Document:

Exhibit
10.15

 

SETTLEMENT
AGREEMENT

 

                                This
Settlement Agreement is entered into and effective as of the 31st
day of December, 2005, by and among Apogee Technology, Inc., a Massachusetts
corporation (“Apogee”) and National Hybrid, Inc., a New York corporation
(“National”).

 

                                WHEREAS,
on or about November 3, 2004, Apogee filed a Complaint in the United States
District Court for the Eastern District of New York (the “Court”), entitled Apogee
Technology, Inc. v. National Hybrid, Inc., Civil Action No. 04 CV 4764 (AS)
(ETB) (the “Action”) seeking, inter  alia, injunctive and
declaratory relief and damages with respect to certain intellectual property
and the physical manifestations thereof previously owned by Standard MEMS,
Inc., a Delaware corporation (“SMI”) and alleged to have been assigned to
Apogee’s assignor, Glenn Fricano (“Fricano”), by Kavlico Corporation
(“Kavlico”), as the holder of a blanket security interest in the assets of SMI,
in accordance with a certain Release of Rights Agreement dated March 31, 2004
(the “SMI Intellectual Property”);

 

                                WHEREAS,
National denied the material allegations of the Complaint and asserted
Counterclaims against Apogee in the Action seeking, inter  alia,
declaratory relief and money damages with respect to the Intellectual property
alleging it is the rightful owner of the assets of SMI, including the SMI
Intellectual Property, in accordance with a certain Equipment Sale and Hold
Harmless Agreement between National and Kavlico, dated December 23, 2003;

 

                                WHEREAS,
National filed and served a Third Party Complaint upon Kavlico seeking, inter
alia, money damages and indemnification from Kavlico;

 

                                WHEREAS,
National and Apogee have agreed to settle their disputes without resort to
further litigation, and National has agreed to release all its claims against
Kavlico set forth in the Third Party Complaint, on the following terms and
conditions.

 

                                NOW, THEREFORE, in consideration of
the foregoing promises and the mutual covenants and obligations contained
herein, the parties hereto agree as follows:

 

1.             Subject to the provisions of paragraphs 3, 4 and 5
hereof, National: (a) withdraws any claim to the SMI Intellectual Property, (b)
will not dispute any right, title and interest of Apogee, if any, to the SMI
Intellectual Property, (c) assigns to Apogee, without representation or
warranty, all of its right, title and interest, if any, in the SMI Intellectual
Property, and (d) represents and warrants to Apogee that National has not
previously made an assignment of, or encumbered, the SMI Intellectual Property
or any interest therein.

 

2.             Apogee represents warrants to National that Apogee (a)
has purchased from Fricano all of the interest in the SMI Intellectual Property
that Fricano purchased from Kavlico, and (b) Apogee has not made an assignment
of, or encumbered, the SMI Intellectual Property, or any interest therein.

 

3.             Apogee hereby agrees that it will not assert any claim
to the equipment and other tangible assets of SMI purchased by National from
Kavlico pursuant to an Equipment Sale and Hold Harmless Agreement between
National and Kavlico other than the Excluded Items as defined below
(collectively, the “SMI Tangible Property”).

 

 

4.             Apogee agrees that National may, without notice to
Apogee and without restriction of any nature whatsoever, sell, transfer,
dispose, hypothecate and/or alienate any and all of the SMI Tangible Property,
in “As Is” condition or otherwise, including but not limited to any and all of
the contents, software, operating systems and any and all of the component
and/or accessory parts thereto absolutely free and clear of any claim by
Apogee, excluding however; any (a) notebooks, (b) drawings, (c) other paper
files or (d) “floppy disks” expressly embodying the SMI Intellectual Property
which Apogee will identify and take possession of during the Inspection Period
(collectively, the “Excluded Items”). 
Apogee agrees that it shall not assert any claim against any of
National’s successors, assignees or transferees, including but not limited to
any bona fide purchasers of the SMI Tangible Property upon compliance by
National with Paragraph 6 hereof.

 

5.             Apogee hereby acknowledges that, prior to any sale,
transfer or any other disposition of the SMI Tangible Property, National is not
obligated to remove, disassemble, decommission or take any action whatsoever
with respect to any contents, software, operating systems, information,
formulations or any other material included in or connected with the Tangible
Property except allowing Apogee to take possession of the Excluded Items during
the Inspection Period as set forth in Paragraph 6 hereof.

 

6.             Commencing on the execution hereof and within twenty
(20) days thereafter (the “Inspection Period”), Apogee may, at its own cost and
expense, during normal business hours and without disrupting the operations of
National, inspect National’s warehouse and/or facility to assemble and gather
the Excluded Items that may be located at such warehouse or facility.  During the Inspection Period, National will,
at National’s expense, provide one or more engineering personnel (“National
Engineer(s)”) to assist Apogee’s representative(s), in any reasonable inquiry
and will arrange reasonable access to the SMI Tangible Property to permit a
search for the Excluded Items to be completed within the Inspection
Period.  Apogee’s representative(s) shall
segregate what are believed to be Excluded Items and provide a list thereof to
the National Engineers.  If the National
Engineers shall disagree with the Apogee representatives as to whether something
is to be an Excluded Item, within five (5) business days after receiving such
list, the immediate possession of the disputed Excluded Items shall be given to
National’s counsel.  Unless such dispute
is resolved by the parties, by the end of 30 days after the Inspection Period
the dispute shall be resolved by the Court, which shall retain jurisdiction to
enforce this Agreement.  Such inspection
shall not require National to operate, start up, decommission or otherwise
modify any of the SMI Tangible Property.

 

7.             National and Apogee each hereby release and forever
discharge the other, its officers, employees, stockholders, directors,
successors, assigns, agents, personal representatives, transferees or persons
or entities affiliated with the aforementioned and any and all persons acting
on their behalf of any and all claims or causes of actions which it asserted or
could have been asserted against the other, its officers, employees,
stockholders, directors, successors, assigns, agents, personal representatives,
transferees or persons or entities affiliated with the aforementioned and any
and all persons action on their behalf arising out of or relating to the SMI
Intellectual Property or the SMI Tangible Property, except that this Settlement
Agreement is not subject to such release.

 

2

 

8.             Contemporaneously herewith the parties, and Kavlico,
shall execute a Stipulation and Order of Discontinuance with Prejudice (the
“Stipulation”) so that it may be submitted to the Court discontinuing the
Action and the Third Party Complaint. The Stipulation shall provide that the
Court will retain jurisdiction to enforce this Settlement Agreement. The
parties agree to take all necessary steps to procure such Order of Discontinuance
with Prejudice should Kavlico not execute such stipulation.

 

9.             This Settlement Agreement and the Stipulation and Order
of Discontinuance with Prejudice referred to herein and executed
contemporaneously herewith, shall constitute the entire agreement between the
parties with respect to the subject matter hereof and merge all prior
discussions and negotiations between them.

 

10.           No party hereto has relied on any statement of
representations not expressly set forth herein. 
This Agreement is a full, final and exclusive expression of the
agreement of the parties hereto and supercedes all prior agreements,
understandings, proposals and communications, oral or written, of either party
with respect to the subject matter hereof and the transactions contemplated
hereby.

 

11.           This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns.

 

12.           The parties hereto agree to execute and deliver, or cause
to be executed and delivered, such further instruments or documents and take
such other action as may be required to effectively carry out the transactions
of the settlement contemplated herein.

 

13.           This Settlement Agreement may not be changed except by a
writing signed by the parties hereto.

 

14.           The parties hereto hereby declare and represent that in
effectuating this Settlement Agreement they have, and counsel of their choice
have, each carefully read the following language, know and understand the
contents thereof, and have freely and voluntarily affixed their signatures
hereto.

 

15.           This Agreement and the transactions and obligations
arising hereunder shall be governed by and construed and enforced in accordance
with the laws of the State of New York without regard to the principles of
conflicts of law.

 

16.           This Agreement may be executed in any number of
counterparts and/or via facsimile signature, each of which shall be deemed to
be an original, all of which together shall be deemed to be one and the same
Settlement Agreement.

 

	
   

  	
  APGOEE TECHNOLOGY, INC.

  	
   

  	
   

  	
   

  	
  NATIONAL HYBRID, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Roy Nardin

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Pres & CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

3

 

	
   

  	
  RUSKIN MOSCOU FALTISCHEK,
  P.C.

  	
   

  	
   

  	
   

  	
  MORITT HOCK HAMROFF &

  
	
   

  	
  Attorneys for Apogee
  Technology Corp.

  	
   

  	
   

  	
   

  	
  HORWITZ LLP

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attorneys for National
  Hybrid, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Stephen E. Kesselman

  	
   

  	
   

  	
  By:

  	
  /s/ Michael S. Re

  
	
   

  	
  Stephen E. Kessleman, Esq.

  	
   

  	
   

  	
   

  	
  Michael S. Re, Esq.

  
	
   

  	
  1425 EAB Plaza

  	
   

  	
   

  	
   

  	
  400 Garden City Plaza

  
	
   

  	
  Uniondale, New York 11556

  	
   

  	
   

  	
   

  	
  Garden City, New York
  11530

  
	
   

  	
  (516) 663-6600

  	
   

  	
   

  	
   

  	
  (516) 873-2000

  

 

 

4

 

 

	
  STATE OF MASSACHUSETTS

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF

  	
  )

  	
   

  

 

 

                On
this          day of                 ,
2006, before me personally came David B. Meyers to me known to be the President
of APOGEE TECHNOLOGY, INC., a corporation, one of the parties to the action and
who executed the foregoing instrument, and acknowledged that he executed the
same.

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Notary Public

  

 

	
  STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF SUFFOLK

  	
  )

  	
   

  

 

 

                On
this  27th day of   February,
2006, before me personally came Roy Nardin to me known to be the President of
NATIONAL HYBRID INC., a corporation, one of the parties to the action and who
executed the foregoing instrument, and acknowledged that he executed the same.

 

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  /s/ Carol Ann Klemm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Notary Public

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Suffolk Cnty. #52-4637587

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Carol Ann Klemm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Notary Public - N.Y.S. - EXP. 12/31/06

  

 

 

5Exhibit
10.16

 

Reproduced
as Executed

Redacted
Version

 

TRANSFER,
EMPLOYMENT AND ROYALTY AGREEMENT

 

                This TRANSFER, EMPLOYMENT AND ROYALTY AGREEMENT (the “Agreement”) is made as of May 11, 2004 (the “Effective Date”) between Apogee  Technology, Inc., a corporation organized and
existing under the laws of the State of Delaware, with its principal office at
129 Morgan Drive Norwood, MA 02062 (“Apogee”), and
Glenn Fricano, an individual residing at [* * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * ] (hereafter “Fricano”).

 

Recitals

 

                WHEREAS,
Fricano is knowledgeable concerning micro-electro-mechanical (:MEMS”) technology, and [* * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * *]  (“[* * *]”);

 

                WHEREAS, [* * *] is a [* * * * * * * * * * * * * * * * * * * * * * * * * * *
* *];

 

                WHEREAS, [* * * * * * * * * * * * * * * * * * * * *]is a [* * * * * * * * * * * * * * * * * * ] of [* * *],[* * * * * * * * * * * * * * * * * * * * *], among other
assets, certain MEMS technology, related documentation, and intellectual
property rights, as further defined below (the “MEMS
Technology and Documentation”);

 

                WHEREAS, Fricano [* * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ] (the “[* * * * * * * * * * * * * * *]”);

 

                WHEREAS, Fricano is willing, on the terms and conditions set
out below, to assign his rights under [* * * * * * * * * * * * * * * * * * * * * * *] to Apogee,
and to collect further materials concerning the MEMS Technology and
Documentation, perform due diligence, and obtain further evidence concerning
interests in the MEMS Technology and Documentation; and

 

                WHEREAS, Apogee wishes to receive such assignment from
Fricano, and to have Fricano collect such further materials and perform such
due diligence, and perform services for Apogee, on the terms set out below:

 

                NOW, THEREFORE, in furtherance of the foregoing Recitals and
in consideration of the mutual covenants and obligations set forth in this
Agreement, the Parties agree as follows:

 

Agreement

 

1.             Definitions.  Capitalized terms shall have the following
meanings:

 

                                                “Confidential
Information” shall have the meaning provided in Section 10
(Confidential Information).

 

                                                “Employment Agreement” shall have the meaning set out in
Section 4 (Employee Commitment).

 

                                                “Further Deliverables” shall have the meaning set out in
Section 5.1 (Further Deliverables).

 

Portions of this Exhibit
have been redacted, as indicated by * * * * * * *; these portions have been provided to the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

1

 

                                                “Initial Deliverables” shall have the meaning set out in
Section 5 (Delivery; Continuing Obligations).

 

                                                “IP Rights” shall mean patent rights, copyrights, trademarks,
rights in mask works, trade secrets rights, and any other rights to exclude,
existing from time to time in a jurisdiction under patent law, copyright law,
trademark law, unfair competition law, moral rights law, trade-secret law,
semiconductor chip protection law, or other similar law.

 

                                                “Knowledge” shall mean the actual knowledge of the indicated
Party without any investigation or due diligence on the part of such person or
persons.

 

                                                “License Revenues” shall mean all of the royalties paid to
Apogee for licensing or similar exploitation, regardless of the form thereof,
of the MEMS Technology and Documentation (as defined below).

 

                                                “MEMS Division” shall mean the division Apogee is
establishing to design, develop, manufacture and sell MEMS Products.

 

                                                “MEMS Product” shall mean any (a) device or intellectual
property that cn be sold or licensed that relies for its content, design,
functionality or manufacturing process in any material respect on the MEMS
Technology and Documentation and (b) any product derived from the MEMS
Technology and Documentation.

 

                                                “MEMS Technology and Documentation” shall mean (a) the
materials, techniques, processes, and information described in Exhibit A,
including all associated IP Rights and (b) all technology developed by the MEMS
Division or otherwise by Apogee using the services of Fricano and others and
based on or originating from the rights being transferred pursuant to Section 3
hereof (Transfer of Rights).

 

                                                “Party” or “Parties” shall
mean Apogee, Fricano, or both Apogee and Fricano, as the context permits.

 

                                                “Release of Rights Agreement” shall have the meaning set out
in the Preamble.

 

                                                “Royalty Start Date” shall mean the first date on which
Apogee sells a MEMS Product.

 

                                                “Term” shall have the meaning set forth in Section 13 hereof
(Term).

 

2.                                      Fricano
Acquisition of Rights. 
Fricano acquired his right, title, and interest in and to the MEMS
Technology and Documentation and all associated IP Rights solely through the
Release of Rights Agreement.

 

3.                                      Transfer
of Rights.  In
consideration of Apogee’s obligations under this Agreement, Fricano hereby
assigns to Apogee all of his interest in the [* * * * * * * * * * * * * * ], and
represents that he has made no other assignment of such rights nor encumbered
the same.

 

4.                                      Employment
Commitment.  Apogee
agrees to employ Fricano, and Fricano agrees to accept and carry out such
employment on a full-time basis for a period of no less than one year,
commencing on the Effective Date, in accordance with the Confidentiality,
Non-Disclosure and 

 

Portions of this Exhibit
have been redacted, as indicated by * * * * * * *; these portions have been provided to the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

2

 

Non-Solicitation Agreements,
a copy of which is annexed hereto as Exhibit B, and incorporated herein by such
reference as if fully set forth herein, and the provisions of Section 6
hereof.  Fricano’s compensation shall be
as separately agreed to by Fricano and Apogee.

 

5.                                      Delivery;
Continuing Obligations. 
Within two (2) business days of the Effective Date Fricano shall deliver
to Apogee all media in his possession as of the Effective Date embodying the
MEMS Technology and Documentation (the “Initial Deliverables”).

 

5.1                               Further
Deliverables.  After
delivery of the Initial Deliverables and in consideration of Apogee’s
obligations under Section 6 (Compensation), Fricano shall during the Term of
this Agreement, shall use reasonable business efforts, at the expense of
Apogee, to collect and compile media embodying the MEMS Technology and
Documentation, it being understood that such media, due to [* * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * *].  Upon
obtaining possession of any media embodying the MEMS Technology and
Documentation, Fricano shall promptly deliver such media to Apogee (“Further Deliverables”) and such Further Deliverables shall
be deemed transferred in accordance with Section 3 (Transfer of Rights).

 

5.2                               Costs.  Actual out-of-pocket costs associated with
the collection of media and delivery of Further Deliverables under Section 5.1
(Further Deliverables) shall be handled in accordance with the Employment
Agreement.  After expiration or termination
of the Employment Agreement (if applicable), Apogee will reimburse Fricano for
his actual out-of-pocket costs, upon submission of supporting invoices and
provided Fricano obtains written pre-approval for costs in excess of [* * * * * * * * *].

 

5.3                               Technical
Assistance.  Fricano
shall provide Apogee with such services and consultation as is reasonably
necessary to allow Apogee to test and evaluate the MEMS Technology and
Documentation.  If Fricano is not
employed at Apogee, such consulting services shall be at such rates and for
such periods as may be agreed to by Fricano and Apogee.

 

6.                                      Compensation.  In consideration of (i) the assignment by
Fricano to Apogee under Section 2 (Transfer of Rights), and (ii) Fricano’s
obligations under Section 4 (Employee Commitment), Apogee agrees as follows:

 

6.1                               Transfer
Compensation.  Apogee
shall pay to Fricano the sum of [* * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * ].

 

6.2                               MEMS
Product Royalties.  Within
forty-five (45) days of the end of each calendar quarter, Apogee shall make a
payment (the “Royalty Payment”) of Royalties (as
defined below) on MEMS Products calculated as set forth below:

 

6.2.1                     Definition
of Net Sales Revenue.  The term “Net Sales Revenue” [* * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * ].

 

Portions of this Exhibit
have been redacted, as indicated by * * * * * * *; these portions have been provided to the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

3

 

6.2.2                     Royalties.  (a) [* * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * ].

 

                                                (b)  [* * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * *].

 

6.3                               Division
of Royalty Payments.  Royalty
Payments shall be allocated as follows:

 

6.3.1                     The [* * * * ]
Royalty.  [* * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * *}.

 

6.3.2                     The [* * * * ]
Royalty.  [* * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * *].

 

6.4                               Royalty
Report.  Simultaneous with the payment
of the Royalty, Apogee shall submit to Fricano a royalty report setting forth [* * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ].

 

6.5                               Method
of Payment; Overdue Payments.  Royalty Payments shall be made in U.S.
dollars by wire transfer or by other reasonable payments means.  [* * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ].

 

6.6                               Apogee
Commercialization Obligations.  Fricano is entering into this Agreement with
the understanding of both Fricano and Apogee that a typical cycle time to bring
a MEMS Product to market [* * * * * * * * * * * * * * * * * * * * *].  This means development needs to begin as soon
as possible after the Effective Date and should be reasonably close to
commercialization [*
* * * * * * * * * * * * * * * * * * * ].  In any event, Apogee intends to take
commercially reasonable steps to design, develop, manufacture and sell MEMS
Products, and Apogee commits to do so, provided, however, that its failure to
do so [* * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ] and releases
him from any obligations to Apogee which would interfere with the exercise by
him or others [* * *
* * * * * * * *].

 

7.                                      Fricano
Representations and Warranties.  Fricano represents and warrants that:

 

7.1                               Right
to Assign.  As of the
Effective Date, Fricano, to his knowledge, has the right to take the action
described in Section 3 hereof (Transfer of Rights).

 

7.2                               Non-Infringement.  As of the Effective Date, Fricano, to his
Knowledge, knows of no infringement or threatened infringement of third party
IP Rights by the MEMS Technology and Documentation, other than the matters set
out on Exhibit C, based solely on writings received by Fricano or statements
made to Fricano which he actually believes to be authoritative.

 

Portions of this Exhibit
have been redacted, as indicated by * * * * * * *; these portions have been provided to the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

4

 

7.3                               No
Claims.  As of the Effective Date, to
Fricano’s Knowledge, no claim has been made and is continuing or threatened
that the use of any IP Right concerning the MEMS Technology and Documentation
is invalid or unenforceable or that the use of any such IP Right does or may
violate the rights of any third party, other than the claims set out on Exhibit
C, based solely on writings received by Fricano or statements made to Fricano
which he actually believes to be authoritative.

 

7.4                               Disclaimer
of Other Warranties.  EXCEPT AS
EXPRESSLY PROVIDED IN THIS SECTION 7 (Fricano Representations and Warranties),
FRICANO MAKES NO OTHER WARRANTIES (AND EXPRESSLY DISCLAIMS ANY AND ALL SUCH
WARRANTIES), WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.  APART FROM THE WARRANTIES SET
FORTH IN THIS SECTION 7, THE MEMS TECHNOLOGY AND DOCUMENTS IS PROVIDED “AS IS.”

 

7.5                               Remedy
for Material Breach of Warranty.  In the event of a material breach of the
representations and warranties set out in this Section, Apogee’s sole remedy
shall be recovery of not more than twenty five percent (25%) of the Transfer
Compensation paid to Fricano under Section 6.1 (Transfer Compensation).

 

8.                                      Conditional
[* * * * *
* * * * * * * * * *].  In the event that Apogee fails to perform the
Apogee Commercialization Obligations, Apogee shall, upon notice of such failure
which is not remedied within sixty (60) days thereafter, [* * * * * * * * * * * * * * * * * * * * *
* *] (with the right to grant [* * * * * * * * * * ])[* * * * * * * * * * * * * * * * * * * * *
* * * * * *].  Such [* * * * * * * * * * * * * * * * ] shall [* * * * * * * * * * * * * * *] on the same
terms and conditions as set out in this Agreement, and shall contain such other
provisions [* * * * *
* * * * * * * * * ].  In
connection therewith, Apogee shall make disclosure to Fricano of any part of
the then MEMS Technology and Documentation.

 

9.                                      Audit
Right.  Apogee shall keep separate,
auditable, books and records pertaining to the sale, distribution, and pricing
of MEMS Products.  Fricano shall be
entitled to examine such books and records, through a licensed public
accountant chosen by him, who shall not disclose the records to him, but shall
provide him with their conclusions (the “Auditors”).  The Auditors shall be required to signed an
appropriate non-disclosure agreement, and shall perform their task at times
agreed in advance between the Parties during normal business hours, and not
more frequently than once per calendar year during the time Apogee is required
to make royalty payments to Fricano, and for one year thereafter.  Any audit shall be at Fricano’s expense,
unless such audit demonstrates that Apogee’s [* * * * * * * * ] calculation was incorrect
by more than ten (10) percent in Apogee’s favor, in which case Apogee shall
reimburse Fricano the reasonable costs of the audit.

 

10.                               Confidential
Information.  The
following terms and conditions govern use and protection of confidential
information that one Party (the “Disclosing Party”)
provides or discloses to the other Party (the “Receiving
Party”) pursuant to this Agreement:

 

10.1                        Definition
of Confidential Information.  The term “Confidential
Information” shall mean (a) the MEMS Technology and Documentation;
(b) non-public information and materials (in any medium), including but not
limited to any software, semiconductor chip design, design documentation,
business, financial or strategic plans or information of the 

 

Portions of this Exhibit
have been redacted, as indicated by * * * * * * *; these portions have been provided to the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

5

 

Disclosing Party; (c)
information subject to an obligation of confidence to a third party; and (d)
any information marked confidential, restricted or proprietary by a Party or by
any other person to whom such party has an obligation of confidence; provided,
however, that the failure of either Party to so mark any material shall not
relieve the Receiving Party of the obligation to maintain the confidentiality
of any unlegended material which the Receiving Party knows or should know
contained Confidential Information. The financial terms of this Agreement shall
be Confidential Information of both Parties.

 

10.2                        Limitations
on Use and Disclosure.  The
Receiving Party shall not use Confidential Information of the Disclosing Party
except for purposes of this Agreement. 
The Receiving Party shall not disclose Confidential Information received
from the Disclosing Party; provided that the Receiving Party may disclose such
information to its employees if such personnel have a legitimate need to know
such information and are bound in writing by confidentiality obligations not
materially less restrictive than those set forth in this Agreement.

 

10.3                        Standard
of Care.  The Receiving Party will use
the same degree of care and discretion (but in any event no less than a
reasonable degree of care and discretion) to avoid unauthorized disclosure or use
of Confidential Information received from the Disclosing Party as the Receiving
Party uses to protect its own information of a similar nature from unauthorized
disclosure or use.

 

10.4                        Exclusions.  Without granting any right or license, the
Parties agree that no obligation of nondisclosure or nonuse under this
Agreement will apply to any information (with the burden of proof upon the
Receiving Party) (i) that the Receiving Party already rightfully possesses at
the time of the disclosure by the Disclosing Party or rightfully receives from
a third party, (ii) that the Receiving Party develops independently and without
reference to any Confidential Information of the Disclosing Party, or (iii)
that is or becomes available to the public other than by breach of this
Agreement.  The Receiving Party may
disclose Confidential Information received from the Disclosing Party to the
extent that the Receiving Party is required by any judicial or government
authority to disclose such information, provided the Receiving Party gives the
Disclosing Party prompt notice of such requirements and reasonably cooperates
with the Disclosing Party in attempting to limit such required disclosure.

 

10.5                        Return
of Confidential Information.  Upon termination or expiration of this Agreement
the Receiving Party will promptly return all documents and materials containing
Confidential Information that were provided to it by Disclosing Party or will
certify to the destruction of such materials.

 

11.                               Limitation
of Liability.  IN NO EVENT
SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, OR
CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER, INCLUDING WITHOUT
LIMITATION, LOSS OF PROFITS OR OTHER ECONOMIC LOSS, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT FOR A BREACH OF SECTION 10
(Confidential Information).

 

12.                               No
Implied Licenses.  Any license
concerning the [* * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ] under this
Agreement must be expressly 

Portions of this Exhibit
have been redacted, as indicated by * * * * * * *; these portions have been provided to the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

6

 

provided herein, and there
shall be no licenses implied pursuant to this Agreement, based on any course of
conduct or other construction or interpretation thereof.

 

13.                               Term.  The term (“Term”) of this Agreement shall
commence on the Effective Date and shall continue in force until all of the
provisions hereof have been performed as set forth herein, unless sooner
terminated in accordance with Section 14 (Termination).

 

14.                               Termination.  Without prejudice to other remedies, a Party
may terminate this Agreement on the occurrence of one or more of the following:

 

14.1                        Material
Breach.  In the event that either of
the Parties is in material breach of any obligation under this Agreement, the
non-breaching Party may terminate this Agreement upon (i) providing the other
Party with written notice of the breach (a “Notice of
Breach”) and (ii) providing thereafter a ninety (90) day opportunity
to cure beginning on the date of receipt by the alleged breaching Party of the
Notice of Breach.

 

14.2                        Insolvency.  In the event a Party shall become insolvent,
shall make an assignment for the benefit of creditors, or shall have a petition
in bankruptcy filed for or against it, the other Party shall have the right to
terminate this entire Agreement immediately upon providing written notice of
such termination.

 

14.3                        Survival.  The rights and obligations of the Parties
under the following Sections shall survive the termination or expiration of
this Agreement:  Section 2 (Transfer of
Rights); Section 7 (Fricano Representations and Warranties); Section 9 (Audit
Right) (for the period specified in such section); Section 10 (Confidential
Information);; Section 11 Limitation of Liability); and Section 15 (General).

 

15.                               General

 

15.1                        No
Agency.  Nothing contained herein shall
be construed as creating any agency, partnership, or other form of joint
enterprise between the Parties.

 

15.2                        Press
Releases.  Upon
obtaining the consent of the other Party (which consent shall not be
unreasonably withheld or delayed), either Party shall be entitled to issue
press releases concerning this Agreement.

 

15.3                        Governing
Law.  This Agreement shall be
governed in all respects by the laws of Commonwealth of Massachusetts without
regard to its conflicts of law principles.

 

15.4                        Forum.  In the event of a dispute hereunder, the same
shall be submitted to binding arbitration under the rules of the American
Arbitration Association in the city of Boston, State of Massachusetts or the
City of New York, State of New York.  The
Party prevailing shall be entitled to recover reasonable legal fees and
expenses from the Party not prevailing.

 

15.5                        Notices.  In any case where any notice or other
communication is required or permitted to be given hereunder, such notice or
communication will be given in writing by personal delivery or national
overnight delivery service, addressed to the respective Party at the addresses
indicated above.  All such notices or
other communications will be deemed to 

 

Portions of this Exhibit
have been redacted, as indicated by * * * * * * *; these portions have been provided to the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

7

 

have been given and received
(i) upon receipt if personally delivered or sent by registered mail; or (ii)
when delivery is confirmed if sent by overnight delivery service

 

15.6                        Force
Majeure.  Neither Party shall be liable
hereunder by reason of any failure or delay in the performance of its
obligations hereunder on account of strikes, shortages, riots, insurrection,
fires, flood, storm, explosions, acts of God, acts of terrorism, war,
governmental action, labor conditions, earthquakes, material shortages or any
other cause which is beyond the reasonable control of such Party.

 

15.7                        Waiver.  The failure of either Party to require
performance by the other party of any provision hereof shall not affect the
full right to require such performance at any time thereafter; nor shall the
waiver by either party of a breach of any provision hereof be taken or held to
be a waiver of the provision itself.

 

15.8                        Severability.  In the event that any provision of this
Agreement shall be unenforceable or invalid under any applicable law or be so
held by applicable court decision, such unenforceability or invalidity shall
not render this Agreement unenforceable or invalid as a whole, and, in such
event, such provision shall be changed and interpreted so as to best accomplish
the objectives of such unenforceable or invalid provision within the limits of
applicable law or applicable court decisions.

 

15.9                        Assignment.  Neither this Agreement nor any rights or
obligations of either Party shall be assigned without the prior written
approval of the other Party except as follows: 
(a) Apogee shall assign its rights and obligations hereunder to any
entity that acquires its business and assets, or such portion thereof as is
relevant to the subject matter of this Agreement; and (b) Fricano may assign
any right to any payment to him hereunder.

 

15.10                 Counterparts.  This Agreement may be executed simultaneously
in two or more counterparts, each of which will be considered an original, but
all of which together will constitute one and the same instrument.

 

15.11                 Entire
Agreement.  This
Agreement together with the exhibits hereto completely and exclusively states
the agreement of the Parties regarding its subject matter and supersedes, and
its terms govern, all prior proposals, agreements, or other communications
between the parties, oral or written, regarding such subject matter.  This Agreement shall not be modified except
by a subsequently dated written amendment signed on behalf of each of the
parties.

 

Portions of this Exhibit
have been redacted, as indicated by * * * * * * *; these portions have been provided to the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

8

 

                IN WITNESS WHEREOF, the parties hereto have caused this
Transfer and Royalty Agreement to be executed by their duly authorized
representatives.

 

	
  Fricano:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/

  	
  G. Fricano

  
	
  Date:

  	
   

  	
  May 11, 2004

  
	
   

  	
   

  	
   

  
	
  Apogee Technology,

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/

  	
   

  
	
  Title:

  	
   

  	
  Chief Operating Officer

  
	
  Date:

  	
   

  	
  May 11, 2004

  

 

 

Portions of this Exhibit
have been redacted, as indicated by * * * * * * *; these portions have been provided to the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

9

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