EXHIBIT 10.50
ASSET PURCHASE AGREEMENT
DATED OCTOBER 31, 2003
BETWEEN
MKS INSTRUMENTS, INC.
AND
HEI, INC.
TABLE OF CONTENTS
Page
ARTICLE I THE ASSET PURCHASE..................................................................................1
1.1 Purchase and Sale of Assets..............................................................................1
1.2 Assumption of Liabilities................................................................................1
1.3 Purchase Price...........................................................................................1
1.4 Further Assurances.......................................................................................1
1.5 Closing..................................................................................................1
1.6 Bulk Transfer Law........................................................................................2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLER........................................................2
2.1 Organization, Qualification and Corporate Power..........................................................2
2.2 Authorization of Transaction.............................................................................2
2.3 Noncontravention.........................................................................................3
2.4 Solvency.................................................................................................3
2.5 Ownership and Condition of Assets........................................................................3
2.6 Intellectual Property....................................................................................4
2.7 Litigation...............................................................................................5
2.8 Legal Compliance.........................................................................................5
2.9 Governmental and Third-Party Notices and Consents........................................................5
2.10 Disclosure...............................................................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE BUYER.........................................................6
3.1 Organization and Corporate Power.........................................................................6
3.2 Authorization of the Transaction.........................................................................6
3.3 Noncontravention.........................................................................................6
3.4 Litigation...............................................................................................6
ARTICLE IV POST-CLOSING COVENANTS..............................................................................6
4.1 Proprietary Information..................................................................................7
4.2 Non-Competition..........................................................................................7
4.3 Service Contractor Agreements............................................................................7
4.4 Delivery of Assets.......................................................................................8
ARTICLE V INDEMNIFICATION.....................................................................................8
5.1 Indemnification by the Seller............................................................................8
5.2 Indemnification by the Buyer.............................................................................8
5.3 Indemnification Claims...................................................................................9
5.4 Survival of Representations and Warranties..............................................................11
5.5 Limitation of Liability.................................................................................11
ARTICLE VI DEFINITIONS........................................................................................12
ARTICLE VII MISCELLANEOUS......................................................................................14
7.1 Press Releases and Announcements........................................................................14
7.2 No Third Party Beneficiaries............................................................................15
7.3 Entire Agreement........................................................................................15
7.4 Succession and Assignment...............................................................................15
7.5 Counterparts and Facsimile Signature....................................................................15
7.6 Headings................................................................................................15
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7.7 Notices.................................................................................................15
7.8 Governing Law...........................................................................................16
7.9 Amendments and Waivers..................................................................................16
7.10 Severability............................................................................................16
7.11 Expenses................................................................................................17
7.12 Submission to Jurisdiction..............................................................................17
7.13 Specific Performance....................................................................................17
7.14 Construction............................................................................................17
Exhibits
Exhibit A - General Assignment and ▇▇▇▇ of Sale
Exhibit B - Patent Assignment
Exhibit C - Form of Service Contractor Agreement
Schedules
Schedule 1.1 - Additional Acquired Assets
Schedule 1.3(a) - Wiring Instructions
Schedule 1.5(d) - June 2003 ▇▇▇▇ of Materials
Schedule 2.5(a)(i) - Security Interests and Contractual Obligations
Schedule 2.6(a) - Patent Schedule
Schedule 2.6(d) - Third Party Intellectual Property Agreements; Licenses
Schedule 2.6(e) - Acquired Intellectual Property Owned by Third Parties
Schedule 4.3 - Service Contractor Schedule
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into as of October 31, 2003 by
and between MKS Instruments, Inc. a Massachusetts corporation (the "Buyer"),
having offices located at Six ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and HEI, Inc., a
Minnesota corporation (the "Seller"), having offices located at ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Capitalized terms used in this Agreement shall have
the meanings ascribed to them in Article VI.
In consideration of the representations, warranties and covenants herein
contained, the Parties agree as follows.
ARTICLE I
THE ASSET PURCHASE
1.1 Purchase and Sale of Assets. Upon and subject to the terms and
conditions of this Agreement, the Buyer hereby purchases from the Seller, and
the Seller hereby sells, transfers, conveys, assigns and delivers to the Buyer,
at the Closing, for the consideration specified below in this Article I, all
right, title and interest in, to and under the Acquired Assets.
1.2 Assumption of Liabilities. Buyer shall not assume or become
responsible for any liabilities of Seller.
1.3 Purchase Price. The Purchase Price to be paid by the Buyer for the
Acquired Assets at the Closing shall be up to four hundred twenty three thousand
dollars ($423,000.00), payable as follows:
(a) $223,000 to be paid by wire transfer, in accordance with
the instructions set forth on Schedule 1.3(a) attached hereto, at the Closing
upon completion of the actions set forth in Section 1.5 hereof;
(b) $100,000 upon delivery of all remaining Acquired Assets and
related documentation and materials; and
(c) $100,000 upon the earlier of (i) the completion of services
to be provided by the Service Contractors, as described in Section 4.3, attached
hereto; or (ii) the full expenditure of the Service Contractor hours set forth
on Schedule 4.3 (provided such services have been provided to the extent
requested in accordance with such schedule).
1.4 Further Assurances. At any time and from time to time after the
Closing, at the request of the Buyer and without further consideration, the
Seller shall execute and deliver such other instruments of sale, transfer,
conveyance and assignment and take such actions as the Buyer may reasonably
request to more effectively transfer, convey and assign to the Buyer, and to
confirm the Buyer's rights to, title in and ownership of, the Acquired Assets
and to place the Buyer in actual possession and operating control thereof.
1.5 Closing. At the Closing, the following shall occur:
(a) the Buyer and the Seller shall execute and deliver to each
other the General Assignment and ▇▇▇▇ of Sale in the form attached hereto as
Exhibit A;
(b) the Seller shall execute and deliver to the Buyer a Patent
Assignment in the form attached hereto as Exhibit B;
(c) ▇▇▇▇ ▇▇▇▇▇ and each of the other Service Contractors who
have been identified at the Closing shall execute Service Contractor Agreements
substantially in the form attached hereto as Exhibit C;
(d) the Seller shall supply to the Buyer a true and accurate
▇▇▇▇ of materials relating to the Amplifier Systems, which ▇▇▇▇ of materials is
not materially different from the ▇▇▇▇ of materials relating to Amplifier
Systems delivered by the Seller to Eltech Electronics, Inc. in June 2003, a copy
of which is attached hereto as Schedule 1.5(d); and
(e) the Seller shall deliver to the Buyer two fully operational
Amplifier Systems, along with associated test data providing accurate evidence
of such Amplifier Systems' operation to the Amplifier Systems' published
specifications.
1.6 Bulk Transfer Law. The Buyer and the Seller each hereby waives
compliance with the provisions of the bulk transfer statute in each of the
jurisdictions, if any, where such compliance would be required in connection
with the transactions contemplated by this Agreement (subject to the indemnity
provided for in Article V of this Agreement).
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer that the statements
contained in this Article II are true and correct, as of the date hereof, except
as set forth in the Disclosure Schedule. The Disclosure Schedule shall be
arranged in sections and subsections corresponding to the numbered and lettered
sections and subsections contained in Article II of this Agreement. The
disclosures in any section or subsection of the Disclosure Schedule shall
qualify only the corresponding section or subsection in this Article II. For the
purposes of this Article II, the phrase "to the knowledge of the Seller" or any
phrase of similar import shall be deemed to refer to the actual knowledge of the
Executive Officers of the Seller.
2.1 Organization, Qualification and Corporate Power. The Seller is a
corporation duly organized, validly existing and in corporate and tax good
standing under the laws of the State of Minnesota. The Seller has all requisite
corporate power and authority to carry on the businesses in which it is engaged
and to own and use the properties owned and used by it. The Seller has furnished
to the Buyer complete and accurate copies of its Articles of Incorporation and
by-laws. The Seller is not in default under or in violation of any provision of
its Articles of Incorporation or by-laws.
2.2 Authorization of Transaction. The Seller has all requisite power and
authority to execute and deliver this Agreement and the Ancillary Agreements and
to perform its obligations
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hereunder and thereunder. The execution and delivery by the Seller of this
Agreement and the performance by the Seller of this Agreement and the Ancillary
Agreements and the consummation by the Seller of the transactions contemplated
hereby and thereby have been duly and validly authorized by all necessary
corporate action on the part of the Seller. This Agreement has been duly and
validly executed and delivered by the Seller and constitutes, and each of the
Ancillary Agreements, upon its execution and delivery by the Seller, will
constitute, a valid and binding obligation of the Seller, enforceable against
the Seller in accordance with its terms.
2.3 Noncontravention. Neither the execution and delivery by the Seller
of this Agreement or the Ancillary Agreements, nor the consummation by the
Seller of the transactions contemplated hereby or thereby, will (a) conflict
with or violate any provision of the Certificate of Incorporation or by-laws of
the Seller, (b) require on the part of the Seller any notice to or filing with,
or any permit, registration, certificate authorization, consent or approval of,
any Governmental Entity, (c) conflict with, result in a breach of, constitute
(with or without due notice or lapse of time or both) a default under, result in
the acceleration of obligations under, create in any party the right to
terminate, modify or cancel, or require any notice, consent or waiver under, any
contract or instrument to which the Seller is a party or by which the Seller is
bound or to which any of its assets is subject, (d) result in the imposition of
any Security Interest upon any assets of the Seller or (e) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Seller
or any of its properties or assets.
2.4 Solvency. As of the date hereof, both before and after giving effect
to the transactions contemplated in connection with this Agreement, the Seller
is Solvent. For purposes of this Agreement, "Solvent" shall mean that (a) the
fair value of the Seller's property is greater than the total amount of its
liabilities, including contingent liabilities; (b) the present fair salable
value of the Seller's assets is not less than the amount that will be required
to pay its probable liability on its debts as they become absolute and matured;
(c) the Seller does not intend to, and does not believe that it will, incur
debts or liabilities beyond its ability to pay as such debts and liabilities
mature; and (d) the Seller is not engaged in a business or transaction for which
its property would constitute unreasonable small capital.
2.5 Ownership and Condition of Assets.
(a) The Seller is the true and lawful owner, and has good title
to, all of the Acquired Assets, free and clear of all Security Interests and
contractual obligations, except as set forth in Schedule 2.5(a)(i) attached
hereto. No subsidiary of the Seller, and no partnership, joint venture or other
business entity in which the Seller has an interest owns assets or technology
relating to Amplifier Systems. Upon execution and delivery by the Seller to the
Buyer of the instruments of conveyance referred to in Section 1.5, the Buyer
will become the true and lawful owner of, and will receive good title to, the
Acquired Assets, free and clear of all Security Interests and contractual
obligations other than those set forth in Schedule 2.5(a)(i).
(b) The Acquired Assets are free from defects that materially
affect performance, have been maintained in accordance with normal industry
practice, are in good operating condition and are suitable for the respective
purposes for which they are presently
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used. To the knowledge of the Seller, all of the inventory of the Seller that
constitutes Acquired Assets consists of a quality and quantity usable and
saleable in the ordinary course of business of the Seller consistent with past
custom and practice.
2.6 Intellectual Property.
(a) Schedule 2.6(a) lists each patent, patent application,
copyright registration or application therefor, mask work registration or
application therefor, and trademark, service ▇▇▇▇ and domain name registration
or application therefor of the Seller included in the Acquired Intellectual
Property.
(b) The Seller owns and has the right to use all Acquired
Intellectual Property. Upon execution and delivery by the Buyer to the Seller of
the instruments of conveyance referred to in Section 1.5, each item of Acquired
Intellectual Property will be owned or available for use by the Buyer
immediately following the Closing on substantially identical terms and
conditions as it was immediately prior to the Closing. The Seller has taken
reasonable measures to protect the proprietary nature of each item of Acquired
Intellectual Property, and to maintain in confidence all trade secrets and
confidential information, that it owns or uses. No other person or entity has
any rights to any of the Acquired Intellectual Property (except pursuant to
agreements or licenses specified in Schedule 2.6(d)), and, to the knowledge of
the Seller, no other person or entity is infringing, violating or
misappropriating any of the Acquired Intellectual Property.
(c) To the knowledge of the Seller, none of the Acquired
Intellectual Property, or the marketing, distribution, provision or use thereof,
infringes or violates, or constitutes a misappropriation of, any Intellectual
Property rights of any person or entity. To the knowledge of the Seller, none of
the Internal Systems, or the use thereof, infringes or violates, or constitutes
a misappropriation of, any Intellectual Property rights of any person or entity.
The Seller has not received any written complaint, claim or notice, or written
threat thereof, alleging any such infringement, violation or misappropriation.
The Seller has provided to the Buyer complete and accurate copies of all written
documentation in the Seller's possession relating to claims or disputes known to
the Seller concerning any Acquired Intellectual Property.
(d) The Seller has not entered into any license or other
agreement pursuant to which the Seller has licensed, distributed or otherwise
granted any rights to any third party with respect to, any Acquired Intellectual
Property. The Seller has not agreed to indemnify any person or entity against
any infringement, violation or misappropriation of any Intellectual Property
rights with respect to any Acquired Intellectual Property.
(e) Schedule 2.6(e) identifies each item of Acquired
Intellectual Property that is owned by a party other than the Seller, and the
license or agreement pursuant to which the Seller uses it (excluding
off-the-shelf software programs licensed by the Seller pursuant to "shrink wrap"
or "click-through" licenses).
(f) The Seller has not disclosed the source code for any
software constituting Acquired Intellectual Property or other confidential
information constituting, embodied in or
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pertaining to such software to any person or entity, and the Seller has taken
reasonable measures to prevent disclosure of such source code.
(g) All of the copyrightable materials (including software)
incorporated in or bundled with the Acquired Intellectual Property have been
created by employees of the Seller within the scope of their employment by the
Seller or by independent contractors of the Seller who have executed agreements
expressly assigning all right, title and interest in such copyrightable
materials to the Seller. No portion of such copyrightable materials was jointly
developed with any third party.
(h) The Internal Systems are free from significant defects or
programming errors and conform in all material respects to the written
documentation and specifications therefore.
2.7 Litigation. There is no Legal Proceeding which is pending or has
been threatened in writing against the Seller which (a) relates to the Acquired
Assets or (b) in any manner challenges or could prevent, enjoin, alter or delay
the transactions contemplated by this Agreement. There are no judgments, orders
or decrees outstanding against the Seller relating to the Acquired Assets.
2.8 Legal Compliance. The Seller, and the conduct and operation of its
business, is in compliance with, and the Seller has not received any written
notice or communication from any Government Entity alleging noncompliance with,
applicable law (including rules and regulations thereunder) of any federal,
state, local or foreign government, or any Governmental Entity, which affects or
relates to (a) this Agreement or the Ancillary Agreements or the transactions
contemplated hereby or (b) the Acquired Assets.
2.9 Governmental and Third-Party Notices and Consents.
(a) The Seller has obtained all waivers, permits,
registrations, certificates, consents, approvals or other authorizations from
Governmental Entities, and effected all registrations, filings and notices with
or to Governmental Entities, as may be required for it to consummate the
transactions contemplated by this Agreement and to otherwise comply with all
applicable laws and regulations in connection with the consummation of the
transactions contemplated by this Agreement.
(b) The Seller has obtained all waivers, consents or approvals
from third parties, and effected all notices to third parties, as may be
required to consummate the transactions contemplated by this Agreement.
2.10 Disclosure. No representation or warranty by the Seller contained
in this Agreement, and no statement contained in the Disclosure Schedule or any
other document, certificate or other instrument delivered or to be delivered by
or on behalf of the Seller pursuant to this Agreement, contains or will contain
any untrue statement of a material fact or omits or will omit to state any
material fact necessary, in light of the circumstances under which it was or
will be made, in order to make the statements herein or therein not misleading.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller that the statements
contained in this Article III are true and correct as of the date hereof.
3.1 Organization and Corporate Power. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. The Buyer has all requisite corporate power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it.
3.2 Authorization of the Transaction. The Buyer has all requisite power
and authority to execute and deliver this Agreement and the Ancillary Agreements
and to perform its obligations hereunder and thereunder. The execution and
delivery by the Buyer of this Agreement and the performance by the Buyer of this
Agreement and the Ancillary Agreements and the consummation by the Buyer of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of the Buyer. This
Agreement has been duly and validly executed and delivered by the Buyer and
constitutes, and each of the Ancillary Agreements, upon its execution and
delivery by the Buyer, will constitute, a valid and binding obligation of the
Buyer, enforceable against the Buyer in accordance with its terms.
3.3 Noncontravention. Neither the execution and delivery by the Buyer of
this Agreement or the Ancillary Agreements, nor the consummation by the Buyer of
the transactions contemplated hereby or thereby, will (a) conflict with or
violate any provision of the Articles of Incorporation or by-laws of the Buyer,
(b) require on the part of the Buyer any filing with, or permit, registration,
certificate, authorization, consent or approval of, any Governmental Entity, (c)
conflict with, result in breach of, constitute (with or without due notice or
lapse of time or both) a default under, result in the acceleration of
obligations under, create in any party any right to terminate, modify or cancel,
or require any notice, consent or waiver under, any contract or instrument to
which the Buyer is a party or by which it is bound or to which any of its assets
is subject, except for (i) any conflict, breach, default, acceleration,
termination, modification or cancellation which would not adversely affect the
consummation of the transactions contemplated hereby or (ii) any notice, consent
or waiver the absence of which would not adversely affect the consummation of
the transactions contemplated hereby, or (d) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Buyer or any
of its properties or assets.
3.4 Litigation. There is no Legal Proceeding which is pending or has
been threatened in writing against the Buyer which in any manner challenges or
could prevent, enjoin, alter or delay the transactions contemplated by this
Agreement.
ARTICLE IV
POST-CLOSING COVENANTS
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4.1 Proprietary Information. From and after the Closing, the Seller and
its Affiliates shall hold in confidence all knowledge and information of a
confidential nature, and all related documents, with respect to the Acquired
Assets and shall not disclose, publish or make use of the same without the prior
written consent of the Buyer except to the extent that such knowledge,
information or documents shall have become public knowledge other than through
improper disclosure by the Seller or an Affiliate of the Seller; provided,
however, that, if the Seller is required by any Governmental Entity to disclose
such knowledge and information, the Seller shall not be liable for such
disclosure provided that (i) the Seller, as promptly as reasonably possible,
gives notice to the Buyer of the requirement in order that the Buyer may contest
the requirement to provide such knowledge and (ii) the Seller uses best efforts
to limit the disclosure of such knowledge and information to that which is
required by such Governmental Entity. The Seller shall enforce, for the benefit
of the Buyer, all confidentiality, invention assignments and similar agreements
relating to the Acquired Assets between the Seller and any employee, contractor
or former employee or contractor of the Seller or its affiliates, and the Seller
hereby assigns to the Buyer the right to enforce any such agreement between the
Seller or its affiliates and any other party.
4.2 Non-Competition.
(a) Non-competition Agreement. During the period commencing on
the date hereof and ending on the second anniversary hereof, neither the Seller,
nor any Affiliate thereof shall directly or indirectly, as a partner,
stockholder (other than as a holder of less than five percent (5%) of the
outstanding shares of a publicly traded company), consultant, joint venturer,
investor or otherwise, (i) design, develop, produce, market or sell products, or
render services, that are competitive with any product designed, developed (or
under development), manufactured, sold or licensed by, or any service provided
by, the Buyer relating to the solid state MRI amplifier market (the "Market"),
provided that the provision by the Seller of contract manufacturing services for
third party designs within the Market shall not constitute a violation of this
Section 4.2(a), or (ii) solicit, divert or take away the business or patronage
of any individual, corporation or other entity which was or is a prospective
client, customer or account of the Buyer in the Market, or (iii) assist any
other person or entity in doing any of the foregoing.
(b) The Seller agrees that the duration and geographic scope of
the non-competition provision set forth in this Section 4.2 are reasonable. In
the event that any court determines that the duration or the geographic scope,
or both, are unreasonable and that such provision is to that extent
unenforceable, the Parties agree that the provision shall remain in full force
and effect for the greatest time period and in the greatest area that would not
render it unenforceable. The Parties intend that this non-competition provision
shall be deemed to be a series of separate covenants, one for each and every
county of each and every state of the United States of America and each and
every political subdivision of each and every country outside the United States
of America where this provision is intended to be effective.
4.3 Service Contractor Agreements. The Seller shall provide, and shall
use reasonable effort to cause the respective Service Contractors to provide, to
the Buyer the services of the Service Contractors in accordance with the terms
set forth on Schedule 4.3 hereto. Upon determination of the identity of any of
the Service Contractors who did not execute a Service
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Contractor Agreement at the Closing, the Seller shall cause such Service
Contractor to execute a Service Contractor Agreement. If the services of any of
the Service Contractors becomes unavailable for any reason, the Buyer shall
identify, within 30 days of such unavailability, a replacement Service
Contractor. The Seller shall pay such replacement Service Contractor for the
services provided to the Buyer pursuant to the Service Contractor Agreement, in
an amount up to $159.00 per hour. Any amounts owed to the replacement Service
Contractor for services provided pursuant to the Service Contract Agreement in
excess of $159.00 per hour shall be payable to such Service Contractor directly
by the Buyer. Upon the earlier of (i) the completion of services provided by the
Service Contractors, as described in Schedule 4.3; or (ii) full expenditure of
the Service Contractor hours set forth on Schedule 4.3 (provided that services
have been provided to the extent requested in accordance with such schedule),
the Buyer shall make a payment to the Seller in accordance with Section 1.3(c)
hereof.
4.4 Delivery of Assets. Within thirty (30) days after the Closing, the
Seller shall deliver to the Buyer's designated delivery address all of the
Acquired Assets and related documentation and materials not delivered at the
Closing.
ARTICLE V
INDEMNIFICATION
5.1 Indemnification by the Seller. The Seller shall indemnify the Buyer
in respect of, and hold the Buyer harmless against, Damages incurred or suffered
by the Buyer or any Affiliate thereof resulting from, relating to or
constituting:
(a) any breach of any representation or warranty of the Seller
contained in this Agreement, any Ancillary Agreements or any other agreement or
instrument furnished by the Seller to the Buyer pursuant to this Agreement;
(b) any failure to perform any covenant or agreement of the
Seller contained in this Agreement, any Ancillary Agreement or any agreement or
instrument furnished by the Seller to the Buyer pursuant to this Agreement; or
(c) the failure of the Buyer and the Seller, in connection with
the sale of the Acquired Assets by the Seller to the Buyer pursuant to this
Agreement, to comply with, and obtain for the Buyer the benefits afforded by
compliance with, any applicable bulk transfer laws.
5.2 Indemnification by the Buyer. The Buyer shall indemnify the Seller
in respect of, and hold the Seller harmless against, Damages incurred or
suffered by the Seller or any Affiliate thereof resulting from, relating to or
constituting:
(a) any breach of any representation or warranty of the Buyer
contained in this Agreement, any Ancillary Agreements or any other agreement or
instrument furnished by the Buyer to the Seller pursuant to this Agreement; or
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(b) any failure to perform any covenant or agreement of the
Buyer contained in this Agreement, any Ancillary Agreements or any agreement or
instrument furnished by the Buyer to the Seller pursuant to this Agreement.
5.3 Indemnification Claims.
(a) An Indemnified Party shall give written notification to the
Indemnifying Party of the commencement of any Third Party Action. Such
notification shall be given within 20 days after receipt by the Indemnified
Party of notice of such Third Party Action, and shall describe in reasonable
detail (to the extent known by the Indemnified Party) the facts constituting the
basis for such Third Party Action and the amount of the claimed damages;
provided, however, that no delay or failure on the part of the Indemnified Party
in so notifying the Indemnifying Party shall relieve the Indemnifying Party of
any liability or obligation hereunder except to the extent of any damage or
liability caused by or arising out of such failure. Within 20 days after
delivery of such notification, the Indemnifying Party may, upon written notice
thereof to the Indemnified Party, assume control of the defense of such Third
Party Action with counsel reasonably satisfactory to the Indemnified Party;
provided that (i) the Indemnifying Party may only assume control of such defense
if (A) it acknowledges in writing to the Indemnified Party that any damages,
fines, costs or other liabilities that may be assessed against the Indemnified
Party in connection with such Third Party Action constitute Damages for which
the Indemnified Party shall be indemnified pursuant to this Article V and (B)
the maximum amount claimed is less than or equal to the amount of Damages for
which the Indemnifying Party is liable under this Article V and (ii) without the
prior written consent of the Indemnified Partly, the Indemnifying Party may not
assume control of the defense of Third Party Action involving criminal liability
or in which equitable relief is sought against the Indemnified Party.
Notwithstanding the foregoing, no party that is found by a court of competent
jurisdiction to have committed or engaged in fraud shall be entitled to
indemnification hereunder nor shall any party be entitled to indemnification if
the payment of such indemnification is found by a court of competent
jurisdiction to be contrary to public policy. If the Indemnifying Party does
not, or is not permitted under the terms hereof to, so assume control of the
defense of a Third Party Action, the Indemnified Party shall control such
defense. The Non-controlling Party may participate in such defense at its own
expense. The Controlling Party shall keep the Non-controlling Party advised of
the status of such Third Party Action and the defense thereof and shall consider
in good faith recommendations made by the Non-controlling Party with respect
thereto. The Non-controlling Party shall furnish the Controlling Party with such
information as it may have with respect to such Third Party Action (including
copies of any summons, complaint or other pleading which may have been served on
such party and any written claim, demand, invoice, billing or other document
evidencing or asserting the same) and shall otherwise cooperate with and assist
the Controlling Party in the defense of such Third Party Action. The fees and
expenses of counsel to the Indemnified Party with respect to a Third Party
Action shall be considered Damages for purposes of this Agreement if (i) the
Indemnified Party controls the defense of such Third Party Action pursuant to
the terms of this Section 5.2(b) or (ii) the Indemnifying Party assumes control
of such defense and the Indemnified Party reasonably concludes that the
Indemnifying Party and the Indemnified Party have conflicting interests or
different defenses available with respect to such Third Party Action. The
Indemnifying Party shall not agree to any settlement of, or the entry of any
judgment arising from, any such Third
9
Party Action without the prior written consent of the Indemnified Party, which
shall not be unreasonably withheld, conditioned or delayed. The Indemnified
Party shall not agree to any settlement of, or the entry of any judgment arising
from, any such Third Party Action without the prior written consent of the
Indemnifying Party, which shall not be unreasonably withheld, conditioned or
delayed.
(b) In order to seek indemnification under this Article V, an
Indemnified Party shall deliver a Claim Notice to the Indemnifying Party.
(c) Within 20 days after delivery of a Claim Notice, the
Indemnifying Party shall deliver to the Indemnified Party the Response, in which
the Indemnifying Party shall: (i) agree that the Indemnified Party is entitled
to receive all of the Claimed Amount (in which case the Response shall be
accompanied by a payment by the Indemnifying Party to the Indemnified Party of
the Claimed Amount, by check or by wire transfer), (ii) agree that the
Indemnified Party is entitled to receive a portion of the Agreed Amount, in
which case the Response shall be accompanied by a payment by the Indemnifying
Party to the Indemnified Party of the Agreed Amount, by check or by wire
transfer or (iii) dispute that the Indemnified Party is entitled to receive any
or all of the Claimed Amount. If the Response creates a Dispute, the
Indemnifying Party and the Indemnified Party shall follow the procedures set
forth in Section 5.2(d) for the resolution of such Dispute.
(d) During the 30-day period following the delivery of a
Response that reflects a Dispute, the Indemnifying Party and the Indemnified
Party shall use good faith efforts to resolve the Dispute. If the Dispute is not
resolved within such 30-day period, the Indemnifying Party and the Indemnified
Party shall submit the Dispute to arbitration, unless otherwise mutually agreed
to by the Parties.
(e) Notwithstanding the other provisions of this Section 5.2,
in the event that the Seller has not timely paid to the Buyer amounts that have
been finally determined, in accordance with this Article V, to be due as Damages
to the Buyer, the Buyer shall have the right, but not the obligation, to elect
to satisfy such obligations by setting off from future amounts payable by the
Buyer to the Seller pursuant to Sections 1.3(b) or 1.3(c) hereof, the amount of
such Damages, or portion thereof.
(f) Notwithstanding the other provisions of this Section 5.2,
if a third party asserts (other than by means of a lawsuit) that an Indemnified
Party is liable to such third party for a monetary or other obligation which may
constitute or result in Damages for which such Indemnified Party may be entitled
to indemnification pursuant to this Article V, and such Indemnified Party
reasonably determines that it has a valid business reason to fulfill such
obligation, then (i) such Indemnified Party shall be entitled to satisfy such
obligation, without prior notice to or consent from the Indemnifying Party, (ii)
such Indemnified Party may subsequently make a claim for indemnification in
accordance with the provisions of this Article V, and (iii) such Indemnified
Party shall be reimbursed, in accordance with the provisions of this Article V,
for any such Damages for which it is entitled to indemnification pursuant to
this Article V (subject to the right of the Indemnifying Party to dispute
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the Indemnified Party's entitlement to indemnification, or the amount for which
it is entitled to indemnification, under the terms of this Article V).
5.4 Survival of Representations and Warranties. All representations and
warranties contained in this Agreement shall (a) survive the Closing and (b)
shall expire on the date one (1) year following the date hereof. If an
Indemnified Party delivers to an Indemnifying Party, before expiration of a
representation or warranty, either a Claim Notice based upon a breach of such
representation or warranty, or an Expected Claim Notice, then the applicable
representation or warranty shall survive until, but only for purposes of, the
resolution of the matter covered by such notice. If the legal proceeding or
written claim with respect to which an Expected Claim Notice has been given is
definitively withdrawn or resolved in favor of the Indemnified Party, the
Indemnified Party shall promptly so notify the Indemnifying Party. The rights to
indemnification set forth in this Article V shall not be affected by any
investigation conducted by or on behalf of an Indemnified Party or any knowledge
of an Indemnified Party with respect to the inaccuracy or noncompliance with any
representation, warranty, covenant or obligation which is the subject of
indemnification hereunder.
5.5 Limitation of Liability. The obligations and liabilities of the
Indemnifying Party for indemnification hereunder shall be subject to the
following limitations:
(a) The Indemnified Party's right to indemnification under
Section 5.1 shall be limited to an aggregate maximum recovery from the
Indemnifying Party of the aggregate amount that is paid to the Seller by the
Buyer in accordance with Section 1.3 hereof (including the aggregate amount of
any set-offs pursuant to Section 5.3(e) hereof). However, in the event the
Indemnified Party assumes control of a Third Party Action solely as a result of
the provisions of Section 5.3(a)(ii) hereof, then the Indemnified Party's right
to indemnification under Section 5.1 with respect to such Third Party Action
shall be limited to an aggregate amount of $150,000.
(b) No indemnification shall be required to be made by the
Indemnifying Party unless the aggregate cumulative amount of the Indemnified
Party's Damages exceeds Twenty-Five Thousand Dollars ($25,000.00), in which case
the Indemnifying Party shall be required to pay the full amount of such Damages
(and not just such amounts in excess of $25,000).
IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY LOST PROFITS OR INCIDENTAL OR
CONSEQUENTIAL DAMAGES REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, NOR ANY CLAIM AGAINST SUCH PARTY BY ANY OTHER
PARTY.
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ARTICLE VI
DEFINITIONS
For purposes of this Agreement, each of the following terms shall have
the meaning set forth below.
"Acquired Assets" shall mean (a) the Acquired Intellectual Property and
(b) the Additional Acquired Assets.
"Acquired Intellectual Property" shall mean all of the Seller's rights,
title and interest in, and all of the assets and properties constituting, all of
following that relate to solid state MRI amplifiers:
(a) the patents, patent applications, patent disclosures and
all related continuations, continuations-in-part, divisionals, reissues,
reexaminations, utility models, certificates of invention and design patents,
patent applications, registrations and applications for registrations as set
forth on Schedule 2.6(a);
(b) copyrights and registrations and applications for
registration thereof;
(c) mask works and registrations and applications for
registration thereof;
(d) computer software, data and documentation;
(e) inventions, trade secrets and confidential business
information, whether patentable or nonpatentable and whether or not reduced to
practice, manufacturing and product processes and techniques, research and
development information, and copyrightable works;
(f) other proprietary rights relating to any of the foregoing
(including remedies against infringements thereof and rights of protection of
interest therein under the laws of all jurisdictions); and
(g) copies and tangible embodiments thereof.
"Additional Acquired Assets" are those assets, properties and rights of
the Seller set forth on Schedule 1.1 attached hereto.
"Affiliate" shall mean any affiliate, as defined in Rule 12b-2 under the
Securities Exchange Act of 1934.
"Amplifier Systems" shall mean the Seller's 1.5 Tesla MRI amplifier
systems.
"Ancillary Agreements" shall mean the General Assignment and ▇▇▇▇ of
Sale and any other instruments of conveyance.
"Buyer" shall have the meaning set forth in the first paragraph of this
Agreement.
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"Claimed Amount" shall mean the amount of any Damages incurred or
reasonably expected to be incurred by the Indemnified Party.
"Claim Notice" shall mean written notification which contains (i) a
description of the Damages incurred or reasonably expected to be incurred by the
Indemnified Party and the Claimed Amount of such Damages, to the extent then
known, (ii) a statement that the Indemnified Party is entitled to
indemnification under Article V of this Agreement for such Damages and a
reasonable explanation of the basis therefor, and (iii) a demand for payment (in
the manner provided in Section 5.2(c) of this Agreement) in the amount of such
Damages.
"Closing" shall mean the closing of the sale of the Acquired Assets
contemplated by this Agreement.
"Controlling Party" shall mean the party controlling the defense of any
suit or proceeding relating to a third party claim for which indemnification is
sought pursuant to Article V of this Agreement.
"Damages" shall mean any and all debts, obligations and other
liabilities (whether absolute, accrued, contingent, fixed or otherwise, or
whether known or unknown, or due or to become due or otherwise), diminution in
value, monetary damages, fines, fees, penalties, interest obligations,
deficiencies, losses and expenses (including amounts paid in settlement,
interest, court costs, costs of investigators, fees and expenses of attorneys,
accountants, financial advisors and other experts, and other expenses of
litigation).
"Disclosure Schedule" shall mean the disclosure schedule provided by the
Seller to the Buyer on the date hereof and accepted in writing by the Buyer.
"Dispute" shall mean the dispute resulting if the Indemnifying Party in
the Response disputes its liability for all or part of the Claimed Amount.
"Executive Officers" shall mean ▇▇▇▇ ▇▇▇▇▇▇▇, the Chief Executive
Officer; ▇▇▇▇ ▇▇▇▇▇▇, the Chief Financial Officer; and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the Vice
President of Colorado Operations for the Seller.
"Expected Claim Notice" shall mean a notice that, as a result a legal
proceeding instituted by or claim made by a third party, the Indemnified Party
reasonably expects to incur Damages.
"Governmental Entity" shall mean any court, arbitrational tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency.
"Indemnified Party" shall mean the Buyer or Seller, as appropriate.
"Indemnifying Party" shall mean the Seller or Buyer, as appropriate.
"Internal Systems" shall mean the internal systems of the Seller that
are used in its business or operations, including computer hardware systems,
software applications and embedded systems that relate to solid state MRI
amplifiers.
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"Legal Proceeding" shall mean any action, suit, proceeding, claim,
arbitration or investigation before any Governmental Entity or before any
arbitrator.
"Non-controlling Party" shall mean the party not controlling the
defense of any suit or proceeding relating to a third party claim for which
indemnification is sought pursuant to Article V of this Agreement.
"Parties" shall mean the Buyer and the Seller.
"Purchase Price" shall mean the purchase price to be paid by the Buyer
for the Acquired Assets at the Closing, as set forth in Section 1.3 of this
Agreement.
"Response" shall mean a written response containing the information
provided for in Section 5.2(c).
"Security Interest" shall mean any mortgage, pledge, security interest,
encumbrance, charge or other lien (whether arising by contract or by operation
of law), other than (i) mechanic's, materialmen's, and similar liens, (ii) liens
arising under worker's compensation, unemployment insurance, social security,
retirement, and similar legislation and (iii) liens on goods in transit incurred
pursuant to documentary letters of credit, in each case arising in the ordinary
course of business of the Seller consistent with past custom and practice and
not material to the Seller.
"Seller" shall have the meaning set forth in the first paragraph of
this Agreement.
"Service Contractors" shall mean (i) ▇▇▇▇ ▇▇▇▇▇ and (ii) a software
engineer and an RF Engineer, who have experience in connection with the Acquired
Assets, each of whom shall be mutually agreed upon by the Seller and the Buyer
in accordance with Section 4.3 hereof and Schedule 4.3 attached hereto; along
with any contractors who replace such persons in accordance with Section 4.3
hereof.
"Service Contractor Agreements" shall mean service contractor
agreements executed between the Company and the Service Contractors in the form
attached hereto as Exhibit C.
"Third Party Action" shall mean any suit or proceeding by a person or
entity other than a Party for which indemnification may be sought by a Party
under Article V.
ARTICLE VII
MISCELLANEOUS
7.1 Press Releases and Announcements. Neither Party shall issue any
press release or public announcement relating to the subject matter of this
Agreement without the prior written approval of the other Party; provided,
however, that either Party may make any public disclosure it believes in good
faith is required by applicable law, regulation or stock market rule (in which
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case the disclosing Party shall use reasonable effort to advise the other Party
and provide it with a copy of the proposed disclosure prior to making the
disclosure).
7.2 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns.
7.3 Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, with respect to the subject matter hereof.
7.4 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. Neither Party may assign either this Agreement or any of
its rights, interests, or obligations hereunder without the prior written
approval of the other Party.
7.5 Counterparts and Facsimile Signature. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument. This
Agreement may be executed by facsimile signature.
7.6 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.7 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly delivered four
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent for next
business day delivery via a reputable nationwide overnight courier service, in
each case to the intended recipient as set forth below:
If to the Seller: Copy to:
---------------- -------
HEI, Inc. HEI, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Attn: Contracts Manager
VP, Colorado Operations
facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Buyer: Copy to:
--------------- -------
MKS Instruments, Inc. ▇▇▇▇ and ▇▇▇▇ LLP
Six ▇▇▇▇▇▇▇▇ Road ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
President facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Either Party may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the party for whom it is intended. Either Party may
change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.
7.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the
Commonwealth of Massachusetts, without giving effect to any choice or conflict
of law provision or rule (whether of the Commonwealth of Massachusetts or any
other jurisdiction) that would cause the application of laws of any
jurisdictions other than those of the Commonwealth of Massachusetts.
7.9 Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time prior to the Closing; provided, however,
that no amendment of any provision of this Agreement shall be valid unless the
same shall be in writing and signed by each of the Parties. No waiver by either
Party of any right or remedy hereunder shall be valid unless the same shall be
in writing and signed by the Party giving such waiver. No waiver by either Party
with respect to any default, misrepresentation, or breach of warranty or
covenant hereunder shall be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such occurrence.
7.10 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to limit 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, and this Agreement shall be enforceable as so
modified.
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7.11 Expenses. Except as set forth in Article V, each Party shall bear
its own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
7.12 Submission to Jurisdiction. In the event litigation is initiated
by Buyer, the jurisdiction and venue shall be the state and federal courts
located in the Commonwealth of Massachusetts. In the event litigation is
initiated by Seller, the jurisdiction and venue shall be the state and federal
courts located in the State of Colorado. Each Party (a) agrees that, in the
event litigation is initiated by Buyer, the parties shall submit to the
jurisdiction of any state or federal court sitting in the Commonwealth of
Massachusetts, and that, in the event litigation is initiated by Seller, the
parties shall submit to the jurisdiction of any state or federal courts sitting
in the State of Colorado, in any action or proceeding arising out of or relating
to this Agreement or the Ancillary Agreements, (b) agrees that all claims in
respect of such action or proceeding may be heard and determined in any such
court, (c) agrees not to bring any action or proceeding arising out of or
relating to this Agreement or the Ancillary Agreements in any other court and
(d) waives any right it may have to a trial by jury with respect to any action
or proceeding arising out of or relating to this Agreement or the Ancillary
Agreements. Each Party hereby waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought.
7.13 Specific Performance. Each Party acknowledges and agrees that the
other Party would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each Party agrees that the other Party
shall be entitled to an injunction and other equitable relief to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter, in addition to any other remedy to which it may be
entitled, at law or in equity.
7.14 Construction. The language used in this Agreement shall be deemed
to be the language chosen by the Parties to express their mutual intent, and no
rule of strict construction shall be applied against either Party. Any reference
to any federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
MKS INSTRUMENTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title: VP & CFO
--------------------------
HEI, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Title: VP, Colorado Operations
--------------------------
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