TECHNOLOGY ASSET PURCHASE AGREEMENT

 

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 870 N. Commons Drive, Aurora, Illinois 60504 (“CMC” or the “Parent”), QED Technologies International, Inc., a Delaware corporation having a place of business at 870 N. Commons Drive, Aurora, Illinois 60504 (the “Purchaser”), and Byelocorp Scientific, Inc., a New York corporation having a place of business at 70 Pine Street, New York, New York 10270 (“BSI” or the “Seller”).

 

 

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, Don Golini (“Golini”) and Lowell Mintz (“Mintz” and, together with Golini, 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, Mintz and certain members, and trusts for the benefit of members, of Mintz’s family own 100% of the capital stock and all voting and equity interests in BSI, and, pursuant to voting trust agreements, Mintz has the exclusive right to vote 100% of the voting interests of BSI;

 

WHEREAS, Mintz and certain members, and trusts for the benefit of members, of Mintz’s 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  

 

 

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  

 

 

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  

 

 

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  

 

 

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  

 

 

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 Withers Bergman 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  

 

 

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  

 

 

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  

 

 

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  

 

 

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  

 

 

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.

 

 

Byelocorp Scientific, Inc.

70 Pine Street

57^th Floor

New York, NY 10270

Attention: Lowell A. Mintz

Telephone:  ###-###-####

Facsimile:  ###-###-####

 

 

QED Technologies International, Inc.

c/o Cabot Microelectronics Corp.

870 N. Commons Drive

Aurora, IL 60504 

Attention:  General Counsel

Telephone:  ###-###-####

Facsimile:  ###-###-####

 

 

Cabot Microelectronics Corporation

870 N. Commons Drive

Aurora, IL 60504 

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]

 

IN WITNESS WHEREOF the parties hereto have executed this Technology Asset Purchase Agreement as of the day and year first above written.

 

 

 

BYELOCORP SCIENTIFIC, INC.

 

By:

Name: Lowell A. Mintz

Title: Chairman, Chief Executive Officer and President

 

 

 

QED TECHNOLOGIES INTERNATIONAL, INC.

 

By:

Name:

Title:

 

 

 

CABOT MICROELECTRONICS CORPORATION

 

By:

Name:

Title:

 

QED Technologies, Inc., Don Golini and Lowell Mintz 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:

 

DON GOLINI, an individual

 

____________________________________________

 

LOWELL MINTZ, an individual

 

____________________________________________

 

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