EXHIBIT 10.9
CONFIDENTIAL TREATMENT
REQUESTED. CONFIDENTIAL PORTIONS
OF THIS DOCUMENT HAVE BEEN
REDACTED AND HAVE BEEN
SEPARATELY FILED WITH THE
COMMISSION.
AGREEMENT
This Agreement is entered into as of July 24, 1998 ("Effective Date") by
and between High Voltage Engineering Europa B.V., located at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ("HVEE"), Varian Associates, Inc., a Delaware
corporation ("Varian") through its Ion Implant Systems business unit located at
▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇, and Genus, Inc., a California
corporation ("Genus") through its Ion Technology Division, located at ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇, referred to hereinafter individually
as a "Party" or jointly as the "Parties."
Recitals
HVEE and Genus entered into a Joint Technology Development Agreement dated
September 13, 1996 for the development and supply of tandem accelerator
assemblies and components to Genus, as subsequently modified by the Extension of
the Supply Agreement dated October 16, 1997 and by the Amendment to the
Extension of the Supply Agreement dated December 2, 1997 (collectively "the 1996
Supply Agreement").
HVEE and Varian entered into a Development and Supply Agreement dated
February 24, 1998 for the development and supply of prototype tandem
accelerators to Varian ("the 1998 Varian Agreement").
Varian and Genus entered into an Asset Purchase Agreement dated April 15,
1998, under which Varian is acquiring certain assets of Genus related to Genus'
Ion Technology Division and its high energy ion implanter business ("the Asset
Purchase Agreement"). Pursuant to the terms of the Asset Purchase Agreement,
Genus agreed to assign its rights and obligations under the 1996 Supply
Agreement to Varian. Also pursuant to the terms of the Asset Purchase
Agreement, Genus (a) represented that neither HVEE nor Genus was in default in
the performance of its obligations under the 1996 Supply Agreement, and (b)
agreed to use its best efforts to ensure that HVEE will grant any consent
necessary for Genus to assign its rights and obligations under the 1996 Supply
Agreement to Varian.
HVEE gave notice to Genus of three instances of breach by Genus of the 1996
Supply Agreement, in an April 29, 1998 letter from ▇▇▇▇▇ ▇▇▇▇▇▇▇ to ▇▇▇▇
▇▇▇▇▇▇▇▇▇.
HVEE, Genus and Varian desire to resolve any and all disputes concerning
past obligations pursuant to the terms of the 1996 Supply Agreement and to
terminate the 1996 Supply Agreement on the Asset Purchase Agreement closing date
("the Closing Date"), assigning to Varian only certain rights and obligations
under the 1996 Supply Agreement.
HVEE, Genus and Varian desire to terminate the 1998 Varian Agreement, to
release Varian from certain future purchase obligations under the terms of the
1996 supply Agreement, and substitute certain other purchase and supply
obligations between HVEE and Varian for tandem accelerators and components
thereof.
Therefore, in consideration of the promises and mutual agreements made by
the Parties herein, the Parties agree as follows:
1. The 1996 Supply Agreement
1.1. Termination. Except as specifically provided below in Section 1.2,
HVEE and Genus hereby terminate the 1996 Supply Agreement by mutual
consent and extinguish all rights and obligations of both parties
under the 1996 Supply Agreement.
1.2. Effect of Termination.
1.2.1. Neither HVEE nor Genus shall have any further rights or
obligations with respect to the 1996 Supply Agreement, and
any and all of HVEE's and Genus' rights and remedies in
respect of any breach or default thereunder shall be
extinguished, except that the obligations under Section 6
(Warranty), 7 (Indemnification) and 8 (Confidentiality) of
the 1996 Supply Agreement shall survive. Except as
specifically provided in Section 1.2.4, HVEE shall have no
rights or remedies against Varian with respect to any past
or future obligation of Genus under the 1996 Supply
Agreement.
1.2.2. HVEE hereby sells and assigns to Genus title to the
prototype 750 kV accelerator unit developed and constructed
by HVEE under the 1996 Supply Agreement, and Genus shall
transfer title to the prototype 750 kV accelerator unit to
Varian pursuant to the Asset Purchase Agreement.
1.2.3. As part of the settlement and termination of the 1996 Supply
Agreement, Genus hereby sells, conveys, assigns, transfers
and delivers to HVEE all of Genus' rights, title and
interest (if any) in and to all of the technology and date
pursuant to the 1996 Supply Agreement. HVEE acknowledges
that Varian has the right to receive from Genus, and
thereafter possess, the drawings and technical
specifications previously delivered to Genus by HVEE under
the 1996 Supply Agreement, solely for use by Varian in
maintaining and supporting (but not manufacturing) Products
(as later defined herein) previously sold by HVEE to Genus.
1.2.4. Genus' surviving rights and obligations with respect to
warranty and intellectual property infringement claims under
Sections 6 and 7 of the 1996 Supply Agreement are hereby
transferred to Varian, to the extent Varian assumes the
liability for warranty and intellectual property
infringement claims pursuant to the Asset Purchase
Agreement. Genus' surviving rights and obligation under
Section 8 of the 1996 Supply Agreement are hereby
transferred to Varian. Notwithstanding the foregoing
transfer, Genus shall continue to be bound by Section 8.
Varian hereby accepts the transferred rights, and agrees to
pay, perform and discharge all of the transferred
obligations specified in this Section 1.2.4.
1.2.5. Varian and Genus hereby amend the terms of the Asset
Purchase Agreement to delete Genus' obligation to assign the
1996 Supply Agreement to Varian.
1.3. Termination Payment. Genus hereby pays to HVEE, and HVEE
acknowledges receipt from Genus, of $1,971,666 for cancellation
charges and other amounts due in respect of the 1996 Supply
Agreement.
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1.4. Form of Payment by Genus. Payment by Genus to HVEE hereunder shall
be by wire transfer to: Fleet National Bank, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ABA Bank Number 011 000 138, for credit to: High
Voltage Engineering Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Account Number 93737-25814-00156,
Reference High Voltage Engineering Europa payment, Genus and Varian
Charges.
2. The 1998 Varian Agreement
2.1. Termination. Except as specifically provided below in Section 2.2,
HVEE and Varian hereby terminate the 1998 Varian Agreement by mutual
consent and extinguish all rights and obligations of both parties
under the 1998 Varian Agreement.
2.2. Effect of Termination. Neither Varian nor HVEE shall have further
rights or obligations with respect to the 1998 Varian Agreement,
except that the rights and obligations under the terms of the
Confidential Disclosure Agreement ("CDA"), Exhibit F to the 1998
Varian Agreement, as amended in Section 2.2.1 hereof, shall survive.
2.2.1. Each of Varian and HVEE agree that Section 6 of the CDA
shall be deleted in its entirety and replaced by the
following: "6. This CDA shall apply only to Confidential
Information disclosed during the period beginning October
15, 1997 and ending upon the termination date of that
certain Agreement executed by VARIAN, HVEE and Genus, Inc.,
dated as of July 24, 1998 (the "New Agreement").
Confidential Information will be subject to the protection
of this CDA for a period of three (3) years from the
termination date of the New Agreement.
2.3. Termination Payment. Varian hereby pays HVEE, and HVEE acknowledges
receipt from Varian, of a total of $560,000 for cancellation of
Varian Purchase Order #076045 pursuant to the 1998 Varian Agreement,
comprised of the $371,205 down payment made previously and a
$188,795 payment herewith.
2.4. Form of Payment by Varian. Payment by Varian to HVEE hereunder shall
be by wire transfer to Fleet National Bank, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, ABA Bank Number 011 000 138, for credit to High Voltage
Engineering Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇, Account Number 93737-25814-00516, Reference High
Voltage Engineering Europa payment, Genus and Varian Charges.
3. Supply and Purchase of HVEE Products
3.1. Definitions Relating to Products.
3.1.1. "Products", as used herein, means the tandem accelerator
assemblies, and all subassemblies and components thereof
sold or contemplated to be sold by HVEE to Genus under the
1996 Supply Agreement and all Specified Products.
3.1.2. "Specified Products", as used herein, means the Extension
Accelerator Assembly, the Amendment Accelerator Assembly,
the New Accelerator Assembly, the
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Tandetron Power Supply, the Column Assembly, the Pumping
tube Assembly, the New Accelerator Power Supply, and the Q-
snout, including all subassemblies and components thereof,
and all design changes and improvements thereto, whether by
HVEE or requested or required by Varian.
3.1.3. "Extension Accelerator Assembly", as used herein, means the
tandem accelerator assembly, in the configuration described
in the October 16, 1997 Extension of the 1996 Supply
Agreement.
3.1.4. "Amendment Accelerator Assembly", as used herein, means the
tandem accelerator assembly, in the configuration described
in the December 2, 1997 Amendment to the Extension of the
1996 Supply Agreement.
3.1.5. "New Accelerator Assembly", as used herein, means the
Extension Accelerator Assembly, but with a New Accelerator
Power Supply replacing the Tandetron Power Supply.
3.1.6. "Tandetron Power Supply", as used herein, means a DC power
supply in which the high voltage is generated by means of an
oscillator circuit from which the output voltage is
capacitively coupled to diode stacks by means of dynodes and
pick-up plates, commonly known as a capacitively coupled
parallel fed ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Power supply, including the
driver, regulator, power transformer, Cee's and related
parts.
3.1.7. "New Accelerator Power Supply", as used herein, means the
magnetically coupled, RF cascade, power supply for the
generation of DC high voltage, basically consisting of
cascaded deck assemblies including RF driver and controls,
including without limitation, the 750 kV, 10mA configuration
constructed by HVEE during Phase III of the 1996 Supply
Agreement.
3.1.8. "Column Assembly", as used herein, means the column assembly
including the integrated column/accelerator tube assembly
which basically consists of insulator rings and accelerated
electrodes, integrated magnetic field suppression, grading
plates, spark gaps and voltage dividing resistors, including
without limitation, the configuration sold by HVEE to Genus
under the 1996 Supply Agreement.
3.1.9. "Pumping Tube Assembly", as used herein, means the
integrated column/pumping tube assembly, for pumping excess
stripper gas, which basically consists of insulator rings,
electrodes, grading plates, spark gaps and voltage dividing
resistors, including without limitation, the configuration
sold by HVEE to Genus under the 1996 Supply Agreement.
3.1.10. "Q-snout", as used herein, means the electrostatic energy
matching lens located at the entrance of the low energy
acceleration tube to match the source emittance and the
accelerated acceptance, and related power supply, including
without limitation, the configuration described in the 1996
Supply Agreement.
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3.1.11. "Market", as used herein, means the semiconductor production
and flat panel display ion implantation equipment market.
3.2. Purchase and Supply of Amendment Accelerator Assemblies. HVEE shall
supply and Varian shall purchase [*] Amendment Accelerator
Assemblies at the price of [*] each and on the delivery terms
set forth in the 1996 Supply Agreement for delivery by March 31,
1999, for sale by Varian only in the Market.
3.3. Purchase and Supply of Specified Products. Varian and HVEE hereby
agree that the following supply and purchase oblations in respect of
Specified Products shall be in effect from the date hereof through
September 13, 2003:
3.3.1. Varian shall purchase Specified Products only from HVEE,
except pursuant to Section 3.3.9 or any agreement reached
pursuant to Section 3.7.
3.3.2. Varian shall not be required to purchase minimum quantities of
any Specified Product, except as provided by Section 3.2.
3.3.3. The price for each Extension Accelerator Assembly shall be
[*] provided that the price shall be [*] for each
Extension Accelerator Assembly ordered more than six months
after the New Accelerator Power Supply proves to be
production worthy, in accordance with Section 3.3.9.
3.3.4. The price for each New Accelerator Assembly shall be [*].
3.3.5. Except as provided herein, unless otherwise agreed between
HVEE and Varian, the prices for Products shall be the prices
established, excluding the discount schedule, in the 1996
Supply Agreement (including the amendment and extension).
3.3.6. Purchase and supply of Specified Products shall be on
payment and delivery terms substantially similar to the
terms for production units in the 1998 Varian Agreement.
3.3.7. Varian shall purchase Products from HVEE only for sale in
the Market, and shall not resell Products for use, to
Varian's knowledge, in other markets.
3.3.8. For so long as Varian Purchases a Specified Product only
from HVEE, HVEE shall not sell that Specified Product in any
configuration, or subassemblies or components thereof, to
third parties for use or resale, to HVEE's knowledge, in the
Market.
3.3.9. If the New Accelerator Power Supply does not prove
production worthy, in Varian's reasonable judgment, by June
30, 1999, Varian shall be free to find an alternative
source, and thereafter purchase 10 mA 750 kV power supplies
from suppliers other than HVEE for use in Varian's
semiconductor manufacturing equipment, provided that the
substitute does not infringe or misappropriate any
intellectual property right of HVEE; provided, that by such
date, Varian has (1) placed purchase orders for the New
Accelerator Power Supply, (2) completed its
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* CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
testing of the New Accelerator Power Supply and (3)
otherwise reasonably cooperated with and assisted HVEE in
respect of establishing the production worthiness of the New
Accelerator Power Supply. Varian shall continue to purchase
other Specified Products only from HVEE. However, in the
event Varian incorporates such a substitute power supply in
semiconductor equipment sold by Varian, HVEE shall be free
to sell the New Accelerator Power Supply to third parties
for use in the Market or elsewhere.
3.3.10. Unless otherwise agreed pursuant to Section 3.8 of this
Agreement, HVEE shall be free to sell any Product which is
not a Specified Product to any third party in any market,
including the Market.
3.4. Forecasts. Varian shall provide reasonably accurate, estimate
purchase quantity forecasts detailing anticipated delivery schedules
for each Specified Product as follows:
3.4.1. Forecasts shall be provided for each month for the next
twelve (12) months, beginning thirty (30) days from the date
hereof. Forecasts will be rolling, and updated and provided
to HVEE monthly or as HVEE may otherwise reasonably request.
3.4.2. Forecasts shall be good faith estimates by Varian, shall be
used only for production master planning and making firm
commitments to purchase long lead time items, and shall not
be binding upon Varian as purchase commitments.
3.5. Engineering Changes. Varian and HVEE will negotiate in good faith
and mutually agree to determine price changes due to design changes
and improvements, whether requested by HVEE or requested or required
by Varian. Cost changes will be based on the effect on direct
variable cost induced by the design change. HVEE will provide
reasonable justification for any cost change that results in any
proposed price increase and will work with Varian to reduce costs.
Cost increases will be shared equally between HVEE and Varian for
one year by adding half of the cost increase to the price, and
thereafter the full cost increase will be added to the price. Cost
savings will be shared equally, by reducing the price to Varian by
half of the cost savings achieved.
3.6. Long Lead Items. Varian and HVEE shall cooperate to develop a
procedure to manage the exposure for long lead items purchased to
meet the demand for Specified Products forecasted by Varian. Varian
and HVEE shall negotiate in good faith with a view to entering into
a mutually agreeable arrangement for long lead items.
3.7. Alternate Supply. Varian and HVEE shall cooperate to provide an
adequate continuing supply of Specified Products. Varian and HVEE
recognize that, given reasonably accurate forecasts, HVEE expects to
be able to fully meet Varian's order volume, but that it is
difficult to accurately forecast changes in the demand for Varian's
products. Should Varian need Products beyond the volume HVEE
supplies, HVEE shall cooperate with Varian to provide an alternate
source of additional supply of Products. Varian and HVEE shall
negotiate in good faith with a view to entering into a mutually
agreeable
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arrangement by which the Specified products may be supplied to
Varian by an alternate source in the event that HVEE is unable to
meet Varian's requirements.
3.8. Other Products. The purchase and supply obligations with respect to
any Products other than Specified Products shall be provided by
mutual agreement of HVEE and Varian from time to time. In the
absence of any such mutual agreement, neither HVEE nor Varian shall
have any obligations to the other in this regard.
3.9. HVEE's Affiliates. HVEE reserves the right to establish and maintain
production capability in respect of any Product at the facility of
any of its affiliates or to subcontract any of its supply
obligations hereunder to any of its affiliates; provided, that such
affiliate agrees to be bound by the confidentiality provisions of
this Agreement, and further provided, that HVEE shall remain
responsible for the performance of its affiliate and that HVEE
obtains prior written approval from Varian.
3.10. Preprinted Forms. For its convenience, Varian may use its preprinted
forms to order Products hereunder, and HVEE may use its preprinted
forms to acknowledge same; provided, however, that the provisions of
this Agreement shall govern the supply and purchase transactions
contemplated hereby, and any preprinted or other provision contained
in any such forms (other than Product identifications, quantities,
price terms and delivery terms which are consistent with this
Agreement) shall have no effect under this Agreement.
3.11. No Other Licenses. Except as specifically granted herein, this
Agreement grants no licenses of intellectual property rights to
Varian or to Genus, including licenses of rights after the
termination date of this Agreement.
4. Miscellaneous
4.1. Effectiveness. This Agreement shall take effect simultaneously with,
and only upon, the closing of Varian's acquisition of the Genus
assets contemplated by the Asset Purchase Agreement.
4.2. Entire Agreement. This Agreement and the other instruments and
agreements referred to in this Agreement constitute the entire
understanding of the Parties and supersede all other agreements and
understandings upon them, both written and oral, relating to the
subject matter of this Agreement, and all previous agreements among
the Parties.
4.3. Amendments. This Agreement may not be amended or supplemented except
by means of a written agreement executed on behalf of each of the
Parties.
4.4. Dispute Resolution. Any dispute of claim arising out of or in
connection with this Agreement or the performance, breach or
termination thereof, shall be finally settled only by binding
arbitration under the Commercial Arbitration Rules of the American
Arbitration Association, by a panel of three arbitrators, selected
under the normal procedures prescribed in the Rules, except that one
arbitrator, who shall chair the panel, shall be a member of the
American College of Trial Lawyers. The arbitration shall take place
in Boston, Massachusetts and in no other place. The arbitrators'
decision shall be
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in writing, shall be binding and final and judgment on the award may
be entered and enforced in any court of competent jurisdiction. No
party shall receive, and the arbitrators shall not have the
authority to award, exemplary or punitive damages. Each party to the
arbitration shall bear their own attorney's fees and costs, but the
parties shall each pay an equal share of the fees and expenses of
the arbitrators and of the American Arbitration Association. The
arbitrators shall have the authority to grant injunctive relief and
to order specific performance.
4.5. Severability. If any one or more of the provisions or a portion of
any provisions of this Agreement shall be deemed to be contrary to
law, invalid, illegal, unenforceable or unreasonable in any respect
by any governmental authority, court of law or arbitrator(s) having
competent jurisdiction over the subject matter and over the Parties,
the remaining provisions, portions of such provisions or reasonable
scope of such provisions shall be severable and enforceable in
accordance with their terms, and the Parties shall make whatever
reasonable adjustments in their arrangements as may be mutually fair
in light of their original intent as reflected in this Agreement.
4.6. Waiver. No failure on the part of a Party to exercise any right or
remedy under this Agreement, and no delay on the part of a Party in
exercising any right or remedy under this Agreement, shall
constitute a waiver of such right or remedy; and no single or
partial exercise of any such right or remedy shall preclude any
other or further exercise of such right or remedy or of any other
right or remedy. No waiver or consent shall be effective unless in
writing and signed by the Party against which enforcement is sought.
4.7. Governing Law and Construction. This Agreement will be governed by
and construed in accordance with the laws of the Commonwealth of
Massachusetts, excluding the body of law related to the choice of
laws. The language of this Agreement shall be interpreted without
reference to which party prepared this Agreement or any portion of
this Agreement.
4.8. Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original and all of which, when taken
together, shall constitute the Agreement.
IN WITNESS WHEREOF, the duly authorized representatives of the Parties have
executed this Agreement as of the date first written above.
High Voltage Engineering Europa, B.V.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
Managing Director
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GENUS, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
President & Chief Executive Officer
Varian Associates, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
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