EX 10.4
EXECUTION COPY
U.S. ROBOT
SUPPLY AGREEMENT
This SUPPLY AGREEMENT (this "AGREEMENT") is made as of June 30, 2006 (the
"EFFECTIVE DATE"), by and between ▇▇▇▇▇▇ AUTOMATION, INC., a Delaware
corporation, having its principal business office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("BUYER"), and YASKAWA ELECTRIC CORPORATION, a Japanese
corporation having its principal business office at ▇-▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇-▇▇▇▇ ▇▇▇▇▇ ("SELLER").
WHEREAS, Seller is engaged in, among other things, the business of
developing, designing, manufacturing and selling various semiconductor robotic
products, and
WHEREAS, Buyer is engaged in, among other things, the business of
developing, designing, manufacturing and selling various integrated automation
and subsystems for the semiconductor wafer manufacturing and related industries:
and
WHEREAS, simultaneously herewith, Buyer is acquiring Seller's subsidiary,
Synetics Solutions, Inc. ("SYNETICS SOLUTIONS") under an Agreement and Plan of
Merger (the "MERGER AGREEMENT") dated as of May 8, 2006 (the "Signing Date");
and
WHEREAS, simultaneously herewith, Buyer and Seller are entering into a
Shareholders' Agreement ("SHAREHOLDERS' AGREEMENT") for the formation and
management of Yaskawa ▇▇▇▇▇▇ Automation, Inc., a joint venture between Buyer and
Seller in Japan; and
WHEREAS, Seller and Buyer desire to enter into an agreement whereby Seller
will supply certain Products (as hereinafter defined) to Buyer for resale.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties set forth below, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Seller and Buyer
agree as follows:
1. GRANT OF SALES RIGHTS.
1.1 DEFINITIONS.
"AFFILIATE" shall mean, with respect to any Person, (i) any other
Person that directly or indirectly controls such specified Person or (ii)
any other Person that directly or indirectly is controlled by, or is under
common control with, such specified Person. A Person shall be deemed to
control another Person if the controlling Person owns 50% or more of any
class of voting securities (or other ownership interest) of the controlled
Person.
"AGREEMENT" shall have the meaning set forth in the introductory
paragraph to this agreement.
"ASSUMED CUSTOMER PROGRAMS" shall mean Seller's Product programs with
Semiconductor Customers as set forth on Schedule B hereto.
"▇▇▇▇▇▇ PRODUCTS" means all vacuum robotics and other types of
products for the Semiconductor Industry that are listed under the heading
"▇▇▇▇▇▇ Products" on Schedule A hereto; provided that the definition of
"▇▇▇▇▇▇ PRODUCTS" excludes (i) products specifically targeted to flat
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panel display automation and motor and motion control products (including
tables driven by motion control products) on a stand-alone basis and (ii)
articulated multi-axis robots (with 6-axes or greater).
"BUSINESS DAY" shall mean a day on which banks are open for business
in both Boston, Massachusetts and Tokyo, Japan.
"BUYER" shall have the meaning set forth in the introductory paragraph
to this Agreement.
"CHANGE OF CONTROL" shall have the meaning set forth in the
Shareholders' Agreement.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section
7.2 hereof.
"CORPORATE CONFIDENTIALITY BREACH" shall mean a material breach of
Section 7 of this Agreement that is either (A) clearly sanctioned, directed
or ratified by the senior management or the Board of Directors of Buyer, or
(B) expressly permitted by the then-effective policies promulgated by the
senior management or the Board of Directors of Buyer or (C) the result of
Buyer's failure to maintain reasonable measures, customary in the industry,
calculated to protect confidential and/or proprietary information in the
possession of Buyer (including Confidential Information and Embedded
Software) from impermissible disclosure and misuse, provided that any such
failure shall be determined on an aggregate basis considering all such
measures maintained by Buyer taken as a whole. For the avoidance of doubt,
by way of example but not limitation, no Corporate Confidentiality Breach
shall be deemed to occur by reason of any (i) action or omission of any
officer, director, employee, agent or representative of Buyer (whether
intentional, willful, reckless, grossly negligent or otherwise) which does
not satisfy the requirements of clauses (A), (B) or (C) above, (ii) any
failure by Buyer to maintain a particular information security measure as
long as the measures maintained by Buyer that are calculated to protect
confidential information and/or proprietary information in the possession
of Buyer, when viewed in the aggregate, represent a level of information
security that is reasonable and customary in the industry, or (iii) any
violation or breach of Section 7 that does not cause actual harm or damage
to Seller or its business operations.
"CUSTOMER AFFILIATE" shall mean any Subsidiary of a Primary Person,
which Primary Person has its principal offices located in North America,
wherever such Subsidiary may be located; provided that the following
Persons shall be excluded from the meaning of Subsidiary for the purposes
of this definition: Sumitomo Eaton Nova, MFSI Limited and MEMC Japan
Limited.
"DELIVERY POINT" shall have the meaning set forth in Section 2.1
hereof.
"DROP IN PRODUCTS" shall have the meaning set forth in Section 1.3
hereof.
"EFFECTIVE DATE" shall have the meaning set forth in the introductory
paragraph to this Agreement.
"INITIAL TERM" shall have the meaning set forth in Section 8.1 hereof.
"INTELLECTUAL PROPERTY" shall have the meaning set forth in Section
10.1 hereof.
"MAJOR BREACH" shall mean the Buyer's:
(i) failure to use good faith efforts to meet the minimum
purchase targets as required by Section 1.4 hereof,
(ii) repeated failure to make timely payments due and owing under
this
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Agreement,
(iii) failure to perform any of its material obligations under
Section 5.3.2,
(iv) Corporate Confidentiality Breach, and
(v) use of Seller's Intellectual Property in violation of
Section 10.1.
"OEM" means a Primary Person, which does not have its principal
offices located in North America, or any of its Subsidiaries which do not
have their principal offices located in North America, in either case that
purchases Products for the purpose of adding value by incorporating
Products as a minor component of a larger system that is sold by such
Primary Person or its Subsidiaries.
"PARTS" shall have the meaning set forth in Section 3.3 hereof.
"PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association or joint venture.
"PRIMARY PERSON" shall mean a Person that is not under the control of
any other Person (other than an individual). A Person shall be deemed to
control another Person if the controlling Person owns 50% or more of any
class of voting securities (or other ownership interest) of the controlled
Person.
"PRODUCTS" means Yaskawa Products and/or ▇▇▇▇▇▇ Products, as
applicable.
"PURCHASE ORDER" shall have the meaning set forth in Section 3.1
hereof.
"QUARTERLY BUSINESS REVIEW" or "QBR" shall have the meaning set forth
in Section 1.4 hereof.
"REQUIRED BID INFORMATION" means the types of information relating to
the Product desired by a customer under Section 1.5 hereof, as listed on
Schedule C hereto, excluding any and all information that the customer
refuses to provide to Buyer.
"SCARA" means Selective Compliant Articulated/Assembly Robot Arm.
"SELLER" shall have the meaning set forth in the introductory
paragraph to this Agreement.
"SEMICONDUCTOR CUSTOMER" shall mean (i) all Primary Persons with
principal offices located in North America that, either directly or through
their Customer Affiliates, are current or prospective purchasers or users
of Products and (ii) all Customer Affiliates it being agreed and
acknowledged by both parties that Seller shall not knowingly sell Products
to any customer (other than any OEM) for the purpose of selling or
otherwise distributing such Products to any Person that meets the criteria
set forth in clauses (i) or (ii) above.
"SEMICONDUCTOR INDUSTRY" means the design, development, manufacture,
assembly, use, sale, repair, installation, testing, quality control,
inspection or calibration of equipment or tools (including software), and
all components and subassemblies thereof, that are used in the design,
development, manufacture, patterning, assembly, testing or packaging of
semiconductor, magnetic media, magnetic storage, and optical devices as
well as reticles and masks used in connection therewith.
"SHAREHOLDERS' AGREEMENT" shall have the meaning set forth in the
recitals.
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"SPECIFICATIONS" shall have the meaning set forth in Section 5.1
hereof.
"SYNETICS SOLUTIONS" shall have the meaning set forth in the recitals.
"SUBSIDIARY" of any Person shall mean each of the Persons that,
directly or indirectly, through one or more intermediaries, is owned or
controlled by such Person. A Person shall be deemed to control another
Person if the controlling Person owns 50% or more of any class of voting
securities (or other ownership interest) of the controlled Person.
"YASKAWA PRODUCTS" means all atmospheric SCARA robotics products for
the Semiconductor Industry that are under the heading "Yaskawa Products" on
Schedule A provided that the definition of "YASKAWA PRODUCTS" (i) excludes
products specifically targeted to flat panel display automation and motor
and motion control products (including tables driven by motion control
products) on a stand-alone basis (ii) excludes articulated multi-axis
robots (with 6-axes or greater) and (iii) for the avoidance of doubt,
excludes ▇▇▇▇▇▇ Products.
1.2 GRANT. Seller hereby grants to Buyer the exclusive right to market and
distribute the Products to Semiconductor Customers. Buyer shall use its
commercially reasonable efforts to promote, sell and service the Yaskawa
Products to the Semiconductor Customers and to maintain adequate facilities and
personnel as may be necessary to sell and support the Yaskawa Products,
including, but not limited to, calling on and training Semiconductor Customers,
collecting market data and acting as a liaison between the Semiconductor
Customer and Seller with respect to Semiconductor Customers' technical,
engineering and delivery requirements relating to the Yaskawa Products. Buyer
shall use such efforts to sell ▇▇▇▇▇▇ Products as Buyer may deem in its best
interests from time to time, in its sole discretion. Seller agrees to use
commercially reasonable efforts to customize the Yaskawa Products to promote
sales in the North American market as Buyer or its Semiconductor Customers may
request from time to time. For the avoidance of doubt, the parties acknowledge
that Seller shall have the right to market and distribute (i) any products
specifically targeted to flat panel display automation and motor and motion
control products (such as tables driven by motion control products) on a stand
alone basis to any customer, including Semiconductor Customers and (ii) any
products, including without limitation the Products, to customers other than
Semiconductor Customers.
1.3 SUPPLY UNDER EXISTING SEMICONDUCTOR CUSTOMER CONTRACTS. Buyer shall not
sell atmospheric robotics products that have substantially identical
configurations to the Yaskawa Products ("DROP IN PRODUCTS") to Semiconductor
Customers that are parties to Assumed Customer Programs in order to replace the
sale of those same Yaskawa Products to such Semiconductor Customers that are
sold under the applicable Assumed Customer Program; provided that Buyer may make
such sale if Buyer follows the following process: (i) a Semiconductor Customer
under such Assumed Customer Program first approaches Buyer for a replacement or
alternative to such Yaskawa Products, (ii) Buyer obtains such Semiconductor
Customer's stated reasons for such request ("CUSTOMER REASONS"), (iii) Buyer
provides such Customer Reasons to Seller promptly after receipt of the Customer
Reasons, (iv) Seller provides a response to such Customer Reasons at or before
the next QBR (as discussed below) ("SELLER RESPONSE") and (v) if Seller provides
a Seller Response in the foregoing timeframe, Buyer provides such Seller
Response to the applicable Semiconductor Customer and offers the Semiconductor
Customer an opportunity to meet with Seller. If, after such process is
completed, the applicable Semiconductor Customer continues to request that Buyer
sell such Drop In Products to such Semiconductor Customer, then Buyer shall be
free to sell such Drop In Products to such Semiconductor Customer without
limitation hereunder. For the avoidance of doubt, this Section 1.3 shall not
apply to ▇▇▇▇▇▇ Products.
1.4 QUARTERLY BUSINESS REVIEWS; MINIMUM PURCHASE TARGETS. Buyer and Seller
shall appoint key personnel of each party to meet quarterly to discuss the
status of the parties' performance under this Agreement relating to Yaskawa
Products, to raise any concerns and to discuss and plan for future business
opportunities involving the sale of Yaskawa Products to Semiconductor Customers
(such meetings,
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herein referred to as "QUARTERLY BUSINESS REVIEWS" or "QBRS"). In such meetings,
Buyer and Seller shall use good faith efforts to resolve any disputes or
concerns regarding the supply and sale of the Yaskawa Products to the mutual
satisfaction of the parties. Buyer and Seller each agree that such QBRs shall
involve, without limitation, establishment of minimum purchase targets for the
subsequent quarter. Both parties will use good faith efforts to implement any
understandings reached at a QBR; without limitation, Buyer will use good faith
efforts to meet the minimum purchase targets agreed in a QBR. If Buyer fails to
meet such minimum purchase targets for the 3 months immediately prior to each of
three consecutive QBRs, or if Buyer and Seller fail to agree to minimum purchase
targets at a QBR, then the President of Buyer and President of Seller shall
meet, either by phone or in person, to discuss the matter. It is hereby agreed
and acknowledged by both parties hereto that (A) (i) Buyer's failure to meet
such minimum purchase targets, or Buyer and Seller's failure to agree on minimum
purchase targets, shall not be a breach of this Agreement nor of any other
agreements between Buyer and Seller in which this Section 1.4 is not expressly
and specifically superceded, (ii) Buyer shall not be required by law or court
order to meet such minimum sales targets and (iii) Buyer's rights under this
Agreement shall not be limited in any manner as a result of any such failure to
agree to minimum purchase targets or to meet such minimum purchase targets, but
(B) Buyer's failure to use good faith efforts to reach the minimum purchase
targets agreed in a QBR will be a material breach of this Agreement. For the
avoidance of doubt, this Section 1.4 shall not apply to ▇▇▇▇▇▇ Products.
1.5 PREFERRED VENDOR. Buyer will give Seller the same opportunity to sell
its Yaskawa Products to Buyer for resale to Semiconductor Customers as Buyer
provides to itself or any third party in their sale of atmospheric robotics
products for such Semiconductor Customers, which means that (i) Buyer will keep
Seller informed of its future (whether actual or potential) requirements of
atmospheric robotic products for the Semiconductor Industry, (ii) Buyer shall
notify Seller promptly after receipt of an inquiry from a Semiconductor Customer
regarding the supply of an atmospheric robotics product for the Semiconductor
Industry and will provide Seller with the Required Bid Information with such
notice, (iii) within 10 Business Days (or such longer period as the parties may
agree on a case by case basis based on the actual requirements of the
Semiconductor Customer) of receipt of such notification and Required Bid
Information from Buyer (the "DETERMINATION PERIOD"), Seller shall respond to
Buyer indicating whether Seller elects to supply the Yaskawa Product and, if so,
providing a preliminary estimate of the lead time and price for the same (each
estimate, a "PROJECT BID") and (iv) if Seller provides a Project Bid to Buyer in
the Determination Period, Buyer will present Seller's Project Bid to its
Semiconductor Customer; provided that Buyer may inform its Semiconductor
Customer of its obligations under the foregoing process and, if the
Semiconductor Customer instructs Buyer that the Semiconductor Customer is not
interested in acquiring Seller's atmospheric products, for any or no reason,
Buyer shall be deemed to have complied with the foregoing process for such sale
of Products to such Semiconductor Customer. If Buyer does not provide Seller
with the Required Bid Information pursuant to clause (ii) above, (A) Seller
shall provide Buyer with written notice within three (3) Business Days of
receipt of notification from Buyer under clause (ii) of what Required Bid
Information is missing and (B) if the notification under clause (A) is delivered
in that timeframe, (1) The Determination Period shall recommence once the Buyer
provides Seller with such Required Bid Information and (2) the process set forth
in clauses (ii) through (iv) above shall recommence upon such delivery.
Notwithstanding anything to the contrary herein, Buyer will use good faith
efforts to obtain all the items set forth on Schedule C, but shall be deemed to
have met its obligation to provide all Required Bid Information so long as Buyer
provides all information made available by the customer to Buyer as a result of
those efforts. Each Project Bid from the Seller shall be the Seller's
Confidential Information and shall be subject to the provisions of Section 7.2,
except that the Buyer is permitted to provide the Project Bid to the
Semiconductor Customer. For the avoidance of doubt, Buyer shall be free to
provide the Semiconductor Customer with other proposals for the sale of
atmospheric robotic products for the Semiconductor Industry to such
Semiconductor Customer before, during or after the above process, so long as
Buyer does not actually sell such products to the Semiconductor Customer without
following the above process. If a Semiconductor Customer selects Seller's
Project Bid, then Buyer and Seller shall negotiate in good faith a comprehensive
agreement for the development of such Yaskawa Product ("DEVELOPMENT AGREEMENT")
for such Semiconductor Customer, which Development Agreement will set forth all
of the
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specific requirements for the development of the Yaskawa Product, including,
without limitation, Specifications, target pricing, preliminary volume
requirements, acceptance criteria, schedule for development, milestones,
prototypes, and ownership of intellectual property. Buyer and Seller each agree
and acknowledge that a Semiconductor Customer will be free to reject a Project
Bid by Seller, in whole or in part, at any time, even after acceptance, and, in
such event, Buyer is free to sell other products to such Semiconductor Customer
to satisfy the requirements set forth in the notice sent to Seller pursuant to
clause (ii) above (or requirements substantially identical thereto), on
condition that the Buyer will provide written notification to Seller of the
reasons why the Semiconductor Customer has elected not to purchase Seller's
Yaskawa Product. The Determination Period under clause (iii) of this Section 1.5
has been established based upon anticipated Semiconductor Customer requirements
and the parties agree that Seller's failure to respond within said Determination
Period shall not constitute a bar to Seller electing to supply the Yaskawa
Product and submitting a Project Bid, in each case solely to Buyer. If Buyer
determines, in its sole discretion, that late submission of Seller's Project Bid
to the Semiconductor Customer would not be disruptive to the sales cycle, and,
if the Semiconductor Customer has indicated that it will consider a Project Bid
for Seller's Yaskawa Products, then Buyer will submit Seller's Project Bid to
the Semiconductor Customer. However, Buyer shall not be subject to the
obligations of this Section 1.5 with respect to a Yaskawa Product for a
Semiconductor Customer if the Seller failed to respond within the applicable
Determination Period, regardless of whether the Seller provides such late
election and Project Bids. Notwithstanding anything to the contrary in this
Section 1.5, Buyer and Seller agree and acknowledge that the provisions of this
Section 1.5 shall not apply to the sale by Buyer of (i) any Yaskawa Products for
the Semiconductor Industry to a Semiconductor Customer where Buyer was selling
an identical or substantially similar product to such customer on or prior to
the Effective Date nor (ii) any products (such as, without limitation, ▇▇▇▇▇▇
Products) that are not Yaskawa Products for the Semiconductor Industry. This
Section 1.5 shall terminate and be of no force or effect 36 months prior to the
expiration of the then-current term unless the parties have agreed to an
extension of such term pursuant to Section 8.1 hereof.
1.6 DEVELOPMENT OR CUSTOMIZATION. If Buyer and Seller agree that Seller
will perform design or development work for Buyer, then a separate design and
development agreement will be entered into between the parties, which agreement
shall address ownership of resulting intellectual property rights in detail.
2. PRICE AND PAYMENT.
2.1 PRICE. The prices charged to Buyer for the Products to be supplied to
the Semiconductor Customers under the Assumed Customer Programs shall be
equivalent to the pricing that was in effect from Seller to Synetics Solutions
on June 13, 2005, subject to adjustment permitted by, or disclosed pursuant to,
the second sentence of Section 2.7 of the Merger Agreement and as provided in
Section 2.2 of this Agreement, between June 13, 2005 and the Effective Date and
thereafter. All other prices for Products purchased by Buyer under this
Agreement shall be agreed on a customer-by-customer, Product-by-Product basis.
All prices shall be payable in U.S. dollars, FCA (Incoterms 2000), Seller's
plant (the "DELIVERY POINT").
2.2 PRICE ADJUSTMENT.
2.2.1 SPECIFICATION CHANGES In the event that any Specification
changes are made to the Products that adds to or decreases the cost of
manufacture, the price of the Products will be increased or decreased by
the actual additional or reduced cost incurred by Seller arising from such
changes and a reasonable margin thereon; provided, however, that Seller
shall make no such Specification changes, whether such Specification
changes add to or decrease the cost of manufacture, to any of the Products
without mutual written agreement to the resulting Specifications and price
changes. If the parties cannot agree on a Specification or price change,
then the applicable Specification change shall not be implemented and the
matter will be discussed at the next QBR. No Specification or
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price adjustment will take effect without mutual written agreement, if any,
following the applicable QBR.
2.2.2 PRICE ADJUSTMENT. During the QBRs, either Buyer or Seller may
request a reevaluation and adjustment of the price for the Products to
reflect such items as increases or decreases in labor and material used to
produce the Product, volumes, customer requirements, including cost down
initiatives and the like. If such reevaluation and adjustment are
requested, the parties will negotiate in good faith to equitably adjust the
price of the Products. The party requesting the reevaluation and adjustment
will provide detailed information supporting the requested price
adjustment. No price adjustment will take effect without mutual written
agreement, if any, following the applicable QBR.
2.2.3 COMMITTED PRICE REDUCTIONS TO KLA TENCOR CORPORATION. The
Purchase Agreement, dated October 29, 2004, between KLA Tencor Corporation
("KLA") and Synetics Solutions, without amendment (the "KLA AGREEMENT"),
requires that the purchase price paid by KLA for certain Yaskawa Products
be reduced over time as set forth on Exhibit C to the KLA Agreement. Seller
shall provide price reductions to Buyer for such Yaskawa Products purchased
for resale to KLA on a schedule and in reduction amounts necessary to
provide Buyer with a Gross Margin Percentage, for each purchase order for
Yaskawa Products for resale to KLA, equal to Synetics Solutions' Gross
Margin Percentage on January 6, 2006, on sales of such Yaskawa Products
under the KLA Agreement for the term of the KLA Agreement, without
amendment, extension or other modification after the Effective Date that
affects pricing, and only for Products for which KLA is a components
customer. Buyer will use good faith and commercially reasonable efforts to
communicate and facilitate any necessary Product changes or Product
Specification changes to KLA relating to required price reductions. For the
purposes of this Section 2.2.3, "Gross Margin Percentages" shall mean the
aggregate gross margin for all Yaskawa Products sold to KLA divided by the
price charged by Buyer to KLA for such Yaskawa Products pursuant to the KLA
Agreement (the "KLA Price"), and "gross margin" shall mean the difference
between the KLA Price and the price charged to Buyer by Seller under this
Agreement. Promptly after the Effective Date, Buyer will undertake
commercially reasonable efforts to convert KLA from a components customer
to a purchaser of EFEM systems, and in the event that KLA begins to
purchase EFEM systems from the Buyer, then the provisions of this Section
2.2.3 shall not apply to Buyer's purchase of Yaskawa Products to fulfill
KLA's orders of EFEM systems but will continue to apply to Buyer's purchase
of any individual Yaskawa Products to fulfill KLA's orders of individual
Yaskawa Products until such time as the parties agree through QBR
discussions. Furthermore, notwithstanding Section 2.1, prices for Yaskawa
Products to fulfill KLA's orders of EFEM systems shall be subject to
change.
2.3 PAYMENT. Invoices for the Products shall be issued to Buyer upon
delivery of the Products to the Delivery Point. Payment shall be made by Buyer
by wire transfer to such account as Seller shall designate from time to time in
writing to Buyer within 75 days after delivery of the Products to the Delivery
Point. Any amounts not paid within 5 Business Days after the due date for such
payment shall bear interest from and after the due date to the date of payment
at the rate of 1 1/2 % per month or the highest rate permitted by law, whichever
is less, and all such amounts shall be due and payable upon demand by Seller.
3. ORDERS AND FORECASTS.
3.1 PURCHASE ORDERS.
3.1.1 The term "PURCHASE ORDER" shall mean a written or electronic
order for the Products or any other equivalent process by which Buyer
orders quantities of the Products and spare Parts required to perform
repair services from Seller. It is contemplated that, from time to time,
Purchase Orders in forms prepared by Buyer, may be used in ordering the
Products and that there
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may be included in such forms certain stipulations, conditions or
agreements not otherwise contained herein. It is expressly understood and
agreed that the provisions of this Agreement shall be deemed a part of each
Purchase Order accepted by Seller and, unless otherwise mutually agreed in
writing, any provision in any Purchase Order which is inconsistent with,
contrary or in addition to, or which otherwise adversely materially alters
or increases Seller's or Buyer's obligations under this Agreement shall be
deemed amended or deleted, as the case may be and that the terms of this
Agreement shall control. Seller shall ship only the quantities of the
Products ordered by Buyer in the applicable Purchase Order, unless
otherwise agreed in writing by Buyer and Seller in accordance with Sections
3.3 and 3.4 of this Agreement. All Buyer Purchase Orders shall specify the
quantity of the Products, the shipment date, and all other relevant
information necessary to effectuate delivery of the Products to the
Delivery Point.
3.1.2 Seller shall accept all Purchase Orders that are submitted in
conformance with this Agreement. Unless otherwise agreed by Buyer and
Seller on a case by case basis, Seller will deliver the ordered Products to
the Delivery Point 8 weeks after receipt of the Purchase Order issued in
accordance with the terms of this Agreement; provided, however, that, with
respect to quantities of Products ordered under any Purchase Order issued
in accordance with the terms of this Agreement that result in a quantity of
Product ordered in a given month in excess of 130% of the average amount
forecasted for said month in each Buyer forecast provided during the most
recent four months of the preceding 6 month forecast period, Seller shall
only be bound to a lead time for delivery of such excess quantity of
Products on the Purchase Order as Buyer and Seller may agree for such
Products on a case by case basis. Except as provided in Section 3.3 below,
no Purchase Order shall be subject to cancellation or reduction after
acceptance by Seller.
3.1.3 Notwithstanding the limitation on Purchase Orders in excess of
forecast in Section 3.1.2, Seller agrees that with respect to Products
ordered by Buyer for resale (i) to KLA that are subject to upside supply
flexibility requirements under Section 17.1(b) of the KLA Agreement as of
the Effective Date or (ii) to Applied Materials that are subject to similar
requirements under Section 2.5 of the Applied Materials Global Supply
Agreement, dated November 28, 2001 (as amended by the ITO Agreement, dated
December 5, 2005, and as further extended on January 5, 2006, the "AMAT
AGREEMENT") as of the Effective Date, Seller will use commercially
reasonable efforts to fulfill Purchase Orders for a quantity of Product
that are not more than: (I) 180% of the forecast provided for such week 12
weeks prior to such week for Products to KLA and (II) 180% of the forecast
provided for such week 12 weeks prior to such week for Products to Applied
Materials. Nothing in this Section 3.1.3 modifies or shortens the 8-week
minimum lead time requirements of Sections 3.1.2 and 3.2 of this Agreement.
3.1.4 Seller further agrees that it shall be responsible for late
delivery damages under Section 17.5 of the KLA Agreement if (i) such
damages are the result of Seller's failure to meet its delivery obligations
under Section 3.1.2 of this Agreement and (ii) Buyer actually is required
by a claimant to pay such damages. The requirements under Sections 3.1.3
and 3.1.4 are dependent upon the Buyers' fulfillment of its obligations to
provide proper forecasting on a weekly and biweekly basis and its
obligations to maintain sufficient levels of inventory to fulfill the
customers' lead time requirements under the KLA Agreement and the AMAT
Agreements.
3.2 FORECASTS AND PURCHASE ORDER SCHEDULE. In order to meet Buyer's
requirements and in order to assist Seller in its supply chain and inventory
management, the parties agree to the following forecast and Purchase Order
schedule.
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DESCRIPTION COMMITMENT
----------- ----------
PURCHASE ORDER LEAD TIMES-Buyer will Binding and subject to cancellation or
issue Purchase Orders to Seller not reduction after acceptance by Seller
less than 8 weeks prior to the date only in accordance with Section 3.3
on which shipment of the Products below.
from the Delivery Point is required.
Seller shall not be obligated to
accept or fulfill any Purchase Order
which is received by Seller less than
8 weeks prior to the date on which
shipment is required, unless
otherwise agreed by Seller in writing
on a case by case basis.
SIX (6) MONTH ROLLING FORECAST - At Non-binding forecast for production
least every two weeks, Buyer will scheduling purposes only.
provide Seller with a good faith
forecast of its actual anticipated
monthly requirements of the Products
for the six month period following
the 8 week period covered by Purchase
Orders (as set forth above).
ANNUAL FORECAST - By no later than Non-binding forecast for planning
February 1 of each year, Buyer will purposes only.
provide Seller with a forecast of
Buyer's anticipated requirements of
the Products for each fiscal year of
Seller (March 21 through March 20)
3.3 CANCELLATION. Buyer may cancel a Purchase Order at any time. In such
event, the cancelled Products will incur cancellation charges as follows:
Finished Goods: 100% of the then applicable price will be paid in exchange
for delivery of the Finished Goods as purchased Product hereunder, it being
mutually agreed that Seller will not deliver Finished Goods to Buyer until
Seller has successfully completed the pre-shipment testing of such Finished
Goods;
WIP: 50% of the then applicable finished goods price attributable to the
WIP;
Raw Material: 0% if returnable to the supplier or Buyer purchases Products
utilizing such Raw Material within 6 months of cancellation, but otherwise
100% of the original applicable price attributable to the Raw Material.
"FINISHED GOODS" are defined as completely manufactured and/or assembled
Products at the time of the cancellation. "WIP" is defined as incompletely
manufactured and/or assembled Products at the time of the cancellation. "RAW
MATERIAL" is defined as only those materials needed to make a Part and any
purchased Parts. For the purposes of this Agreement, "PART" means a component
line item on a ▇▇▇▇ of materials. Parts are collectively assembled to produce a
Product. The above defined cancellation charges are in lieu of any other
obligation of Buyer arising as a result of the cancellation. All amounts accrued
above are payable within sixty (60) days of Seller's delivery of an invoice to
Buyer. Finished Goods will be invoiced upon delivery of the Finished Goods to
the Delivery Point.
3.4 RESCHEDULING DELIVERY OF PRODUCTS. Buyer may request rescheduling of
the delivery date of any Product scheduled for shipment to the Delivery Point.
Rescheduling of Products by Buyer will incur fees as follows:
9
(i) If Buyer requests an earlier delivery date than the currently
scheduled date, Seller must approve or reject the new delivery date. Seller will
promptly advise Buyer if it approves or rejects the requested new delivery date,
and along with any approval will indicate any additional charges that will be
imposed on Buyer as a result of the change.
(ii) If Buyer requests a later delivery date than the currently
scheduled date, Seller approval is not required and no additional charges will
be imposed on Buyer as a result of such rescheduling; so long as the rescheduled
delivery date does not extend more than three months beyond the originally
scheduled delivery date. Buyer will use good faith efforts to avoid rescheduling
deliveries in a manner that would cause a product to be delivered in a different
Seller fiscal quarter than the originally scheduled delivery date.
3.5 COPY EXACT; END OF LIFE.
(a) Copy Exact. Buyer requires that any and all changes to the product
and components be submitted to Buyer for review 180 days before the planned
cut-in date of the change. Change notification must be processed per the
Buyer Seller Initiated Action Request Process (OP-000-00006-17). Buyer will
review the proposed change for classification relative to Copy Exact (CE!)
criteria and will respond to Seller within 10 Business Days of the change
notification with the CE! Class. Changes that affect system operations
performance or process performance will require Buyer approval before the
change is cut-in. For any change to a Product that is approved by Buyer and
implemented by Seller, Seller will provide Buyer with an updated set of
Product documentation. Notwithstanding the foregoing, Seller and Buyer each
agree that the process under this Section 3.5(a) may be (i) accelerated in
the event of a supply chain emergency situation, upon Buyer's consent
and/or (ii) extended upon mutual agreement on a case by case basis.
(b) End of Life. Seller will keep Buyer fully informed relative to the
Product roadmap and Product life cycle. Buyer will be notified of end of
life at least 12 months (or a lesser time as the parties may agree on a
product-by-product basis from time to time) in advance and provided last
buy privileges at the time of end of life.
4. SHIPMENT AND RISK OF LOSS.
4.1 SHIPMENT. The standard method of shipment shall be ocean carrier;
provided, however, Products will be shipped by air at Buyer's request and
expense. Seller shall ship Products or cause Products to be shipped from its
manufacturing facilities to the Delivery Point on or before the ship date(s) set
forth in the applicable Purchase Order. Prior to shipment, Seller will conduct
the pre-shipment testing contemplated by Section 6.3 hereof and will include its
standard shipment test report with each shipped Product.
4.2 TITLE. Risk of loss shall pass to Buyer according to Incoterms 2000
"FCA" and title shall transfer concurrently therewith.
5. WARRANTY.
5.1 SPECIFICATIONS. The term "SPECIFICATIONS" shall mean all, or any part,
of the detailed description of Products provided with the Product and any other
specifications agreed upon by Seller and Buyer. All Specifications shall be in
writing.
5.2 WARRANTY.
5.2.1 WARRANTY. Seller warrants that the Products will (i) conform to
the Specifications, and (ii) will be free from defects in materials,
workmanship and designs (but only as to designs
10
provided by Seller and not designs provided by Buyer) for a period of 18
months from the date of the ▇▇▇▇ of lading for such Product. The term of
the warranty set forth in the previous sentence shall be extended to 24
months starting from the date of delivery of Products (I) to KLA for
Products covered by the KLA Agreement or (II) to AMAT for Products covered
by the AMAT Agreement. Further, to the extent that AMAT or KLA have agreed,
or agree in the future, in writing to a shorter warranty period for
Products, then such shorter warranty period shall apply to sales to KLA and
AMAT of such Products. This warranty is limited to Buyer, as the original
purchaser of the Product, and cannot be assigned or transferred to any
third person, without Seller's express, prior written consent, it being
agreed and acknowledged that Buyer will make warranties to its
Semiconductor Customers based on Seller's warranties hereunder and that
Buyer shall continue to be the beneficiary of the warranties even after
Buyer distributes Products to its Semiconductor Customers. No person is
authorized to amend or expand this warranty or to grant any other warranty
on behalf of Seller. Seller shall not be responsible for any repair,
replacement or material charges incurred by Buyer or others within the
period of this warranty, or otherwise, unless Seller gives its prior
written consent to the incurring or payment of such charges. Seller's sole
responsibility and liability with respect to any Product under this
warranty shall be, at Seller's option, the repair or replacement of any
Product which fails to comply with the terms of this warranty or, in the
event Seller determines that such Product cannot be repaired or replaced,
the refund to Buyer, through payment or credit, of the purchase price paid
by Buyer for such defective or non-conforming Product. At Seller's request,
Buyer shall return and/or hold any Product claimed to be defective or
non-conforming for inspection, repair or replacement by Seller. Seller
shall inspect such Products, and Products found not to be defective or
non-conforming shall be returned to Buyer at Buyer's cost and expense.
Products found to be defective or non-conforming within such warranty will
be repaired or replaced at no charge to Buyer or, at Seller's option, Buyer
shall receive the aforesaid refund/credit for the purchase price of such
Product. Buyer acknowledges and agrees that Seller shall have no warranty
obligations, and Buyer shall not assert any claim against Seller, with
respect to defects or non-conformities arising out of (i) modifications to
and/or unintended uses of a Product made by Buyer or Buyer's Semiconductor
Customers or third parties where such modifications and/or uses have not
been previously authorized in writing by Seller, (ii) the improper
installation and operation of a Product according to Seller's manual(s) and
instruction(s), or (iii) repairs made by Buyer or its agents or Buyer's
Semiconductor Customers.
5.2.2 LIMITATIONS OF WARRANTY AND REMEDIES. EXCEPT AS EXPLICITLY
STATED IN THIS SECTION 5, SELLER MAKES NO OTHER WARRANTIES, STATUTORY,
EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS, INCLUDING WITHOUT
LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND
FITNESS FOR A PARTICULAR PURPOSE AND EXCEPT FOR SELLER'S INDEMNIFICATION
OBLIGATIONS UNDER SECTION 5.3 HEREOF, THE PROVISIONS OF THIS SECTION 5
SHALL BE SELLER'S SOLE AND EXCLUSIVE OBLIGATION WITH REGARD TO DEFECTIVE OR
NONCONFORMING PRODUCTS COVERED BY THE WARRANTY.
5.3 INDEMNITY
5.3.1 BY SELLER. Except to the extent Products are manufactured to
designs or specifications of Buyer, Seller agrees to indemnify, defend (or,
at its option, settle) and hold Buyer, Buyer's officers, directors and
employees harmless from liability or damages, costs and attorneys' fees
awarded a third party against Buyer for (i) infringement of any U.S. or
Japanese patent, copyright, trademark or any trade secret of such third
party by the use, manufacture, importation, offering for sale or sale of
Products or any part thereof in the form in which such Product was
11
furnished by Seller to Buyer hereunder and (ii) damages or losses arising
out of or otherwise in connection with the Products delivered by Seller to
Buyer or its Semiconductor Customers hereunder not conforming to the
warranties provided hereunder (I) for injury to or death of any person or
(II) property damage suffered or allegedly suffered by any person or
entity, provided that Buyer has given Seller notice of any such claim or
suit for infringement asserted against Buyer promptly after the date Buyer
first receives any notice of claim of infringement, and Buyer has permitted
Seller to control the defense of such claim or suit. Buyer shall provide
reasonable cooperation and assistance to Seller with respect to such
defenses at Seller's expense. In the case the use or sale of the Product,
or any part thereof, is, or may be, enjoined, Seller will, at its own
expense, and at its option, either: (a) procure for Buyer and Buyer's
Semiconductor Customers the right to continue to sell and use the Product;
or (b) modify the Product, so that it becomes non-infringing; or, if
neither (a) nor (b) is commercially practicable, (c) accept return of the
Product and refund to Buyer the purchase price and the transportation and
installation cost, if any, thereof. In no event shall Seller be liable for
any patent or other infringement to the extent (i) based upon the sale or
use of the Products for purposes other than for which they are sold by
Seller to Buyer, or (ii) for any infringement arising out of any
modification to a Product by Buyer, Buyer's Semiconductor Customers or
third parties where such modification has not been expressly previously
authorized in writing by Seller. The foregoing shall constitute the sole
liability of Seller to Buyer (or those asserting claims through or on
behalf of Buyer) for patent or other intellectual property infringement.
5.3.2 BY BUYER. (a) With respect to any designs or specifications
which Buyer provides to Seller and requests Seller to use or incorporate in
connection with the manufacture or sale of Products, and/or with respect to
any modification made by Buyer to the Product, Buyer agrees to indemnify,
defend (or, at its option, settle) and hold Seller and Seller's officers,
directors and employees, harmless from any liability for damages, costs and
attorneys' fees awarded a third party against Seller for infringement of
any U.S. or Japanese patent, copyright, trademark or any trade secret of
such third party by the use, manufacture, importation, offering for sale or
sale of Products, provided that Seller has given Buyer notice of any such
claim or suit for infringement asserted against Seller promptly after the
date Seller first receives any notice of claim of infringement, and Seller
has permitted Buyer to control the defense of such suit. Seller shall
provide reasonable cooperation and assistance to Buyer with respect to such
defense at Buyer's expense. In the case the use or sale of such designs or
specifications, or any part thereof, is, or may be, enjoined, Seller shall
cease all use, manufacture, having manufactured, importation, offering for
sale and sale of any products utilizing such designs or specifications.
(b) The Buyer agrees to defend, indemnify and hold harmless Seller and
its Affiliates and its officers, directors, employees, successors and
assigns from and against any and all losses, demands, claims, liabilities,
obligations and expenses (including punitive damages) incurred by or
threatened against Seller and its Affiliates and its officers, directors,
employees, successors and assigns, due to claims by the Buyer or any third
party (including, but not limited to Semiconductor Customers and any agents
or distributors) arising out of any act or omission of the Buyer,
including, but not limited to, (i) modifications to and/or unintended uses
of a Product made by Buyer or its subcontractors where such modifications
and/or uses have not been previously authorized in writing by Seller, (ii)
the improper installation of a Product by Buyer or its subcontractors or
(iii) repairs of a Product made by Buyer or its subcontractors, in each
case solely to the extent that Buyer's or its subcontractors' act or
omission was a contributing cause of the damage or loss, whether or not the
claim arose during the term of, or after the expiration or termination of
this Agreement.
5.3.3 APPORTIONMENT. In the event a claim is based partially on an
indemnified claim described in Sections 5.3.1 or 5.3.2 above and partially
on a non-indemnified claim, or is based partially on a claim indemnified by
Seller pursuant to Section 5.3.1 above and partially on a claim indemnified
by Buyer pursuant to Section 5.3.2 above, any payments and reasonable
attorney fees
12
incurred in connection with such claims are to be apportioned between the
parties in accordance with the degree of cause attributable to each party.
5.4 LAWS AND REGULATIONS. Seller represents and warrants that all the
Products have been or shall be produced, packaged and delivered in compliance
with the applicable requirements of federal, state and local laws, regulations,
ordinances and administrative orders and rules of the United States and all
other countries in which the Products are produced, packaged or delivered.
Seller shall secure any and all permits, governmental licenses and inspections
necessary for the manufacture and delivery of the Products hereunder.
5.5 NO WAIVER. Acceptance, inspection or payment by Buyer shall in no event
constitute a waiver of Buyer's rights and remedies with regard to any
subsequently discovered defect or nonconformity.
5.6 COMPLIANCE. Throughout the term of this Agreement, for all Products
that Seller, on or prior to the Effective Date, tested, certified and supplied
with a Declaration of Conformance or Declaration of Incorporation in conformance
with the requirements for any CE marked product, Seller shall continue to
perform such testing, certification and supply to Buyer. For all other Products,
such testing and certification shall be performed as agreed in the Development
Agreement for such Product.
6. WARRANTY AND SUPPORT SERVICES
6.1 BUYER SERVICES.
6.1.1 REPAIR AND WARRANTY SUPPORT SERVICES. During the applicable
warranty period or any subscription by a Semiconductor Customer to
post-warranty support services from Buyer, Buyer will (i) provide phone or
other technical support to Semiconductor Customers to whom Buyer has sold
Products, (ii) inspect, remove and replace Products with applicable FRUs or
replacement units from its Parts inventory first and then as provided by
Seller, (iii) where agreed by Seller, repair Products in exchange for
payment of a mutually agreed fee by Seller on a case by case basis, (iv)
accept provision of retrofits from Seller and assist the Semiconductor
Customer with the installation of such retrofits at Buyer's standard
professional services rates to be paid by Seller, (v) if Buyer and Seller
do not agree that Buyer shall repair a Product, or if Buyer cannot repair
such Product, return the Product to Seller as contemplated by Section 6.4
below and (vi) such sales and other support as Buyer and Seller may agree
on a case by case basis, with or without additional fees payable by Seller
as may be agreed by the parties in each case (collectively, the "BUYER
SERVICES"). Buyer shall perform the Buyer Services in a professional and
workmanlike manner and in accordance with generally accepted industry
standards. The repair and warranty services set forth in Section 6.1.1
(ii), (iii) and (iv) shall be performed only by authorized repair personnel
who have been trained by Seller and pursuant to Seller's rules and
procedures for inspection, diagnosis and repair provided at the time of
Seller's training. In the event that Buyer has undertaken the repair of a
Product and is unable to complete such repair, then Seller shall have no
obligation to pay Buyer for such repair services.
6.1.2 INVENTORY AND SPARES. Buyer shall stock, and Seller shall
supply, sufficient inventory of Parts and FRUs to meet Buyer's and Seller's
warranty obligations under this Agreement or to Semiconductor Customers
that purchase Products from Buyer; Seller hereby consents to Buyer
utilizing such Parts and FRUs to perform repair, replacement and support
services for Semiconductor Customers at (i) for any repair, replacement or
support covered by, or within the scope of, Seller's warranties or other
support obligations hereunder, Buyer's cost of obtaining the applicable
spares and replacements plus services rates to be agreed upon by the
parties from time to time for Buyer's (or its subcontractor's) time in
performing such services to be paid by Seller within 75 days of receipt of
Buyer's invoice and (ii) for any other repair, replacement or support, fees
agreed by Buyer and the Semiconductor Customer. If Buyer and Seller cannot
agree on services
13
rates for a repair under clause (i) of this Section 6.1.2, then Buyer will
not be obligated to perform the repair services and may return the
applicable Product to Seller for repair.
6.2 SELLER SERVICES. Seller will provide the following services to Buyer
("SELLER SERVICES"):
6.2.1 TRAINING. Seller will provide Buyer with training, at Seller's
facility in Japan, to the extent necessary for Buyer to provide the Buyer
Services to Semiconductor Customers. Such training shall be at Seller's
expense. Such training shall be provided in English. Buyer shall be
responsible for its own travel, lodging and other expenses in attending
such training.
6.2.2 DOCUMENTATION. Seller shall provide Buyer with information and
service instructions and all documentation, manuals and spare parts lists
that relate to Seller's Products, as in effect from time to time. All such
documentation shall be provided in English. Product information shall be
provided in English units and metric units. Notwithstanding the foregoing,
for existing Products sold to existing customers, documentation and product
information will be provided in a manner consistent with the standard
practice in effect for such customer prior to the Effective Date, unless
the customer requests otherwise.
6.2.3 SPARES. Buyer shall stock sufficient spare Products, FRUs and
Parts as needed to meet all of Seller's warranty and repair services
obligations under this Agreement, subject to Seller's supply of such
Products, FRUs and Parts as contemplated by Section 6.1 above and Seller's
provision of training as contemplated by this Section 6.2.
6.2.4 UPGRADES. Seller shall provide upgrades from time to time as
agreed on a customer by customer basis, at mutually agreed rates.
Seller agrees that Seller will perform the Seller Services in a professional and
workmanlike manner and in accordance with generally accepted industry standards.
6.3 INSPECTION AND TEST AT SELLER'S FACILITIES. All Products purchased by
Buyer are subject to inspection and test procedures, as set forth in the
Specification for the Product or as otherwise agreed by the parties in writing,
and conducted by Seller, and, if Buyer so elects, also observed by Buyer, before
to the applicable Products are shipped from Seller's factory. Inspection and
test requirements will be agreed in writing by the parties. Seller shall provide
Buyer with written certification that the Product tested has passed the final
inspection and complies in all respects with the requirements described in the
Specifications. From time to time, Buyer's Semiconductor Customers may request
the right to review Seller's facilities and operations for the purpose of
qualification and inspection of the Products. Seller agrees to permit such
Semiconductor Customer surveys. Buyer shall provide Seller with written notice
of such request. Such notice shall contain the names of the individuals making
the visit, and the desired date of the visit. Buyer is permitted to accompany
the Semiconductor Customer during these Semiconductor Customer surveys.
Notwithstanding any inspection and testing at Seller's premises, all Products
purchased by Buyer are subject to Buyer's inspection and test (qualification) at
Buyer's or its Semiconductor Customer's premises before final acceptance ("Final
Acceptance Testing"). Final Acceptance Testing requirements will be agreed in
writing by the parties.
6.4 NOTIFICATION; PRODUCT RETURNS. During the applicable warranty period or
any support subscription period, Buyer shall notify Seller promptly in writing
of any alleged defect in a Product, with specificity. If Buyer and Seller agree
that such defect requires that Buyer provide such Product to Seller for repair
and/or replacement (such agreement not to be unreasonably withheld), then Seller
shall provide an RMA number for such Product within twenty-four hours of such
agreement. Seller acknowledges and agrees that more complicated repairs will
often need to be performed by Seller, particularly in the first few years of
this Agreement as Buyer becomes more familiar with the repair of Yaskawa
Products. Upon receipt of such
14
RMA number, Buyer will forward the defective Product to Seller, FCA Buyer's
North American facility, with written specifications of the claimed defect. If
the defect is under warranty or under a current support subscription
contemplated in Section 6.5 below, Seller will ship the repaired or replaced
Product to Buyer, as quickly as is practical, but not later than 20 Business
Days from the date Seller received the Product from Buyer or Synetics Solutions,
Inc. If the average timeframe for completion of such repair or replacement by
Seller of all Products then in Seller's possession or control exceeds 20
Business Days at any point during the term of this Agreement, Seller and Buyer
shall promptly review and discuss (whether in person or by phone or e-mail) the
reasons for such delay and, unless Seller can demonstrate that there are good
reasons for the delay that are outside of the reasonable control of Seller, then
Buyer shall have the right to deliver, and Seller shall promptly acknowledge in
writing, debit memos (which memos shall be sufficient to transfer title in the
applicable Products from Buyer to Seller until return of the repaired Products
to Buyer and put such Products on Seller's books and remove such Products from
Buyer's books) to Seller for all Products then in inventory as a result of such
delays and all Products that are subsequently not repaired or replaced in the
required 20 Business Day period. If Seller is subject to debit memos under this
Section 6.4 but completes repairs so that the average timeframe for completion
of such repair or replacement by Seller of all Products then in Seller's
possession or control no longer exceeds 20 Business Days, the Buyer will issue
no further debit memos for additional Products under repair unless and until
Seller again exceeds the 20 Business Days threshold, in which case the above
debit memo process shall repeat. During the applicable warranty or support
subscription period, Seller shall be responsible for all freight charges and
duties in connection with the return of a Product under this Section 6.4 and
shipment of the repaired or replaced Product to Buyer. Seller's warranty period
for a Product shall toll during repair of a Product by either Seller or Buyer
and shall restart upon either Buyer's completion of the fix for such Product or
Seller's shipment of the repaired Product back to Buyer or its Semiconductor
Customer.
6.5 SUPPORT AVAILABILITY; POST-WARRANTY SUPPORT. Seller shall maintain
support capabilities for each Product for a period of 5 years following the
delivery date of the last such Product hereunder. On a Product by Product basis,
post-warranty services that are identical to the warranty services applicable
during the applicable warranty period will be provided to Buyer by Seller on an
annual subscription basis and shall be provided in accordance with terms and
conditions as may be negotiated in good faith between Seller and Buyer from time
to time.
7. EMBEDDED SOFTWARE LICENSE AND CONFIDENTIAL INFORMATION.
7.1 EMBEDDED SOFTWARE LICENSE. The software included in the Products (the
"EMBEDDED SOFTWARE") is licensed and not sold. Seller hereby grants to Buyer a
non-exclusive, royalty-free, perpetual license to use the Embedded Software only
in the operation of the Product in which it was delivered. Such Embedded
Software may not be copied for use in any equipment other than the Products.
Copies may be made for archival purposes only. Such Embedded Software and any
copies thereof, and all copyright, trade secret, patent, trademark and other
intellectual or industrial property rights therein ("EMBEDDED SOFTWARE RIGHTS"),
is and shall remain the sole property of Seller. The ideas and the expressions
thereof contained in the Embedded Software are confidential and proprietary
information and trade secrets of Seller and/or its licensors that are disclosed
to Buyer in confidence. Buyer shall not cause or permit reverse engineering,
disassembly or decompilation of the Embedded Software or disclosure, copying,
display, loan, publication, transfer of possession (whether by sale, exchange,
gift, operation of law or otherwise) or other dissemination of the Embedded
Software, in whole or in part, to any third party without prior written consent
of Seller. Buyer shall not modify, enhance or otherwise change or supplement the
Embedded Software. Buyer will be permitted to sublicense to Semiconductor
Customers the Embedded Software solely for the operation of the Products sold by
Buyer to Semiconductor Customers hereunder, provided that the sublicense is
effected by agreement signed before the Embedded Software is provided and only
if the sublicense includes the same provisions as used herein.
15
7.2 CONFIDENTIALITY. Each party ("RECEIVING PARTY") agrees to keep
confidential and not disclose or use except in performance of its obligations
under this Agreement, confidential or proprietary information related to the
other party's ("DISCLOSING PARTY") technology or business that the Receiving
Party learns in connection with this Agreement and any other information
received from the other, including without limitation, to the extent previously,
currently or subsequently disclosed to the Receiving Party hereunder or
otherwise, information relating to products or technology of the Disclosing
Party or to the Disclosing Party's business (including, without limitation data,
know-how, processes, ideas, inventions (whether patentable or not), all
information relating to customers and customer transactions and other technical,
business, financial, customer and product development plans, forecasts,
strategies and information), all of the foregoing, "CONFIDENTIAL INFORMATION".
Confidential Information shall not include information the Receiving Party can
document (a) is in or (through no improper action or inaction by the Receiving
Party or any affiliate, agent or employee) enters the public domain (and is
readily available without substantial effort), or (b) was rightfully in the
Receiving Party's possession or known by it prior to receipt from the Disclosing
Party, or (c) was rightfully disclosed to the Receiving Party by another person
without restriction, or (d) was independently developed by the Receiving Party
by persons without accessing such information and without use of any
Confidential Information of the Disclosing Party. Each party, with prior written
notice to the Disclosing Party, may disclose such Confidential Information to
the minimum extent possible that is required to be disclosed to a governmental
entity or agency in connection with seeking any governmental or regulatory
approval, or pursuant to the lawful requirement or request of a governmental
entity or agency, provided that reasonable measures are taken to guard against
further disclosure, including without limitation, seeking appropriate
confidential treatment or a protective order, or assisting the other party to do
so. Each party shall use reasonable precautions to protect the other's
Confidential Information and employ at least those precautions that such party
employs to protect its own confidential or proprietary information.
8. TERM AND TERMINATION.
8.1 TERM. The term of this Agreement shall commence on the Effective Date
and shall continue in full force and effect for a period of 10 years thereafter
("Initial Term"). At any time, at least 36 months prior to end of the Initial
Term or any renewal term, each party shall send written notice to the other
party of its intentions concerning its business relating to the Products and its
interest in extending the Agreement. If both parties have expressed an interest
in extending the current term of the Agreement by written notice to the other,
then the then-current term shall be automatically extended for an additional
five-year term. If one party has expressed an interest in allowing the Agreement
to expire or in modifying the Agreement or has failed to provide notice, then
the Agreement shall terminate at the end of the then-current term, unless the
Agreement is extended and/or modified by the mutual written agreement of the
parties.
8.2 TERMINATION. Notwithstanding the foregoing, and in addition to any
other rights of termination set forth herein, this Agreement may be terminated
prior to the expiration of the term upon or after the occurrence of any of the
following events upon written notice to the other party, which notice shall
specify the reason for termination and the effective date of such termination:
8.2.1 BREACH. By Seller if (A) Buyer has committed a Major Breach of
this Agreement, (B) Buyer has not cured such Major Breach within 60
calendar days of receiving a notice of breach from Seller for such Major
Breach, and (C) the parties have not been able to agree upon an adequate
remedy (other than termination); or
8.2.2 BANKRUPTCY. By either party if a court of competent jurisdiction
shall enter an order, judgment or decree appointing a custodian, receiver,
trustee, liquidator or conservator of the other party, or approve a
petition filed against the other party seeking reorganization or
arrangement or any similar relief under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state thereof or of the country in which Seller or Buyer is located, or, if
under the provisions of any
16
other law for the relief or aid of debtors, a court of competent
jurisdiction shall assume custody or control of the other party and such
proceeding or petition remains undismissed for a period of 60 days.
8.2.3 CHANGE OF CONTROL. By Seller in the event of a Change of Control
of Buyer; provided that, in the event of such a termination, this Agreement
shall remain in full force and effect for a period of two years from
Buyer's receipt of notice of such termination from Seller so that Buyer may
continue to meet the expectations and Product demands of its Semiconductor
Customers.
8.3 OBLIGATIONS UPON TERMINATION. The termination of this Agreement shall
not discharge, affect, or otherwise modify the rights and obligations of parties
established or incurred prior to the termination hereof or the right of either
party to pursue any and all legal remedies it may have against the other party
and such remedies shall survive the termination of the Agreement.
9. NON-COMPETITION AND NON-SOLICITATION.
9.1 NON-COMPETITION. During the term of this Agreement and for any
remainder period set forth in the following sentence of this Section 9.1, (i)
neither Seller nor any of its Affiliates shall knowingly offer and/or sell,
directly or indirectly, any Yaskawa Products to Semiconductor Customers (other
than any OEM) and (ii) neither Seller nor any of its Affiliates shall knowingly
offer and/or sell, directly or indirectly, ▇▇▇▇▇▇ Products to any Semiconductor
Customer (other than any OEM). If this Agreement is terminated by Buyer pursuant
to Section 8.2 during the Initial Term or any renewal term, the rights and
obligations of both parties pursuant to this Section 9.1 shall continue in full
force and effect until the date on which such Initial Term or renewal term would
have expired absent any termination pursuant to Section 8.2 above. If this
Agreement is terminated by Seller pursuant to Section 8.2, then Seller shall
have no obligation under this Section 9.1.
9.2 NON-SOLICITATION. During the term of this Agreement and for a period of
1 year after expiration or termination of this Agreement, neither party will
employ, attempt to employ or solicit the employment of, any employee of or
consultant to of the other party or otherwise induce or attempt to induce any
employee of or consultant to leave the employ of other.
10. MISCELLANEOUS.
10.1 INTELLECTUAL PROPERTY. Seller shall have the sole ownership of
Intellectual Property relating to the Products sold by Seller hereunder and the
sole right to obtain, hold and renew, in its own name and/or for its own
benefit, patents, copyrights, trademarks, trade secrets, registrations and/or
other appropriate protection with respect to any of the Products sold by Seller
hereunder. As used herein, "INTELLECTUAL PROPERTY" means any and all patents and
rights to patent, copyrights, trademarks, trade secrets, Confidential
Information of Seller, know-how and proprietary information of any kind or
nature whatsoever. Buyer stipulates and agrees that under this Agreement Buyer
will acquire no right, title or interest in or to any of such Intellectual
Property, except as expressly provided in writing by the parties.
10.2 AUTHORITY. By signing this document, the undersigned represent that
they have been duly authorized to execute this document on behalf of their
respective corporations.
10.3 COUNTERPARTS. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement, and will become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other.
10.4 GOVERNING LAW; ARBITRATION. This Agreement shall be governed by and in
accordance with the internal laws of the State of New York, excluding: (i) its
conflicts of laws principles; (ii) the United Nations Convention on Contracts
for the International Sale of Goods; (iii) the 1974 Convention on the Limitation
Period in the International Sale of Goods (the "1974 Convention"); and (iv) the
Protocol
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amending the 1974 Convention, done at Vienna April 11, 1980. Any disputes under
this Agreement shall be resolved through the process set forth in Article 11 of
the Shareholders' Agreement by and between Buyer and Seller and dated of even
date herewith, which Article 11 is hereby incorporated by reference and shall be
effective as if set forth in full herein.
10.5 LIMITATION AND DISCLAIMER OF LIABILITY.
(a) EXCEPT WITH RESPECT TO: (1) EITHER PARTY'S BREACH OF CONFIDENTIALITY
OBLIGATIONS, (2) DAMAGES ARISING FROM EITHER PARTY'S VIOLATION OF THE
INTELLECTUAL PROPERTY RIGHTS OF THE OTHER PARTY OR (3) INDEMNIFICATION
OBLIGATIONS UNDER SECTION 5.3.1 (EXCEPT FOR SECTION 5.3.1(ii)(II)) AND SECTION
5.3.2(A)HEREUNDER WITH RESPECT TO DAMAGES OR LOSSES, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER
THEORY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES
INCLUDING WITHOUT LIMITATION LOST PROFITS IN CONNECTION WITH THE SUBJECT MATTER
OF THIS AGREEMENT OR ANY PURCHASE ORDER, EVEN IF SUCH PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
(b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY,
IN NO EVENT WILL EITHER PARTY OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES,
CUSTOMERS AND AGENTS, INCUR ANY LIABILITY RELATED TO OR ARISING OUT OF THIS
AGREEMENT OR THE PRODUCTS, REGARDLESS OF THE FORM OF THE ACTION, WHETHER IN
CONTRACT, WARRANTY, RELIANCE, TORT (INCLUDING NEGLIGENCE) OR OTHER LEGAL THEORY,
EXCEEDING IN THE AGGREGATE UNDER THIS AGREEMENT (I) $5,000,000 PER CLAIM NOR
(II) $10,000,000 IN THE AGGREGATE IN ANY CALENDAR YEAR. HOWEVER, FOR
INDEMNIFICATION OBLIGATIONS UNDER SECTION 5.3.1 (EXCEPT FOR SECTION
5.3.1(ii)(II)) AND SECTION 5.3.2(A) AND FOR CORPORATE WILLFUL MISCONDUCT OF A
PARTY, THERE IS NO LIMITATION ON THE AMOUNT OF SUCH PARTY'S LIABILITY.
10.6 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended,
nor will it be construed, to confer any rights or benefits upon any person
(including, but not limited to, any employee or former employee of Buyer or
Seller) other than the parties to this Agreement, and no other person will have
any rights or remedies under this Agreement.
10.7 ENTIRE AGREEMENT. This Agreement and the Schedule(s) annexed hereto,
contain the entire agreement between the parties with respect to its subject
matter, and there are no agreements or understandings between the parties other
than those set forth or referred to in this Agreement, and in the various
Schedules and/or attachments to same, and other than any such agreements or
understandings which expressly provide otherwise by specific reference to this
Agreement.
10.8 EXPENSES. Except as set forth in this Agreement, all legal and other
costs and expenses incurred in connection with this Agreement will be paid by
the party incurring such costs and expenses.
10.9 FORCE MAJEURE. Neither party shall be responsible for any delay or
failure to perform any provision of this Agreement arising from causes beyond
its reasonable control, including, without limitation, labor disputes, civil
commotion, war, (declared or undeclared), riot, severe weather, heavy snow,
floods, acts of God, governmental rules, laws, requisitions, mobilizations,
embargoes, fires, explosions, shortages of transportation, inability to obtain
freight space, unavailability of raw materials and restrictions on the use of
power. The party relying on this paragraph as an excuse for nonperformance of
its obligations hereunder shall use all reasonable efforts promptly to remove or
remedy the cause giving rise to such nonperformance.
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10.10 NOTICES. All notices hereunder shall be in writing and delivered
personally, by documented overnight courier delivery service or by fax (with
confirmation of receipt), in each case, to the appropriate address or number as
set forth below.
IF TO BUYER: IF TO SELLER
▇▇▇▇▇▇ Automation, Inc. Yaskawa Electric Corporation
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 2-1 Kurosaki-shiroishi, Yahatanishi-ku
Chelmsford, Massachusetts Kitakyushu 806-0004 Japan
▇▇▇▇▇ ▇.▇.▇. Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq. Fax: ▇▇▇.▇▇.▇▇▇.▇▇▇▇
Fax: ▇.▇▇▇.▇▇▇.▇▇▇▇
WITH COPY TO: WITH COPY TO:
WilmerHale
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: ▇▇.▇▇▇.▇▇▇.▇▇▇▇ Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇.▇▇▇.▇▇▇.▇▇▇▇
or to such other address and/or to the attention of such other person as the
intended recipient may designate by written notice in accordance with this
provision. Notices shall be effective upon receipt.
10.11 NONASSIGNMENT. Neither this Agreement, nor any right, duty, term or
obligation thereof, may be assigned by either party to any individual or entity,
without the prior written consent of the other party hereto. For the purposes of
this Agreement, a change of control of a party, including through a sale or
transfer of all or a portion of such party's voting securities shall not
constitute an assignment. This Agreement shall be binding upon and inure to the
benefit of the parties' successors and assigns.
10.12 HEADINGS; DEFINITIONS. The Section headings contained in this
Agreement are inserted for convenience of reference only and will not affect the
meaning or interpretation of the Agreement. All references to Sections contained
herein mean Sections of this Agreement unless otherwise stated. All capitalized
terms defined herein are equally applicable to both the singular and plural
forms of such terms.
10.13 AMENDMENTS AND WAIVERS. This Agreement may not be modified or amended
except by instrument or instruments in writing signed by the party against whom
enforcement of the modification or amendment is sought. Wavier of compliance
with any term or provision of this Agreement must be in writing. Waiver of a
breach of any term or provision of this Agreement will not be construed as a
waiver of any subsequent breach. Consummation of the transactions contemplated
by this Agreement will not constitute a waiver of any prior breach of the
Agreement.
10.14 SEVERABILITY. If at any time any provision of this Agreement is or
becomes illegal, invalid, void or unenforceable in any respect under the law of
any jurisdiction, neither the legality, validity, or enforceability of the
remaining provisions hereof nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction will in any way be affected or
impaired thereby, and the remainder of the provisions of this Agreement will
remain in full force and effect. The parties will endeavor in good faith
negotiations to replace any invalid, illegal, void or unenforceable provision
with a valid, legal and enforceable provision, the effect of which comes as
close as possible to the invalid, illegal, void or unenforceable provision.
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IN WITNESS WHEREOF, the parties have caused this U.S. ROBOT SUPPLY
AGREEMENT to be executed by their duly authorized representative on the date set
forth above.
▇▇▇▇▇▇ AUTOMATION, INC. YASKAWA ELECTRIC CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ Koji Toshima
--------------------------------- ------------------------------------
Title: President Title: President
------------------------------ ---------------------------------
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