EXHIBIT 10.18
IPG PHOTONICS CORPORATION PURCHASE AND SALE AGREEMENT No. 1/99
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This Purchase Agreement ("Agreement") is entered into by IPG Photonics
Corporation ("IPG"), representing the IPG Group of companies, and SDL
Incorporated ("SDL") in respect of a firm order for of
products as specified hereunder, on the following terms and conditions.
1. PURCHASE OF MATERIALS.
1.1 This Agreement constitutes a firm purchase and sale obligation between
the parties hereto. IPG shall purchase and SDL shall sell the products
specified as per the attached Exhibit B ("Products") in the numbers and
of the specifications therein, and at the prices specified in Exhibit C.
The initial delivery schedule in Exhibit A may be revised by IPG in
accordance with the Release Order procedures described in Article 4
("Release Orders") if IPG's requirements change.
If the numbers of units agreed by IPG for delivery, in accordance with
the release procedure, falls short by in any three (3) month period,
in comparison with the delivery schedule specified in Exhibit A, or if
the committed for delivery during the 18 months term of this
Agreement are no longer a reasonable estimate, SDL reserves the right to
adjust the prices in negotiation with IPG, provided that the shortfall
is not the result of SDL's inability to deliver the Products as per the
Release
Orders.
Such price adjustment will be based upon, but not limited to, an
analysis of the number of units of Products released to date, the
remaining Term of this Agreement and the rolling horizon forecast for
the remaining Term of this Agreement.
IPG acknowledges that SDL's prices contained in Exhibit C are based on
IPG's commitment to purchase within the eighteen (18) months' Term of
this Agreement.
2. PRICES AND INVOICES.
2.1 The prices for the Products are listed in Exhibit C in U.S. currency,
unless otherwise stated, and shall remain in effect during the Term of
this Agreement as defined in Article 19.1 of the Agreement ("Term of
this Agreement"). If during the Term price changes are put into effect
by mutual agreement of IPG and SDL, such prices shall apply to all
Release Orders issued by IPG after the effective date(s) of such price
change(s).
2.2 All invoices in respect of supplies to IPG from SDL are due for payment
thirty (30) days from the date of invoices, provided that:
(a) the goods ("Products") are received by IPG in sound condition;
(b) the goods ("Products") conform to the Release Orders and the agreed
specification.
2.3 Freight charges and all applicable taxes and duties in respect of
supplies shall be paid directly by IPG. Notwithstanding the foregoing,
if appropriate SDL reserves the right to collect all applicable taxes if
valid tax exemption certificates are not furnished by IPG to SDL.
2.4 IPG may deduct from SDL's outstanding invoices any monies owed to IPG by
SDL as a result of transactions under this Agreement.
3. SHIPMENT AND DELIVERY.
3.1 Each delivery of Products shall be initiated by a written or electronic
Release Order issued to SDL by IPG. Each Release Order shall specify:
(i) the quantity of Products in numbers, (ii) the unit price, (iii) the
required shipment dates, and (iv) the preferred common carrier or
freight forwarder. SDL shall confirm receipt and commit to the shipment
dates ("Commitment Date") of the Release Order within ten (10) working
days from the date thereof. If there is an error, inconsistency with the
terms of this Agreement or a problem in committing to the required
shipment dates, SDL and IPG agree to negotiate in good faith a mutually
acceptable solution for the Release Order in question.
3.2 A Release Order shall be deemed to have been placed as of the issue date
thereof. IPG shall not be liable for any costs related to or payments
for:
(a) Products not subject to a Release Order from IPG;
(b) Products received by IPG but not conforming to the Release Order or
to the agreed specification.
3.3 All deliveries shall be made complete as per the Release Orders. SDL
shall, within twenty-four (24) hours of SDL's discovery of any potential
failure to ship the specified quantity of Products by the Commitment
Date, give IPG both an oral notification, followed by either a written
or electronic communication of any such potential failure. Should only a
portion of the Products be available for shipment by the Commitment
Date, SDL shall ship the available Products unless directed in writing
by IPG to rechedule shipment.
3.4 If SDL ships any Product by a method other than as specified in the
corresponding Release Order, SDL shall pay any resulting increase in the
cost of freight incurred over the cost of freight which would have been
incurred had SDL complied with IPG's shipping instructions.
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3.5 If SDL fails to make a timely shipment by the Commitment Date, the
Products affected shall be shipped by air transportation or other
expedient means. SDL shall pay for any resulting increase in the freight
cost over that which IPG would have been required to pay by the
specified method of transportation.
3.6 If SDL ships more Products than as per the Release Order, the numbers
over-shipped may, at IPG's discretion, either be kept by IPG for credit
against future Release Orders or returned to SDL pursuant to Article 6.
If IPG elects to retain the Products for credit against future Release
Orders, SDL shall be authorized to issue an invoice to IPG for such
Products, for which payment shall be due thirty (30) days from the
agreed delivery date of the subsequent Release Order and in accordance
with Article 2.2. However, in no case shall payment be delayed for
greater than sixty (60) days from the date of invoice.
3.7 SDL shall obtain IPG's approval before making any shipment more than
five (5) working days prior to the Commitment Date specified in the
Release Order. If SDL ships more than five (5) working days in advance
of such Commitment Date without IPG's approval, IPG may at its option
either return the Products pursuant to Article 6 or make payment in
accordance with the delivery date as per the Release Order and in
accordance with Article 2.2. However, in no case shall payment be
delayed for greater than sixty (60) days from the date of invoice.
3.8 Failure to deliver at least of the specified quantities in a
month period according to the Release Order (a "Shortfall") shall
constitute a breach of this Agreement. In such an event, IPG will advise
SDL in writing providing details of the Shortfall in delivery and will
allow SDL thirty (30) days to make good the Shortfall. Failure by SDL to
make good the Shortfall within such thirty (30) day cure period shall
constitute a material breach of the Agreement. In such an event, the
parties agree to meet and negotiate in good faith a recovery plan for
the delivery schedule.
3.9 Shipment shall be F.O.B. SDL's plant or warehouse in the United States.
Upon shipment by SDL i.e. upon delivery of the Products to the common
carrier of freight forwarder specified by IPG in the Release Order,
title to the Products and the risk of loss or damage shall pass from SDL
to IPG, subject to the provisions of Article 3.10.
3.10 SDL shall preserve, package, handle and pack the Products adequately to
protect the Products from loss or damage, in conformity with sound
commercial practice. SDL shall be responsible for any loss or damage due
to its failure to adequately preserve, package, handle or pack the
Products. In such an event, IPG shall not be required to pursue any
claims for such loss or damage against the common carrier involved.
3.11 Each delivery of Products to IPG shall include a packing list, which
shall contain at least the following information:
(a) The Release Order number;
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(b) the SDL part numbers;
(c) The quantity of Products shipped; and
(d) The date of shipment.
4. RELEASE PROCEDURE.
4.1 IPG shall issue Release Orders for Product deliveries in accordance with
an 18-month rolling horizon forecast consisting of three time zones:
Fixed, Firm and Planning. The Fixed zone shall comprise at all times the
first three months of the current balance of this Agreement's Term,
initially months 1 through 3. The Firm zone shall be the three month
period following the Fixed zone, initially months 4-6. The Planning zone
shall be the remaining months in the Term, initially months 7-18. IPG
shall provide SDL a written update of the rolling horizon forecast
during the first week of each month of the Agreement Term, showing by
month the quantities forecast for each of the zones. The initial rolling
horizon forecast shall be the delivery schedule contained in Exhibit A
attached hereto.
(a) Product quantities for delivery in the Fixed zone are
and IPG shall issue Release Orders for such quantities of the
Product when a particular month first enters the Fixed zone, which
is prior to shipment.
(b) Product quantities for delivery in the Firm zone may be varied by up
to + or - prior to a particular month entering the Fixed zone.
Such percentage variance shall be calculated by comparing the
quantity specified for that month upon entering the Firm zone with
that same month's quantity upon entering the Fixed zone.
(c) Product quantities for delivery in the Planning zone are
and may be subject to the total order commitment
described in Article 1.1.
4.2 Changes to Product deliveries within the Fixed zone or in excess of the
allowable variance within the Firm zone as specified in Article 4.1 are
not permitted except by mutual agreement.
5. QUALITY PROGRAM, INSPECTION AND WARRANTY.
5.1 SDL shall maintain an objective quality program for all Products
supplied pursuant to this Agreement. SDL's program shall be in
accordance with the current and updated version of SDL's Quality Policy
during the Term of this Agreement. SDL shall, upon IPG's request,
provide to IPG copies of SDL's policy
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and procedures and SDL agrees to consider IPG's requests for amendments
to such policy and procedures.
5.2 IPG shall have the right to inspect, at a mutually agreed time, at SDL's
plant, both Products and nonproprietary testing areas for the Products,
Any such inspection of Products shall be prior to shipment; testing
areas may be inspected at any time during the Term of this Agreement.
IPG has the right to such inspection provided such inspection is
reasonable and relevant to this Agreement, including without limitation
to ensure SDL's compliance with the specified and applicable quality
requirements. SDL shall provide access for IPG to SDL's facilities and
services as may be reasonably required by IPG in performing any such
inspection. Acceptance by IPG of any Products inspected pursuant to this
Article 5.2 shall be final only after inspection, pursuant to Article 7,
of the Products by IPG at its own works after delivery.
5.3 SDL warrants that all Products shall be free from defects in workmanship
and materials. This warranty does not apply to Products which have
failed, become defective or unworkable due to abuse, mishandling,
misuse, alteration, negligence, improper installation, use which is not
in accordance with the information and precautions described in the
applicable operating manual, or other causes beyond SDL's control. This
warranty does not apply to (i) any Products or components not
manufactured by SDL or (ii) any aspect of the Products based on IPG's
specification, if applicable, unless SDL has reviewed and approved such
specification in writing.
5.4 The warranty specified in Article 5.3 shall:
(a) Survive any inspection, delivery, acceptance, or payment by IPG; and
(b) Be in effect for following the date of shipment of
the Products to IPG; or
(c) In the case of Products under warranty that are replaced or
reworked, be in effect for the remaining unexpired portion of the
original warranty period applicable to the replaced or reworked
Product, excluding the time period between SDL's receipt of said
Product and its return to IPG.
5.5 THE FOREGOING WARRANTY IS EXCLUSIVE AND IS IN LIEU OF ALL OTHER
WARRANTIES, WHETHER EXPRESSED OR IMPLIED, AS TO THE PRODUCTS, INCLUDING
ANY IMPLIED WARRANTY OF MARKETABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. IPG'S SOLE AND EXCLUSIVE REMEDY SHALL BE SDL'S OBLIGATION TO
REPLACE THE PRODUCT OR GIVE A CREDIT OR REFUND AS SET FORTH IN ARTICLES
6 and 7. IN NO CASE WILL SDL'S AGGREGATE LIABILITY TO IPG UNDER THIS
ARTICLE 5.5 BE GREATER THAN THE PURCHASE PRICE ACTUALLY PAID BY IPG TO
SDL FOR THE PRODUCTS WHICH ARE THE SUBJECT OF IPG'S CLAIM.
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6. RETURN OF PRODUCTS.
6.1 All Products returned by IPG to SDL, including Noncomplying Products
defined in Article 7.1 below, shall be accompanied by a Return Materials
Authorization ("RMA"). Unless further verification is reasonably
required by SDL, SDL shall supply an RMA within three (3) working days
of IPG's request for the return of suspected Noncomplying Products and
for all other Product returns. If further verification is so required,
the RMA shall be supplied by SDL within five (5) working days of receipt
of the appropriate verification from IPG. With the return of any
suspected Noncomplying Product under this Article, IPG will specify, in
writing, the reasons for non-compliance with the return.
6.2 All suspected Noncomplying Products shall be returned by IPG freight
prepaid to SDL's facility. All overshipments, and early shipments
returned by IPG to SDL, and all replacement or reworked Products shipped
by SDL to IPG to replace Noncomplying Products, shall be at SDL's risk
and expense, including transportation charges to IPG.
7. INSPECTION, ACCEPTANCE AND NONCOMPLYING PRODUCTS.
7.1 All Products shall be subject to acceptance inspection and testing by
IPG upon delivery. Unless IPG notifies SDL in writing of rejection by
IPG within fifteen (15) working days of receipt of the Product, such
received Product shall be deemed to be provisionally accepted. However,
IPG reserves the right to conduct lifetime tests of the Products as
described in the agreed specification to ensure compliance and unless
IPG notifies SDL in writing within sixty (60) working days of receipt of
the Product of any such lifetime test failures, such received Product
shall be deemed to be accepted.
If any Product is deemed to be defective or otherwise not in conformity
with the specification of this Agreement by IPG, IPG shall return the
suspected Noncomplying Product in accordance with Article 6. If SDL,
after SDL's inspection of the suspect Noncomplying Product, concurs that
such Product is not in conformity with the specification and, therefore,
deemed a "Noncomplying Product", SDL may elect in its sole discretion,
to:
(a) Replace or rework at SDL's expense the Noncomplying Product; or
(b) Refund any payment made to SDL for the Noncomplying Product within
thirty (30) days from the date of return of the Noncomplying
Product.
7.2 SDL shall, if SDL selects the alternative in Article 7.1(a), return the
replacement or reworked Product as soon as possible but in any event
prior to any further shipment of new units.
7.3 If SDL fails to return the replacement or reworked Product to IPG in a
timely manner as specified in Article 7.2, IPG may reject the
Noncomplying Product and refuse acceptance of replacement or reworked
Product and accept a full refund of
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the original purchase price of the replacement or reworked Product
without any deductions by SDL. Any Product refunds pursuant to this
Article 7.3 or 7.1(b) shall be counted toward IPG's total purchase
obligation set forth in Article 1.1.
7.4 SDL shall provide IPG with SDL's elected disposition of any suspect
Noncomplying Products within thirty (30) working days of receipt of the
Product at SDL's facility. In the event SDL does not find the suspect
Noncomplying Product to be in non-compliance with the specification, SDL
shall return the Product to IPG "as is" with a written report of SDL's
findings.
7.5 Upon IPG's request, SDL shall promptly furnish a Corrective Action
Report on any Noncomplying Product.
8. PROCESS OR DESIGN CHANGES.
8.1 Unless otherwise covered in an applicable general specification referred
to in this Agreement:
(a) With respect to process changes that do not affect the form, fit or
function of the Products, no significant process changes shall be
made or incorporated in Products without the prior written
notification of IPG;
(b) With respect to process changes that do affect the form, fit or
function of the Products, or in the event of the withdrawal of a
product line, SDL shall provide six (6) months' prior written notice
to IPG. The form, fit, or function of the Products includes all
characteristics that affect compliance to the specification
including all external dimensions. SDL shall discuss changes with
IPG and as far as practicable changes shall accommodate IPG's
requirements.
8.2 In the event that changes to the Products affect its form, fit or
function, or SDL plans to withdraw a Product from its product line, IPG
shall have the right to make a last buy of the Product prior to the
effective date of the change or withdrawal. This last buy option shall
be a firm non-cancelable order. Shipment dates and quantities under this
last buy provision will be mutually agreed upon by the parties. IPG will
be relieved of any further purchase obligation for the specified
Product.
9. PATENT INDEMNIFICATION.
9.1 SDL shall defend, indemnify, and hold harmless IPG and its affiliates,
and subsidiaries, from and against all legal proceedings in respect of
any alleged infringement of any Products furnished hereunder of any
United States patents and against all claims, losses, demands, fees,
damages, liabilities, costs, expenses, and obligations, which may be
assessed against IPG on account of such infringement; provided that SDL:
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(a) shall have reasonable written notice of all claims and/or legal
proceedings alleging such infringement;
(b) shall have full opportunity and authority to assume the sole defense
and settlement of such claims and/or legal proceedings; and
(c) shall be furnished, upon SDL's request and at SDL's expense, all
reasonable information and assistance from IPG for such defense.
9.2 In addition to providing information requested by SDL in Article 9.1(c),
IPG, at its option, shall have the right to participate fully in any
such defense at IPG's own expense.
9.3 If any Product in any such legal proceedings or claim is held to
constitute an infringement ("Infringing Product"), SDL shall at its
option and expense:
(a) Procure for IPG the right to continue using the Infringing Product;
(b) Replace the Infringing Product with a non-infringing Product of like
form, fit or function;
(c) Modify the Infringing Product to be non-infringing; or
(d) If unable to replace or modify the Infringing Product, remove the
Infringing Product and refund in full the purchase price paid by IPG
for the Infringing Product without any deductions by SDL.
9.4 IPG agrees to indemnify, defend and hold harmless SDL from and against
all legal proceedings and from all claims, losses, demands, fees,
damages, liabilities, costs, expenses, and obligations, which may be
assessed in any legal proceedings alleging that the Product infringes
any United States patent, and only:
(a) to the extent any such infringement by the Product is found to arise
from the adherence to specifications or drawings relating to the
Product which IPG directs SDL to follow; or
(b) to the extent any such infringement by the Product is caused by the
incorporation of the Product into devices.
9.5 IPG's duty to indemnify is contingent upon SDL:
(a) providing reasonable written notice of all claims and legal
proceedings alleging such infringement;
(b) providing IPG the full opportunity and authority to assume the sole
defense and settlement of such claims and/or legal proceedings; and
(c) furnishing upon IPG's request and at IPG's expense, all reasonable
information and assistance from SDL for such defense. In addition to
providing information requested by IPG, SDL, at its option, shall
have the right to participate fully in any such defense at SDL's own
expense.
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10. LIMITATION OF LIABILITY.
10.1 IN NO EVENT WILL SDL BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO
LOSS OF ANTICIPATED PROFITS OR BENEFITS, EVEN IF SDL HAS BEEN
INFORMED OF THE POSSIBILITY IN ADVANCE, ARISING OUT OF THE SALE OF
PRODUCTS OR IN ANY WAY ARISING OUT OF THIS AGREEMENT. EXCEPT FOR
WARRANTY OBLIGATIONS UNDER ARTICLE 5.5, IN NO CASE WILL SDL'S
AGGREGATE LIABILITY TO IPG BE GREATER THAN EITHER THE LESSER OF I)
THE PURCHASE PRICE ACTUALLY PAID BY IPG TO SDL FOR THE PRODUCTS,
WHICH ARE THE SUBJECT OF IPG'S CLAIM OR II) ONE MILLION DOLLARS.
11. GOVERNMENTAL COMPLIANCE.
11.1 SDL shall comply with all federal, state, local, and foreign laws,
rules, and regulations applicable to its obligations under this
Agreement or to Products supplied hereunder.
11.2 SDL shall furnish to IPG any information reasonably required
during the Term of this Agreement and a reasonable period
thereafter to enable IPG to comply with the requirements of any
federal, state, local, or foreign government agency in its use of
the Products.
11.3 Without limiting the obligations under Article 11.1, SDL warrants
that:
(a) SDL shall comply with the requirements of Executive Order
11246, the Vocational Rehabilitation Act, and the Vietnam
Era Veterans Readjustment Assistance Act;
(b) Each chemical substance contained in the Products is on the
inventory of chemical substances compiled and published by
the Environmental Protection Agency pursuant to the Toxic
Substances Control Act;
(c) All Products shall be shipped in conformity with government
or freight regulations and requirements applicable to
chemicals; and
(d) All Material Safety Data Sheets required to be provided by
SDL for any Product shall be provided to IPG prior to
shipment of the corresponding Products and shall be
complete and accurate.
12. FORCE MAJEURE.
12.1 SDL shall not, subject to the provisions of this Article 12, be
liable for any delay in performance under this Agreement caused by
fire, flood, earthquake, explosion, war, strike, embargo,
governmental regulations, civil or military authority, an act of
God or any other cause beyond SDL's control excluding SDL's fault
or
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negligence (collectively "Delaying Cause"). SDL shall, in the
event of a Delaying Cause, immediately give notice to IPG of the
Delaying Cause.
12.2 In the event of a Delaying Cause, IPG may elect in its sole
discretion, and as its exclusive remedy hereto, to:
(a) Terminate this Agreement if such Delaying Cause is not
cured within 120 days of said notice to IPG or any part
hereof as to Products not shipped; or
(b) Suspend this Agreement in whole or in part for the duration
of Delaying Cause, buy similar products elsewhere, and
deduct from any quantities specified under this Agreement
the quantity so purchased.
12.3 If IPG selects the alternative specified in Article 12.2(b) for
any Delaying Cause, IPG may resume performance under this
Agreement once the Delaying Cause ceases to exist and extend the
Term up to the length of time the Delaying Cause endured.
12.4 Unless IPG gives notice of termination pursuant to Article 12.2(a)
120 days after notice from SDL of the Delaying Cause, IPG shall be
deemed to have selected alternative 12.2(b).
13. TERMINATION.
13.1 If either party commits a material breach of any provision or
obligations of this Agreement, the injured party may by sixty (60)
days prior written notice to the other party terminate the whole
or any part of this Agreement unless:
(a) during such notice period the defaulting party shall have
remedied any such failure; or
(b) if the breach is one which by its nature cannot be fully
remedied in the sixty (60) day notice period, the parties
shall have negotiated in good faith an additional cure
period and the defaulting party shall have remedied any
such failure within this extended cure period.
A "Material Breach" herein is a failure of either party to perform
any substantive promise or performance under this Agreement when
due without reasonable cause.
13.2 This Agreement may be terminated forthwith, at the option of
either party, upon written notice to the other party upon the
occurrence of any of the following events with respect to the
other party:
(a) Proceedings under state or federal law, whether voluntary
or involuntary, in bankruptcy, insolvency or debtor's
relief law by or against such party, which proceedings are
not dismissed within sixty (60) days;
(b) Appointment, with or without such party's consent, of a
receiver or an assignee for the benefit of creditors;
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(c) Such party ceases to carry on its business;
(d) Such party is liquidated or dissolved.
13.3 The rights and remedies granted to the parties pursuant to this
Article 13 are in addition to, and shall not limit or affect, any
other rights or remedies available to the parties in law or in
equity.
14. NOTICES.
14.1 Any notice given pursuant to this Agreement shall be in writing
and shall be deemed received as of five (5) working days after
posting by registered or certified mail, return receipt requested,
postage prepaid (or upon actual receipt thereof, whichever occurs
first) to the addresses specified on the signature page of this
Agreement.
14.2 Either party may change address for purposes of notice in writing
to the other party.
15. COUNTRY OF MANUFACTURE AND DUTY DRAWBACK RIGHTS.
15.1 Upon IPG's request, SDL shall provide IPG with appropriate
certification stating the country of origin for the Products,
sufficient to satisfy the requirements of:
(a) The customs authorities of the country of receipt; and
(b) Any applicable export licensing regulations, including
those of the United States.
15.2 SDL shall ▇▇▇▇ each Product (or the Product's container if there
is no room on the Product) with the country of origin. SDL shall,
in marking Products, comply with the requirements of the customs
authorities of the country of receipt.
16. CONFIDENTIAL INFORMATION.
16.1 IPG and SDL agree that in pursuance of transactions under this
Agreement, the parties are likely to become both disclosing
parties of their own Confidential Information and receiving
parties of Confidential Information. Any such Confidential
Information shall be used only for performance under this
Agreement. As used in this Article 16, the term "Confidential
Information" shall include, without limitation:
(a) All information or data concerning or related to either
party's products (including discovery, invention, research,
improvement, development, manufacture, or sale of products)
or business operations (including sales costs, profits,
pricing methods, organizations, employee or customer lists,
and processes);
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(b) All forecasts for production, support, or service
requirements submitted by IPG pursuant to this Agreement.
16.2 All Confidential Information divulged pursuant to this Agreement
shall be disclosed in writing marked with a "confidential" or
"proprietary" or similar legend. If Confidential Information is
divulged other than in writing, it shall be identified as
proprietary at the time and shall, within 30 days thereof, be
confirmed in writing, so marked and transmitted to the receiving
party.
16.3 All information so identified or marked shall remain the
disclosing party's property and will be used by the receiving
party only for performance under this Agreement unless first
authorized in writing by the disclosing party. The receiving party
shall not disclose to any person or entity, other than those
employees of the receiving party who have a need to know, any
Confidential Information of the disclosing party, which the
receiving party may obtain from the disclosing party. The
receiving party shall maintain all Confidential Information in
strict confidence. The receiving party shall take all reasonable
steps to ensure that no unauthorized person or entity has access
to Confidential Information, and that all authorized persons
having access to Confidential Information refrain from any
unauthorized disclosure. Any Confidential Information furnished
hereunder shall be returned or destroyed when the receiving party
no longer needs the information for the stated purpose or upon the
disclosing party's request.
16.4 The obligation imposed by this Article 16 shall continue in full
force and effect for a period of five (5) years from the date of
the disclosure, regardless of whether this Agreement is terminated
earlier.
16.5 The provisions of this Article 16 shall not apply to any
information that:
(a) is rightfully known to the receiving party prior to
disclosure;
(b) is rightfully obtained by the receiving party from any
third party without any obligation of confidentiality;
(c) is or is made available to the public without restrictions;
(d) is disclosed by the receiving party with the prior written
approval of the disclosing party;
(e) is developed independently by the receiving party without
benefit of the information received pursuant to this
Agreement; or
(f) is disclosed in response to a valid order of the court or
authorizing agency of government provided however that
notice first be given to the disclosing party so that, if
appropriate, the disclosing party may seek protection.
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17. ASSIGNMENT.
17.1 Except as provided in this Article, neither IPG nor SDL shall
assign this Agreement or any right or interest under this
Agreement, nor delegate any duties or assign any rights or claims
under this Agreement to any third party without the other party's
prior written consent. Any such attempted delegation or assignment
shall be void and ineffective. Either party has the right to
assign this Agreement in whole or in part at any time and without
the other party's consent to any corporate parent, or to any
present or future affiliate or subsidiary of the party.
18. PRECEDENCE.
18.1 This Agreement takes precedence over either party's additional or
different terms and conditions, to which objection is hereby made
by the parties hereto. Acceptance by the parties of a contract to
purchase and supply the Products is limited to the terms and
conditions of this Agreement.
18.2 This Agreement comprises the entire understanding between the
parties and supersedes any previous communications,
representations, or agreements, whether oral or written. No
modification of this Agreement shall be binding on either party
unless in writing and signed by an authorized representative of
each party.
18.3 In the event of any conflict between the provisions of this
Agreement and any Release Order or Exhibit, the order of
precedence is as follows:
(a) This Agreement;
(b) The Exhibits to this Agreement; and
(c) Any instructions in a written or electronic Release Order.
19. TERM.
19.1 This Agreement shall be effective for the period of eighteen (18)
months (the "Term of this Agreement") commencing on the date
specified by the parties as under (the "Commencement Date") unless
terminated earlier by mutual agreement of the parties or in
accordance with the provisions of Articles 12 and 13.
The Commencement Date shall be 01 April 1999, retrospectively.
19.2 Upon the expiry or termination of this Agreement, the parties may
mutually agree to extend the terms and conditions contained herein
to apply to any or all outstanding Release Orders previously
accepted by SDL and to all Products shipped under such Release
Orders.
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19.3 The provisions of Articles 5.3, 5.4, 5.5, 9, 10, 16, and 19 shall
survive any expiry or termination of this Agreement.
20. MISCELLANEOUS.
20.1 The waiver of any term, condition, or provision of this Agreement
by IPG or SDL must be in writing and signed by an authorized
representative of the party providing the waiver. No such waiver
or delay in enforcement of any right hereunder shall be construed
as a waiver of any other term, condition, or provision except as
provided in writing, nor as a waiver of any subsequent breach of
the same term, condition, or provision.
20.2 This Agreement shall be interpreted and governed in all respects
by the laws of the State of California. SDL and IPG hereby consent
to the jurisdiction and venue of such courts.
20.3 All references in this Agreement to "days" shall, unless otherwise
specified herein, mean calendar days.
20.4 The Article headings used in this Agreement are for convenience of
reference only. They shall not limit or extend the meaning of any
provision of this Agreement, and shall not be relevant in
interpreting any provision of this Agreement.
20.5 Stenographic, typographical, or clerical errors contained in this
Agreement are subject to correction by IPG or SDL or contained in
any Release Order issued thereunder are subject to correction by
IPG.
20.6 The parties hereto are independent contractors; under this
Agreement and no other relationship is intended, including
partnership, franchise, joint venture, agency, or other business
organization of any kind or nature whatsoever.
20.7 If any term or provision of this Agreement is found to be invalid
under any applicable statute or rule of law, the individual term
or provision notwithstanding, then the remainder of the Agreement
shall remain in full force and effect and such term or provision
shall be deemed omitted.
21. ARBITRATION.
21.1 In the event of breach of this Agreement or disputes arising out
of this, both parties shall make reasonable efforts to reach an
amicable settlement thereof. If the parties cannot reach an
amicable settlement within 90 (ninety) days, all disputes arising
in connection with this Agreement shall be settled under the rules
of conciliation and arbitration of the American Institution of
Arbitration by three arbitrators appointed in accordance with the
said rules. Arbitration shall be held in the United States. The
findings of the arbitrators shall be final and binding on both
parties. The language of the proceedings shall be English.
-14-
22. EXHIBITS.
22.1 All Exhibits attached to this Agreement shall be deemed a part of
this Agreement and incorporated herein by reference. Subject to
Article 18.3, the term "Agreement" includes the Exhibits listed in
this Article 22.
22.2 Terms which are defined in this Agreement and used in any Exhibit
shall have the same meaning in the Exhibit as in this Agreement.
22.3 The following Exhibit(s) are hereby made a part of this Agreement:
EXHIBIT A: Delivery Schedule
EXHIBIT B: Product Specification
EXHIBIT C: Product Pricing
APPROVED AND AGREED TO:
-------------------------------------- -------------------------------------
(SDL) (IPG)
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------- -----------------------------
Typed Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Typed Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President Title: President & Chief Executive
Officer
Date Signed: May 11, 1999 Date Signed: May 14, 1999
-------------------------- --------------------
Address: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, Address: IPG Photonics Corporation,
Galileo
CA 95134-1365 Park, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-15-
Exhibit A
Delivery Schedule
---------------------------------------------------------------
Month Quantity Cum
---------------------------------------------------------------
Apr 99
---------------------------------------------------------------
May 99
---------------------------------------------------------------
Jun 99
---------------------------------------------------------------
Jul 99
---------------------------------------------------------------
Aug 99
---------------------------------------------------------------
Sept 99
---------------------------------------------------------------
Oct 99
---------------------------------------------------------------
Nov 99
---------------------------------------------------------------
Dec 99
---------------------------------------------------------------
Jan 00
---------------------------------------------------------------
Feb 00
---------------------------------------------------------------
Mar 00
---------------------------------------------------------------
Apr 00
---------------------------------------------------------------
May 00
---------------------------------------------------------------
Jun 00
---------------------------------------------------------------
Jul 00
---------------------------------------------------------------
Aug 00
---------------------------------------------------------------
Sept 00
---------------------------------------------------------------
Exhibit B: PRODUCT SPECIFICATION
PRODUCT SPECIFICATION
PRODUCT SPECIFICATION
Exhibit C Product Pricing
AMENDMENT 01
IPG Photonics Corporation Purchase and Sales Agreement No. 1/99
WHEREAS, IPG and SDL desire to continue the relationship established under this
agreement for the Product(s) by entering into a new purchase period, and;
WHEREAS, IPG is desirous of obtaining substantially increased quantities of
Product(s) over this new purchase period, and;
WHEREAS, SDL is willing to supply IPG the increased demand for Product(s) under
certain terms and conditions;
NOW, THEREFORE, in consideration of the covenants herein, the parties hereto
agree as follows:
I. Purpose of Amendment:
This Amendment to IPG Photonics Corporation Purchase and Sales
Agreement No. 1/99 is to extend the period of performance of the Agreement and
establish additional terms and conditions to govern the sale and purchase of
Product(s) for a new commitment by IPG to purchase and take delivery of an
additional /1/within a twenty-four month period beginning 01
October 2000 through 30 September 2002 ("Extended Purchase Period").
II. Article I Purchase of Materials is hereby amended to include the following:
1.2 IPG shall purchase and SDL shall sell the Products for the Extended
Purchase Period at the prices set forth in Exhibit C and pursuant to the
delivery schedule in Exhibit A. The initial delivery schedule in Exhibit A
may be revised by IPG in accordance with the Release Order procedure
described in Article 4 if IPG's requirements change. However IPG
acknowledges that the unit prices provided for the Product(s) in Exhibit C
are based on an agreed minimum run rate for total ordered Product. In the
event IPG does not place Release Orders for Products to meet the minimum
total quantities stated below for the specified time periods, IPG shall be
subject to the following for the units ordered in such
time period. Any incurred will be invoiced to GP, within
any such quarter that such a of Product quantities occurs:
/1/ This total quantity may be adjusted due to product mix allowances
for quantities as described in Exhibit A.
21
Period Minimum Qty
--------------------------------------------------------------------------------
Any given Quarter Exhibit A Total
Q4 '00 thru Q3 '01 Quarterly Demand
Any given Quarter Exhibit A Total
Q4 '00 thru Q3 '02 Quarterly Demand
Where ATQD = Actual Total Quarterly,
EATQD = Exhibit A Total Quarterly Demand.
If IPG does not place orders to take delivery of at least of the total
quantity in any given quarter shown in Exhibit A, IPG shall be deemed in
material breach of this Agreement in accordance with Article 13 and shall
be subject to the and
below, based upon the sum total of parts up to and including the quarter in
question.
1.3 Subject always to SDL conforming in all material respects with its
obligations as set out in this Agreement, then IPG undertakes to purchase
from SDL a quantity of units/2/ of Products during the Extended
Purchase Period. If upon expiry or termination of the Extended Purchase
Period of this Agreement the total quantity of Product for which IPG has
taken delivery is less than of the total units,/2/ then IPG
shall in addition to any obligations it may have pursuant to Article 13
"Termination" pay to SDL a sum calculated as follows:
a) For a requested total two-year demand up to of the two year
cumulative total in Exhibit A:
b) For a requested total two-year demand greater than units:
The payment of any such sum shall be in full and final settlement of any
claim by SDL in respect of its infrastructure investment resulting from
IPG's failure to take delivery of a quantity of of the
total units/2/ of Product within the Extended Purchase Period.
III. Article 4 Release Procedure is hereby amended to include the following:
4.1 (d)IPG shall issue Release Orders for Product deliveries in the Extended
Purchase Period in accordance with a 24-month rolling horizon forecast.
All time zones shall remain as defined in this Article 4.1. For purposes
of the Extended Purchase Period, the Planning zone shall initially be
months 7-24. Product quantities forecasted for delivery in the
--------------------------------------
/2/ This total quantity may be adjusted due to prodcut mix allowances
for quantities as described in Exhibit A.
22
various zones of the Extended Purchase Period may be varied as described,
subject always to the terms of Article I . However, in no event shall IPG's
forecasted quantity for Product in any given quarter be increased by
greater than over that same quarter's initial forecasted demand contained
in Exhibit A. Additionally, any forecasted demand for total Product may not
be increased by greater than over the initial total quantity for Product
in Exhibit A. In the event IPG requests such increases, SDL reserves the
right to equitably adjust the and
accordingly.
IV. Article 13 Termination is hereby amended to include the following:
13.4 In the event of a material breach by IPG, IPG shall remain responsible for
all penalties. liabilities and other obligations to SDL as of the date of
termination.
13.5 In the event of a material breach of this Agreement by SDL, SDL shall be
liable to IPG for a of .
by SDL to IPG shall constitute full and final settlement between the
parties for such material breach by SDL.
13.5 In the event IPG cancels a Release Order at any time prior to delivery and
SDL is not in material breach of this Agreement, IPG shall be liable for:
IPG shall take delivery of the Fixed zone Product quantities in the event
of any such cancellation.
V. Article 16 Confidential Information is hereby amended to include the
following:
16.6 IPG and SDL agree that this Agreement is considered Confidential
Information and subject to the provisions of this Article 16. Neither
party shall without the prior written consent of the other party,
publicize the fact or contents of this Agreement. In the event that SDL is
required to release information related to this Agreement, timely consent
shall be provided by IPG for such release of information.
VI. Article 19 Term is hereby amended to include the following:
19.1 The term of this Agreement is hereby extended for an additional twenty-
four (24) month period for a total of forty-two (42) months from the
Commencement Date.
19.3 The provisions of this Amendment Articles 1.2, 1.3 and 13 shall also
survive any expiry or termination of this Agreement.
23
VII. Exhibits, A - Delivery Schedule, B - Product Specification, and C -Product
Pricing, are modified as set forth in this Amendment 01 and attached
hereto.
VIII. The above specified modifications constitute a formal Amendment to the
Agreement. Except as herein modified, all other specifications, terms and
conditions currently applicable to the Agreement remain unchanged.
24
IN WITNESS WHEREOF, the parties hereto have executed this Amendment 01 by their
respective duly authorized representatives as of the last date set forth below:
Signed for and on behalf of IPG Corp.
Authorized Signatory: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Date: 19/05/2000
------------------------------------------ ----------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Ph.D. 5/19/2000
Title: VP & GM/President & GM
Signed for and on behalf of SDL, Inc.
Authorized Signatory:___________________________________________ Date:________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: General Manager
Industrial Laser Group, SDLI
25
Exhibit A
Exhibit A is hereby amended to include the following initial delivery schedule
for the Extended Purchase Period:
26
Exhibit C
Exhibit C is hereby amended to include the following pricing for the Extended
Purchase Period.
Product Pricing:
27
AMENDMENT 02
IPG Photonics Corporation Purchase and Sales Agreement No. 1/99
WHEREAS, IPG and SDL desire to continue the relationship established under this
agreement for the Product(s) by entering into a new purchase period, and;
WHEREAS, IPG is desirous of obtaining substantially increased quantities of
Product(s) by entering into a new purchase period and;
WHEREAS, SDL is willing to supply IPG the increased demand for Product(s) under
certain terms and conditions;
NOW, THEREFORE in consideration of the covenants herein, the parties hereto
agree as follow:
I. Purpose of Amendment:
This Amendment to IPG Photonics Corporation Purchase and Sales Agreement No.
1/99 is to extend the period of performance of the Agreement and establish
additional terms and conditions to govern the sale and purchase of Product(s)
for a new commitment by IPG to purchase and take delivery of an additional
/1/ within a twenty-four month period beginning January 01, 2001
through December 31, 2002 ("Extended Purchase Period"). The parties shall
continue to perform their respective obligations under and remain subject to the
provisions of Amendment 01 until December 31, 2000, after which the provisions
of this Amendment 02 will apply to the Extended Purchase Period (January 01,
2001, through December 31, 2002).
II. Article 1 Purchase of Materials is hereby amended to include the following:
1.2 IPG shall purchase and SDL shall sell the Products for the Extended Purchase
Period at the prices set forth in Exhibit C and pursuant to the delivery
schedule in Exhibit A. The initial delivery schedule in Exhibit A may be
revised by IPG in accordance with the Release Order procedure described in
Article 4 if IPG's requirements change. However IPG acknowledges that the
unit prices provided for the Product(s) in the Exhibit C are based on an
agreed minimum run rate for total ordered Product. In the event IPG does not
place Release Orders for Products to meet the minimum total quantities
stated below for the specified time periods. IPG shall be subject to the
following for the units ordered in such time period. Any
incurred will be invoiced to IPG within any such quarter
that such a of Product quantities occurs:
Period Minimum Qty
----------------------------------------------------------------------------
Any given Quarter Exhibit A Total
Q1 '01 thru Q4'01 Quarterly Demand
Any given Quarter Exhibit A Total
/1/ This total quantity may be adjusted due to product mix allowances
for quantities as described in Exhibit A.
28
Q1 '02 thru Q4'02 Quarterly Demand
Where ATQD=Actual Total Quarterly Demand,
EATQD=Exhibit A Total Quarterly Demand.
If IPG does not place orders to take delivery of at least of the total
quantity in any given quarter shown in Exhibit A, IPG shall be deemed in
material breach of this Agreement in accordance with Article 13 and
shall be subject to the and
below, based upon the sum total of parts up to and including
the quarter in question.
1.3 Subject always to SDL conforming in all material respects with its
obligations as set out in this Agreement, then IPG undertakes to
purchase from SDL a quantity of /2/ of Products during the Extended
Purchase Period. If upon expiry or termination of the Extended Purchase
Period of this Agreement the total quantity of Product for which IPG has
taken delivery is less than of the total /2/ then IPG shall in
addition to any obligations it may have pursuant to Article 13
"Termination" pay to SDL a sum calculated as follows:
a) For a requested total two-year demand up to of the two
year cumulative total in Exhibit A:
b) For a requested total two-year demand greater than units:
The payment of any such sum shall be in full and final settlement of any
claim by SDL in respect of its infrastructure investment resulting from
IPG's failure to take delivery of a quantity of of the total
units/2/ of Product within the Extended Purchase Period.
III. Article 4 Release Procedure is hereby amended to include the following:
4.1 (d) IPG shall issue Release Orders for Product deliveries in the Extended
Purchase Period in accordance with a 24-month rolling horizon forecast. All time
zones shall remain as defined in this Article 4.1. For purposes of the Extended
Purchase Period, the Planning zone shall initially be months 7-24. Product
quantities forecasted for delivery in the various zones of the Extended
Purchase Period may be varied as described, subject always to the terms of
Article 1. However, in no event, shall IPG's forecasted quantity for Product in
any given quarter be increased by greater than over that same quarter's
initial forecasted demand contained in Exhibit A. Additionally, any forecasted
demand for total Product may not be increased by greater than over the initial
total quantity for Product in Exhibit A. In the event IPG requests such
increases, SDL reserves the right to equitably adjust the and
accordingly.
-------------------------------
/2/ This total quantity may be adjusted due to product mix allowances
for quantities as described in Exhibit A.
29
SDL reserves the right to equitably adjust the and
accordingly.
IV. Article 13 Termination is hereby amended to include the following:
13.4 In the event of a material breach by IPG, IPG shall remain responsible
for all penalties, liabilities and other obligations to SDL as of the
date of termination.
13.5 In the event of a material breach of this Agreement by SDL, SDL shall be
liable to IPG for a of . by SDL to
IPG shall constitute full and final settlement between the parties for
such material breach by SDL.
13.6 In the event IPG cancels a Release Order at any time prior to delivery
and SDL is not in material breach of this Agreement, IPG shall be liable
for:
V. Article 16 Confidential Information is hereby amended to include the
following:
16.6 IPG and SDL agree that this Agreement is considered Confidential
Information and subject to the provisions of this Article 16. Neither
party shall without the prior written consent of the other party,
publicize the fact or contents of this Agreement, except as the company
is required to be disclosed under applicable law, or as the company
discloses to it's accountants, lawyers, commercial and investment
bankers or other advisors, notwithstanding anything herein to the
contrary. In the event that SDL or IPG is required to release
information related to this Agreement (other than to the party's
accountants, lawyers, commercial and investment bankers or other
advisors), timely consent notice to the other party shall be provided by
IPG for prior to such release of information to the extent possible.
VI. Article 19 Term is hereby amended to include the following:
19.1 The term of this Agreement is hereby extended for an additional twenty-
four (24) month period for a total of forty-five (45) months from the
Commencement Date.
30
VII. Exhibits. A - Delivery Schedule, B - Product Specification, and C - Product
Pricing, are modified as set forth in this Amendment 02 and attached hereto.
VIII. The above specified modifications constitute a formal Amendment to the
Agreement. Except as herein modified, all other specifications, terms and
conditions currently applicable to the Agreement remain unchanged.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment 02 by their
respective duly authorized representatives as of the last date set forth below:
Signed for and on behalf of IPG Corporation,
Authorized Signatory: /s/ Valentin Gaponstev, Ph.D. Date: 11/14/00
----------------------------------------- --------
Name: Valentin Gaponstev, Ph.D./▇▇▇▇ ▇▇▇▇▇▇
Title: CEO/President, IPG Corporation
Signed for and on behalf of SDL, Inc.
Authorized Signatory: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Ph.D. Date: 11/15/00
----------------------------------------- --------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Ph.D.
Title: General Manager
Industrial Laser Group, SDLI
31
Exhibit A
Exhibit A is hereby amended to include the following initial delivery schedule
for the Extended Purchase Period:
32
Exhibit B: PRODUCT SPECIFICATION
33
Exhibit B: PRODUCT SPECIFICATION
34
35
Exhibit B - Specifications
--------------------------
Device Characteristics* Symbol Min. Typ. Max. Units
-----------------------------------------------------------------------------
Power
Peak Wavelength
Spectral Width
Slope Efficiency
Conversion Efficiency
Emitting Dimension
Beam Divergence
Parallel
Perpendicular
Threshold Current
Operating Current
Operating Voltage
Series Resistance
Thermal Resistance
Recommended Case Temp.
Absolute Maximum Ratings
Reverse Voltage
Case Operating Temp.
Storage Temp. Range
Lead Soldering Temp.
Accepted By: /s/ ▇▇▇ ▇▇
-----------
Date: Nov. 13, 2000
36
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇(P)
408-943-4260(F)
Exhibit B: Product Specification
Device Performance Rating:
-------------------------
No other device rating performance testing is included or implied.
Note: All specifications to be reviewed subsequent to completion of evaluation
----
order and prior to placement of high volume qty. order.
Accepted By: /s/ ▇▇▇ ▇▇
----------------------
Date: Nov. 13, 2000
-----------------------------
37
Exhibit B: PRODUCT SPECIFICATION
Accepted By ▇▇▇ ▇▇
Date Nov. 13, 2000
38
Exhibit B: PRODUCT SPECIFICATION
Accepted By /s/ ▇▇▇ ▇▇
----------
Date Nov. 13, 2000
-------------
39
Exhibit C
Exhibit C is hereby amended to include the following pricing for the Extended
Purchase Period:
40