DND Technologies Inc – ‘10KSB’ for 12/31/02 – EX-10.1

On:  Tuesday, 4/15/03, at 4:59pm ET   ·   For:  12/31/02   ·   Accession #:  1169232-3-2988   ·   File #:  333-42936

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Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report                                         51    211K 
 2: EX-10.1     Asset Sale and License Agreement                       8     27K 
 3: EX-21.1     Subsidiaries of the Registrant                         1      4K 
 4: EX-99.1     Certification CEO                                      1      5K 
 5: EX-99.2     Certification CFO                                      1      5K 

EX-10.1   —   Asset Sale and License Agreement

EX-10.1
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                                                                    Exhibit 10.1

Asset Sale and License Agreement

This agreement ("Agreement") is between Lam Research Corporation, a Delaware    
Corporation headquartered in Fremont, California ("Lam") and Aspect Systems, 375
East Elliott Road, Chandler, Arizona 85225 ("Aspect"). The effective date of    
this Agreement is ____________________ (the "Effective Date").                  

WHEREAS Lam is willing to sell Aspect certain assets and provide certain        
licenses under Lam's patents, copyrights, trade secrets and know-how            
(collectively, "Intellectual Property") that would be useful to Aspect in the   
manufacture, refurbishment, servicing and repair of AutoEtch(R) and Drytek(R)   
machines (the "Licensed Products" ).                                            

WHEREAS Aspect is willing to purchase such assets and pay Lam a royalty in      
partial consideration for the required licenses;                                

The parties agree as follows:                                                   

1.    Sale of Assets. Aspect agrees to purchase all the assets defined in       
   Exhibit A (the "Assets"). Lam shall update Exhibit A within thirty (30)
 days of the Effective Date to reflect actual quantities of the Assets
     purchased by Aspect and a total Purchase Price for such Assets purchased.
    Aspect may return any Assets that it finds to be defective within thirty
 (30) days of the Effective Date of this Agreement for a proportionate
     reduction in the purchase price of the Assets (the "Purchase Price"). Any
     Assets that are not returned to Lam within that thirty-day period will be
     deemed accepted by Aspect without return right. Aspect and Lam will share
     equally any shipping costs required in respect of the sale of the Assets.

2.    No Warranty on Assets. THE ASSETS SOLD UNDER THIS AGREEMENT ARE SOLD "AS  
IS" AND "WHERE IS". THE ASSETS HAVE NO WARRANTY, EXPRESS OR IMPLIED,
     INCLUDING (WITHOUT LIMITATION) ANY WARRANTY OF MERCHANTABILITY OR FITNESS
     FOR A PARTICULAR PURPOSE. LAM MAKES NO WARRANTIES OF ANY KIND WITH REGARD
    TO INFRINGEMENT OF THIRD PARTY RIGHTS RELATED TO ITS SALE OF THE ASSETS.

3.    Representations by Lam. Lam represents:                                   

  (a)   That it has been using the Assets in the manufacture, service or
repair of the AutoEtch and Drytek machines;             

  (b)   That is has no actual knowledge that the Assets are defective or
         infringe the patents or other intellectual property rights of any
third parties.                                          

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4.    Representations by Aspect. Aspect represents                              

 (a)   That it is capable of inspecting the Assets purchased hereunder
without assistance from Lam;                            

      (b)   That it is not relying upon any representation or warranty of Lam in
making its decision to purchase the Assets;             

(c)   That it will not hold Lam responsible for any latent or patent
defects discovered in the Assets; and                   

  (d)   That it is competent to accept the Assets on the terms set forth
herein.                                                 

5.    Payment of Purchase Price. Aspect shall pay the Purchase Price to Lam     
according to the following table:                                   

 (a)   10 % of the Purchase Price shall be paid on or before March 20,
2002.                                                   

      (b)   10 % of the Purchase Price shall be paid on or before June 20, 2003.

  (c)   The remainder of the Purchase Price shall be paid in twelve (12)
     equal monthly installments commencing July 31, 2003, and each
payment is due on or before the end of each month.      

 (d)   All payments under this Section are payable in U.S. Dollars and
         shall be wired to Lam's bank account <<to be provided>>. Any late
            payments shall constitute breach of a material obligation under this
Agreement, as described herein.                         

6.    Security Interest. Aspect hereby grants Lam a purchase money, first       
     security interest in all the Assets as well as the proceeds of all Assets
     sales and the proceeds of all equipment, tools and products made with the
     Assets to secure payment of Aspect's obligations hereunder. Aspect hereby
      appoints Lam as its agent to execute any security instruments that Lam may
   desire with respect to the perfection of such security interest. Aspect
    will also grant Lam access to its warehouses and other facilities at any
   time should Lam need such access to repossess the Assets or proceeds in
case of Aspect's default.                                           

7.    Supplier Relationship and Performance.                                    

   (a)   Sole Supplier. Subject to the conditions and performance measures
          set forth herein, Lam agrees to purchase AutoEtch and DryTek parts
            and assemblies solely from Aspect Systems and solely for the support
of Lam service contracts or service personnel.          

   (b)   Supplier Performance. Aspect agrees that all parts and assemblies
        sold to Lam hereunder will comply with the following performance
measures:                                               

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    (i)   Delivery time: Aspect agrees that 95% of all parts and
                assemblies scheduled to be delivered within a given calendar
          quarter will be delivered within that quarter. If this
              performance measure is not met, Aspect agrees to deliver a
             curative plan within 15 days of notice by Lam of Aspect's
               failure under this provision. Failure of Aspect to cure the
             delivery time performance measure within 90 days of Lam's
          notice shall constitute grounds for Lam to immediately
               terminate this Agreement and all licenses granted hereunder
for cause without further notice to Aspect; 

            (ii)  Quality: Aspect agrees that all parts and assemblies delivered
               to Lam shall have a defect rate no greater than one percent
                  (1%). If this performance measure is not met, Aspect agrees to
              deliver a curative plan within 15 days of notice by Lam of
               Aspect's failure under this provision. Failure of Aspect to
                cure the delivery time performance measure within 90 days of
                Lam's notice shall constitute grounds for Lam to immediately
                terminate this Agreement for cause without further notice to
Aspect.                                     

            (iii) Cost: Aspect agrees to sell all parts and assemblies purchased
                  by Lam hereunder at a price not greater than ten percent (10%)
          above that charged by Lam's vendors for such parts and
                  assemblies as of the date of sale of the Assets. Aspect agrees
            to not change the selling price, to the customer, of the
          Assets specified in Exhibit A for a period of one year
              commencing upon shipment of said Assets to Aspect systems.

8.    Licenses.                                                                 

     (a)   In partial consideration for the royalty payments set forth herein,
Lam hereby grants Aspect:                               

        (i)   a world-wide, non-exclusive non-transferable license under
               Lam's patents identified in Exhibit B 1 to make, have made,
          offer to sell, sell, import, repair and distribute the
Licensed Products;                          

        (ii)  a world-wide, non-exclusive non-transferable license under
                Lam's copyrights to reproduce and distribute copies of Lam's
                  specifications and drawings for parts identified in Exhibit A,
            but only to its vendors or other suppliers to the extent
                  necessary to enable Aspect to make or have made components and
            assemblies for incorporation into the Licensed Products;

        (iii) a world-wide, non-exclusive non-transferable license under
         Lam's trade secrets and know-how encompassed in Lam's
                 specifications and drawings for parts identified in Exhibit A
or utilized in the products                 

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               identified in Exhibit A to make or have made components and
            assemblies for incorporation into the Licensed Products;

    (b)   The licenses granted in this Section 8 do not include the right to
   sublicense and terminate under the following circumstances:

          (i)   Automatically and immediately, if Aspect declares bankruptcy
                or becomes insolvent. Should Lam reasonably become concerned
            about Aspect's financial condition, Lam may request that
                  Aspect provide reasonable assurances of its ability to fulfill
          the obligations of this Agreement. Lam may immediately
                  terminate the licenses set forth herein if Aspect is unable to
      provide such reasonable assurance within ten days.

          (ii)  Upon notice by Lam for cause for Aspect's default other than
                 as provided in Section 7.b above. Defaults under this Section
                 8.b.ii include non-payment of royalties or breach of any term
             of this agreement; however, except as provided below, Lam
                  shall provide notice of any such default and termination shall
                only be effective if Aspect fails to cure the default within
                 ten calendar days of Lam's delivery of such notice. Exception
               to notice requirement: If Aspect is late on royalty payment
                 three times during any two-year period, Lam may terminate the
              licenses immediately without providing any additional cure
period.                                     

            (iii) By either party for convenience, on twelve months' notice, but
              such notice may not be given prior to January 1, 2003. Any
           such convenience notice on the part of Aspect shall not
                 relieve Aspect's obligation to make payments under Sections 5
                and 16 of this Agreement. Any such convenience notice on the
                part of Lam shall excuse Aspect from all installments of the
               royalty otherwise payable under Section 9 below and falling
            due on a date subsequent to the date of such convenience
notice by Lam.                              

      (c)   Upon termination of this Agreement or the licenses for cause, Aspect
          has no further right to manufacture, sell, repair or refurbish the
    Licensed Products. Upon termination of this Agreement or the
         licenses for the convenience of Lam, Lam agrees to grant Aspect a
        perpetual, worldwide immunity from suit under Lam's Intellectual
     Property coextensive with the licenses granted Aspect in this
          Section 8 ASPECT SHALL HAVE NO RIGHTS TO ANY OF LAM'S INTELLECTUAL
         PROPERTY EXCEPT AS EXPRESSLY SET FORTH HEREIN WITH RESPECT TO THE
         LICENSED PRODUCTS, AND NO LICENSE OR OTHER RIGHT SHALL ARISE FROM
          THE CONSUMMATION OF THIS AGREEMENT OR FROM ANY ACTS, STATEMENTS OR
DEALINGS LEADING TO SUCH CONSUMMATION.                  

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      (d)   Additional Licensees. Should Lam in its sole judgment determine that
       Aspect's performance fails to meet any condition or performance
      measure set forth in this Agreement, or any other condition or
   performance measure the parties mutually develop while this
        Agreement is in effect, then Lam shall have the right to license
          additional licensees to make and sell to Lam and its customers any
           part or assembly listed on Exhibit A. Should Lam exercise its right
          under this provision, then the royalty payment due Lam from Aspect
      shall be reduced by 15% of the sales price of any such part or
assembly sold by Lam or such additional licensee.       

9.    Royalty. In partial consideration of the rights and licenses granted      
      herein, Aspect shall pay Lam a royalty in the amount of Five Million Three
      Hundred Seventy-Six Thousand Dollars ($5,376,000.00). The royalty shall be
    paid in ninety-six (96) equal monthly installments of Fifty-six Thousand
dollars ($56,000.00) each commencing thirty (30) days after the date
      Aspect begins shipping the Licensed Products as referenced in Lam's letter
     to its customers and due on or before the end of each calendar month. All
  payments under this Agreement are payable in U.S. Dollars and shall be
wired to Lam's bank account <<to be provided>>.                     

10.   Indemnity                                                                 

  (a)   by Lam. Lam makes no representations or warranties regarding the
           licenses set forth herein whether or infringement or otherwise. Lam
       disclaims any obligation to defend or hold harmless Aspect, its
          customers, or anyone claiming through them against any third party
           claims, whether of infringement or other nature, except that if any
            challenge to the title or ownership of the Assets is not resolved by
           Lam within a reasonable time, Aspect may return the Assets impacted
            by that claim for a refund of the amount actually paid by Aspect for
those Assets.                                           

      (b)   by Aspect. Aspect shall defend, indemnify and hold harmless Lam, and
            its officers, agents and representatives from and against any claim,
           suit or damage by or to third parties as a result of the actions of
            Aspect or any of its officers, employees, agents or representatives,
           including its (or their) use of the Assets or Intellectual Property
in connection with the Licensed Products.               

11.   Insurance. Aspect shall name Lam as an additional insured under its       
    General Liability Insurance Policy. Aspect shall carry General Liability
   Insurance in the amount of at least $1,000,000 per occurrence and shall
    also carry workers compensation insurance in every jurisdiction in which
      it has employees. This obligation shall terminate upon Aspect's payment in
   full of the Purchase Price of the Assets set forth in Exhibit A hereto.

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12.   Relationship of the Parties. Nothing in this contract shall create any    
 joint venture or partnership between the parties. Aspect at all times
shall be an independent contractor to Lam.                          

13.   Publicity. Lam and Aspect shall mutually agree in advance upon any press  
    release or other announcement by Aspect regarding this Agreement. Except
for the foregoing, Aspect shall not make any other public statement 
     regarding its relationship with Lam without the prior written approval by
an authorized Lam representative.                                   

14.   Confidential Information.                                                 

   (a)   All disclosures of information marked as Confidential Information
          occurring under this Agreement, or if disclosed visually or orally
           and identified at the time of disclosure as comprising or including
           confidential information, shall be deemed to be confidential to the
           discloser. If information is not marked as confidential at the time
            of disclosure, the discloser may nevertheless provide written notice
           to the recipient within thirty (30) days following the date of such
           disclosure, whereafter the recipient shall in good faith treat such
    information as the discloser's Confidential Information. All
        Confidential Information disclosed in a tangible form, including
        electronic transmissions of documents comprising or Confidential
            Information, will be accompanied by a letter describing the contents
            of the disclosure and that such disclosure was made pursuant to this
Agreement.                                              

   (b)   Notwithstanding anything herein to the contrary, all Lam know-how
           transferred to Aspect by Lam hereunder is deemed to be, without any
       further action by Lam, Lam Confidential Information and a trade
secret of Lam.                                          

     (c)   Subject to the provisions of this Section, for a period of ten (10)
          years from the date of disclosure of Confidential Information, the
        recipient agrees to use the same degree of care to not disclose,
   publish, or disseminate the Confidential Information as the
           recipient employs with similar information of its own which it does
           not desire to publish, disclose or disseminate, but in no case less
      than a reasonable degree of care; provided however, Aspect may
            disclose Lam's Confidential Information to its vendors and suppliers
     for the express purpose of this Agreement set forth above and
            consistent with the licenses granted in Section 7 of this Agreement.

      (i)   The obligations imposed upon the parties do not apply to
information which the recipient can show:   

      (ii)  is already lawfully in the possession of or known by the
                  recipient before receiving the information from the discloser;

       (iii) is or becomes publicly known through no violation of this
Agreement;                                  

        (iv)  is lawfully received by the recipient from any third party
without restriction on disclosure or use;   

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            (v)   is independently developed without violating this Agreement by
                the recipient's employees who have not had access to, relied
        upon or received any of the discloser's Confidential
      Information as confirmed by satisfactory evidence;

         (vi)  is required to be disclosed by court order following notice
           sufficient to allow discloser to contest such order; or

(vii) is expressly approved in writing, by an authorized
               representative of the discloser for release or other use by
the recipient.                              

15.   Competition and Hiring. Aspect agrees not to compete against Lam in using,
      making, having made, offering for sale, selling, importing or distributing
      any multichamber etch tool except upon mutual agreement of the parties, in
  writing, amending this agreement. Aspect shall not solicit or recruit,
     directly or indirectly, any Lam employee or contractor. These obligations
     shall extend until twelve months after the termination of this Agreement.

16.   Governing Law. This contract has been negotiated under and shall be       
    construed in accordance with the laws of the State of California without
regard to its conflict of laws provisions.                          

17.   Compliance with Laws. Aspect agrees to comply with all laws, rules and    
regulations or any governmental agency or authority of any country  
applicable to the Agreement or the activities occurring hereunder.  

18.   Entire Agreement. This Agreement is the complete and full agreement and   
     understanding of Aspect and Lam, and shall supersede all prior agreements
and understandings, oral or written, between them in respect of the 
  subject matter of this Agreement. This Agreement may not be amended or
     terminated orally by or on behalf of either Aspect of Lam. Any amendments
  to or terminations of this Agreement shall be in writing and signed by
authorized representatives of Aspect and Lam.                       

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in duplicate originals by its duly authorized representatives on the dates      
entered below:                                                                  

Lam Research Corporation                                          

By:                                                                             

Signature  /s/ Ernie Maddock                      Date 11/1/2002            
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Ernie Maddock          Vice President, Customer Support Business Group      
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Print/Type Name              Title                                              

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Aspect Systems                                              

Signature  /s/ Wayne Bixler                        Date 11/8/02                 
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Wayne Bixler               Chief Operating Officer                          
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Print/Type Name              Title                                              

8 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10KSB’ Filing		Date		First		Last			Other Filings
		7/31/03		2
		6/20/03		2
Filed on:		4/15/03
		1/1/03		4
For Period End:		12/31/02							10KSB/A,  NT 10-K
		3/20/02		2
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