-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ByzaCRagRbxRUZqnBFxPANL4brqKhtWbjAscMSsaTHy6H+x9PtYDKWgAJbOxBvYL 9/ba1W0a9Snzyf7TfRWt/w== 0000930413-09-006410.txt : 20091223 0000930413-09-006410.hdr.sgml : 20091223 20091223172913 ACCESSION NUMBER: 0000930413-09-006410 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20090630 FILED AS OF DATE: 20091223 DATE AS OF CHANGE: 20091223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZYGO CORP CENTRAL INDEX KEY: 0000730716 STANDARD INDUSTRIAL CLASSIFICATION: OPTICAL INSTRUMENTS & LENSES [3827] IRS NUMBER: 060864500 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-12944 FILM NUMBER: 091259070 BUSINESS ADDRESS: STREET 1: LAUREL BROOK RD CITY: MIDDLEFIELD STATE: CT ZIP: 06455 BUSINESS PHONE: 8603478506 MAIL ADDRESS: STREET 1: LAUREL BROOK ROAD CITY: MIDDLEFIELD STATE: CT ZIP: 06455 10-K/A 1 c59763_10ka.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K/A
AMENDMENT No. 2

(Mark One)


x	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the fiscal year ended June 30, 2009
Or
o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from ______________________________ to ______________________________

Commission file number 0-12944

ZYGO CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		06-0864500

(State or other jurisdiction of		(IRS Employer Identification Number)
incorporation or organization)


	Laurel Brook Road, Middlefield, Connecticut 06455-1291

	(Address of principal executive offices) (Zip Code)

	(860) 347-8506

	(Registrant’s telephone number, including area code:)

	Securities registered pursuant to Section 12(b) of the Act:

	None

	Securities registered pursuant to Section 12(g) of the Act:

	Common Stock, $.10 Par Value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES o NO x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

YES o NO x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES o NO x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceeding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES o NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in rule 12b-2 of the Exchange act. (Check one):


Large accelerated filer	o		Accelerated filer x
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

YES o NO x

The aggregate market value of the registrant’s Common Stock held by non-affiliates, based upon the closing price of the Common Stock on December 31, 2008, as reported by the NASDAQ National Market, was $64,026,111. Shares of Common Stock held by each executive officer and director and by each person who owns 5% or more of the outstanding Common Stock, based on filings with the Securities and Exchange Commission, have been excluded since such persons may be deemed affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

Indicate the number of shares outstanding of each of the registrant’s classes of Common Stock, as of the latest practicable date.

16,988,156 Shares of Common Stock, $.10 Par Value, at September 1, 2009

EXPLANATORY NOTE

The purpose of this Amendment No. 2 (this "Form 10-K/A") to our Annual Report on Form 10-K for the fiscal year ended June 30, 2009, which was filed with the Securities and Exchange Commission (the "SEC") on September 14, 2009 and amended on October 26, 2009 (the "Annual Report"), is to include revised versions of Exhibits 10.30 and 10.31. The versions of Exhibits 10.30 and 10.31 filed herewith have been revised in response to comments of the Staff of the SEC relating to ZYGO's request for confidential treatment.

In addition, pursuant to the rules of the SEC, Item 15 of Part IV of the Annual Report has been amended to contain currently dated certifications from our Chief Executive Officer and Chief Financial Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 with respect to this Form 10-K/A. The currently dated certifications of our Chief Executive Officer and Chief Financial Officer are attached to this Form 10-K/A as Exhibits 31.1, 31.2, 32.1 and 32.2. Except as described above, no other changes are made to the Annual Report, and this Form 10-K/A does not amend, update or change any other Item or the disclosures in the Annual Report in any way. This Form 10-K/A does not reflect events occurring after the filing of the Annual Report or modify or update those disclosures, including any exhibits to the Annual Report, affected by subsequent events.

PART IV

Item 15. Exhibits, Financial Statement Schedules


(a)	The following documents are filed as part of this report:

	1. and 2. Consolidated Financial Statements and Financial Statement Schedule:

		Consolidated Financial Statements and Financial Statement Schedule (previously filed with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2009, as filed with the Securities and Exchange Commission on September 14, 2009)

	3.	EXHIBITS

	3.(i)	Restated Certificate of Incorporation of the Company and amendments thereto (Exhibit 3.(i) to the Company’s Annual Report on Form 10-K for its year ended June 30, 1993)*

	3.(ii)	Certificate of Amendment of Certificate of Incorporation, filed June 3, 1996 (Exhibit 3.(ii) to the Company’s Annual Report on Form 10-K 405 for its year ended June 30, 1996)*

	3.(iii)	By-laws of the Company (Exhibit (3)(b) to Registration No. 2-87253 on Form S-1 hereinafter “Registration No. 2-87253”)*

	4.1	Zygo Corporation Code of Ethics (Exhibit 14.1 to the Company’s Quarterly Report on Form 10-Q for its quarterly period ended March 26, 2004)*

	10.1	Confidentiality and Non-Competition Agreement dated October 25, 1983, between the Company and Carl A. Zanoni (Exhibit (10)(b) to Registration No. 2-87253)*

	10.2	Agreement dated November 20, 1980, between the Company and Canon Inc. regarding exchange of information (Exhibit (10)(y) to Registration No. 2-87253)*

	10.3	Amended and Restated Zygo Corporation Profit Sharing Plan (Exhibit 10.15 to the Company’s Annual Report on Form 10-K 405 for its year ended June 30, 1995)*

	10.4	Canon/ZYGO Confidentiality Agreement dated March 7, 1990, between the Company and Canon Inc. regarding confidential technical information received from each other (Exhibit 10.42 to the Company’s Annual Report on Form 10-K for its year ended June 30, 1991)*

	10.5	Zygo Corporation Amended and Restated Non-Qualified Stock Option Plan ratified and approved by the Company’s Stockholders on November 19, 1992 (Exhibit 10.30 to the Company’s Annual Report on Form 10-K for its year ended June 30, 1993)*

	10.6	Zygo Corporation Non-Employee Director Stock Option Plan ratified and approved by the Company’s Stockholders on November 17, 1994 (Exhibit 10.30 to the Company’s Annual Report on Form 10-K 405 for its year ended June 30, 1996)*

	10.7	Employment Agreement dated January 15, 1999, between Zygo Corporation and J. Bruce Robinson (Exhibit 10.34 to the Company’s Annual Report on Form 10-K 405 for its year ended June 30, 1999)*

	10.8	Zygo Corporation Amended and Restated Non-Employee Director Stock Option Plan ratified and approved by the Company’s Stockholders on November 17, 1999 (Exhibit to the Company’s Definitive Proxy Statement for its year ended June 30, 1999)*

	10.9	Employment agreement dated July 1, 1999, between Zygo Corporation and Brian J. Monti (Exhibit 10.22 to the Company’s Annual Report on Form 10-K 405 for its year ended June 30, 2000)*


	10.10	Subcontract B519044 between The Regents of The University of California Lawrence Livermore National Laboratory and Zygo Corporation dated January 14, 2002 (Exhibit 10.25 to the Company’s Annual Report on Form 10-K for its year ended June 30, 2002)*

	10.11	Development Agreement dated September 11, 2002, between Zygo Corporation and Canon, Inc. (Exhibit 99.2 to the Company’s Current Reports on Form 8-K dated September 17, 2002)*

	10.12	Development and Manufacturing Support Services Agreement effective December 1, 2001, between Zygo Corporation and Philips Electronics North America Corporation. (Exhibit 99.1 to the Company’s Current Report on Form 8-K dated October 22, 2002)*

	10.13	Development Agreement Amendment dated December 20, 2004, between Zygo Corporation and Canon Inc. (Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for its quarterly period ended December 31, 2004)*

	10.14	Development Agreement Amendment dated February 26, 2005, between Zygo Corporation and Canon Inc. (Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for its quarterly period ended March 31, 2005)*

	10.15	Development Agreement dated February 23, 2005, between Zygo Corporation and Canon Inc. (Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for its quarterly period ended March 31, 2005)*

	10.16	Zygo Corporation 2002 Equity Incentive Plan Restricted Stock Agreement. (Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for its quarterly period ended September 30, 2005)*

	10.17	Zygo Corporation 2002 Equity Incentive Plan Stock Option Agreement. (Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for its quarterly period ended September 30, 2005)*

	10.18	Employment contract dated October 23, 2006 between Zygo Corporation and James Northup. (Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for its quarterly period ended December 31, 2006)*

	10.19	Employment contract dated November 20, 2006 between Zygo Corporation and John Stack. (Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for its quarterly period ended December 31, 2006)*

	10.20	Agreement dated February 8, 2007 between Zygo Corporation and Carl A. Zanoni. (Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for its quarterly period ended March 31, 2007)*

	10.21	Employment contract dated June 15, 2007 between Zygo Corporation and Walter A. Shephard. (Exhibit 10.23 to the Company’s Annual Report on Form 10-K for its annual period ended June 31, 2007)*

	10.22	Employment Agreement dated November 19, 2007 between Zygo Corporation and Mr. Douglas J. Eccleston (Exhibit 99.1 to the Company’s Current report on Form 8-K dated November 20, 2007)*

	10.23	Press Release, dated February 28, 2008, issued by Zygo Corporation which announces that it acquired the assets of Solvision, Inc. (Exhibit 99.1 to the Company’s Current Reports on Form 8-K dated February 29, 2008)*

	10.24	Restricted Stock Unit Agreement dated January 31, 2008 between ZYGO Corporation and J. Bruce Robinson (Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for its quarterly period ended March 31, 2008)*

	10.25	Entry into an agreement and plan of merger and reorganization (Exhibit 2.1 to the Company’s Current Reports on Form 8-K dated October 21, 2008)

	10.26	Employment agreement amendments between Zygo Corporation and J. Bruce Robinson, James R. Northup, and John M. Stack, dated October 21, 2008 (Exhibit 10.1, 10.2, and 10.3, respectively, to the Company’s Current Reports on Form 8-K dated October 21, 2008)*


	10.27	Audited consolidated financial statements of Solvision Inc. (Exhibit 99.1 to the Company’s Current Report on Form 8-K/A dated February 28, 2008)

	10.28	Employment Agreement amendment, dated January 15, 2009, between Zygo Corporation and Brian M. Monti (Exhibit 99.1 to the Company’s Current Report on Form 8-K dated January 22, 2009)*

	10.29	Settlement Agreement and Mutual Release, dated as of April 2, 2009, by and among Electro Scientific Industries, Inc., Zirkon Merger Sub, LLC, and Zygo Corporation (Exhibit 2.1 to the Company’s Current Report on Form 8-K dated April 3, 2009)

	10.30	Asset Transfer Agreement, dated as of June 17, 2009, by and between Zygo Corporation and Nanometrics Corporation. **

	10.31	Supply Agreement, dated as of June 17, 2009, by and between Zygo Corporation and Nanometrics Corporation. **

	10.32	Employment contract dated November 16, 2007 between Zygo Corporation and David Person. Previously filed with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2009, as filed with the Securities and Exchange Commission on September 14, 2009.

	21.	Subsidiaries of Registrant. Previously filed with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2009, as filed with the Securities and Exchange Commission on September 14, 2009.

	23.1	Consent of Independent Registered Public Accounting Firm. Previously filed with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2009, as filed with the Securities and Exchange Commission on September 14, 2009.

	24.	Power of Attorney (included in the signature page to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2009, as filed with the Securities and Exchange Commission on September 14, 2009)

	31.1	Certification Pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.2	Certification Pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


	Exhibit numbers 10.3, 10.5, 10.6, 10.7, 10.8, 10.9, 10.16, 10.17, 10.18, 10.19, 10.20, 10.21, 10.22, 10.24, 10.26, 10.28, and 10.32 are management contracts, compensatory plans or compensatory arrangements.

* Incorporated herein by reference.

** Confidential treatment has been requested for portions of this exhibit. Omitted portions have been filed separately with the Securities Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


ZYGO CORPORATION

Registrant

By	/s/ Walter A. Shephard	Date	December 23, 2009

	Walter A. Shephard
	Vice President, Finance, Chief Financial Officer, and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


/s/ J. Bruce Robinson	Chief Executive Officer (principal	December 23, 2009
	executive officer) and Director
J. Bruce Robinson

/s/ Walter A. Shephard	Vice President, Finance, Chief	December 23, 2009
	Financial Officer, and Treasurer
Walter A. Shephard	(principal financial and accounting officer)

*	Director	December 23, 2009

Eugene G. Banucci

*	Director	December 23, 2009

Stephen D. Fantone

*	Director	December 23, 2009

Samuel H. Fuller

*	Director	December 23, 2009

Seymour E. Liebman

*	Director	December 23, 2009

Robert B. Taylor

*	Director	December 23, 2009

Carol P. Wallace

*	Director	December 23, 2009

Gary K. Willis

*	Director - Chairman	December 23, 2009

Bruce W. Worster

* By: /s/ Walter A. Shephard

ATTORNEY-IN-FACT

EXHIBIT INDEX


EXHIBIT TABLE NUMBER


	10.30	Asset Transfer Agreement, dated as of June 17, 2009, by and between Zygo Corporation and Nanometrics Corporation.**

	10.31	Supply Agreement, dated as of June 17, 2009, by and between Zygo Corporation and Nanometrics Corporation.**

	31.1	Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.2	Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32.1	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	32.2	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	** Confidential treatment has been requested for portions of this exhibit. Omitted portions have been filed separately with the Securities Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

EX-10.30 2 c59763_ex10-30.htm

EXHIBIT 10.30

EXECUTION COPY

ASSET TRANSFER AGREEMENT

This Asset Transfer Agreement (this “Agreement”) dated as of June 17, 2009, is entered into by and between Zygo Corporation, a Delaware corporation (“Zygo”), and Nanometrics Incorporated, a Delaware corporation (“Nano”).

RECITALS

A. Zygo has developed and is the owner of certain technology related to interferometers (the “Automated Interferometers”), including the “heads,” the control, monitoring and analysis software, and electronic control systems, as well as the automation of the systems that use these technologies.

B. Zygo seeks to establish a relationship with Nano, and Nano intends to establish a relationship with Zygo, pursuant to which Nano becomes the exclusive provider of the product referred to by Zygo as the “Unifire” and other Approved Systems (as defined below) in the Approved Markets (as defined below) that incorporate Heads (as defined below), subject to the terms and conditions hereof, and in that certain Supply Agreement, dated as of the Closing Date, by and between Zygo and Nano, attached hereto as Exhibit D (the “Supply Agreement”).

AGREEMENT

In consideration of the foregoing and the respective representations, warranties, covenants and agreements contained in this Agreement and the Supply Agreement, and other good and valuable consideration, the receipt and sufficiency of which each of the parties hereby acknowledges, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I

PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES

1.1 Transfer of Assets. Upon and subject to the terms and conditions of this Agreement, Zygo shall transfer, convey, assign and deliver to Nano at the Closing, for the consideration specified in Section 1.3 below, (a) all right, title and interest in, to and under the Acquired Assets (which are listed on Schedule A-1 hereto), and (b) subject to Section 4.6 hereof, all its rights and obligations under the Assigned Contracts (which are listed on Schedule A-2 hereto).

1.2 Assumption of Liabilities. Upon and subject to the terms and conditions of this Agreement, Nano shall assume as of the Closing and become responsible for the Assumed Liabilities (which are listed on Schedule B hereto).

1.3 Consideration. The consideration for the transfer of assets is the execution of the Supply Agreement and this Agreement, and the related covenants of Nano hereunder and thereunder.

1.4 The Closing.

(a) The Closing shall take place at the offices of Fulbright & Jaworski L.L.P. in New York, New York, commencing at 1:00 p.m. local time on the Closing Date. All transactions at the Closing shall be deemed to take place simultaneously, and no transaction shall be deemed to have been completed and no documents or certificates shall be deemed to have been delivered until all other transactions are completed and all other documents and certificates are delivered.

(b) At the Closing:

(i) Zygo shall execute and deliver to Nano a bill of sale in the form attached hereto as Exhibit A (the “Bill of Sale”), and such other instruments of conveyance as Nano may reasonably request in order to (A) effect the sale, transfer, conveyance and assignment to Nano of valid ownership of the Acquired Assets, and (B) subject to Section 4.6 hereof, assign to Nano all its rights and obligations under the Assigned Contracts;

(ii) Zygo shall deliver to Nano, or otherwise put Nano in possession and control of, all of the Acquired Assets of a tangible nature;

(iii) Nano and Zygo shall execute and deliver to each other a cross-receipt evidencing the transactions referred to above;

(iv) Nano shall execute an instrument of assumption in substantially the form attached hereto as Exhibit B (the “Assumption Agreement”) to effect the assumption of the Assumed Liabilities;

(v) Nano and Zygo shall execute and deliver to each other the Supply Agreement; and

(vi) Nano and Zygo shall execute and deliver to each other the Sublease Agreement.

(c) As soon as practicable after the Closing, but in any event prior to the shipment by Zygo to Nano of the Purchased Inventory or the Demo Equipment, Nano shall execute and deliver to Zygo a security agreement granting Zygo a first perfected security interest in the Purchased Inventory and Demo Equipment (as later defined), and a corresponding UCC-1 financing statement, both in a form reasonably acceptable to Zygo, to ensure Zygo’s receipt of the Purchased Inventory Purchase Price and Demo Equipment Purchase Price or the return of such transferred assets.

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1.5 Sublease of Hillsboro Facility.

(a) At Closing, Nano and Zygo shall enter into a sublease agreement (the “Sublease Agreement”) pursuant to which Nano will sublease from Zygo, and Zygo will sublease to Nano, Zygo’s facility located at 2925 N.W. Aloclek Drive, Suite # 100 Hillsboro, Oregon (the “Oregon Facility”), consisting of 6,410 square feet of space, through December 31, 2012, for monthly rent in an amount equal to the current base rent and any other charges otherwise payable by Zygo under its existing lease of the Oregon Facility.

(b) As of the Closing, Nano and Zygo agree as follows

(i) Zygo hereby leases to Nano and Nano hereby leases from Zygo, for the monthly rent equal to the amortization of the fixed assets described in Section 2.15 of Exhibit C over the life of the Sublease Agreement based on an interest rate of zero percent, the Personal Property (as hereinafter defined) on the terms and conditions of this Section 1.5(b). The term “Personal Property” means certain improvements, furniture, phone system and fixed assets described in Section 2.7 of Exhibit C. This lease of Personal Property shall expire and terminate at such time the Sublease Agreement shall expire or earlier terminate. This lease of Personal Property and any conveyance of Personal Property are made AS-IS, WHERE-IS, without any warranty of merchantability of suitability for any particular purpose, all rights waived by Nano.

(ii) Nano shall maintain the Personal Property in its existing condition, ordinary wear and tear excepted, at its sole cost and expense. Nano shall bear the entire risk of loss or damage to the Personal Property during the term of this lease, and Nano shall insure the Personal Property at all times against risks of loss or damage by fire, theft and such other risks as may be covered by the insurance generally carried by Nano in respect of its personal property. All insurance proceeds shall be payable to Nano, and Nano shall pay to Zygo all insurance proceeds paid to Nano in respect of the Personal Property. Nano may not remove the Personal Property from the Oregon Facility without the consent of Zygo. Nano shall not grant any security interest in the Personal Property or in any other manner assign, pledge, hypothecate, mortgage, lease, sublease, encumber or otherwise transfer the Personal Property or its interest in the Personal Property.

(iii) Upon termination of this lease of Personal Property, Nano shall return the Personal Property to Zygo in the condition in which it was leased to Nano, ordinary wear and tear excepted.

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1.6 Payment for Inventory.

(a) Nano is purchasing the inventory described in Schedule A-1 (the “Purchased Inventory”) for $2,014,000, subject to adjustment after Closing pursuant to Section 1.6(c) hereof (the “Purchased Inventory Purchase Price”). Nano shall pay for the Purchased Inventory in the manner described in this Section. Within ten (10) days after the end of the month in which Nano receives payment on the sale by Nano of each Automated Interferometer System that includes Purchased Inventory, Nano shall pay to Zygo an amount equal to the price paid to Nano by Nano’s customer for such entire system (adding back the dollar amount of any set-offs or other types of credits, or reductions to the purchase price actually applied, for amounts Nano may otherwise owe to such customer) but reducing such by the cost of the Head included in the Automated Interferometer System (which will be paid for in accordance with the Supply Agreement), to be applied toward the Purchased Inventory Purchase Price, until the total Purchased Inventory Purchase Price has been paid in full, and thereafter to the Demo Equipment Purchase Price (as defined below) until such amount has been paid in full. For example, if Nano sells an Automated Interferometer System for $1,200,000 that includes any Purchased Inventory, and the outstanding balance of the Purchased Inventory Purchase Price exceeds $1,200,000 at the time of such sale, then Nano shall pay to Zygo the amount of $1,200,000 less the cost of the Head included in such System (which will be paid for in accordance with the Supply Agreement) within ten (10) days after the end of the month in which Nano receives payment from Nano’s customer, and such amount shall be applied toward the outstanding balance of the Purchased Inventory Purchase Price.

(b) Nano hereby agrees that, from and after the Closing Date until such time as the Purchased Inventory Purchase Price and the Demo Equipment Purchase Price have been paid in full (or, in the case of subsection (b)(v) below, until 30 days following the calendar quarter during which the last of such outstanding amounts shall have been paid in full):

(i) in the production of any Automated Interferometer System, Nano shall first utilize the Purchased Inventory prior to utilizing alternatively available inventory

(ii) Nano shall not use Purchased Inventory for any purpose other than the production of such systems or in connection with providing warranty service or other service with respect to Automated Interferometer Systems sold by Zygo or by Nano;

(iii) Nano shall sell the Automated Interferometer System for cash consideration (including a check or money order) and shall set pricing based on its standard practices for ordinary course arms-length third party transactions (“Standard Prices”);

(iv) Nano shall make diligent efforts, consistent with its historical practice, to collect payment for all sales of its Automated Interferometer Systems as to which all or any portion of such payment shall be paid to Zygo pursuant to the provisions of Sections 1.6 and/or 1.7 hereof; and

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(v) No later than 30 days following each calendar quarter, Nano will provide Zygo with a statement of its sales of Automated Interferometer Systems, certified by Nano’s Chief Financial Officer. Upon reasonable notice, and at Zygo’s cost and expense, Nano will permit Zygo and its representatives to audit Nano’s books and records as they pertain to sales of Automated Interferometer Systems; provided that if an audit reveals discrepancy of greater than the lesser of (x) $50,000 or (y) five (5) times aggregate dollar sales, then the cost and expense of such audit shall be borne by Nano.

(c) No later than fifteen (15) business days after the Closing Date, Zygo shall perform a physical inventory on the Purchased Inventory in accordance with generally accepted accounting principles applied consistently with Zygo’s past practices. Nano, or their respective representatives, shall observe the taking of the inventory at its sole cost and expense. Disputes between Zygo and Nano with respect to the merchandise inventory shall be resolved by Zygo and Nano at the time the physical inventory is being taken. The results of the inventory shall conclusively be deemed to be the Purchased Inventory for purposes of this Agreement. As part of this inventory, Zygo shall determine the book value of the Purchased Inventory as of the Closing Date, in accordance with generally accepted accounting principles applied consistently with Zygo’s past practices. The determination of the book value of the Purchased Inventory as of the Closing Date pursuant to this Section 1.6(c), shall, for all purposes of this Agreement, be the Purchased Inventory Purchase Price. All work sheets used in determining the foregoing shall be signed by Zygo and Nano or their respective representatives.

1.7 Payment for Demo Equipment. Nano is purchasing the Demo equipment described in Schedule A-1 (the “Demo Equipment”) for $1,583,224.66, which the parties hereby agree is the net book value (NBV) thereof as of the Closing Date (the “Demo Equipment Purchase Price”). Nano shall pay for such equipment in the manner described in this Section. After the outstanding balance of the Purchased Inventory Purchase Price shall have been reduced to zero pursuant to Section 1.6 of this Agreement, then within ten (10) days after the end of the month in which Nano receives payment on the sale by Nano of each Automated Interferometer System, Nano shall pay to Zygo an amount equal to the price paid to Nano by Nano’s customer for such system, to be applied toward the price of the Demo Equipment, until the Demo Equipment Purchase Price shall have been paid in full. For example, if, after the Purchased Inventory Purchase Price shall have been reduced to zero pursuant to Section 1.6 of this Agreement, Nano sells an Automated Interferometer System for $1,200,000 and the outstanding balance of the Demo Equipment Purchase Price exceeds $1,200,000 at the time of such sale, then Nano shall pay to Zygo the amount of $1,200,000 within ten (10) days after the end of the month in which Nano receives payment of $1,200,000 from Nano’s customer, and such $1,200,000 shall be applied toward the outstanding balance of the Demo Equipment Purchase Price.

1.8 Acceleration. Notwithstanding the provisions of Section 1.6 and 1.7 to the contrary, if, prior to the date on which Nano shall have paid to Zygo in full the outstanding

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balance of the Purchased Inventory Purchase Price and the Demo Equipment Purchase Price, […*…].

1.9 Full Payment of Acquired Assets. Notwithstanding the provisions of Sections 1.6 and 1.7 above or any other provision of this Agreement, full payment by Nano to Zygo for the Purchased Inventory Purchase Price and Demo Equipment Purchase Price shall be completed (paid in full) no later than ten (10) business days after the first anniversary of the Closing.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF ZYGO

Zygo represents and warrants to Nano that the statements contained in this Article II are true and correct as of the date of this Agreement, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date).

The Disclosure Schedule attached hereto as Exhibit C is arranged in sections and subsections corresponding to the numbered and lettered sections and subsections contained in this Article II. The disclosures in any section or subsection of the Disclosure Schedule will qualify the corresponding section or subsection in this Article II and any other sections or subsections to which their applicability is reasonably apparent. For purposes of this Article II, the phrase “to the knowledge of Zygo” or any phrase of similar import shall be deemed to refer to the actual knowledge (without independent inquiry or investigation) of the Key Persons.

2.1 Organization, Qualification and Corporate Power. Zygo is a corporation duly organized, validly existing and in corporate and tax good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on the Business and to own and use the properties owned and used by it in the Business. Zygo is qualified to do business and is in corporate and tax good standing in the state of Oregon.

2.2 Authorization of Transaction. Zygo has all requisite power and authority to execute and deliver this Agreement and the Ancillary Documents and to perform its obligations hereunder and thereunder. The execution and delivery by Zygo of this Agreement and the Ancillary Documents, the performance by Zygo of this Agreement and the Ancillary Documents and the consummation by Zygo of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action on the part of Zygo. Each of this

* CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

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Agreement and the Ancillary Documents has been duly and validly executed and delivered by Zygo and constitutes a valid and binding obligation of Zygo, enforceable against Zygo in accordance with its terms, except as enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or similar laws in effect from time to time affecting creditors’ rights generally, and (b) general principles of law or equity.

2.3 Noncontravention. Neither the execution and delivery by Zygo of this Agreement and the Ancillary Documents, nor the consummation by Zygo of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the Certificate of Incorporation or by-laws of Zygo, (b) except for required filings with the Securities and Exchange Commission, or other public company filings, require on the part of Zygo any notice to or filing with, or any permit, authorization, consent or approval of, any Governmental Entity, (c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which Zygo is a party or by which Zygo is bound, or (d) result in the imposition of any Security Interest upon any Acquired Assets, except, in all instances of (b), (c) and (d) above, for (i) any conflict, breach, default, acceleration, termination, modification or cancellation which would not adversely affect the consummation of the transactions contemplated hereby or (ii) any notice, consent or waiver the absence of which would not adversely affect the consummation of the transactions contemplated hereby.

2.4 Ownership and Condition of Acquired Assets.

(a) Zygo is the true and lawful owner, and has good title to, all of the Acquired Assets, free and clear of all Security Interests. Upon execution and delivery by Zygo to Nano of the instruments of conveyance referred to above, Nano will receive the Acquired Assets, free and clear of all Security Interests, except as provided in Section 1.4(b)(iv) hereof.

(b) Each tangible Acquired Asset listed on Schedule A-1 is free from material defects, has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear) and is suitable for the purposes for which it presently is used.

(c) Schedule A-1 lists individually all Acquired Assets which are Demo Equipment, indicating the cost, accumulated book depreciation (if any) and the net book value of each such fixed asset as of the Closing Date.

2.5 Intellectual Property. None of the Acquired Assets infringes, misappropriates or otherwise violates any patent, copyright, mask work right, trademark right, trade dress right, trade secret right, or other intellectual property right of any Person. The use, sale, export and import of such Acquired Assets do not infringe or misappropriate any intellectual property rights of any Person. Zygo makes the representations and warranties in this Section only as to the

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Acquired Assets that have not been modified in any way after delivery to Nano hereunder where the modification causes any claimed infringement.

2.6 Inventory. All inventory included in the Acquired Assets consists of a quality and quantity usable and saleable in the ordinary course of business, except for obsolete items and items of below standard quality which are identified in Section 2.6 of Exhibit C.

2.7 Contracts. Zygo has delivered to Nano a complete and accurate copy of each of the Assigned Contracts. With respect to each Assigned Contract: (i) the agreement is legal, valid, binding and enforceable and in full force and effect; (ii) subject to obtaining the consent contemplated by Section 4.6 hereof, the agreement is assignable by Zygo to Nano and will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing; and (iii) neither Zygo nor, to the knowledge of Zygo, any other party, is in material breach or violation of, or default under, any such agreement, and no event has occurred, is pending or, to the knowledge of Zygo, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a material breach or default by Zygo or, to the knowledge of Zygo, any other party under such agreement.

2.8 Litigation. There is no Legal Proceeding which is pending or, to Zygo’s knowledge, has been threatened against Zygo related to the Business or the Acquired Assets. There are no judgments, orders or decrees outstanding against Zygo related to the Business or the Acquired Assets.

2.9 Warranties. No product or service manufactured, sold, leased, licensed or delivered by Zygo, the obligation of which is being assumed by Nano, in connection with the Business is subject to any guaranty, warranty, right of return, right of credit or other indemnity other than (i) the applicable standard terms and conditions of sale or lease of Zygo, which are set forth in the Assigned Contracts, and (ii) manufacturers’ warranties for which Zygo has no liability.

2.10 Employees. Section 2.10 of Exhibit C contains a list of all employees (and their status of citizenship) of Zygo whose services relate primarily to the Business. To the knowledge of Zygo, no employee or group of employees listed on Schedule 4.4 hereto has informed Zygo that such employee(s) plan not to accept employment with Nano if so offered by Nano. Zygo is not a party to or bound by any collective bargaining agreement, and has not experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes that relate to the Acquired Assets or the employees of Zygo listed on Schedule 4.4 hereto. Zygo has no knowledge of any organizational effort made or threatened, either currently or within the past two years, by or on behalf of any labor union with respect to the employees of Zygo listed on Schedule 4.4 hereto.

2.11 Legal Compliance. Zygo is currently conducting, and has at all times in the past two years conducted, the Business in compliance with each applicable law (including rules and

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regulations thereunder) of any federal, state, local or foreign government, or any Governmental Entity, except for any violations or defaults that, individually or in the aggregate, have not had and would not reasonably be expected to be materially adverse to the Business as a whole. To Zygo’s knowledge, it has not received any notice or communication from any Governmental Entity alleging noncompliance with any applicable law, rule or regulation related to the Business.

2.12 Customers and Suppliers. Section 2.12 of Exhibit C sets forth a list of each supplier that is the sole supplier of any significant product or service to Zygo related to the Business. Section 2.12 also sets forth a list of each customer of the Business, and each party with whom Zygo has engaged over the past twelve months as a prospective customer of the Business, including a summary description of the status of such engagement. To Zygo’s knowledge, no such customer or supplier has indicated within the past year that it will stop, or decrease the rate of, buying products or supplying products, as applicable, to Zygo. No purchase order or commitment of Zygo which is an Assigned Contract was in excess of normal requirements at the time entered into.

2.13 Permits. To Zygo’s knowledge, there are no material permits, licenses, rights, registrations or other authorizations (collectively, “Permits”) required in connection with Zygo’s conduct of the Business. Notwithstanding the foregoing, Nano’s sole recourse with respect to a breach of this representation shall be fulfillment of Zygo’s obligations under Section 4.12 hereof.

2.14 Brokers’ Fees. Zygo has no liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

2.15 Fixed Assets. Section 2.15 of Exhibit C sets forth a list or description of all fixed assets located in the Oregon Facility that are the subject of the Sublease Agreement. There are no liens on such fixed assets, other than customary landlord’s liens.

2.16 Lease for the Oregon Facility. Attached as Section 2.16 of Exhibit C is a true and correct copy of Zygo’s lease of the Oregon Facility (the “Lease”). Zygo has paid all amounts due to date under the Lease and has performed all obligations of Zygo required to date under the Lease.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF NANO

Nano represents and warrants to Zygo that the statements contained in this Article III are true and correct as of the date of this Agreement.

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3.1 Organization and Corporate Power. Nano is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Nano has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.

3.2 Authorization of the Transaction. Nano has all requisite power and authority to execute and deliver this Agreement and the Ancillary Documents and to perform its obligations hereunder and thereunder. The execution and delivery by Nano of this Agreement and the Ancillary Documents and the consummation by Nano of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action on the part of Nano. This Agreement has been duly and validly executed and delivered by Nano and constitutes a valid and binding obligation of Nano, enforceable against it in accordance with its terms, except as enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or similar laws in effect from time to time affecting creditors’ rights generally, and (b) general principles of law or equity.

3.3 Noncontravention. Neither the execution and delivery by Nano of this Agreement or the Ancillary Documents, nor the consummation by Nano of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the Certificate of Incorporation or by-laws of Nano, (b) except for required filings with the Securities and Exchange Commission, or other public company filings, require on the part of Nano any filing with, or permit, authorization, consent or approval of, any Governmental Entity, (c) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party any right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which Nano is a party or by which it is bound or to which any of its assets is subject, except for (i) any conflict, breach, default, acceleration, termination, modification or cancellation which would not adversely affect the consummation of the transactions contemplated hereby or (ii) any notice, consent or waiver the absence of which would not adversely affect the consummation of the transactions contemplated hereby, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Nano or any of its properties or assets.

3.4 Use of Technology. In addition to selling the Zygo Unifire system, Nano is entering into this Agreement and the Supply Agreement with the current intention of using commercially reasonable efforts to market and sell all four types of systems enumerated as clauses (a) through (d) in the definition of “Approved Systems.”

3.5 Viability. To Nano’s knowledge, it has sufficient resources, financial and otherwise, to satisfy each of its obligations hereunder and under the Supply Agreement as each comes due.

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ARTICLE IV

COVENANTS

4.1 Proprietary Information. From and after the Closing, neither Party shall disclose or make use of (except to pursue its rights under this Agreement or the Ancillary Documents), and each Party shall use its best efforts to cause all of its Affiliates or other advisors or representatives not to disclose or make use of, any knowledge, information or documents of a confidential nature or not generally known to the public with respect to Acquired Assets, the Business or the other Party or its business (including the financial information, technical information or data relating to its products and names of its customers), except to the extent that such knowledge, information or documents shall have become public knowledge other than through improper disclosure by such Party or an Affiliate or other advisor or representative thereof. Notwithstanding the foregoing, nothing in this Agreement shall be construed to prevent Zygo or Nano from making its required filings with the Securities and Exchange Commission, or other public company filings, including without limitation any filing requiring attachment of this Agreement or the Supply Agreement as an exhibit.. Zygo shall use commercially reasonable efforts to enforce, for the benefit of Nano, all confidentiality agreements, invention assignments and similar agreements between such party and any other party relating to the Acquired Assets.

4.2 Non-Competition.

(a) During the term of the Supply Agreement and for a period of twelve months thereafter, Zygo shall not, either directly or indirectly as a stockholder, investor, partner, consultant or otherwise, market or sell Automated Interferometer Systems in Approved Markets, or sell Heads or Automated Interferometer Systems to any other Person with the actual knowledge that such Person will utilize the Heads in Automated Interferometer Systems in Approved Markets. Zygo shall enforce, for the benefit of Nano, all non-competition and similar agreements between Zygo and any other party which are not Assigned Contracts, in all instances only to the extent such agreements would prevent such third party from marketing or selling Approved Systems in Approved Markets. Notwithstanding the foregoing or anything to the contrary in this Agreement, nothing herein shall prevent Zygo from providing, directly or indirectly, (i) Automated Interferometer Systems in any markets other than the Approved Markets or (ii) any other products, including without limitation laboratory systems, semi-automated systems, and stage metrology systems (such as distance measuring interferometry systems) in any market.

(b) Zygo agrees that the duration and geographic scope of the non-competition provisions set forth in this Section are reasonable. In the event that any court determines that the duration or the geographic scope, or both, are unreasonable and that such provision is to that extent unenforceable, the Parties agree that the provision shall remain in full force and effect for the greatest time period and in the greatest area that would not render it unenforceable.

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4.3 Cooperation in Litigation. From and after the Closing Date, each Party shall fully cooperate with the others in the defense or prosecution of any litigation or proceeding already instituted or which may be instituted hereafter against or by such Party relating to or arising out of the conduct of the Business by Zygo or Nano prior to or after the Closing Date (other than litigation among the Parties and/or their Affiliates arising out the transactions contemplated by this Agreement). The Party requesting such cooperation shall pay the reasonable out-of-pocket expenses incurred in providing such cooperation (including legal fees and disbursements) by the Party providing such cooperation and by its officers, directors, employees and agents, but shall not be responsible for reimbursing such Parties or their officers, directors, employees and agents, for their time spent in such cooperation.

4.4 Employees. Nano will offer employment as of the Closing Date to, and hire if such offer is accepted, and Zygo hereby consents to the hiring by Nano of, those employees listed on Schedule 4.4 hereto. Nano hereby agrees that it will offer employment to such persons on substantially similar terms as those provided to such persons by Zygo, which terms Nano acknowledges have been disclosed in writing by Zygo to Nano prior to the date of this Agreement. Nano hereby agrees that, from and after the Closing Date, it will be responsible for any separation, termination or similar costs or other payments to each employee listed on Schedule 4.4 (the “Obligations”) provided that (a) such employee accepts employment with Nano and commences work for Nano after the date hereof, and (b) Nano has offered such rights to the particular employee. Zygo hereby waives, with respect to the employment by Nano of such employees, any claims or rights Zygo may have against Nano or any such employee under any non-competition, confidentiality or employment agreement, to the extent it relates to the Business.

4.5 Warranty Claims. Nano shall assume as of the Closing, and become responsible for, all warranty obligations of Zygo related to any Automated Interferometer, any Automated Interferometer System or component of any Automated Interferometer System, in all instances to the extent sold by Zygo prior to the signing of this Agreement in Nano’s Field of Use. In furtherance thereof, Nano agrees to perform all such warranty obligations and to maintain sufficiently qualified personnel in order to satisfy its obligations hereunder. With respect to each such warranty claim actually made, Zygo shall pay to Nano, within thirty (30) days after receiving Nano’s invoice, an amount equal to (a) all direct, actual costs incurred by Nano in responding to such warranty claim and performing the applicable warranty obligations, plus (b) 30% of such costs. This clause is not applicable for warranty claims for heads or components sold by Zygo to Nano after this Agreement is signed.

4.6 […*…].

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4.7 Automated Interferometer Systems. Nano shall assume as of the Closing, and become responsible for, the obligations of Zygo to install and service all Automated Interferometer Systems shipped or sold by Zygo prior to the Closing Date in Nano’s Field of Use. With respect to each such installation or service obligation performed by Nano, Zygo shall pay to Nano, […*…] an amount equal to […*…].

4.8 Assigned Contracts. Nano shall perform, in accordance with the terms of all Assigned Contracts, the obligations of Zygo arising thereunder after the Closing.

4.9 Assumed Liabilities. Nano shall satisfy all Assumed Liabilities in accordance with the terms thereof.

4.10 Oregon Facility Assets. Zygo shall not at any time remove from the Oregon Facility any of the equipment, furniture, furnishings, phone system, fixed assets or supplies located at the Oregon Facility (other than letterhead stationery and similar supplies that contain Zygo’s name or trademarks). Nano shall not at any time remove from the Oregon Facility any of the equipment, furniture, furnishings, phone system, fixed assets or supplies provided by Zygo at the Oregon Facility.

4.11 Contracts. Zygo agrees that, to the extent the Assigned Contracts and the rights obtained by Nano under this Agreement and the Supply Agreement are insufficient to conduct the Business from and after the Closing in the manner it was conducted by Zygo prior to the Closing, then Zygo shall, at Zygo’s expense, use commercially reasonable efforts to provide Nano with such rights as would be sufficient to so conduct the Business.

4.12 Permits. Zygo agrees that, to the extent any Permits were required but not obtained prior to the Closing, in connection with Zygo’s conduct of the Business prior to the Closing, and such failure to hold any such Permit results in any Damages to Nano, then Zygo shall, at Zygo’s expense, use commercially reasonable efforts to obtain such Permits.

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ARTICLE V

INDEMNIFICATION

5.1 Indemnification by Zygo. Zygo shall indemnify Nano in respect of, and hold Nano harmless against, Damages incurred or suffered by Nano or any Affiliate thereof resulting from, relating to or constituting:

(a) any breach, as of the date of this Agreement, of any representation or warranty of Zygo contained in this Agreement, any Ancillary Document or any other agreement or instrument furnished by Zygo to Nano pursuant to this Agreement, or

(b) any failure to perform any covenant or agreement of Zygo contained in this Agreement, any Ancillary Document or any other agreement or instrument furnished by Zygo to Nano pursuant to this Agreement.

5.2 Indemnification by Nano. Nano shall indemnify Zygo in respect of, and hold it harmless against, any and all Damages incurred or suffered by Zygo resulting from, relating to or constituting:

(a) any breach, as of the date of this Agreement, of any representation or warranty of Nano contained in this Agreement, any Ancillary Document or any other agreement or instrument furnished by Nano to Zygo pursuant to this Agreement,

(b) any failure to perform any covenant or agreement of Nano contained in this Agreement, any Ancillary Document or any other agreement or instrument furnished by Nano to Zygo pursuant to this Agreement,

(d) any Assumed Liability.

5.3 Indemnification Claims

An Indemnified Party shall give written notification to the Indemnifying Party of the commencement of any Third Party Action. Such notification shall be given within 20 days after receipt by the Indemnified Party of notice of such Third Party Action, and shall describe in reasonable detail (to the extent known by the Indemnified Party) the facts constituting the basis for such Third Party Action and the amount of the claimed damages; provided, however, that no delay or failure on the part of the Indemnified Party in so notifying the Indemnifying Party shall relieve the Indemnifying Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party,

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assume control of the defense of such Third Party Action with counsel reasonably satisfactory to the Indemnified Party; provided that the Indemnifying Party may not assume control of the defense of Third Party Action involving criminal liability or in which equitable relief is sought against the Indemnified Party. If the Indemnifying Party does not, or is not permitted under the terms hereof to, so assume control of the defense of a Third Party Action, the Indemnified Party shall control such defense. The Non-controlling Party may participate in such defense at its own expense. The Controlling Party shall keep the Non-controlling Party advised of the status of such Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-controlling Party with respect thereto. The Non-controlling Party shall promptly furnish the Controlling Party with such information as it may have or receive with respect to such Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party in the defense of such Third Party Action. The fees and expenses of counsel to the Indemnified Party with respect to a Third Party Action shall be considered Damages for purposes of this Agreement if (x) the Indemnified Party controls the defense of such Third Party Action pursuant to the terms of this Section 5.3 or (y) the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such Third Party Action. The Indemnifying Party shall not agree to any settlement of, or the entry of any judgment arising from, any Third Party Action without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld, conditioned or delayed. The Indemnified Party shall not agree to any settlement of, or the entry of any judgment arising from, any such Third Party Action without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld, conditioned or delayed.

5.4 Arbitration.

(a) Any controversy, dispute or claim arising under or in connection with this Agreement (including, without limitation, the existence, validity, interpretation or breach hereof and any claim based on contract, tort of statute) shall be resolved by a binding arbitration, to be held in Portland, Oregon (or its nearest surrounding area) pursuant to the Federal Arbitration Act and in accordance with the then-prevailing International Arbitration Rules of the AAA.

(b) The parties shall commence the arbitration by jointly filing a written submission with the Portland, Oregon (or its nearest surrounding area) office of the AAA in accordance with Commercial Rule 5 (or any successor provision).

(c) The Arbitrator shall have no power or authority, under the Commercial Rules or otherwise, to (i) modify or disregard any provision of this Agreement or any Ancillary Document, or (ii) address or resolve any issue not submitted by the parties.

(d) In connection with any arbitration proceeding pursuant to this Agreement, each party shall bear its own costs and expenses, except that the fees and costs of the AAA and

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the Arbitrator, the costs and expenses of obtaining the facility where the arbitration hearing is held, and such other costs and expenses as the Arbitrator may determine to be directly related to the conduct of the arbitration and appropriately borne jointly by the parties (which shall not include any party’s attorneys’ fees or costs, witness fees (if any), costs of investigation and similar expenses) shall be shared equally by the Indemnified Party and the Indemnifying Party.

5.5 Survival of Representations and Warranties. All representations and warranties that are covered by the indemnification agreements in Section 5.1(a) and Section 5.2(a) shall (a) survive the Closing and (b) shall expire on the date 18 months following the Closing Date, except that the representations and warranties set forth in Sections 2.1, 2.2, 3.1 and 3.2 shall survive the Closing. If an Indemnified Party delivers to an Indemnifying Party, before expiration of a representation or warranty, either a Claim Notice based upon a breach of such representation or warranty, or an Expected Claim Notice based upon a breach of such representation or warranty, then the applicable representation or warranty shall survive until, but only for purposes of, the resolution of the matter covered by such notice. If the legal proceeding or written claim with respect to which an Expected Claim Notice has been given is definitively withdrawn or resolved in favor of the Indemnified Party, the Indemnified Party shall promptly so notify the Indemnifying Party. The rights to indemnification set forth in this Article V shall not be affected by (x) any investigation conducted by or on behalf of an Indemnified Party or any knowledge acquired (or capable of being acquired) by an Indemnified Party, whether before or after the Closing Date, with respect to the inaccuracy or noncompliance with any representation, warranty, covenant or obligation which is the subject of indemnification hereunder or (y) any waiver by an Indemnified Party of any closing condition relating to the accuracy of any representations and warranties or the performance of or compliance with agreements and covenants.

5.6 Limitations. Notwithstanding anything to the contrary herein, Zygo shall not be liable under this Article V unless and until the aggregate Damages for which it would otherwise be liable under this Article V exceed […*…]. Thereafter Zygo will be responsible for such excess Damages in an amount not to exceed […*…]. Notwithstanding anything to the contrary contained in this Agreement, in no event shall Zygo be liable for any consequential, indirect, punitive, individual or special damages of any nature, or any damage or claim for lost profits.

5.7 Treatment of Indemnity Payments. Any payments made to an Indemnified Party pursuant to this Article V shall be treated as an adjustment to the consideration paid hereunder for tax purposes.



* CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

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ARTICLE VI

DEFINITIONS

For purposes of this Agreement, each of the following terms shall have the meaning set forth below.

“AAA” shall mean the American Arbitration Association.

“Acquired Assets” shall mean the assets of Zygo set forth on Schedule A-1 hereto.

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through owners of voting securities, by contract or otherwise.

“Ancillary Documents” shall mean the Supply Agreement, that certain Confidentiality Agreement dated as of February 23, 2009 by and between the Parties, the Bill of Sale, the Assumption Agreement, the Sublease Agreement and the documents executed and delivered by the Parties pursuant to Section 1.4(c).

“Approved Markets” means the following markets in which Nano will have the exclusive right to market and sell Approved Systems, but limited to Nano’s Field of Use (defined below): (a) manufacturing and testing of semiconductors, including but not limited to […*…] (b) manufacturing and testing of […*…] (c) manufacturing and testing of […*…] and (d) manufacturing and testing of […*…].

“Approved Systems” means the following types of systems that Nano will have exclusive rights to market and sell in Approved Markets pursuant to the terms of this Agreement and the Supply Agreement: (a) an Automated Interferometer System referred to as the “Unifier” that has been designed, marketed and sold by Zygo […*…].

“Arbitrator” shall mean a single arbitrator selected by Nano and Zygo in accordance with the Commercial Rules.

“Assigned Contracts” shall mean those contracts set forth on Schedule A-2 hereto.

“Assumed Liabilities” shall mean those liabilities set forth on Schedule B hereto and all obligations of Zygo arising after the Closing under the Assigned Contracts.



* CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

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“Automated Interferometer System” means an interferometer system including fully-automated wafer handling equipment sufficient to enable in-line operation in the Approved Markets for Nano’s Field of Use, and specifically excluding laboratory tool interferometer systems and semi-automated interferometer systems (such as those with motorized stages). “Automated Interferometer Systems” can be a stand-alone metrology unit or it can be incorporated into another unit, such as a production unit to, for example, provide real-time metrology feedback during production of a device.

“Business” shall mean the marketing and sale of Approved Systems in Approved Markets.

“Buyer” shall have the meaning set forth in the first paragraph of this Agreement.

“Claim Notice” shall mean written notification which contains (a) a description of the Damages incurred or reasonably expected to be incurred by the Indemnified Party and the Claimed Amount of such Damages, to the extent then known, (b) a statement that the Indemnified Party is entitled to indemnification under Article V for such Damages and a reasonable explanation of the basis therefor, and (c) a demand for payment in the amount of such Damages.

“Claimed Amount” shall mean the amount of any Damages incurred or reasonably expected to be incurred by the Indemnified Party.

“Closing” shall mean the closing of the transactions contemplated by this Agreement.

“Closing Date” shall mean the date of this Agreement.

“Commercial Rules” shall mean the Commercial Arbitration Rules of the AAA.

“Controlling Party” shall mean the party controlling the defense of any Third Party Action.

“Damages” shall mean any and all debts, obligations and other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), diminution in value, monetary damages, fines, fees, penalties, interest obligations, deficiencies, losses and expenses (including amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation), in all instances actually and directly incurred, and other than those costs and expenses of arbitration of a Dispute which are to be shared equally by the Indemnified Party and the Indemnifying Party.

“Disclosure Schedule” shall mean the disclosure schedule provided by Zygo to Nano and attached hereto.

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“Dispute” shall mean the dispute resulting if the Indemnifying Party in a Response disputes its liability for all or part of the Claimed Amount.

“Documentation” shall mean printed, visual or electronic materials, reports, white papers, documentation, specifications, designs, flow charts, code listings, instructions, user manuals, frequently asked questions, release notes, recall notices, error logs, diagnostic reports, marketing materials, packaging, labeling, service manuals and other information describing the use, operation, installation, configuration, features, functionality, pricing, marketing or correction of a product, whether or not provided to end user.

“Expected Claim Notice” shall mean a notice that, as a result of a legal proceeding instituted by or written claim made by a third party, an Indemnified Party reasonably expects to incur Damages for which it is entitled to indemnification under Article V.

“Exploit” shall mean develop, design, test, modify, make, use, sell, have made, used and sold, import, reproduce, market, distribute, commercialize, support, maintain, correct and create derivative works of.

“GAAP” shall mean United States generally accepted accounting principles.

“Governmental Entity” means any government or governmental or regulatory entity or body thereof, or political subdivision thereof, whether Federal, state, local or foreign, or any commission, agency, instrumentality or authority thereof, or any court, tribunal or arbitrator (public or private).

“Heads” means the heads for interferometers made by or for Zygo as described in Exhibit A to the Supply Agreement as well as any heads hereafter made by or for Zygo that include modifications or improvements but are generally the same as, or a successor of, such heads described in Exhibit A to the Supply Agreement.

“Indemnified Party” shall mean a party entitled, or seeking to assert rights, to indemnification under Article V of this Agreement.

“Indemnifying Party” shall mean the party from whom indemnification is sought by the Indemnified Party.

“Key Person” shall mean Zygo’s chief executive officer, divisional president, chief financial officer, senior vice president of technology, and vice president of semiconductor solutions.

“Legal Proceeding” shall mean any action, suit, proceeding, claim, arbitration or investigation before any Governmental Entity or before any arbitrator.

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“Nano’s Field of Use” means in-line, fully–automated wafer handling equipment, as opposed to laboratory tools or semi-automated systems (such as those with motorized stages).

“Non-controlling Party” shall mean the party not controlling the defense of any Third Party Action.

“Ordinary Course of Business” shall mean the ordinary course of business consistent with past custom and practice (including with respect to frequency and amount).

“Parties” shall mean Nano and Zygo.

“Person” means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Entity.

“Requisite Approvals” shall mean the approval of the sale of the Acquired Assets by Zygo to Nano as contemplated by this Agreement by the directors of Zygo.

“Retained Liabilities” shall mean any and all liabilities or obligations (whether known or unknown, absolute or contingent, liquidated or unliquidated, due or to become due and accrued or unaccrued, and whether claims with respect thereto are asserted before or after the Closing) of Zygo that are not Assumed Liabilities.

“Security Interest” shall mean any mortgage, pledge, security interest, encumbrance, charge or other lien (whether arising by contract or by operation of law), other than (a) mechanic’s, materialmen’s, and similar liens, (b) liens arising under worker’s compensation, unemployment insurance, social security, retirement, and similar legislation and (c) liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the Ordinary Course of Business of Zygo and not material to Zygo.

“Software” shall mean computer software code, applications, utilities, development tools, diagnostics, databases and embedded systems, whether in source code, interpreted code or object code form.

“Third Party Action” shall mean any suit or proceeding by a person or entity other than a Party for which indemnification may be sought by a Party under Article V.

ARTICLE VII

MISCELLANEOUS

7.1 Press Releases and Announcements. Neither Party shall issue any press release or public announcement relating to the subject matter of this Agreement without the prior written approval of the other Party; provided, however, that either Party may make any public disclosure it believes in good faith is required by applicable law, regulation or stock market rules (in which

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case the disclosing Party shall use reasonable efforts to advise the other Party and provide it with a copy of the proposed disclosure prior to making the disclosure).

7.2 No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns.

7.3 Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement between the Parties and supersedes any prior understandings, agreements, or representations by or between the Parties, written or oral, with respect to the subject matter hereof; provided that the Confidentiality Agreement dated February 23, 2009 between Nano and Zygo shall remain in effect in accordance with its terms.

7.4 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. Neither Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Party. Any attempted assignment in contravention of this provision shall be void.

7.5 Counterparts and Facsimile Signature. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement may be executed by facsimile signature.

7.6 Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

7.7 Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly delivered four business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent for next business day delivery via a reputable nationwide overnight courier service, in each case to the intended recipient as set forth below:


	If to Zygo:		Copy to:

	Zygo Corporation		Fulbright & Jaworski L.L.P.
	Laurel Brook Road		666 Fifth Avenue
	Middlefield, CT 06455-0448		New York, NY 10103
	Attn: Chief Executive Officer		Attn: Sheldon Nussbaum
	Tel: 860-704-5109		Tel: (212) 318-3000

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	Fax: 860-347-8372		Fax: (212) 318-3400

	If to Nano:		Copy to:

	Nanometrics Incorporated		Perkins Coie LLP
	1550 Buckeye Drive		101 Jefferson Drive
	Milpitas, CA 95035		Menlo Park, CA 94025
	Attn: Chief Executive Officer		Attn: Buddy Arnheim
	Tel: (408) 545-6000		Tel: (650) 838-4300
	Fax: (408) 904-6278		Fax: (650) 838-4350

Either Party may give any notice, request, demand, claim, or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the party for whom it is intended. Either Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth.

7.8 Governing Law. This Agreement (including the validity and applicability of the arbitration provisions of this Agreement, the conduct of any arbitration of a Dispute, the enforcement of any arbitral award made hereunder and any other questions of arbitration law or procedure arising hereunder) shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or of any other jurisdiction) that would cause the application of laws of any jurisdiction other than the State of Delaware.

7.9 Amendments and Waivers. The Parties may mutually amend any provision of this Agreement at any time prior to the Closing. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the Parties. No waiver by either Party of any right or remedy hereunder shall be valid unless the same shall be in writing and signed by the Party giving such waiver. No waiver by either Party with respect to any default, misrepresentation, or breach of warranty or covenant hereunder shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

7.10 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any

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invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.

7.11 Expenses. Each Party shall bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.

7.12 Service of Process. Each party agrees to accept service of any summons, complaint or other initial pleading made in the manner provided for the giving of notices in Section 7.7, provided that nothing in this Section 7.12 shall affect the right of either Party to serve such summons, complaint or other initial pleading in any other manner permitted by law.

7.13 Specific Performance. Each Party acknowledges and agrees that the other Party would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each Party agrees that the other Party shall be entitled to an injunction or other equitable relief to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter, in addition to any other remedy to which it may be entitled, at law or in equity.

7.14 Construction.

(a) The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against either Party.

(b) Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.

(d) Any reference to any Article, Section or paragraph shall be deemed to refer to an Article, Section or paragraph of this Agreement, unless the context clearly indicates otherwise.

7.15 Cross Default. A breach by either party under the Supply Agreement shall be deemed to constitute a breach by that party under this Agreement.

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[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.


NANOMETRICS INCORPORATED

By:	/s/ Timothy J. Stultz, Ph.D.


Title:		President and Chief Executive Officer


ZYGO CORPORATION

By:	/s/ J. Bruce Robinson

Title:		Chief Executive Officer

EXHIBIT A

EXECUTION COPY

BILL OF SALE AND ASSIGNMENT

THIS BILL OF SALE AND ASSIGNMENT is made and entered into as of June 17, 2009, by and among Zygo Corporation, a Delaware corporation (“Zygo”); and Nanometrics Incorporated, a Delaware corporation (“Nano”).

WITNESSETH:

WHEREAS, Zygo and Nano have entered into that certain Asset Transfer Agreement dated June 17, 2009 (the “Asset Transfer Agreement”), pursuant to which Zygo has agreed to convey, and Nano has agreed to acquire, the Acquired Assets (as such term is defined in the Asset Transfer Agreement) and all of Zygo’s rights and obligations under the Assigned Contracts (as such term is defined in the Asset Transfer Agreement), for the consideration therein provided.

NOW, THEREFORE, in consideration of the foregoing and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Zygo and Nano hereby agree as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Asset Transfer Agreement.

2. Sale of Assets; Assignment of Contract. Zygo hereby sells, transfers, conveys, assigns and delivers to Nano at the Closing, for the consideration specified in Section 1.3 of the Asset Transfer Agreement, (a) all right, title and interest in, to and under the Acquired Assets, and (b) subject to Section 4.6 of the Asset Transfer Agreement, all its rights and obligations under the contract listed on Schedule A-2 to the Asset Transfer Agreement (the “Assigned Contract”).

3. Acceptance. Nano hereby accepts (a) the sale, transfer, conveyance and assignment to Nano of valid ownership of the Acquired Assets and (b) subject to Section 4.6 of the Asset Transfer Agreement, all of Zygo’s rights and obligations under the Assigned Contract.

4. Miscellaneous.

(a) All of the representations, warranties, covenants and agreements contained in the Asset Transfer Agreement with respect to the Assets being sold, conveyed, assigned, transferred and delivered hereby shall survive the delivery of this Bill of Sale and Assignment and the Closing of the transactions referred to in the Asset Transfer Agreement to the extent set forth in the Asset Transfer Agreement.

(b) This instrument is being delivered pursuant to Section 1.4(b)(i) of the Asset Transfer Agreement and shall be construed consistent therewith. This instrument is not intended to,

and does not, in any manner enlarge, diminish or modify the rights and obligations of the parties to the Asset Transfer Agreement.

5. Counterparts. This Bill of Sale and Assignment may be executed in any number of counterparts and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Bill of Sale and Assignment shall become binding when one or more counterparts taken together shall have been executed and delivered by the parties. It shall not be necessary in making proof of this Bill of Sale and Assignment or any counterpart hereof to produce or account for any of the other counterparts.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed and delivered as of the day and year first above written.


	NANOMETRICS INCORPORATED

	By:

	Title:


	ZYGO CORPORATION

	By:

	Title:

EXHIBIT B

EXECUTION COPY

ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (this “Assignment and Assumption Agreement”) is made and entered into is made and entered into as of June 17, 2009, by and among Zygo Corporation, a Delaware corporation (“Assignor”); and Nanometrics Incorporated, a Delaware corporation (“Assignee”).

WHEREAS, Assignor and Assignee are parties to that certain Asset Transfer Agreement dated as of June 17, 2009 (the “Purchase Agreement”), pursuant to which Assignee has purchased substantially all of the assets of Assignor; and

WHEREAS, pursuant to the Purchase Agreement, Assignor has agreed to assign certain rights and agreements to Assignee, and Assignee has agreed to assume certain obligations of Assignor, as set forth herein, and this Assignment and Assumption Agreement is contemplated by Section 1.4(b)(iv) of the Purchase Agreement.

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

1. Capitalized Terms. Capitalized terms used but not defined herein shall have the meanings for such terms that are set forth in the Purchase Agreement.

2. Assignment and Assumption. Effective as of 1:00 p.m. New York time on the date hereof (the “Effective Time”), Assignor hereby assigns, sells, transfers and sets over (collectively, the “Assignment”) to Assignee the Assumed Liabilities, as contemplated pursuant to Section 1.2 of the Purchase Agreement. Assignee hereby accepts the Assignment and assumes and agrees to observe and perform all of the duties, obligations, terms, provisions and covenants, and to pay and discharge all of the liabilities of Assignor to be observed, performed, paid or discharged from and after the Closing, in connection with the Assumed Liabilities.

3. Further Actions. Each of the parties hereto covenants and agrees, at its own expense, to execute and deliver, at the request of the other party hereto, such further instruments of transfer and assignment and to take such other action as such other party may reasonably request to more effectively consummate the assignments and assumptions contemplated by this Assignment and Assumption Agreement.

4. Expenses. Each party hereto shall pay its own expenses incidental to the preparation of this Assignment and Assumption Agreement and the carrying out of the provisions of this Assignment and Assumption Agreement.

5. Miscellaneous.

(a) All of the representations, warranties, covenants and agreements contained in the Asset Transfer Agreement with respect to the Assets being sold, conveyed, assigned, transferred and delivered hereby shall survive the delivery of this Assignment and Assumption Agreement and the Closing of the transactions referred to in the Asset Transfer Agreement to the extent set forth in the Asset Transfer Agreement.

(b) This instrument is being delivered pursuant to Section 1.4(b)(iv) of the Asset Transfer Agreement and shall be construed consistent therewith. This instrument is not intended to, and does not, in any manner enlarge, diminish or modify the rights and obligations of the parties to the Asset Transfer Agreement.

6. Counterparts. This Assignment and Assumption Agreement may be executed in any number of counterparts and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Assignment and Assumption Agreement shall become binding when one or more counterparts taken together shall have been executed and delivered by the parties. It shall not be necessary in making proof of this Assignment and Assumption Agreement or any counterpart hereof to produce or account for any of the other counterparts.

IN WITNESS WHEREOF, the parties have executed this Assignment and Assumption Agreement as of the date first above written.


	NANOMETRICS INCORPORATED

	By:

	Title:


	ZYGO CORPORATION

	By:

	Title:

EXHIBIT C

[…*…]



^* CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

EXHIBIT D

[Supply Agreement]

EX-10.31 3 c59763_ex10-31.htm

EXHIBIT 10.31

EXECUTION COPY

SUPPLY AGREEMENT

This Supply Agreement (this “Agreement”) dated as of June 17, 2009 (the “Effective Date”) is entered into between Zygo Corporation, a Delaware corporation (“Zygo”) and Nanometrics Incorporated, a Delaware corporation (“Nano”).

RECITALS

A. Zygo has developed and is the owner of certain technology related to “Automated Interferometer Systems” (as defined below), including the Heads (as defined below), the control, monitoring and analysis software, and electronic control systems) as well as the automation of the systems that use these technologies.

C. As such, Zygo seeks to supply to Nano the Heads (as defined below), the Components (as defined below), and certain other parts and components, and to transfer to Nano certain flow through license rights and assets related to the Heads, Components and the Unifire, in order to empower Nano as the exclusive provider of Approved Systems in Approved Markets as described below.

AGREEMENT

In consideration of the foregoing and the respective representations, warranties, covenants and agreements contained in this Agreement and the Asset Transfer Agreement (as defined below), and other good and valuable consideration, the receipt and sufficiency of which each of the parties hereby acknowledges, and intending to be legally bound hereby, the parties agree as follows:

1. Definitions. As used in this Agreement, the terms set forth in this Section 1 shall have the meanings set forth below.

1.1 “Approved Markets” means the following markets in which Nano will have the exclusive right to market and sell Approved Systems, but limited to Nano’s Field of Use (defined below): (a) manufacturing and testing of semiconductors, including but not

limited to […*…] (b) manufacturing and testing of […*…] (c) manufacturing and testing of […*…] and (d) manufacturing and testing of […*…].

1.2 “Approved Systems” means the following types of systems that Nano will have exclusive rights to market and sell in Approved Markets pursuant to the terms of this Agreement: (a) an Automated Interferometer System referred to as the “Unifire” that has been designed, marketed and sold by Zygo […*…].

1.3 “Asset Transfer Agreement” means that certain Asset Transfer Agreement of even date herewith entered into by Zygo and Nano.

1.4 “Automated Interferometer System” means an interferometer system including fully-automated wafer handling equipment sufficient to enable in-line operation in the Approved Markets for Nano’s Field of Use, and specifically excluding laboratory tool interferometer systems and semi-automated interferometer systems (such as those with motorized stages). The Automated Interferometer Systems can be a stand-alone metrology unit or it can be incorporated into another unit, such as a production unit to, for example, provide real-time metrology feedback during production of a device.

1.5 “Components” means all components of any of the Heads (defined below), all improvements or modifications of such components made or acquired by Zygo during the term of this Agreement, and all replacements for or successors of such components made or acquired by Zygo during the term of this Agreement.

1.6 “Flow-Through Licensed Technology” means all intellectual property, trade secrets, know-how, software, works of authorship, copyrightable works, mask works, data, discoveries, inventions and improvements, whether patentable or not, technology, information and documentation now owned or hereinafter obtained by Zygo related to the Head or Components as they are used in the Approved Systems in the Approved Markets, […*…]. Flow-Through Licensed Technology may be recorded or fixed in written or other form.

1.7 “Heads” means the heads for interferometers made by or for Zygo as described in Exhibit A attached hereto as well as any heads hereafter made by or for Zygo that include modifications or improvements but are generally the same as, or a successor of, such heads described in Exhibit A.

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1.8 “Nano’s Field of Use” means in-line, fully–automated wafer handling equipment, as opposed to laboratory tools or semi-automated systems (such as those with motorized stages).

1.9 “Net Revenues” means the revenues received by Nano from the sale of Approved Systems. Net Revenues do not include any amounts which are (a) collected by Nano as sales tax, use tax, or other taxes; or (b) refunded or otherwise credited to the Person from whom Nano received such amounts; provided, however, that the calculation for Net Revenues shall add back the dollar amount of any set-offs or other types of credits paid, or reductions to the purchase price for, amounts Nano may otherwise owe, to such customer for matters unrelated to the sale of Approved Systems. For purposes of determining Net Revenues, revenues from Approved Systems sold by Nano on credit shall not be considered received by Nano unless and until such payments are actually collected by Nano.

1.10 “Person” means any individual, partnership, corporation, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government entity, agency or political subdivision of any governmental entity, or any other entity.

2. Purchase and Sale of Heads and Components.

2.1 Supply of Heads and Components. Zygo shall sell and deliver to Nano such Heads and Components as Nano may order from Zygo during the term of this Agreement, in accordance with the terms hereof.

2.2 Orders. Each of Nano’s orders for Heads or Components (an “Order”) shall contain a description of the Heads or Components ordered, specify the quantity and price of the Heads or Components ordered, specify the date on which each order of Heads or Components is to be delivered and specify the address to which the Heads or Components are to be shipped. Such specifications will be within the parameters for Orders set forth on Schedule 2.2 hereto.

2.3 Purchase Price.

2.3.1 Nano shall pay to Zygo for each unit of Heads or Components accepted by Nano the price set forth in Exhibit B. Such prices shall not be increased during […*…]. Thereafter, Zygo will give Nano […*…] advance notice of any increase in any price. Zygo shall have no right to increase prices more often than […*…] and each increase in prices by Zygo, […*…] shall not exceed […*…]

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	2.3.2 The price to be paid by Nano to Zygo for any Heads or Components not listed on Exhibit B shall be determined in accordance with the provisions of this subsection.

	(a) With respect to each Head or Component not listed on Exhibit B that is substantially the same as a Head or Component listed on Exhibit B (a “Category #1 New Head or Component”) the price to Nano of such Category #1 New Head or Component shall be equal to the price to Nano of the Head or Component listed on Exhibit B that is substantially the same as the Category #1 New Head or Component.

	(b) With respect to each Head or Component not listed on Exhibit B that is not a Category #1 New Head or Component (a “Category #2 New Head or Component”), the price to Nano of such Category #2 New Head or Component shall be, from time to time, an amount that *[……] listed on Exhibit B (regardless of how similar or dissimilar the Category #2 New Head or Component may be from a Head or Component listed on Exhibit B). For clarification, the parties acknowledge that the gross margins received by Zygo on the sales of Head hardware, Head software and other Components described in Exhibit B** may be different.

	(c) Zygo and Nano agree to negotiate in good faith to agree upon the prices to be paid by Nano for any Heads and Components not listed on Exhibit B, consistent with the provisions of Section 2.3.2(b) above.

2.4 Payment. Zygo shall issue its invoice to Nano for the price of Heads and Components purchased by Nano upon delivery of such Heads and Components. Nano shall pay Zygo the amount due under each of Zygo’s invoices within 30 days after Nano’s receipt of the invoice or delivery of the Heads or Components, whichever is later. Zygo shall promptly furnish Nano with such documentation and information as Nano may reasonably request to verify the amount due under any of Zygo’s invoices. Notwithstanding the foregoing, to the extent any such Head or Component is determined by Nano, after inspection as provided in Section 4 hereof, not to comply with specifications, payment for such non-complying Head or Component only, may be withheld by Nano, with the remainder of the invoice paid in full. In such event, Nano shall notify Zygo of such determination of non-compliance and, at the request of Zygo, Nano shall return such non-complying Head or Component to Zygo.

2.5 Cancellation of Orders. Nano may at any time cancel any Order placed in good faith, as to all or any portion of the Heads or Components not then delivered to and

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accepted by Nano, by giving Zygo written notice of such cancellation. Nano will provide Zygo a written 12-month forecast for shipment of Orders, to be updated within 30 days of the end of each calendar quarter. In the event any Order is cancelled by Nano, Nano will be responsible for cancellation charges as follows:

(a) […*…];

(b) […*…];

(d) […*…].

[…*…].

2.6 Taxes. The prices specified in this Agreement do not include sales taxes that may be imposed upon the sale of Heads or Components under this Agreement. Nano shall pay such taxes that are properly due and payable. At Zygo’s request, Nano shall provide Zygo with reasonable justification for Nano’s position that any such taxes are not properly due or payable (e.g., certification that such sales are exempt from tax). If Zygo receives any assessment or other notice with regard to any such taxes, Zygo shall immediately provide Nano with a copy of such notice.

2.7 Exclusivity. During the term of this Agreement, Zygo will not directly or indirectly (a) sell to any Person other than Nano any Heads or Components for Approved Systems, or Automated Interferometer Systems, to be marketed or sold in the Approved Markets, or any Unifires or any other Approved Systems to be marketed or sold in the Approved Markets, (b) make, have made, use, import, export, maintain or repair any Approved Systems or portion thereof including the Head for marketing or sale in any Approved Markets, (c) grant any right or license to any Person other than Nano to make, have made, use, sell, license, import, export, maintain or repair any Approved System or portion thereof including the Head for marketing or sale in the Approved Markets, (d) provide any Person with any training or other service pertaining to the Flow-Through Licensed Technology with respect to the Approved Systems to be marketed or sold in the Approved Markets, (e) exercise any rights under any third party rights that are included in the Flow-Through Licensed Technology with respect to the Approved Systems in the Approved Markets; or (f) sublicense or assign any rights in the Flow-Through Licensed Technology with respect to the Approved Systems in the Approved Markets. Notwithstanding the foregoing or anything to the contrary in this Agreement, nothing herein shall prevent Zygo

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from providing, directly or indirectly, (i) Automated Interferometer Systems in any markets other than the Approved Markets or (ii) any other products, including without limitation laboratory systems, semi-automated systems, and stage metrology interferometer systems (such as distance measuring interferometry systems), in any market.

3. Delivery.

3.1 Point of Delivery. Zygo shall deliver all Heads and Components to Nano or to Nano’s customers F.O.B. or FCA (Incoterms) Zygo’s facility located at Middlefield, Connecticut.

3.2 Shipment. Zygo shall properly mark and otherwise identify the Heads and Components for shipment to Nano or such other destination as may be specified by Nano in the Order for such Heads and Components.

3.3 Packaging. Zygo shall properly package the Heads and Components for protection against damage or deterioration that may result from shipment, handling, storage or other cause.

3.4 Schedule. Zygo shall deliver the Heads and Components to Nano on the delivery date specified in the Order for such Heads and Components. However, Zygo shall not be liable for delays in delivery due to causes which are not reasonably foreseeable and which are beyond Zygo’s control provided that, to the extent practicable, Zygo gives Nano prompt written notice of the circumstances giving rise to the delay, the anticipated duration of the delay and the action being taken by Zygo to overcome or mitigate the delay. The specified delivery date shall be extended by the period of any such delay.

4. Inspection.

4.1 Zygo’s Plant. Zygo’s facilities at which Zygo manufactures any Heads or Components shall be subject to inspection by Nano during normal business hours provided that reasonable notice is given to Zygo to accommodate such inspection. Zygo shall provide Nano with safe and sufficient access for such inspection. Nano shall perform any such inspection in such a manner as to minimize disruption of Zygo’s business and operations at such facility.

4.2 By Zygo. Zygo shall perform such detailed inspections and tests of the Heads and Components sold by Zygo to Nano as are reasonably necessary to ensure that such Heads and Components comply with the requirements of this Agreement and applicable regulations governing the manufacture, supply and delivery of such Heads and Components to Nano as provided hereunder. Without limiting the generality of the foregoing, Zygo shall comply with the inspection procedures applicable to the Heads and Components. Zygo shall keep and maintain complete and adequate records of all inspections and tests performed on Heads and Components. Final test documentation shall be shipped with each Head and

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component assembly. Zygo shall make such records available to Nano for examination, copying and audit, for a period of two (2) years from the date of sale.

4.3 By Nano. All Heads and Components purchased by Nano shall be subject to reasonable inspection and testing by Nano; and provided such inspection and testing is performed in such a manner as to minimize disruption to Zygo’s business and operations. Zygo shall provide Nano with safe and sufficient access, equipment and facilities for any such inspection or test prior to delivery. No acceptance of any Heads or Components shall be construed to result from any inspection, test or delay or failure to inspect or test by Nano prior to final inspection and test of such Heads or Components by Nano in accordance with this Section 4.3. Payment for any Heads or Components shall not constitute acceptance of such units. Nano shall inspect and test the Heads and Components at its specified destination within three (3) months of receipt (the “Inspection Period”), and any failure to notify Zygo of a problem or defect within the Inspection Period shall be deemed an acceptance by Nano of such Heads or Components. No inspection, test, delay or failure to inspect or test, or failure to discover any defect or noncompliance by Nano prior to expiration of the Inspection Period shall relieve Zygo of any of its obligations under this Agreement or impair Nano’s right to reject defective or noncomplying Heads or Components or any other right or remedy afforded to Nano.

5. Compliance with Standards.

5.1 General. Zygo shall use commercially reasonable good faith efforts to comply in all material respects, and to ensure that all Heads, Components and Unifires assembled by Zygo comply in all material respects, with all applicable laws, ordinances, rules, regulations, orders, licenses, permits and other requirements, now or hereafter in effect, of any governmental authority that are applicable to the manufacture, supply or delivery of the Heads, Components and Unifire as provided hereunder. Upon reasonable request, Zygo shall furnish such documents as may be required to effect or evidence such compliance. Notwithstanding any other provision of this Agreement, Zygo will, after a reasonable but expeditious opportunity to cure any such non-compliance, make Nano whole for any such non-compliance that results directly in Nano bearing any costs, obligations or damages therefrom, subject to the damage limitations in Section 17.18 hereof. Any such non-compliance will not constitute a breach of this Agreement unless Zygo does not satisfy its obligations defined in the immediately preceding sentence.

5.2 Industry Standards. Zygo shall produce all Heads, Components and Unifire in accordance with, and shall ensure that each unit of Heads, Components and Unifire complies with, the following requirements as now or hereafter in effect:


	(a) CE standard specifications; and

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	(b) Semiconductor industry specifications for electronic equipment and Underwriters Laboratory (or UL) rating.

Zygo shall provide Nano with such specifications, testimony and other assistance as Nano may reasonably request in connection with the listing, approval, registration or satisfaction of similar requirements of any trade association or other organization, as the same may apply to any Heads or Components.

6. Training and Technical Support. Zygo will provide training to Nano personnel according to the terms, scheduling, and compensation set forth on Exhibit C. Zygo will also provide technical support services to Nano in accordance with the provisions of Exhibit C during the term and thereafter until the expiration of the warranty period for all Heads and Components delivered under this Agreement.

7. Development Services and Sustaining Engineering Services/Minimum Volume. Beginning on July 1, 2010, Nano shall pay Zygo a Sustaining Engineering Fee (the “Sustaining Engineering Fee”) which shall be applied to any engineering requests that Nano should request from Zygo to facilitate the commercial development of Automated Interferometer Systems (see Exhibit C, Section (b) and (c) for terms, scheduling and compensation). Zygo shall be under no obligation to provide engineering and/or development services beyond those paid for through the Sustaining Engineering Fee, with any such supplemental services to be provided by Zygo (if at all) on mutually agreeable pricing and terms.

8. Customer Support. During the warranty period applicable to the Heads and Components, Zygo will provide warranty service to Nano pursuant to Section 10.4 of this Agreement. Nano will maintain trained personnel to address Head repairs for […*…] Zygo will provide replacement Heads and Components to Nano for all Heads and Components that are under warranty. […*…] Support or repair needs during the term of this Agreement will continue after termination of this Agreement in accordance with Zygo’s standard rates and schedules for such services, as may be in effect from time to time, until […*…].

9. Confidentiality. Zygo and Nano have entered into a separate Non-Disclosure Agreement. Each of the parties shall perform their obligations under such Non-Disclosure Agreement with respect to Confidential Information received by the parties in connection with the performance of this Agreement.

10. Warranty.

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10.1 Warranty. Zygo warrants to Nano that:


	(a) the Heads and Components shall be free from defects in materials, workmanship and design;

	(b) all materials, parts, components and other items incorporated in the Heads and Components shall be new and suitable for its intended purposes;

	(c) the Heads and Components shall comply with the specifications applicable to such Heads and Components, the documentation provided by Zygo pertaining to such Heads and Components, and to any samples of such Heads and Components provided by Zygo;

	(d) the Heads and Components shall comply with the requirements of this Agreement and the Order pursuant to which it is purchased by Nano; and

	(e) Zygo will not, without the prior written consent of Nano, alter or change the existing design of the Heads to be provided to Nano in any way that would require Nano to create new designs for integration of the Heads or Components into its products. Specifically, Zygo is aware that certain customers maintain “Copy Exact” requirements and Zygo agrees to maintain a product in compliance therewith. Nothing in this section shall preclude Zygo from changing the design of other heads which Zygo may manufacture or produce for its own use or for sale to others so long as Zygo continues to supply Nano “copy exact” Heads as Nano so requests.

10.2 Warranty Period. The warranty for each unit of the Heads and Components shall be in effect for […*…].

10.3 Correction of Noncompliance. If at any time during the warranty period Nano notifies Zygo of any failure of any unit of the Heads or Components to comply with any applicable warranty, Zygo shall correct such noncompliance within three (3) business days after receiving Nano’s notice (i.e., by repair or replacement of the noncomplying unit) and remedy any damage to such unit of the Head or Component resulting from such failure. All transportation and other costs incidental to such correction and remedying shall be borne by Zygo. If Nano rejects any Heads or Components that do not comply with any applicable warranty, Zygo shall have a reasonable time to correct the noncompliance. If Zygo fails to correct the noncompliance within a reasonable time, Nano may cancel the Order as it applies to the noncomplying Heads or Components without any cost to Nano with respect to such Heads or Components, in which event Nano shall promptly

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return to Zygo any noncomplying Heads or Components from the cancelled Order of which it still has possession.

10.4 Warranty Service by Zygo. Zygo shall maintain a list, by serial numbers of Heads and Components, of the shipment date of each unit and a toll-free service number for the purpose of notifying Zygo of warranty claims. Upon receipt of each such claim, Zygo shall determine whether the warranty period with respect to such unit has expired. If the warranty period has not expired, Zygo shall perform warranty service as required under this Section. Zygo shall provide technical phone response upon notification of a field failure from Nano’s field service or factory personnel. Zygo’s warranty service includes telephone support and technical assistance by email to support diagnosis of problems and repair of Heads in the field by Nano that can reasonably be serviced in the field by Nano. If Nano or Zygo determine that a Head cannot be reasonably serviced in the field, Nano will remove the Head and ship the Head to Zygo for repair. Zygo shall maintain sufficient inventory of Heads and Components to enable Zygo to ship a replacement Head or Component to Nano within three (3) business days after receiving notice from Nano. Zygo shall ship replacement Heads and Components to Nano within three (3) business days after receiving notice from Nano of the requirement for a replacement Head, provided that Nano shall ship the Head requiring repair back to Zygo promptly after giving such notice. If the claim is not within Zygo’s warranty obligations, Zygo shall so notify Nano and, at Nano’s option, shall either return such unit to Nano, at Nano’s expense, or shall perform the required service as directed by Nano, at such price as Nano and Zygo shall agree.

10.5 Limitation on Warranty. Notwithstanding anything contained in this Section 10 or any other provision of this Agreement, Zygo will not have any warranty obligations for any products on which Nano performs repairs in addition to those for “first level” issues (as provided in Section 8 hereof), or on which Nano personnel have performed or attempted repairs that are not in accordance with the training provided by Zygo (as provided in Section 6 hereof).

11. Flow-Through License To Nano. The parties intend for Nano to be able to integrate the Heads into Approved Systems and sell such Approved Systems in the Approved Markets. To facilitate this intent, Zygo agrees to grant to Nano the following Flow-Through License:

11.1 Subject to Nano’s obligations under this Agreement and Nano’s obligations in the related Asset Transfer Agreement, for the term of this Agreement, Zygo hereby grants to Nano an exclusive, worldwide license to the Flow-Through Licensed Technology to […*…]. The foregoing is intended to allow Nano to exercise all patents,

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copyrights, works of authorship, copyrightable works, and mask works in connection with the exercise of Nano’s rights to […*…] Notwithstanding the foregoing or any other provision of this Agreement, it is understood and agreed that this license is limited to […*…] No license is granted for any system that includes a Head made by an entity other than Zygo. Notwithstanding the foregoing or anything to the contrary in this Agreement, nothing herein shall prevent Zygo from providing, […*…]

11.2 For purposes of clarification with respect to 11.1 above, the Flow-Through Licensed Technology will include but not be limited to […*…].

11.3 Sublicenses. The licenses granted by Zygo to Nano include the sublicenses (but limited only to […*…]) of any Flow-Through Licensed Technology that Zygo has a license to use or under which Zygo has a license to […*…]

11.3.1. Zygo shall pay all payments and royalties due under […*…].

11.4 Right to Sublicense. The licenses granted in this Section include the right of Nano to grant sublicenses (but limited only to […*…]).

11.5 Non-Assertion of Rights. Zygo shall not assert any patent, copyright, trade secret rights or other intellectual property rights against Nano or Nano’s sublicensees or customers relating to the manufacture, use, sale or importation of the Approved Systems in the Approved Markets, in a manner consistent with and as authorized and approved herein, or with respect to the use of the Flow-Through Licensed Technology by Nano or Nano’s sublicensees or customers in connection with the Approved Systems in the Approved Markets, in a manner consistent with and as authorized and approved herein.

12 Intellectual Property Infringement. […*…].

12.1 In the event that Zygo fails to promptly or effectively respond to any such claim or to defend any such suit or proceeding brought against Nano or any of Nano’s sublicensees or customers, or Zygo notifies Nano that Zygo has opted not to do so, Nano may, but shall not be obligated to, respond, at Nano’s sole cost, to the claim or defend or assume the defense of the suit or proceeding, in which event Nano is hereby authorized, upon giving prior written notice to Zygo, to proceed, if it so elects, in its own name or the name(s) of its sublicensee(s) or customer(s).

12.2 Zygo shall defend, indemnify and hold Nano (including its officers, agents, directors and employees) and Nano’s sublicensees and customers harmless from and

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against all costs, expenses, royalties, damages, losses, harm, and liabilities (including, without limitation attorneys’ fees and expenses) (the “Costs”), arising out of any such claim, suit or proceeding for which Zygo is obligated to indemnify pursuant to the provisions of the first paragraph of this Section 12, in all instances up to […*…] (the “Indemnity Cap”). Notwithstanding any other provision in this Agreement, Zygo’s obligation under this indemnity section will not extend to claims of lost profit by the third party intellectual property owner, Nano, or any other third party, or any consequential damages resulting from an injunction against Nano or its customers, or any consequential, indirect, punitive, individual or special damages of any nature. If applicable, Zygo will negotiate in good-faith with Nano to adjust the purchase price of subsequent Zygo-made Heads to account for the third party intellectual property.


	12.2.1 In the event the suit or proceeding is settled or otherwise terminated without a final judgment setting forth the reasonable royalty for those Zygo-made Heads and those Zygo-designed “Unifire” automated interferometer systems determined to have infringed the third party intellectual property, the Parties will negotiate in good-faith to determine what portion of the settlement is attributable to a reasonable royalty for the accused Zygo-made Heads and Zygo-designed “Unifire” automated interferometer systems. The settlement price can be considered in determining the reasonable royalty, but is not dispositive of it.

	12.2.2 If the Indemnity Cap is less than the total Costs, Nano shall have the right to terminate this Agreement upon sixty (60) days written notice to Zygo, except that, Zygo, in response to Nano’s written notice, can elect to pay Nano the difference between the Costs and the Indemnity Cap within the sixty (60)-day period to keep this Agreement in force.

12.3. Actions Against Infringers

Enforcement against any third party of any Zygo patent related to this Agreement shall be at Zygo’s sole discretion. Nano shall promptly provide notice to Zygo if Nano becomes aware of any third party patent infringement, and in response Zygo shall determine in good faith whether the commercial consequences to Zygo of that third party’s patent infringement (including with respect to the sale of Zygo Heads to Nano under this Supply Agreement) merit enforcement of a Zygo patent(s) against that third party. If Zygo decides not to pursue enforcement of its patent(s), and Nano can demonstrate in good faith that the third party infringement has substantial commercial consequences adverse to Nano, then Nano and Zygo shall have 30 days (the “Renegotiation Period”) after notice thereof from Nano to Zygo to renegotiate in good faith the Purchase Price of the Zygo Heads sold to

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Nano under this Supply Agreement. In such event, if no agreement is reached within the Renegotiation Period, then Nano shall have the right to terminate this Supply Agreement by notice given to Zygo not more than 10 business days after the expiration of the Renegotiation Period; provided that no such termination shall affect Nano’s obligation to pay for Heads previously delivered to Nano, or for Heads in production by Zygo pursuant to an accepted Order (except as permitted by Section 2.5 hereof).

13. Improvements.

13.1 Improvements By Zygo. Zygo shall deliver to Nano all improvements, enhancements, derivative works and modifications (collectively, “Zygo Improvements”) in, of or to any Flow-Through Licensed Technology used in the Approved Systems in the Approved Markets hereafter developed or acquired by Zygo. During the term of this Agreement, Zygo shall deliver all such updating information to Nano within 10 business days after Nano’s request therefor, but in no event more than once per calendar quarter. All sales of Approved Systems by Nano subsequent to its receipt of any such Zygo Improvements that are not required to be “copy exact” shall include such Zygo Improvements; provided, however, that Nano will have no such obligation if including such Zygo Improvements would require Nano to make a modification to the Approved System that Nano, in its sole discretion, deems undesirable; but further provided, in such instance, that Zygo shall not be liable for damages under Section 12 hereof subsequent to Nano’s receipt of any such Zygo Improvements in the event that the Zygo Improvement would have rectified or otherwise minimized any such intellectual property infringement. Zygo shall be the sole owner of any and all Zygo Improvements in, of or to any Flow-Through Licensed Technology made independently by Zygo.

13.2 Improvements by Nano. Nano shall be the sole owner of any and all improvements, enhancements, derivative works and modifications in, of or to any Flow-Through Licensed Technology, used in the Approved Systems in the Approved Markets, made independently by Nano.

13.3 Joint Improvements. Nano and Zygo shall jointly own any improvements, enhancements, derivative works and modifications in, of or to any Flow-Through Licensed Technology, used in the Approved Systems in the Approved Markets, made jointly by Nano and Zygo. Neither Nano nor Zygo shall have any obligation to (a) share with the other party any revenue or profits derived from the exploitation of such jointly owned property, or (b) provide any accounting to the other party. Each party shall be the sole owner of any improvements, enhancements, derivative works and modifications made by such party in, of, or to any jointly owned technology. Ownership of joint improvements pertaining solely to Heads shall revert back to Zygo upon termination of this Agreement; provided Nano retains a perpetual, non-exclusive, royalty free license for such joint improvements.

14. Zygo Representations. Zygo hereby represents and warrants to Nano that the following are true and correct as of the date of this Agreement, and, except for the

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representations and warranties in Section 14.3 hereof, with respect to all modifications and improvements of Flow-Through Licensed Technology delivered by Zygo to Nano during the term of this Agreement, as of the date of each delivery of such modifications and improvements.

14.1 Good Title, Free of Rights of Others. Zygo owns all Flow-Through Licensed Technology, free and clear of all security interests, liens, encumbrances, restrictions, licenses, rights and claims of any Person, or otherwise has sufficient rights, title and interest in and to the Flow-Through Licensed Technology necessary to grant the rights and licenses set forth in this Agreement, and to perform Zygo’s obligations under this Agreement.

14.2 No Conflicting Licenses. Zygo is not a party to any outstanding options, licenses or agreements of any kind relating to the Unifire, or the Flow-Through Licensed Technology used in Approved Systems in Approved Markets, or to the manufacture, use, or sale of Approved Systems, or their improvements, in Approved Markets, […*…].

14.3 No Infringement. As of the date hereof, (a) neither the Unifire nor the Zygo-made Head infringes, misappropriates or otherwise violates any patent, copyright, mask work right, trademark right, trade dress right, trade secret right, or other intellectual property right of any Person; and (b) the manufacture, use, sale, export and import of the Heads, Components or Unifires do not infringe or misappropriate any intellectual property rights of any Person. Zygo makes the representations and warranties in this Section 14.3 only as to Heads, Components and Unifires that have not been modified in any way after manufacture or sale by Zygo where the modification directly or indirectly causes the claimed infringement. Nothing in this paragraph shall extinguish Zygo’s indemnity obligation under the paragraphs of Section 12 with respect to modifications and improvements made by Zygo to the Heads after the Effective Date of this Agreement where such Heads are sold to Nano.

14.4 No Violation of Obligations of Zygo. The licenses granted by Zygo in this Agreement, and the other obligations of Zygo under this Agreement do not constitute a breach of, default under or other violation of any agreement, contract or obligation of Zygo.

15. Payment of Technology Transfer Fees to Zygo. Nano shall pay Zygo […*…] in technology transfer fees (the “Technology Transfer Fees”) in accordance with this Section 15.

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15.1 Fee Per System or Head. Until the aggregate amount of Technology Transfer Fees paid by Nano to Zygo under this Agreement equals […*…] Nano shall pay to Zygo the following […*…] Nano shall have no obligation to pay more than an aggregate […*…] in Technology Transfer Fees to Zygo under this Agreement. […*…].

15.2 Fee Period. As used in this Agreement, the term “Fee Period” means the period beginning on January 1, 2010 and ending on the earliest of (a) the date on which Nano shall have paid to Zygo aggregate Technology Transfer Fees under this Agreement of […*…] or (b) the expiration or earlier termination of this Agreement, or (c) […*…].

15.3 Reports. Nano shall deliver to Zygo a report within thirty (30) days after the end of each calendar quarter during the Fee Period, stating the number of Approved Systems (including Upgrade Sales) sold by Nano during such calendar quarter.

15.4 Payments. Concurrently with each report under Section 15.3, Nano shall pay to Zygo the Technology Transfer Fees due to Zygo for each unit sold by Nano pursuant to 15.1, at Zygo’s office in Middlefield, Connecticut, or at such other address as may be designated in writing.

15.5 Records. Nano shall keep records and books of account which shall show the Net Revenues received by Nano from each Approved System sold by Nano during the Fee Period. Zygo will have the right to conduct annual audits of reports submitted during the prior six (6) calendar years. Such audits shall be conducted by a certified public accountant at the expense of Zygo, unless an underpayment of ten percent (10%) or more is found for any calendar year, in which case the expense shall be borne by Nano.

15.6 Covenants as to Net Revenues.


	(a) Nano shall sell Approved Systems for cash consideration, including a check or money order, and shall determine the pricing for sales of Approved Systems based on its standard practice for ordinary course, arms-length transactions.

	(b) Nano shall not make sales of Approved Systems on credit outside of its ordinary course of business, or on terms or for reasons inconsistent with past practice.

	(c) Nano will diligently pursue collection of amounts due from sales of Approved Systems on a good faith basis.

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15.7 Consideration. In clarification of this Section 15, the Technology Transfer Fees due Zygo under this Section are separate from, and in addition to, the Sustaining Engineering Fee due Zygo under Section 7 and Exhibit C and the Purchase Price of Zygo Heads by Nano under Sections 2.3 and 2.4.

16. Additional Obligations of Zygo.

16.1. Spare Parts. Zygo shall supply to Nano a spare parts price list no later than thirty (30) days after the date of this Agreement and shall supply Nano with a revised spare parts price list as revisions are made. The prices included on such price list shall be Zygo’s then-current list price for such spare parts. Zygo shall stock parts reasonably required for the repair and servicing of Heads and Components by Nano, and shall sell such parts to Nano pursuant to the terms of this Agreement. Zygo shall test and inspect all parts using the same procedures as Zygo uses for like components of the Heads and Components. Zygo shall maintain the capability of repairing and otherwise servicing Heads and Components and furnishing spare parts manufactured by Zygo until the expiration of at least five (5) years after the date of Zygo’s delivery of such Head or Component. Zygo shall use its best efforts to ship parts ordered by Nano within two (2) business days after receipt and acceptance of Nano’s order. Zygo shall notify Nano promptly of the date by which such shipment will occur if such shipment will not be made within such two (2) business day period.

16.2 Service Not Covered by Warranty. In the event that any unit requires repair or other service that is not covered by Zygo’s warranty obligations (e.g., after expiration of the warranty period), Zygo shall be obligated to provide such service at Zygo’s then-applicable labor rate and parts prices unless Zygo is otherwise no longer in the business of selling or supporting such parts. Zygo shall use its best efforts to complete such repairs within ten (10) business days.

16.3 Defect Notification. Zygo shall immediately notify Nano of any material or recurring defect, deficiency or nonconformity discovered with respect to any of the Heads or Components manufactured by Zygo.

16.4 Head Modifications and Life Cycle Management. Zygo will satisfy all “Copy Exact” requirements so that Nano can fulfill such requirements to […*…] and other customers. If Zygo at any time modifies any Heads, Zygo shall, if requested by Nano in Nano’s sole discretion, continue to make and supply Nano with unmodified Heads during the remaining term of this Agreement. Zygo will notify Nano at least six months prior to making any change in the design, performance, function, material or components of any Head purchased by Nano. Zygo shall use good faith efforts to notify Nano of any engineering

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change in any Head or Component sufficiently in advance of making any engineering change to enable Nano to provide comments and input into Zygo’s engineering change control process. Zygo shall not modify or authorize any modification affecting fit, form or function of any of the Heads or Components, or which would be significant with respect to requirements of any governmental authority.

16.5 Documentation. Zygo shall deliver a copy of the user manuals (hard or soft), if any, with each unit of Heads and Components. Zygo shall update all documentation as necessary to keep it current, accurate and complete. Nano shall have a nonexclusive, royalty-free license to use, reproduce and distribute any and all documentation in connection with the marketing, use or distribution of Heads and Components or products or systems into which any of the Heads or Components are incorporated.

17. General.

17.1 Independent Contractors. The parties to this Agreement are acting as independent contractors with respect to each other; neither is an employee, partner or joint venturer of the other with respect to this Agreement. Neither party is authorized to act on behalf of, make representations for, or bind the other in any way.

17.2 Successors and Assigns. Each party may assign all of its rights and delegate all of its duties hereunder to an entity which acquires at least that portion of its business to which this Agreement relates, or to any corporate successor by way of merger or consolidation; provided, however, that such assignee assumes all of such parties obligations hereunder; and provided further that Nano may not make such assignment or delegation to those specific entities listed on Schedule 17.2 hereto. Subject to the foregoing, this Agreement shall be fully binding upon, inure to the benefit of and be enforceable by the parties and their respective successors, assigns and legal representatives.

17.3 Time of Essence. Time is of the essence in the performance of each party’s obligations under this Agreement.

17.4 Force Majeure. Neither party shall be liable for any delays in performance due to causes beyond its reasonable control, including but not limited to acts of God, public enemy, governmental laws, regulations or requirements, civil or military authority, labor disputes, fires, riots, wars, embargoes, epidemic, or floods.

17.5 Notices. Any notices required or permitted to be given by one party under this Agreement shall be deemed given to the other party when delivered in hand or three days after deposit with the United States Postal Service, registered or certified mail, postage prepaid, addressed as follows:


	If to Zygo:

	Zygo Corporation

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	Laurel Brook Road
	Middlefield, CT 06455-0448
	Attention: Chief Executive Officer
	Tel: 860-704-5109
	Fax: 860-347-8372

	With a copy to:

	Fulbright & Jaworski L.L.P.
	666 Fifth Avenue
	New York, NY 10103
	Attention: Sheldon Nussbaum
	Tel: (212) 318-3000
	Fax: (212) 318-3400

	If to Nano:

	Nanometrics Incorporated
	1550 Buckeye Drive
	Milpitas, CA 95035
	Attention: Chief Executive Officer
	Tel: (408) 545-6000
	Fax: (408) 904-6278

	With a copy to:

	Perkins Coie LLP
	101 Jefferson Drive
	Menlo Park, CA 94025
	Attention: Buddy Arnheim
	Tel: (650) 838-4300
	Fax: (650) 838-4350

17.6 Severability. If any provision of this Agreement shall be held to be invalid or unenforceable by a court of competent jurisdiction, then that provision shall be deemed omitted form this Agreement, and all remaining provisions shall remain in effect and enforceable according to their terms; provided, however, that if the result of this severability provision is to substantially alter the obligations of the parties or the underlying intent of this Agreement, then either party may at its option rescind this Agreement.

17.7 Governing Law; Venue. This Agreement and performance under it are governed by the laws of the State of Delaware, exclusive of choice of law rules.

17.8 Arbitration.

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	(a) Any controversy, dispute or claim arising under or in connection with this Agreement (including, without limitation, the existence, validity, interpretation or breach hereof and any claim based on contract, tort of statute) shall be resolved by a binding arbitration, to be held in Portland, Oregon (or its nearest surrounding area) pursuant to the Federal Arbitration Act and in accordance with the then-prevailing International Arbitration Rules of the American Arbitration Association (“AAA”).

	(b) The parties shall commence the arbitration by jointly filing a written submission with the Portland, Oregon (or its nearest surrounding area) office of the AAA in accordance with Commercial Rule 5 (or any successor provision). The arbitration shall be conducted by a single arbitrator (the “Arbitrator”) selected by Nano and Zygo in accordance with the Commercial Arbitration Rules of the AAA (the “Commercial Rules”).

	(c) The Arbitrator shall have no power or authority, under the Commercial Rules or otherwise, to (i) modify or disregard any provision of this Agreement, or (ii) address or resolve any issue not submitted by the parties.

	(d) In connection with any arbitration proceeding pursuant to this Agreement, each party shall bear its own costs and expenses, except that the fees and costs of the AAA and the Arbitrator, the costs and expenses of obtaining the facility where the arbitration hearing is held, and such other costs and expenses as the Arbitrator may determine to be directly related to the conduct of the arbitration and appropriately borne jointly by the parties (which shall not include any party’s attorneys’ fees or costs, witness fees (if any), costs of investigation and similar expenses) shall be shared equally by the parties.

17.9 Attorneys’ Fees. If any action or suit is instituted to enforce the obligations of this Agreement, the prevailing party shall be entitled to recover from the other party, in addition to any other rights and remedies it may have, all reasonable expenses and attorneys’ fees incurred up to and including arbitration, trial, appeal, and any petition for review.

17.10 Titles and Subheadings. The use of titles and subheadings in this Agreement is for the convenience of the parties only. They do not constitute binding portions and are not to be used in the interpretation of this Agreement.

17.11 Exhibits. The following Exhibits are attached and are part of this Agreement:


	Exhibit A:	Descriptions of Heads and Components
	Exhibit B:	Price List
	Exhibit C:	Training
	Exhibit D	Orders

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17.12 Complete Agreement. This Agreement, together with the related Asset Transfer Agreement and Non-Disclosure Agreement, constitute the entire understanding of the parties with respect to its subject matter and supersedes all prior agreements and understandings of the parties. A breach by either party under the Asset Transfer Agreement shall be deemed to constitute a breach by that party under this Agreement. Nano shall not be bound by, and specifically objects to, any term, condition or other provision which is different from or in addition to the provisions of this Agreement (whether or not it would materially alter this Agreement) and which is proposed by Zygo in any quotation, invoice, shipping document, acceptance, confirmation, correspondence or otherwise, unless Nano specifically agrees to such provision in a written instrument signed by Nano.

17.13 Modification by Signed Writing Only; Waiver. No modification, change, amendment, or any waiver of rights with respect to this Agreement shall be binding unless in writing signed by the party to be charged. No waiver of any violation or nonperformance of this Agreement in one instance shall be deemed to be a waiver of any subsequent violation or nonperformance.

17.14 Nonwaiver. The failure of any party to insist upon or enforce performance of any of the provisions of this Agreement or to exercise any rights under this Agreement shall not be construed as a waiver or relinquishment to any extent of such party’s right to assert or rely upon any such provisions or rights in that or any other instance; rather, the same shall be and remain in full force and effect.

17.15 Implementation. Each party shall take such action (including, but not limited to, the execution, acknowledgment and delivery of documents) as may reasonably be requested by any other party for the implementation or continuing performance of this Agreement. Without limiting the generality of the foregoing, Zygo shall execute, acknowledge and deliver to Nano all such further assurance as Nano may reasonably request to evidence, vest and confirm the rights granted to Nano under this Agreement.

17.16 Remedies. The rights and remedies provided in this Agreement shall be the exclusive rights or remedies of the parties for monetary damages with respect to the matters covered herein.

17.17 Set-Off. All claims for monies due or to become due from Nano under this Agreement or otherwise shall be absolute, and there shall be no right to deduction by Nano for any setoff arising out of this or any other transaction between Nano and Zygo.

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17.18 Damages. Notwithstanding anything contained in any other provision of this Agreement, (a) in the case of Zygo, damages hereunder will not exceed the […*…]; (b) Zygo shall have no obligation to Nano in respect of any claim by Nano relating to any Head or Component, other than servicing or replacing such Head or Component in accordance with Section 10; and (c) in no event will consequential, indirect, punitive, individual or special damages of any nature, or any damage or claim for lost profits, be awarded to either party under any circumstances. Notwithstanding the foregoing, the indemnification obligations under Section 12 hereof are excluded from the foregoing as provided in Section 12.

17.19 Equitable Relief. Each party acknowledges that the provisions of this Agreement pertaining to the other party’s interests in the Flow-Through Licensed Technology are essential to the other party; that the other party would not enter into this Agreement if this Agreement did not include such provisions; and that damages sustained by the other party as a result of a breach of such provisions cannot be adequately remedied by monetary damages. Each party agrees that the other party, in addition to any other remedy it may have under this Agreement or at law, shall be entitled to injunctive and other judicial equitable relief to prevent or curtail a party from breaching the provisions of this Agreement.

17.20 Term. This Agreement shall continue for an initial term of […*…] from the date of execution (the “Initial Term”). The term of this Agreement shall be renewed upon mutual agreement of both parties. […*…].

17.21 Nano shall use good faith efforts to market and sell the Approved Systems in the Approved Markets.


ZYGO CORPORATION		NANOMETRICS CORPORATION
(“Zygo”)		(“Nano”)

By:	/s/ J. Bruce Robinson	By:	/s/ Timothy J. Stultz, Ph.D.

Its:	Chief Executive Officer	Its:	President and Chief Executive Officer




* CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

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EXHIBIT A

Descriptions of Heads and Components

For purposes of clarification, the term “Head” is exemplified by the Head in the Unifire and includes:


	(a) optical lens subassemblies, light source, components, power supplies, filters, cameras, image processing and pattern recognition software and algorithms and related mounting or bridging hardware required to embody the head in an automated final assembly;

	(b) the control, modeling and analysis software, and related algorithms, utilized by and in the Automated Interferometer Systems developed and marketed by Zygo;

	(c) the electronic control systems utilized by and in the Automated Interferometer Systems developed and marketed by Zygo (which may or may not be contained in the “Head” assembly);

	(d) the know-how, software, systems and hardware that automates the systems;

	(e) all parts, components and subassemblies of the products described in clause (a) above;

	(f) all equipment and goods that are or may be used in connection with or ancillary to the manufacture, testing, use, calibration, maintenance or repair of “Heads”;

	(g) all modifications and enhancements to any of the foregoing; and

	(h) all replacements for and successors of any of the foregoing products made, used, sold or acquired by Zygo during the term of this Agreement.

“Head” also includes any improvements or modifications that arise during the term of this Agreement. Reference is made to Section 10.1(e) of the Agreement regarding “Copy Exact” requirements.

Notes:

The light source for the Head will be a white-light LED. The head can accept a Xenon light source as an option, but this is priced separately. There is no laser.

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EXHIBIT B

Price List

[…*…]




* CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

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EXHIBIT C

Training, Sustaining Engineering Services and Development Services

(a) Training. Zygo shall train, instruct and advise […*…] as provided in this Exhibit C. This training, instruction and advice (a) shall commence on the Effective Date, (b) shall proceed in good faith at a reasonable pace to completion, and (c) may be conducted individually or collectively (except that persons in each category shall be trained collectively with the others in such category). The cost of such training shall be included in subsection (c) below. Training shall be conducted at Zygo’s manufacturing facility in Middlefield, Connecticut […*…] After such training in Middlefield, Connecticut, training shall be conducted at Nano’s manufacturing facility in Milpitas, California in accordance with Zygo’s acceptance test procedures (ATPs) in conjunction with the manufacture of […*…] at such facility of Nano […*…] All other training shall be conducted at Zygo’s facility in Middlefield, Connecticut. Zygo shall complete such training within approximately 90 days of the Effective Date. Additional training sessions shall be held semiannually with respect to updates supplied under this Agreement. Zygo’s obligation to provide training, instruction, and advice pursuant to this Exhibit C shall continue so long as this Agreement remains in effect.

(b) Development Services. During the term of the Agreement, Zygo agrees to work with Nano toward the development of […*…]

Beginning July 1, 2010, and throughout the term of this Agreement, Nano shall pay to Zygo a Sustaining Engineering Fee which shall be applied to any engineering services that Nano requests from Zygo to facilitate the commercial development of the Unifire and other automated interferometer systems that include a Zygo Head. […*…]




* CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

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EX-31.1 4 c59763_ex31-1.htm

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF
1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Bruce Robinson, certify that:


1)	I have reviewed this annual report on Form 10-K/A of Zygo Corporation;

2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

		a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

		b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

		c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

		d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5)	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

		a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

		b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:December 23, 2009

		/s/ J. Bruce Robinson

		J. Bruce Robinson
		Chief Executive Officer

EX-31.2 5 c59763_ex31-2.htm

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF
1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Walter A. Shephard, certify that:


1)	I have reviewed this annual report on Form 10-K/A of Zygo Corporation;

2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

		a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

		b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

		c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

		d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5)	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

		a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

		b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: December 23, 2009

		/s/ Walter A. Shephard

		Walter A. Shephard
		Vice President, Finance,
		Chief Financial Officer, and Treasurer

EX-32.1 6 c59763_ex32-1.htm

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Bruce Robinson, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of Zygo Corporation on Form 10-K/A for the fiscal year ended June 30, 2009, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Zygo Corporation.

A signed original of this written statement required by Section 906 has been provided to Zygo Corporation and will be retained by Zygo Corporation and furnished to the Securities and Exchange Commission or its staff upon request.


	Dated: December 23, 2009

	/s/ J. Bruce Robinson

	J. Bruce Robinson
	Chief Executive Officer of
	Zygo Corporation

EX-32.2 7 c59763_ex32-2.htm

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Walter A. Shephard, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of Zygo Corporation on Form 10-K/A for the fiscal year ended June 30, 2009, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Zygo Corporation.


	Dated: December 23, 2009

	/s/ Walter A. Shephard

	Walter A. Shephard
	Vice President, Finance,
	Chief Financial Officer, and Treasurer of
	Zygo Corporation

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