in the foregoing clauses (i), (ii) and (iii).
Section
1.02 Definitional
Provisions.
The
words "hereof," "herein," and "hereunder" and words of similar import, when
used
in this Agreement, shall refer to this Agreement as a whole and not to any
particular provisions of this Agreement. Terms defined in the singular shall
have a comparable meaning when used in the plural, and vice-versa.
ARTICLE
II
SALE
AND PURCHASE OF ASSETS
Section
2.01 Purchased
Assets.
Subject
to and upon the terms and conditions of this Agreement, and in reliance upon
the
representations, warranties, covenants and agreements made in this Agreement
by
the Seller at the Closing on the Closing Date (as defined in Section 5.01 of
this Agreement), the Purchaser shall purchase and accept from the Seller, and
the Seller shall sell, transfer, convey, assign and deliver to the Purchaser,
free and clear of all liens, claims, encumbrances or other right (subject to
(a)
Rochester’s right, title and interest in and to the BSI/Rochester Patents
(subject to the BSI/Rochester Exclusive License), (b) any statutory or
regulatory right or interest of the U.S. Government in or to Rochester’s right,
title and interest in and to the BSI/Rochester Patents, (c) Rochester’s rights
and interests under the BSI/Rochester Exclusive License (a copy of which is
attached as Exhibit
C
to this
Agreement), including, without limitation, Rochester’s nonexclusive limited
license under the BSI/Rochester Patents and certain of the issued U.S. BSI
Patents (collectively, the “IP
Encumbrances”),
(d)
QED’s rights and interests under the BSI/QED Exclusive License (which will be
terminated on the Closing Date simultaneous with the Asset Purchase Transaction)
and (e) Permitted Encumbrances (as defined in the Asset Purchase Agreement,
but
excluding encumbrances set forth on Part 3.9 of the Disclosure Letter delivered
by QED in connection with the Asset Purchase Agreement)), all of the Seller’s
right, title and interest in and to all of its assets and properties used in
or
relating to the Technology (collectively, the “Purchased
Assets”),
including, without limitation, on a worldwide basis: (a) the Seller’s entire
right, title and interest in and to all of the Scheduled Intellectual Property,
including the BSI/Rochester Exclusive License; (b) all goodwill associated
with
any of the foregoing; and (c) all other intellectual property of the Seller
which is related to the Technology wheresoever located and whether or not called
or reflected on the books, records and financial statements of the Seller ;
provided, however, that the name Byelocorp Scientific and variations thereof
and
derivations therefrom shall be excluded from the Purchased Assets.
Section
2.02 Past
Infringement.
The
Seller further grants, conveys and assigns to Purchaser, without representation
or warranty of any kind or nature except as expressly set forth herein, all
of
its
Section
2.03 Approvals
and Consents.
The
Seller will obtain all necessary third party consents, assignments, releases
of
liens or other approvals which may be necessary on the part of the Seller to
consummate the sale of Purchased Assets to Purchaser pursuant to this
Agreement.
Section
2.04 Additional
Obligations.
(a)
File
Transfer.
Within
fifteen (15) calendar days following the Closing Date, the Seller will provide
Purchaser with all original prosecution files relating to the Scheduled
Intellectual Property, together with all books and records relating to any
patent royalties, licenses and other material agreements or correspondence;
provided, however, that during the period prior to Seller’s delivery of such
files and documents to Purchaser, Seller will take all reasonably necessary
actions to avoid impairing in any material respect any of the Scheduled
Intellectual Property or Purchased Assets.
(b)
Further
Assistance.
From
and after the Closing, the Seller shall provide continuing reasonable
cooperation and support to Purchaser with respect to the Purchased Assets,
including, by way of example and not limitation, the following: (i) executing
documents prepared by Purchaser necessary for recordation, prosecution,
maintenance, and litigation of the Scheduled Intellectual Property; (ii)
utilizing commercially reasonable efforts to cause the inventors and other
relevant persons employed or formerly employed by the Seller to be reasonably
available to Purchaser or its counsel for interviews and/or testimony to assist
in good faith in further prosecution, maintenance or litigation of the Scheduled
Intellectual Property, including, but not limited to, the signing of documents
related thereto; (iii) forwarding copies of all correspondence sent and received
concerning the Scheduled Intellectual Property as promptly as possible after
receipt by the Seller; and (iv) making all relevant documents in the possession
or control of the Seller and corresponding to the Scheduled Intellectual
Property, or any licenses thereunder, available to Purchaser or its counsel.
Any
actual out-of-pocket expenses associated with any such assistance shall be
borne
by Purchaser, expressly excluding the value of the work time by the Seller
and
the Seller’s employees; provided, however, that in the case of assistance with
litigation, the parties shall agree on a case-by-case basis on compensation,
if
any, of the Seller for the value of the work time of the Seller as reasonably
required in connection with such litigation.
ARTICLE
III
CONSIDERATION
Section
3.01 Purchase
Price.
Subject
to the terms and conditions contained herein, the Purchaser agrees to pay to the
Seller, and the Seller agrees to accept from the Purchaser as the aggregate
purchase price for the Purchased Assets and the other covenants and agreements
of the Seller contained or referred to herein (including the Seller’s
non-compete covenants), the sum of two million, two hundred and twenty-five
thousand dollars ($2,225,000) in cash (the "Purchase
Price").
Section
3.02 Payment
of Purchase Price.
At the
Closing on the Closing Date, the Purchaser shall pay to the Seller by wire
transfer of immediately available funds to the account at a bank specified
by
the Seller in writing no less than two (2) business days prior to the Closing
Date, an aggregate amount equal to the Purchase Price.
Section
3.03 Allocation
of Purchase Price.
The
Purchase Price shall be allocated among the Purchased Assets and the non-compete
covenant set forth in Section 6.01 as set forth in Schedule 3.03 of this
Agreement. The Purchaser and the Seller agree to file all required tax reports
and returns reflecting the transactions contemplated herein consistent with
such
allocation.
Section
3.04 Payment
Guarantee by CMC.
Notwithstanding anything in this Agreement, CMC unconditionally guarantees
Purchaser’s monetary liabilities and monetary obligations under this Agreement,
including without limitation (a) the monetary liabilities and monetary
obligations of BSI in the BSI/Rochester Exclusive License after the Closing
Date, which monetary liabilities and monetary obligations the Purchaser agrees
to assume and become liable for pursuant to Section 4.01 of this Agreement,
and
(b) the monetary liability and monetary obligation of the Purchaser to make
the
payment of the Purchase Price to the Seller pursuant to Section 3.01 and Section
3.02 of this Agreement.
ARTICLE
IV
NONASSUMPTION
OF LIABILITIES
Section
4.01 Non-assumption
of Liabilities.
Except
for all of the liabilities and obligations of BSI in the BSI/Rochester Exclusive
License after the Closing Date (other than any liabilities and obligations
arising from the breach or noncompliance by BSI with the BSI/Rochester Exclusive
License prior to the Closing Date or the nonpayment of the License Price
thereunder), which liabilities and obligations the Purchaser hereby agrees
to
assume and become liable for, and except for the other liabilities and
obligations of the Purchaser pursuant to this Agreement, the Purchaser shall
not
assume, or in any way become liable for, any liabilities or obligations of
the
Seller, of any kind or nature, whether accrued, absolute, contingent or
otherwise, or whether due or to become due, or otherwise, arising out of events
or transactions or facts which shall have occurred on or prior to or, only
with
respect to the Purchased Assets, subsequent to the Closing Date (collectively,
the “Excluded
Assets”).
The
Excluded Assets shall include, without limitation: (a) 50% of all transfer,
sales, purchase, use, value added, excise or similar tax imposed under the
laws
of the United States, or any other state or political subdivision thereof,
which
arises out of the transfer of the Purchased Assets; (b) any liability or
obligation arising out of any claim, action, suit or proceeding pending as
of
the Closing Date or any subsequent claim, action, suit or proceeding arising
out
of or relating to matters or events occurring, or with respect to the manner
in
which the Seller owned or used the Technology, on or prior to the Closing Date;
(c) any liability or obligation relating to the ownership, development or
use of the Technology by the Seller on or prior to the Closing Date; (d) any
liability or obligation arising out of or relating to assets owned or leased
by
the Seller on, prior or after the Closing Date (other than with respect to
the
BSI/Rochester Exclusive License after the Closing Date); (e) any liability
or obligation of the Seller with respect to a collective bargaining agreement
or
any employee benefit or incentive plan, agreement or arrangement; (f) any
liability of the Seller or its affiliates for any federal, state, local or
foreign income taxes, or any non-accrued payroll, sales, property or other
taxes
(including, without limitation, those yet to be assessed or payable) for any
periods prior to or, other than with respect to the Purchased Assets, subsequent
to the Closing Date including, without limitation, all monies or trust fund
taxes required to be withheld by the Seller from employees employed by the
Seller; (g) the fees, costs and expenses of any person, firm, corporation
or other entity acting on behalf of, or representing the Seller as broker,
finder, investment banker, financial advisor, accountant, attorney or in any
similar capacity; (h) any debt, obligation or liability of the Seller for
money borrowed; (i) any liability or obligation resulting from a breach
caused by the Seller at any time before or after the Closing of any agreement,
contract, commitment, license or lease; (j) any liability, obligation, fine
or penalty of any kind resulting from and relating to the Seller’s violation of
applicable laws or failure to have, maintain or comply with the terms of any
required permits, licenses, certificates or other authorizations required under
applicable law; (k) any liability or obligation relating to investigation,
remediation or otherwise with respect to hazardous materials including, without
limitation, all liabilities and obligations with respect to handling, removal,
transport, treatment, storage and disposal of hazardous materials, to any
location, in each case, occurring prior to or after the Closing Date; and/or
(l) future performance obligations of the Seller in respect of outstanding
leases, contracts, licenses, sales orders and purchase orders (other than
pursuant to the BSI/Rochester Exclusive License).
ARTICLE
V
CLOSING
Section
5.01 Closing
and Closing Date.
The
closing of the transactions contemplated by this Agreement (“Closing”)
shall
take place at the offices of the Purchaser simultaneously with the “Closing”
under the Asset Purchase Agreement, anticipated to occur commencing at 10 a.m.,
Chicago time on July 6, 2006 or such other date as the parties to the Asset
Purchase Agreement may mutually agree (the date on which the Closing is to
take
place being herein sometimes referred to as the “Closing
Date”).
Notwithstanding the foregoing, this Agreement shall automatically terminate
and
be null and void and of no force or effect if the transactions contemplated
under Asset Purchase Agreement do not close on or before September 15,
2006.
Section
5.02 Closing
Deliveries.
At the
Closing on the Closing Date, (A) the Seller shall deliver to the Purchaser
fully
executed copies of the following: (a) all such bills of sale, assignments
of all intellectual property related to or arising from the Technology, contract
assignments and other documents and instruments of sale, assignment, conveyance
and transfer, necessary to sell and transfer the Purchased Assets to the
Purchaser; (b) the articles of incorporation for BSI, certified by the Secretary
of State of the State of New York as of a date within one (1) week prior to
Closing; (c) certificates of good standing for BSI from the State of New York
and any other state where BSI is required to be qualified to transact business
as a foreign corporation, issued within one (1) week prior to Closing; (d)
a
copy of BSI's by-laws, as certified by its Secretary; (e) a certified copy
of
minutes (or the unanimous written consent) of the Board of Directors of BSI
authorizing and approving the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby; (f)
the
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, special counsel for the Seller, in form and
substance reasonably satisfactory to the Purchaser; (g) any and all UCC-3
termination statements or other documents needed to release any liens on the
Purchased Assets; (h) a docket identifying all prosecution and maintenance
fee
events due within 90 days after the Closing Date with respect to the Scheduled
Intellectual Property; and (i) such other documents as the Purchaser may
reasonably request to carry out the purposes of this Agreement; (B)
the
Purchaser shall deliver to the Seller: (i)
the
Purchase Price, by wire transfer to an account specified by the Seller in
writing; (ii)
a
certified copy of minutes of the Boards of Directors of the Purchaser
authorizing and approving the execution, delivery and performance by the
Purchaser of this Agreement and the consummation by the Purchaser of the
transactions contemplated hereby; (iii)
such documents of assignment and assumption with respect to the BSI/Rochester
Exclusive License as the Seller may reasonably request; and (iv)
such
other documents as the Seller may reasonably request to carry out the purposes
of this Agreement;
and (C)
CMC shall deliver to the Seller: (i) a Secretary’s Certificate of CMC confirming
authorization and approval of the execution, delivery and performance by CMC
of
this Agreement and the consummation of the transactions contemplated hereby;
and
(ii) such other documents as the Seller may reasonably request to carry out
the
purposes of this Agreement.
ARTICLE
VI
ADDITIONAL
COVENANTS AND AGREEMENTS OF THE SELLER
Section
6.01 Noncompetition,
Nonsolicitation and Nondisparagement
(a) Noncompetition.
For a period of five (5) years after the Closing Date (the "Period"),
Seller shall not, without the prior written consent of the Chairman of the
Purchaser’s board of directors, or the President of CMC, participate or engage
in, directly or indirectly (as an owner, shareholder (other than passive
ownership of up to two percent (2%) of the outstanding stock of any class that
is publicly traded), partner, independent contractor, consultant, advisor or
in
any other capacity calling for the rendition of services, advice, or acts of
management, operation or control), any business that, during the Period, is
competitive with the Purchased Assets sold by Seller to Purchaser hereunder
or
(b) Nonsolicitation.
During the Period, Seller shall not, directly or indirectly:
(i) cause,
induce or attempt to cause or induce any customer, supplier, licensee, licensor,
employee, consultant or other business relation of Purchaser or CMC to cease
doing business with Purchaser or CMC, to deal with any competitor of Purchaser
or CMC or in any way interfere with its relationship with Purchaser or CMC
with
respect to businesses conducted by the Purchaser or CMC as of the
Closing;
(ii) cause,
induce or attempt to cause or induce any customer, supplier, licensee, licensor,
employee, consultant or other business relation of Seller on the Closing Date
or
within the year preceding the Closing Date to cease doing business with
Purchaser or CMC, to deal with any competitor of Purchaser or CMC or in any
way
interfere with its relationship with Purchaser or CMC; or
(iii) hire,
retain or attempt to hire or retain any employee or independent contractor
of
Purchaser or CMC or in any way interfere with the relationship between Purchaser
or CMC and any of its respective employees or independent contractors. For
purposes of clarity, Purchaser in this Section 6.01(b) includes the employees
and contractors of QED up to and including the Closing Date, as well as those
retained by Purchaser during the Period.
(c) Nondisparagement.
After the Closing Date, none of the parties hereto will disparage any other
party hereto or such party’s shareholders, directors, officers, employees or
agents publicly or to any third party, other than in connection with any
Proceeding (as defined in the Asset Purchase Agreement).
(d) Modification
of Covenant. If a final judgment of a court or tribunal of competent
jurisdiction determines that any term or provision contained in Section 6.01(a)
through (c) is invalid or unenforceable, then the parties agree that the court
or tribunal will have the power to reduce the scope, duration or geographic
area
of the term or provision, to delete specific words or phrases or to replace
any
invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of
the
invalid or unenforceable term or provision. This Section 6.01 will be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed. Seller expressly agrees that this Section 6.01 is
reasonable and necessary to protect and preserve Purchaser's legitimate business
interests and the value of the Purchased Assets and to prevent any unfair
advantage conferred on Seller.
Section
6.02 Additional
Agreements.
At
Closing, the Seller shall execute all such bills of sale, trademark assignments,
copyright assignments, patent assignments, contract assignments and other
documents and instruments of sale, assignment, conveyance and transfer, as
Purchaser or its counsel may deem reasonably necessary to effect the transfer
of
the Purchased Assets to Purchaser (including, but not limited to, evidence
satisfactory to Purchaser that the BSI/QED Exclusive License and any and all
liens on the Purchased Assets (other than Permitted Encumbrances and IP
Encumbrances) have been released or terminated).
Section
6.03 Further
Assurances.
The
Seller shall, on request of the Purchaser, on and after the Closing Date,
cooperate by furnishing any additional information, executing and delivering
any
additional documents and/or instruments and doing any and all such other things
as may be reasonably required by the Purchaser or its counsel to consummate
or
otherwise implement the transactions contemplated by this Agreement; provided,
however, that Purchaser will reimburse any such cooperation
Section
6.04 Taxes.
From
and after the Closing, the Seller agrees to indemnify the Purchaser for all
taxes attributable to the ownership of the Purchased Assets for all taxable
periods (or portions thereof) ending on or before the Closing Date
("Pre-Closing
Taxes").
From
and after the Closing, the Purchaser agrees to indemnify the Seller for all
such
taxes for all taxable periods commencing on the Closing Date. From and after
the
Closing, Taxes which are personal property taxes shall be allocated to the
Pre-Closing Taxes based on the number of days in the taxable period (or portion
thereof) ending on or before the Closing Date.
Section
6.05 Patent
Maintenance Fees.
At
Closing, the Purchaser agrees to pay the Seller for all patent maintenance fees
attributable to the patents and patent applications listed on Exhibit A of
this
Agreement only for all periods (or portions thereof) commencing on or after
the
Closing Date, but not for any periods (or portions thereof) occurring prior
to
the Closing Date, to the extent the Seller has paid any such fees on or before
the Closing Date, as set forth in more detail on Schedule
6.05
of this
Agreement, as such schedule shall be updated by Seller and delivered to
Purchaser at Closing.
ARTICLE
VII
CONDITIONS
PRECEDENT TO OBLIGATIONS
The
obligations of the Seller, CMC and the Purchaser to consummate the purchase
and
sale of the Purchased Assets and the other transactions contemplated hereby
are
subject to the satisfaction of the following conditions at or prior to the
Closing Date:
Section
7.01 Consents
and Filings.
All
consents of third parties required on the part of the Seller or the Purchaser
or
CMC for the consummation of the transactions contemplated hereby shall have
been
duly obtained or effected, including, without limitation, any consents required
by any federal, state, local or foreign government.
Section
7.02 Simultaneous
Closing of Related Asset Purchase Agreement; BSI License Price; Pre-Closing
Amendment.
The
Closing shall be contingent upon each of the following: (i) the simultaneous
closing of the Asset Purchase Agreement and the transactions contemplated
thereunder, all in accordance with the terms and conditions of the Asset
Purchase Agreement; (ii) payment by BSI of the License Price (as defined in
the
BSI/Rochester Exclusive License) to Rochester pursuant to Section 3 of the
BSI/Rochester Exclusive License on or before the Closing Date; and (iii) the
parties entering into the Pre-Closing Amendment pursuant to Section 9.03 below
on or before the Closing Date.
Section
7.03 No
Adverse Proceedings.
No
action or proceeding before any court of governmental agency or authority shall
be pending or threatened which questions the legality or validity of the
transactions contemplated hereby or which may otherwise materially adversely
affect the parties’ rights or obligations hereunder.
Section
7.04 Closing
Deliveries.
The
Seller, the Purchaser and CMC shall have delivered all reports, agreements,
certificates, instruments, opinions and other documents required to be delivered
by the Seller or the Purchaser and CMC, as the case may be, on the Closing
Date
pursuant to Section
5.02,
and the
form and substance of all such reports, agreements, certificates, instruments,
opinions and other documents shall be reasonably satisfactory to the Purchaser
and CMC or the Seller, as the case may be.
ARTICLE
VIII
REPRESENTATIONS
AND WARRANTIES
Section
8.01 Representations
and Warranties of the Seller.
The
Seller represents and warrants that the following are true and
correct:
(a) Seller
is
a corporation duly incorporated, validly existing and in good standing under
the
laws of the State of New York and is duly qualified to do business and is in
good standing in each other jurisdiction in which the character of the business
conducted by it or the location of the properties owned or leased by it makes
such qualification necessary, except where the failure to be so qualified or
in
good standing would not, individually or in the aggregate, have a material
adverse effect on the Seller or the Purchased Assets.
(b) The
Seller has full power and authority to execute, deliver and perform this
Agreement and all other documents, instruments or agreements to be executed,
delivered and performed by it in connection herewith (the
“Seller
Transaction Documents”).
The
Seller has taken all action required by law, the articles of incorporation
or
bylaws of the Seller or otherwise to authorize the execution and delivery of
the
Seller Transaction Documents and the consummation of the transactions
contemplated hereby and thereby.
(c) This
Agreement and the Seller Transaction Documents constitute the valid and binding
agreements of the Seller enforceable against it in accordance with its terms,
except as the same may be restricted, limited or delayed by applicable
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to creditors' rights generally and are subject to general principles of equity.
(d) Subject
to the IP Encumbrances and the Permitted Encumbrances, Seller (i) has good
and
marketable title to the Purchased Assets, free and clear of all liens, claims
or
encumbrances of any nature whatsoever; and (ii) has full right, power and
authority to sell, assign, transfer and deliver good and marketable title to
the
Purchased Assets hereunder, free and clear of all liens, charges, claims,
pledges and encumbrances whatsoever (other than as set forth above in this
clause (d)) and conveys such title to the Purchaser.
(e) To
the
best of the Seller’s knowledge, the Seller is not in violation of any law, rule,
regulation or order of the United States court, or any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, wherever located whether in the United States or elsewhere
affecting the Purchased Assets or the Technology.
(f) No
claims, actions, suits or proceedings are pending nor commenced during the
past
five (5) years or to the best of the Seller’s knowledge threatened at law or in
equity before any foreign, federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, wherever
located whether in the United States or elsewhere, against the Seller relating
to the Purchased Assets.
(g) (i) Exhibits
A
and
B
together
include, on a worldwide basis, all patents, copyrights, trademarks and service
marks, and any application, renewal, extension or related right relating
thereto, owned or used by the Seller as of the date of this Agreement and
related to the Technology. To the best of the Seller’s knowledge, all Scheduled
Intellectual Property, including, but not limited to, the patents, patent
applications and registrations listed in Exhibit
A
and/or
listed in Exhibit
B
are in
good standing, valid and enforceable or not known by the Seller to be invalid
or
unenforceable, subsisting and in full force and effect in accordance with their
terms, and paid-up with respect to maintenance fees such that no surcharges
or
penalty payments are required to effect maintenance fee payments. To the best
of
the
(ii) To
the
best of the Seller’s knowledge, there is not now and has not been since January
1, 2002, any infringement, misuse or misappropriation by Seller of any valid
patent, trademark, tradename, servicemark, copyright (including, without
limitation, any computer software, programs and licenses) or trade secret or
other intellectual property right, that relates to the Technology and which
is
owned by any third party, and to the best of the Seller’s knowledge there is not
now any existing or threatened claim against the Seller for infringement,
misuse, or misappropriation of any such intellectual property rights used in
connection with, or necessary for the operation of the Seller’s business
relating to, the Technology;
(iii) There
is
no pending or threatened claim by the Seller (or by any stockholder on behalf
of
the Seller) against others for infringement, misuse or misappropriation of
any
of the Purchased Assets; and
(iv) None
of
any director, affiliate or officer of BSI owns directly or indirectly (otherwise
than through ownership of stock or other equity interests of BSI and of QED),
in
whole or in part, any of the Purchased Assets.
(h) To
the
best of the Seller’s knowledge, no consent, waiver, permit, approval,
authorization or order is required by law, agreement, instrument or otherwise
(whether oral or written) to be obtained prior to the consummation of the sale
contemplated by this Agreement in order to transfer the Purchased Assets to
the
Purchaser at Closing, nor will any Purchased Assets be materially adversely
affected or materially restricted as the result of such transfer.
(i) There
is
no action at law or in equity, no arbitration proceeding, and no action,
proceeding, complaint or investigation before or by any federal, foreign, state
or local governmental or regulatory commission, agency or other administrative
or regulatory body or authority, pending or, to the Seller’s knowledge,
threatened against or affecting the Technology or any of the Purchased Assets
or
the Seller’s right to own the Purchased Assets; and the Seller has no knowledge
of any state of facts or contemplated events which may give rise to any such
claim, action, suit, proceeding, complaint or investigation.
(j) To
the
best of the Seller’s knowledge, the Seller does not (x) own, nor has the Seller
owned, the Technology in violation of any federal, foreign, state or local
law,
statute, ordinance, rule or regulation, or any court or administrative order
or
process, or (y) carry on or conduct, nor has Seller carried on or conducted,
any
of its affairs with respect to the Technology in violation of any federal,
foreign, state or local law, statute, ordinance, rule or regulation, or any
court or administrative order or process.
(k) There
is
no suit, action, proceeding, investigation, claim or order pending or, to the
knowledge of the Seller, threatened against the Technology or against the Seller
or to which the Seller is a party with respect to the Technology before any
court, or before any governmental department, commission, board, agency, or
instrumentality, nor, to the best the Seller’s knowledge, is there any
reasonable basis for any such action, proceeding or investigation. To the best
of the Seller’s knowledge,
(l) The
Seller has not employed any broker, finder or agent and has not incurred and
will not incur any obligation or liability to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.
(m) All
former and current employees of Seller (other than former and current
administrative and office personnel) and independent contractors of Seller
(other than former and current independent contractors of Seller whose duties
do
not and did not relate to the Technology) have executed written agreements
with
Seller that: (i) assign to Seller all rights to any inventions, improvements,
discoveries, works of authorship, or information developed relating to the
Technology, whether or not an application for patent or other intellectual
property right has not yet been filed, and (ii) impose confidentiality
obligations in favor of Seller as to the assigned rights described in the
immediately preceding clause (i). No current or former employee or independent
contractor of Seller has any interest in any Purchased Asset. Seller has paid
to
its respective employees and independent contractors all fees due, if any,
for
the assignment of such rights pursuant to individual agreements or applicable
legal provisions.
(n) None
of
the representations and warranties of the Seller set forth in this Agreement,
in
any of the certificates, schedules, lists, documents, exhibits, or other
instruments delivered, or to be delivered, to Purchaser as contemplated by
any
provision hereof (including, without limitation, the Seller Transaction
Documents), contains any untrue statement of a material fact or omits to state
a
material fact necessary to make the statements contained herein or therein
not
misleading.
Section
8.02 Representations
and Warranties of the Purchaser.
The
Purchaser and CMC each represents and warrants, jointly and severally, to the
Seller that the following are true and correct:
(a) Each
of
the Purchaser and CMC is a corporation duly organized, validly existing and
in
good standing under the laws of the State of Delaware, and has all necessary
corporate power to own (or hold under lease or license) its properties and
assets and to carry on its business as now conducted, except where the failure
to be so qualified or in good standing would not, individually or in the
aggregate, have a material adverse effect on the Purchaser or CMC, as
applicable.
(b) Each
of
the Purchaser and CMC has full power and authority to execute, deliver and
perform this Agreement and all other documents, instruments or agreements to
be
executed, delivered and performed by it in connection herewith (the
“Purchaser
Transaction Documents”)
and
has taken all action required by law, the charter and bylaws of the Purchaser
or
CMC, as the case may be, or otherwise to authorize the execution and delivery
of
this Agreement and the other Purchaser Transaction Documents in connection
herewith and the consummation of the transactions contemplated hereby and
thereby.
(c) This
Agreement and the Purchaser Transaction Documents constitute the valid and
binding agreements of the Purchaser and CMC, enforceable against the Purchaser
and CMC in accordance with their respective terms, except as the same may be
restricted, limited or delayed by
(d) No
consent, waiver, permit, approval, authorization or order is required by law,
agreement, instrument or otherwise (whether oral or written) to be obtained
by
the Purchaser or CMC prior to the consummation of the sale contemplated by
this
Agreement.
ARTICLE
IX
INDEMNIFICATION
Section
9.01 Indemnification
and Reimbursement.
(a) By
Seller. From and after the Closing Date, the Seller agrees to indemnify, defend
and hold harmless the Purchaser and its Representatives, shareholders,
subsidiaries and Related Persons (collectively, the “Purchaser
Indemnified Persons”)
after
the Closing from and against any Damages (as defined in the Asset Purchase
Agreement) arising out of or resulting from: (a) the untruth or inaccuracy
of
any representation or warranty of the Seller contained in this Agreement (or
in
any document, writing or certificate delivered by the Seller pursuant to this
Agreement); (b) the failure by the Seller to perform any of its covenants or
obligations hereunder; (c) any brokers’ commissions, finders’ fees or other like
payments incurred or alleged to have been incurred by the Seller in connection
with the sale of the Purchased Assets or the consummation of the transactions
contemplated by this Agreement; and (d) any claims, actions, liabilities,
obligations, damages, losses, costs or expenses (including reasonable attorneys’
fees) which may be suffered or incurred by any Purchaser Indemnified Person
as a
result of the assertion against any Purchaser Indemnified Person of any
liabilities or obligations of the Seller (other than (i) the liabilities and
obligations of BSI in the BSI/Rochester Exclusive License which the Purchaser
agrees to assume and become liable for pursuant to Section 4.01 (excluding
any
liabilities and obligations arising from the breach or noncompliance by BSI
with
the BSI/Rochester Exclusive License prior to the Closing Date or the nonpayment
of the License Price thereunder); and (ii) the other liabilities and obligations
of the Purchaser pursuant to this Agreement).
(b) BSI
Indemnity Cap; Excess Damages.
The
total aggregate amount of Damages for which BSI is liable pursuant to Section
9.01(a) shall not exceed $2,225,000 (the “BSI
Indemnity Cap”).
Notwithstanding the foregoing, the amount of Damages recoverable by Purchaser
and the other Purchaser Indemnified Persons from QED and the QED Shareholders
pursuant to the provisions of Section 9.01(a) is not limited to the BSI
Indemnity Cap and such Damages may exceed the BSI Indemnity Cap as described
in
Section 9.01(c) below. All Damages in excess of the BSI Indemnity Cap shall
be
referred to herein as “Excess
Damages”.
Any
Excess Damages and other Damages hereunder and under the Purchase Agreement
shall not in the aggregate exceed the Indemnity Cap under the Asset Purchase
Agreement.
(c) By
QED
and the QED Shareholders.
QED and
the QED Shareholders agree to be jointly and severally liable for all Excess
Damages; provided that such Excess Damages, together with all other Damages
hereunder or under the Asset Purchase Agreement shall not exceed the Indemnity
Cap (as defined in the Asset Purchase Agreement). Purchaser acknowledges and
agrees that its indemnification rights under Section 9.01(a) for Excess Damages
shall be pursued exclusively as set forth in Section 11 of the Asset Purchase
Agreement and shall be subject to the Escrow, Escrow Exclusions and Indemnity
Cap provisions set forth therein. QED and each QED
Section
9.02 Indemnification
and Reimbursement. by the Purchaser.
From
and after the Closing Date, the Purchaser will indemnify and hold harmless
the
Seller and its Representatives, shareholders, subsidiaries and Related Persons
(collectively, the “Seller
Indemnified Persons”)
and
will reimburse the Seller Indemnified Persons, for any Damages arising from
or
in connection with:
(a) the
untruth or inaccuracy of any representation or warranty made by the Purchaser
or
CMC in this Agreement or in any certificate, document, writing or instrument
delivered by the Purchaser or CMC pursuant to this Agreement;
(b) the
failure of the Purchaser or CMC to perform any of its covenants or obligations
hereunder;
(c) any
claim
by any person for brokerage or finder’s fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by such
person with the Purchaser or CMC (or any person acting on the Purchaser’s or
CMC’s behalf) in connection with any of the transactions contemplated by this
Agreement;
(d) any
Damages which may be suffered or incurred by the Seller Indemnified Persons
as a
result of the assertion against any Seller Indemnified Person of any liabilities
or obligations of the Purchaser or CMC, including the liabilities and
obligations of BSI in the BSI/Rochester Exclusive License after the Closing,
which the Purchaser hereby agrees to assume and become liable for, pursuant
to
and in accordance with Section 4.01. Seller acknowledges and agrees that its
indemnification rights under this Section 9.02 shall be pursued exclusively
as
set forth in Section 11 of the Asset Purchase Agreement and shall be subject
to
the limitation on liability provisions set forth in Section 11.6
therein.
Section
9.03 Pre-Closing
Undertaking Among BSI, QED, Purchaser and the QED Shareholders.
BSI,
QED, Purchaser and the QED Shareholders each acknowledge and agree that it
is
the intent of the parties that the indemnification obligations of BSI under
this
Agreement be consistent with the indemnification terms, conditions, procedures
and other provisions set forth in Sections 11.5 through 11.16 of the Asset
Purchase Agreement (collectively, the “APA
Indemnification Terms”),
including, but not limited to, the basket, the Escrow, Time Limitations and
the
Escrow Exclusions described therein, provided, however, that: (i) all monetary
baskets, caps and thresholds are intended to apply to Damages hereunder and
thereunder in the aggregate and shall not create or give rise to duplicate
or
separate baskets, caps and thresholds in contravention of the Purchaser’s
intended rights and benefits under the APA Indemnification Terms; (ii)
notwithstanding the provisions of the immediately preceding clause (i), for
purposes of application to BSI of the APA Indemnification Terms, the BSI
Indemnity Cap shall be substituted for the Indemnity Cap (as defined in the
Asset Purchase Agreement); and (iii) for the avoidance of doubt BSI shall have
no liability under the Asset Purchase Agreement for any obligations of QED
or
the QED Shareholders thereunder. The parties hereto expressly acknowledge and
agree that it is their intent that BSI receive the benefit of, and undertake
the
obligations under, the APA Indemnification Terms. Toward that end, the parties
hereto agree to use good faith, diligent and commercially reasonable efforts
to
draft, negotiate and enter into an amendment to this Agreement after the date
hereof and before the Closing to effect the foregoing intent, and only the
foregoing intent (the “Pre-Closing
Amendment”).
.
.
Section
9.04 Knowledge
and Materiality Qualifiers.
Any
knowledge (including best knowledge) and materiality qualifiers in Seller’s,
CMC’s or Purchaser’s representations and warranties in this Agreement shall be
disregarded for purposes of determining Seller’s, CMC’s, Purchaser’s, QED’s and
the QED Shareholder’s indemnification obligations, as applicable (including the
extent of Damages), in this Section 9.
ARTICLE
X
MISCELLANEOUS
Section
10.01 Notices.
All
notices, requests, demands and other communications required or permitted to
be
given hereunder shall be by hand-delivery, certified or registered mail, return
receipt requested, facsimile, or air courier to the parties set forth below.
Such notices shall be deemed given: at the time delivered by hand, if personally
delivered; at the time received if sent certified or registered mail; when
answered back, if telexed; when receipt acknowledged, if telecopied; and the
fifth (5th) business day after timely delivery to the courier, if sent by air
courier.
If
to
the Seller:
Byelocorp
Scientific, Inc.
▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇
▇.
▇▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
If
to
the Purchaser:
QED
Technologies International, Inc.
▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
General
Counsel
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
If
to
CMC:
Cabot
Microelectronics Corporation
▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
General
Counsel
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Section
10.02 Governing
Law and Jurisdiction.
This
Agreement will be governed by and construed under the laws of the State of
Illinois without regard to conflicts-of-laws principles that would require
the
application of any other law. Any Proceeding arising out of or relating to
this
Agreement or any Contemplated Transaction may be brought in the courts of the
State of Illinois, County of DuPage, or, if it has or can acquire jurisdiction,
in the United States District Court for the Northern District of Illinois,
Eastern Division, and each of the parties irrevocably submits to the exclusive
jurisdiction of each such
court
in
any such Proceeding, waives any objection it may now or hereafter have to venue
or to convenience of forum, agrees that all claims in respect of the Proceeding
shall be heard and determined only in any such court and agrees not to bring
any
Proceeding arising out of or relating to this Agreement or any Contemplated
Transaction in any other court. The parties agree that either or both of them
may file a copy of this paragraph with any court as written evidence of the
knowing, voluntary and bargained agreement between the parties irrevocably
to
waive any objections to venue or to convenience of forum. Process in any
Proceeding referred to in the first sentence of this section may be served
on
any party anywhere in the world.
Section
10.03 WAIVER
OF TRIAL BY JURY.
EACH
PARTY HERETO HEREBY, TO THE EXTENT PERMITTED BY LAW, KNOWINGLY, VOLUNTARILY,
AND
INTENTIONALLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR OTHER LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS
IT
CONTEMPLATES. THIS WAIVER APPLIES TO ANY ACTION OR LEGAL PROCEEDING, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE.
Section
10.04 Sales
and Transfer Taxes.
Notwithstanding anything herein to the contrary, the Seller shall pay 50% and
the Purchaser shall pay 50% of the cost of any transfer, sales, purchase, use,
value added, excise or similar tax imposed under the laws of the United States
or any state or political subdivision thereof, which arises out of the transfer
of any of the Purchased Assets to the Purchaser.
Section
10.05 Execution
in Counterparts.
This
Agreement may be executed simultaneously 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.
Section
10.06 Titles
and Headings.
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.
Section
10.07 Entire
Agreement.
This
Agreement, the other Seller Transaction Documents and Purchaser Transaction
Documents, the Asset Purchase Agreement and the Transaction Documents referred
to therein, constitute the entire agreement among the parties with respect
to
the matters covered hereby and shall supersede all previous written, oral or
implied understandings among them with respect to such matters.
Section
10.08 Amendment
and Modification.
This
Agreement may be amended, modified or supplemented only by mutual consent set
forth in writing duly signed by the parties hereto.
Section
10.09 Currency.
All
amounts expressed in this Agreement and all payments by this Agreement shall
be
in United States dollars.
Section
10.10 Binding
Effect; Assignment.
This
Agreement shall be binding upon, and inure to the benefit of, the parties hereto
and their respective successors, permitted assigns, heirs and personal
representatives. No party, without the consent of all other parties, may assign
its rights or obligations under or related to this Agreement whether
voluntarily, involuntarily, by operation of law, transfer of the capital stock
or assets of any party or otherwise, except that the Purchaser may, without
any
consent, either prior to, at or after the Closing assign its rights and
obligations under or related to this Agreement to any subsidiary corporation
or
other affiliated entity of the Purchaser; provided, however, that no such
assignment shall relieve the Purchaser or CMC of its obligations under this
Agreement.
Section
10.11 Expenses.
Except
as otherwise provided in this Agreement, each party hereto shall pay their
own
expenses, including, without limitation, the expenses of its or their own
counsel and accountants, in connection with the consummation of the transactions
contemplated by this Agreement.
Section
10.12 Exhibits
and Schedules.
The
Exhibits and Schedules hereto shall be construed with and as an integral part
of
this Agreement to the same effect as if the contents thereof had been set forth
verbatim herein.
Section
10.13 Public
Announcement.
All
notices to third parties and all other publicity relating to the transactions
contemplated by this Agreement shall be jointly planned, coordinated and agreed
to by the Purchaser and the Seller, except to the extent disclosures are
required by applicable law.
Section
10.14 Severability.
If any
provision of this Agreement shall be found invalid or unenforceable, in whole
or
in part, then such provision shall be deemed to be modified or restricted to
the
extent and in the manner necessary to render the same valid and enforceable,
or
shall be deemed excised from this Agreement, as the case may require, and this
Agreement shall be construed and enforced to the maximum extent permitted by
law, as if such provision had been originally incorporated herein as so modified
or restricted, or as if such provision had not been originally incorporated
herein, as the case may be.
[signature
page follows]
3
IN
WITNESS WHEREOF the parties hereto have executed this Technology Asset Purchase
Agreement as of the day and year first above written.
SELLER:
BYELOCORP
SCIENTIFIC, INC.
By:
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Chairman, Chief Executive Officer and President
THE
PURCHASER:
QED
TECHNOLOGIES INTERNATIONAL, INC.
By:
Name:
Title:
CMC:
CABOT
MICROELECTRONICS CORPORATION
By:
Name:
Title:
3
QED
Technologies, Inc., ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ are parties to this Technology
Asset Purchase Agreement solely with respect to their obligations under Section
9
QED
TECHNOLOGIES, INC., a New York corporation
By:
Name:
Title:
▇▇▇
▇▇▇▇▇▇, an individual
____________________________________________
▇▇▇▇▇▇
▇▇▇▇▇, an individual
____________________________________________
3
Pursuant
to Item 601(b)(2) of Regulation S-K, Cabot Microelectronics Corporation hereby
agrees to furnish supplementally to the Securities and Exchange Commission
a
copy of the following schedules to the Technology Asset Purchase Agreement,
which have been omitted from this filing:
|
Schedule
|
Contents
|
|
Exhibit
A
|
List
of patents
|
|
Exhibit
B
|
List
of copyrights, tradenames and service marks
|
|
Exhibit
C
|
BSI/Rochester
exclusive license agreement
|
|
Schedule
6.05
|
List
of patent maintenance fees
|
|
Schedule
8.01(g)
|
List
of sublicenses
|
|
Schedule
8.01(k)
|
List
of litigation
|
PRE-CLOSING
AMENDMENT
TO
This
Pre-Closing Amendment to Technology Asset Purchase Agreement (this “Amendment”),
dated
as of 7 July 2006, is by and among Cabot
Microelectronics Corporation, a Delaware corporation (“CMC”
or
the
“Parent”),
QED
Technologies International, Inc., a Delaware corporation and wholly owned
subsidiary of CMC (the “Purchaser”),
Byelocorp Scientific Inc., a New York corporation (“BSI”
or
the
“Seller”),
QED
Technologies, Inc., a New York corporation (“QED”),
▇▇▇
▇▇▇▇▇▇, an individual (“▇▇▇▇▇▇”),
and
▇▇▇▇▇▇ ▇▇▇▇▇, an individual (“▇▇▇▇▇”
and,
together with ▇▇▇▇▇▇, the “QED
Shareholders”
and,
each, a “QED
Shareholder”).
RECITALS
WHEREAS,
Parent, Purchaser and Seller are parties to that certain Technology Asset
Purchase Agreement dated as of June 15, 2006 (the “Agreement”);
WHEREAS,
QED and the QED Shareholders are parties to the Agreement for indemnification
purposes as set forth therein; and
WHEREAS,
Parent, Purchaser, Seller, QED and the QED Shareholders desire to enter
into
this Amendment to further provide for certain indemnification matters as
contemplated by and described in Section 9.03 of the Agreement,
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, Parent, Purchaser, Seller, QED and the QED
Shareholders hereby agree as follows:
AGREEMENT
1. Section
9.03 of the Agreement shall be deleted in its entirety and the following
inserted in lieu thereof:
“Section
9.03 Indemnification
Generally.
Defined
terms used in this Section 9.03 but not defined herein or elsewhere in
the
Agreement shall have the definitions assigned to such terms in the Asset
Purchase Agreement.
(a) Survival.
All
representations, warranties, covenants and obligations in this Agreement,
the
certificates delivered pursuant to Section 5.02(A) and any other certificate
or
document delivered by the Seller pursuant to this Agreement shall survive
the
Closing and the consummation of the Contemplated Transactions, subject
to
Section 9.03(c) below. The right to indemnification, reimbursement or other
remedy based upon such representations, warranties, covenants and obligations
shall not be affected by any investigation conducted with respect to, or
any
Knowledge acquired (or capable of being acquired) at any time, whether
before or
after the execution and delivery of this Agreement or the Closing Date,
with
respect to the accuracy or inaccuracy of or compliance with any such
representation, warranty, covenant or obligation. The waiver of any condition
based upon the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right
to
indemnification, reimbursement or other remedy based upon such representations,
warranties, covenants and obligations.
(b) Limitations
on Amount.
Neither
Seller, QED nor any QED Shareholder shall have liability (for indemnification
or
otherwise) with respect to claims under Section 9.01(a) until the total
of all
Damages with respect to such matters, together with Damages under Section
11 of
the Asset Purchase Agreement, exceeds Two Hundred Thousand Dollars ($200,000.00)
in the aggregate, and then for all amounts of such Damages in excess of
One
Hundred Thousand Dollars ($100,000.00) in the aggregate; provided,
however,
that
the total aggregate amount of Damages recoverable by Purchaser and the
other
Purchaser Indemnified Persons pursuant to the provisions of this Article
IX,
together with Damages under Article 11 of the Asset Purchase Agreement,
shall be
limited to the Escrow Amount, other than for Damages arising in respect
of the
Escrow Exclusions, which Escrow Exclusions expressly include Damages in
respect
of Sections 8.01(g)(i), (ii) and (iii), 8.01(i) and 8.01(k) (such Sections
8.01(g)(i), (ii) and (iii), 8.01(i) and 8.01(k), herein the “BSI
Escrow Exclusions”)
of
this Agreement (and none of Seller, QED or any QED Shareholder shall have
personal liability for any claim for Damages under this Article IX except
for
BSI Escrow Exclusions, in the case of BSI, and for Escrow Exclusions, in
the
case of QED and the QED Shareholders and then only to the extent, and in
the
amount by which, Damages for Escrow Exclusions exceed the Escrow Amount,
and in
all events subject to the BSI Indemnity Cap, in the case of BSI, and the
Indemnity Cap, in the case of QED and the QED Shareholders). Damages for
the
Escrow Exclusions, together with Damages under any other provision of Article
11
of the Asset Purchase Agreement and any other provision of this Agreement,
shall
be limited to an indemnity cap of Eight Million Five Hundred Thousand Dollars
($8,500,000.00) (the
“Indemnity
Cap”)
in the
aggregate. Subject to the foregoing limitations, including the Indemnity
Cap,
BSI will be liable for all Damages under this Article IX up to the BSI
Indemnity
Cap and QED and the QED Shareholders will be jointly and severally liable
for
all Excess Damages. Likewise, Purchaser will have no liability (for
indemnification or otherwise) with respect to claims under Section 9.02
until
the total of all Damages with respect to such matters, together with Damages
under Section 11.4(a) of the Asset Purchase Agreement, exceeds Fifty Thousand
Dollars ($50,000) and then for the entire amount of such Damages; provided,
however,
that
the total aggregate amount of Damages recoverable by Seller and the other
Seller
Indemnified Persons pursuant to the provisions of Section 9.02, together
with
all Damages recoverable by QED under Section 11.4 of the Asset Purchase
Agreement, shall be limited to Damages not exceeding an indemnity cap of
Eight
Million Five Hundred Thousand Dollars ($8,500,000.00) in the aggregate.
(c)
Time
Limitations.
(i) If
the
Closing occurs, BSI, QED and the QED Shareholders, as applicable, will
have
liability (for indemnification or otherwise) with respect to any Breach
under
this Agreement of (A) a covenant or obligation to be performed or complied
with
prior to the Closing Date (other than those in Sections 2.01 (“Purchased
Assets”) and 4.01 (“Non-assumption of Liabilities”) and Article VI (“Additional
Covenants”), as to which a claim may be made at any time) or (B) a
representation or warranty (other than those relating to the BSI Escrow
Exclusions, as to which a claim may be made at any time within three (3)
years
after the Closing Date), only if on or before the date that is eighteen
(18)
months after the Closing Date, Purchaser notifies BSI, QED and the QED
Shareholders of a claim specifying the factual basis of the claim in reasonable
detail to the extent then known by Purchaser.
(ii) If
the
Closing occurs, Purchaser will have liability (for indemnification or otherwise)
with respect to any Breach of (i) a covenant or obligation to be performed
or
complied with by it prior to the Closing Date or (ii) any representation
or
warranty, only if on or before eighteen (18) months following the Closing
Date,
BSI notifies Purchaser of a claim specifying the factual basis of the claim
in
reasonable detail to the extent then known by BSI.
(d) Escrow.
Upon
notice to BSI, QED and the QED Shareholders specifying in reasonable detail
the
basis therefor, Purchaser may give notice of a claim in any amount to which
it
may be entitled under this Article IX against the amount held escrow under
the
Escrow Agreement. To the extent that BSI and/or QED and the QED Shareholders
have any obligation or liability pursuant to this Article IX, other than
matters
arising in respect of the Escrow Exclusions, such obligation or liability
shall
be discharged from the Escrow Amount in accordance with the Escrow Agreement
and, with respect to matters arising from the Escrow Exclusions, first
from the
Escrow Amount (to the extent then available) in accordance with the Escrow
Agreement and thereafter by BSI (for BSI Escrow Exclusions only) and/or
QED and
the QED Shareholders (for all other Escrow Exclusions), as applicable,
up to the
BSI Indemnity Cap, in the case of BSI and up to the Indemnity Cap, in the
case
of QED and the QED Shareholders. Neither the exercise of nor the failure
to
exercise such right to give a notice of a claim under the Escrow Agreement
will
constitute an election of remedies or limit Purchaser in any manner in
the
enforcement of any other remedies that may be available to it.
(e) Third-Party
Claims.
(i) Promptly
after receipt by a Person entitled to indemnity under this Article IX (an
"Indemnified
Person")
of
notice of the assertion of a Third-Party Claim against it, such Indemnified
Person shall give notice to the Person obligated to indemnify (an "Indemnifying
Person")
of the
assertion of such Third-Party Claim, provided that the failure to notify
the
Indemnifying Person will not relieve the Indemnifying Person of any liability
that it may have to any Indemnified Person, except to the extent that the
Indemnifying Person demonstrates that the defense of such Third-Party Claim
is
prejudiced by the Indemnified Person's failure to give such notice.
(ii) If
an
Indemnified Person gives notice to the Indemnifying Person of the assertion
of a
Third-Party Claim, the Indemnifying Person shall be entitled to participate
in
the defense of such Third-Party Claim and, to the extent that it wishes
(unless
(i) the Indemnifying Person is also a Person against whom the Third-Party
Claim
is made and the Indemnified Person determines in good faith that joint
representation would be inappropriate or (ii) the Indemnifying Person fails
to
provide reasonable assurance to the Indemnified Person of its financial
capacity
to defend such Third-Party Claim and provide indemnification with respect
to
such Third-Party Claim), to assume the defense of such Third-Party Claim
with
counsel reasonably satisfactory to the Indemnified Person. After notice
from the
Indemnifying Person to the Indemnified Person of its election to assume
the
defense of such Third-Party Claim, the Indemnifying Person shall not, so
long as
it diligently conducts such defense, be liable to the Indemnified Person
under
this Article for any fees of other counsel or any other expenses with respect
to
the defense of such Third-Party Claim, in each case subsequently incurred
by the
Indemnified Person in connection with the defense of such Third-Party Claim,
other than reasonable costs of investigation. If the Indemnifying Person
assumes
the defense of a Third-Party Claim, no compromise or settlement of such
Third-Party Claims may be effected by the Indemnifying Person without the
Indemnified Person's Consent unless (A) there is no finding or admission
of any
violation of Legal Requirement or any violation of the rights of any Person;
(B)
subject to Section 9.03(b), the sole relief provided is monetary damages
that
are paid in full by the Indemnifying Person; and (C) the Indemnified Person
shall have no liability with respect to any compromise or settlement of
such
Third-Party Claims effected without its Consent, which Consent shall not
be
unreasonably withheld, delayed or conditioned. If notice is given to an
Indemnifying Person of the assertion of any Third-Party Claim and the
Indemnifying Person does not, within thirty (30) days after the Indemnified
Person's notice is given, give notice to the Indemnified Person of its
election
to assume the defense of such Third-Party Claim, the Indemnifying Person
will be
bound by any
(iii) Notwithstanding
the foregoing, if an Indemnified Person determines in good faith that there
is a
reasonable probability that a Third-Party Claim may adversely affect it
or its
Related Persons other than as a result of monetary damages for which it
would be
entitled to indemnification under this Agreement, the Indemnified Person
may, by
notice to the Indemnifying Person, assume the exclusive right to defend,
compromise or settle such Third-Party Claim, but the Indemnifying Person
will
not be bound by any determination of any Third-Party Claim so defended
for the
purposes of this Agreement or any compromise or settlement effected without
its
Consent (which may not be unreasonably withheld).
(iv) Notwithstanding
the provisions of Section 10.02, each party hereto hereby consents to the
nonexclusive jurisdiction of any court in which a Proceeding in respect
of a
Third-Party Claim is brought against any Indemnified Person for purposes
of any
claim that an Indemnified Person may have under this Agreement with respect
to
such Proceeding or the matters alleged therein and agree that process may
be
served on each such party with respect to such a claim anywhere in the
world.
(v) With
respect to any Third-Party Claim subject to indemnification under this
Article
IX: (i) both the Indemnified Person and the Indemnifying Person, as the
case may
be, shall keep the other Person fully informed of the status of such Third-Party
Claim and any related Proceedings at all stages thereof where such Person
is not
represented by its own counsel; and (ii) the parties agree (each at its
own
expense) to render to each other such assistance as they may reasonably
require
of each other and to cooperate in good faith with each other in order to
ensure
the proper and adequate defense of any Third-Party Claim.
(vi) With
respect to any Third-Party Claim subject to indemnification under this
Article
IX, the parties agree to cooperate in such a manner as to preserve in full
(to
the extent possible) the confidentiality of all Confidential Information
and the
attorney-client and work-product privileges. In connection therewith, each
party
agrees that: (i) it will use its best efforts, in respect of any Third-Party
Claim in which it has assumed or participated in the defense, to avoid
production of Confidential Information (consistent with applicable law
and rules
of procedure), and (ii) all communications between any party hereto and
counsel
responsible for or participating in the defense of any Third-Party Claim
shall,
to the extent possible, be made so as to preserve any applicable attorney-client
or work-product privilege.
(f) Other
Claims.
Within
thirty (30) Business Days after a party obtains Knowledge that it has sustained
any Damages not involving a Third-Party Claim or action which such party
reasonably believes may give rise to a claim for indemnification from another
party hereunder, such Indemnified Person shall deliver notice of such claim
to
the Indemnifying Person, together with a brief description of the facts
and data
which support the claim for indemnification; provided,
however,
that
failure to so notify the Indemnifying Person shall not relieve the Indemnifying
Person of its indemnification obligations hereunder, except to the extent
that
the Indemnifying Person is actually prejudiced thereby. Any such notice
must be
made to the Indemnifying Person not later than the expiration of the applicable
survival period specified in Section 9.03(c). If the Indemnifying Person
does
not notify the Indemnified Person within thirty (30) Business Days following
its
receipt of such notice that the Indemnifying Person disputes its liability
to
the Indemnified Person under this Article IX, such claim specified by the
Indemnified Person in such notice shall be conclusively deemed a Liability
of
the Indemnifying Person under this Article IX and the Indemnifying Person
shall
pay the amount of such claim to the
(g) Resolution
of Conflicts.
(i) For
purposes of this Article IX, if no agreement can be reached after good
faith
negotiation between the parties, either Purchaser, Seller, QED or the QED
Shareholders may, by written notice to the other parties, request that
appropriate representatives of each party with decision-making authority,
together with their respective counsel, meet in New York, New York (if
such
request is made by Purchaser) or in Chicago, Illinois (if such request
is made
by BSI, QED or the QED Shareholders) for one (1) day in an effort to directly
resolve the dispute. In the event such a meeting or subsequent meetings
fail to
resolve the dispute, the parties agree that they shall submit the claim
to the
following alternative dispute resolution process: The parties first agree
to
submit the claim and attempt in good faith to resolve the claim pursuant
to
non-binding mediation or non-binding arbitration of the dispute by a neutral
third-party mediator or arbitrator, as applicable, mutually agreed upon
and
selected in good faith by the parties (in either case, the party conducting
such
mediation or arbitration shall be referred to herein as a “mediator”) and
conducted on terms and conditions to be determined by agreement of the
parties
and such mediator. The mediator shall set a limited time period and establish
procedures designed to reduce the cost and time expended by the parties
while
allowing the parties an opportunity, adequate in the reasonable judgment
of the
mediator, to discover relevant information from the opposing parties about
the
subject matter of the dispute. In the case of non-binding arbitration,
such
mediator may render findings and such findings may be admissible in court,
but
neither party shall be deemed to have stipulated or agreed to such findings
or
otherwise be bound by such findings. In the event that non-binding mediation
or
non-binding arbitration fails to resolve the dispute, then any party may
resort
to litigation, provided, however, that the party(ies) who does not prevail
in
such litigation will be responsible for all costs, expenses and attorneys’ fees
related to such litigation both for and on behalf of itself and the prevailing
party.
(ii) It
is the
intent of the parties hereto that all claims between the parties, except
those
seeking equitable relief, shall be settled by the procedures as set forth
in
this Section 9.03(g).
(h) Indemnification
in Case of Strict Liability or Indemnitee Negligence.
The
indemnification provisions in this Article IX shall be enforceable
regardless of whether the liability is based upon past, present or future
acts,
claims or Legal Requirements and regardless of whether any Person (including
the
person from whom indemnification is sought) alleges or proves the sole,
concurrent, contributory or comparative negligence of the Person seeking
indemnification or the sole or concurrent strict liability imposed upon
the
Person seeking indemnification.
(i) Exclusive
Remedy.
In the
absence of fraud and except as provided in Section 9.03(l), the indemnification
provisions set forth in this Article IX shall provide the exclusive remedy
for
breach of any covenant, agreement, representation or warranty of Seller,
Purchaser or CMC, as the case may be, set forth in this Agreement, the
certificates delivered pursuant to Section 5.02, any transfer instrument
or any
other certificate, document, writing or instrument delivered by Seller,
Purchaser or CMC, as the case may be, pursuant to this agreement. In the
case
of
fraud, the remedies provided in this Article IX will not be exclusive of
or
limit any other remedies that may be available to Purchaser, Seller and
the
other Indemnified Persons, as the case may be
(j) Tax
Treatment of Indemnification Payments.
Unless
otherwise required by applicable law, Purchaser and Seller agree to treat
any
payment made pursuant to this Article IX as an adjustment to the Purchase
Price
for federal, state and local income Tax purposes.
(k) Effect
of Tax and Insurance Benefits.
Notwithstanding anything to the contrary contained herein, for purposes
of this
Article IX, the amount of Damages for a particular claim for which
indemnification is provided under this Article IX shall be offset by (i)
any Tax
benefits actually realized by an Indemnified Person pursuant to Section
9.03(j)
as a result of payments made under such claim or otherwise directly as
a result
of such claim and (ii) the amount of any insurance proceeds received by
an
Indemnified Person by reason or in respect of such Damages (exclusive of
deductibles, retrospective premiums and self-insured retentions under such
insurance policies and any costs associated with making or pursuing any
claims);
provided, however that neither Purchaser nor CMC shall be required or obligated
to make or pursue any claims under any insurance policies as a condition
to
indemnification pursuant to this Article IX or otherwise and any such claims
actually made shall be in the sole discretion of Purchaser or CMC, as
applicable, provided, however, that Purchaser and CMC shall accept any
such
insurance proceeds resulting from any such claim in offset under this Section
9.03(k), subject only to the commercially reasonable requirements or conditions
of its insurer.
(l) Enforcement
of Agreement.
Seller
acknowledges and agrees that Purchaser would be irreparably damaged if
any of
the provisions of this Agreement are not performed in accordance with their
specific terms and that any breach of this Agreement by Seller could not
be
adequately compensated in all cases by monetary damages alone. Accordingly,
in
addition to any other right or remedy to which Purchaser may be entitled,
at law
or in equity, it shall be entitled to enforce any provision of this Agreement
by
a decree of specific performance and to temporary, preliminary and permanent
injunctive relief to prevent breaches or threatened breaches of any of
the
provisions of this Agreement, without posting any bond or other
undertaking.”
--3. Except
as
expressly amended hereby, all terms and conditions of the Agreement shall
remain
in full force and effect, and from and after the date hereof, reference
to the
Agreement shall refer to the Agreement, as amended hereby.
[signature
page(s) follow]
IN
WITNESS WHEREOF, the parties hereto, hereby execute this Amendment as of
the
date first set forth above.
SELLER:
BYELOCORP
SCIENTIFIC INC.
By:
Name:
▇▇▇▇▇▇
▇.
▇▇▇▇▇
Title:
Chairman,
Chief Executive Officer and President
PURCHASER:
QED
TECHNOLOGIES INTERNATIONAL, INC.
By:
Name:
Title:
CMC:
CABOT
MICROELECTRONICS CORPORATION
By:
Name:
Title:
(Signature
Pages Continue on Following Page)
QED:
QED
TECHNOLOGIES, INC., a New York corporation
By:
Name:
Title:
QED
SHAREHOLDERS:
▇▇▇
▇▇▇▇▇▇, an individual
_____________________________________
▇▇▇▇▇▇
▇▇▇▇▇, an individual
_____________________________________