GLOBAL SUPPLY AGREEMENT
Exhibit 99.1
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
GLOBAL SUPPLY AGREEMENT
This Global Supply Agreement is entered into as of this 21st day of April
2005 (the "Effective Date") by and between APPLIED MATERIALS, INC., a Delaware
corporation, with places of business in Santa Clara, California, and Austin,
Texas, and MKS INSTRUMENTS, INC., a Massachusetts corporation, with its
principal place of business in Wilmington, Massachusetts.
In consideration of the mutual promises and other valuable consideration
set forth in this Agreement the Parties agree as follows:
1. DEFINITIONS.
In addition to those definitions set forth elsewhere in this Agreement,
the following capitalized terms shall have the meanings specified below:
(a) "Agreement" means (i) this Global Supply Agreement, (ii) Attachment 1
hereto, and (iii) all Authorized Demand Signals, as each may be amended from
time to time.
(b) "Applied" means Applied Materials, Inc., including its subsidiaries existing
on or after the Effective Date.
(c) "Applied Web Site" means the password-protected Web Site maintained by
Applied and located at ▇▇▇▇://▇▇▇▇.▇▇▇▇.▇▇▇, to which Supplier may be given
access for the purpose of performing under this Agreement.
(d) "Authorized Demand Signal" means an order for Item(s) communicated pursuant
to this Agreement by Applied to Supplier via (i) a purchase order (whether in
hardcopy or electronic form), (ii) EDI or other electronic transmission, or
(iii) Applied's designated on-line purchasing system. All Authorized Demand
Signals are deemed to be incorporated into this Agreement by this reference.
(e) "Business Processes" means those processes, requirements and forms
applicable generally to Applied's supply chain, pertaining to ordering,
payments, packaging, delivery, shipment, crating and repair of Items, among
other things. All Business Processes shall be communicated to Supplier through
posting on the Applied Web Site. Certain Business Processes referred to in this
Agreement are identified by their title in italics.
(f) "Internal Applied Data" means planning data, product engineering or
manufacturing data, information, forecasts, Specifications or Confidential
Information that is recorded, displayed, maintained or accessed on the Applied
Web Site or other Applied internal databases or intranets.
(g) "Item" means a component, equipment, material, subassembly or other good and
related software and services specified in (i) Attachment 1, (ii) an Authorized
Demand Signal; or (iii) a purchase order delivered by Applied to Supplier prior
to the Effective Date and undelivered as of such date.
(h) "Parties" means Applied and Supplier.
GLOBAL SUPPLY AGREEMENT
(i) "Specifications" means such drawings, designs, instructions, technical or
performance requirements or other technical information relating to the design,
development, manufacture, installation, assembly, testing and/or use of one or
more Items.
(j) "Sub-tier Supplier" means a member of Supplier's direct or indirect sub-tier
supply base (including, without limitation, subcontractors and vendors of
Supplier) that provides goods and/or services in connection with an Item.
(k) "Supplier" means MKS INSTRUMENTS, INC. and all of its subsidiaries.
(l) "Third Party" means a qualified subassembler selected by Applied for
outsourcing or contract manufacturing of an assembly, component, or subassembly
at any stage prior to final integration as, or into, completed semiconductor or
flat panel capital equipment.
2. SCOPE OF AGREEMENT; TERM.
(a) Scope of Agreement. This Agreement sets forth the terms and conditions
governing the purchase and sale of Items, the relationship between Applied and
Supplier, and compliance with Applied's Business Processes. Applied Materials,
Inc. and its subsidiaries shall be entitled to purchase Items from Supplier
under this Agreement, and shall have all of the rights of "Applied" under this
Agreement. As to any purchase of Items under this Agreement by Applied
Materials, Inc., all obligations under this Agreement are the sole obligations
of Applied Materials, Inc. As to any purchase of Items under this Agreement by a
subsidiary of Applied, all obligations under this Agreement are the sole
obligations of such subsidiary. This Agreement shall not apply to Applied's
purchase, and Supplier's sale, of any goods or services pursuant to (i) a
purchase order or other agreement which expressly identifies this Global Supply
Agreement and states that the terms and conditions of the purchase order or
other agreement, rather than this Agreement, shall govern the transaction; or
(ii) a joint development or license agreement, except to the extent expressly
provided therein.
(b) Term. This Agreement shall commence on the Effective Date and, unless
extended as set forth in this Section 2 or terminated as set forth in Section
21, shall expire on April 20, 2008 (the "Term"). At any time prior to expiration
of the Term, and upon mutual written agreement at least six (6) months prior to
the expiration of the Term, the Term may be extended for three additional
periods not to exceed one (1) year each. The Parties acknowledge that after the
Term they may desire to renew this Agreement or enter into a similar volume
supply agreement. If Supplier decides during the Term that it does not wish to
enter into such renewal or volume supply agreement, Supplier shall provide
notice thereof to Applied at least six (6) months prior to the expiration of the
Term.
(c) Compliance With Business Processes. Applied has implemented, and from time
to time updates and revises, Business Processes applicable generally to
Applied's supply chain. Descriptions of all Business Processes shall be provided
to Supplier through posting on the Applied Web Site. Supplier agrees to comply
with all Business Processes identified in this Agreement that are in effect as
of the Effective Date and as may be amended in accordance with this subsection.
If Applied desires to amend a Business Process, it shall give notice thereof by
referring Supplier to the Applied Web Site to access such amended Business
Process. Supplier agrees to regularly access the Applied Web Site to review any
amended Business Processes. No amendment to a Business Process described in
Sections 16(h) (Certificate of Destruction) or 18(b) (On-Site Representative
Agreement) shall become effective unless Supplier consents thereto in writing.
Amendments to all other Business Processes shall be deemed accepted by Supplier
if Supplier fails to object thereto in writing within [**] days after the date
on which the amended Business Process is communicated to Supplier.
GLOBAL SUPPLY AGREEMENT
3. ORDERS.
(a) Orders. All orders for Items shall be in the form of an Authorized Demand
Signal and delivered by an Applied Authorized Purchasing Agent. An Authorized
Demand Signal shall (i) identify the Item(s) requested; (ii) state the ▇▇▇▇-to
address, Ship-to address, Applied Purchase Order number, Supplier Item(s)
number, Applied Item(s) number, Item(s) description, quantity, promise date, tax
code, shipping method, and price of the Item(s) requested; and (iii) specify if
it is for a Spares Down Order (as defined in this Agreement). Supplier shall
accept communications of Authorized Demand Signals in the format designated by
Applied. Designated format shall not impose unreasonable financial burden on
Supplier.
(b) Acceptance/Rejection of Orders. Supplier shall promptly communicate its
acceptance or rejection of an Authorized Demand Signal. Supplier shall not,
however, reject an Authorized Demand Signal for Items set forth on Attachment 1
so long as the Authorized Demand Signal conforms to the terms and conditions of
this Agreement. Any notice of rejection shall state the specific grounds for
such rejection. The following guidelines for prompt response to an Authorized
Demand Signal apply:
(i) An Authorized Demand Signal that is for a "Spares Down Order" will
be responded to no later than [**] after its receipt by Supplier;
(ii) An Authorized Demand Signal sent via EDI or other electronic
transmission for JIT (Bus Route) Items will be responded to no later than [**]
after the time it is issued, and
(iii) An Authorized Demand Signal that is an Applied purchase order
(whether in hard copy or electronic form) for Direct (Spot Buy) Items will be
responded to no later than [**] after receipt by Supplier.
Any telephonic notice of rejection shall be followed by the delivery of written
or electronic notice to Applied within [**] of delivery of the rejected
Authorized Demand Signal. In all events, any objection by Supplier to the terms
of an Authorized Demand Signal shall be deemed waived upon [**].
(c) Order Adjustments. Supplier acknowledges that, due to the highly cyclical
nature of the semiconductor equipment industry and other factors, Applied may be
required to modify Authorized Demand Signals from time to time. Applied may
increase the quantity of Items in any Authorized Demand Signal outside of
standard lead time for such Items and, provided such increase falls within the
Quantity Flexibility Matrix set forth below, (i) Supplier will deliver such
increased quantity with no additional charges including accelerated delivery,
expedite fees or the like, and (ii) such increase will not affect the delivery
schedule of Items previously ordered.
STANDARD LEAD TIME + [**] WEEKS [**] WEEKS [**] WEEKS [**] WEEKS [**] WEEKS
----------------------- ---------- ---------- ---------- ---------- ----------
FLEXIBILITY OF QUANTITY [**] [**] [**] [**] [**]
OF ITEMS IN AN
AUTHORIZED DEMAND
SIGNAL
If Applied requires an increase in the quantity of Items in any Authorized
Demand Signal and such increase does not fall within the Quantity Flexibility
Matrix set forth above, then, if feasible and as mutually agreed upon by the
Parties, Supplier will provide such increased Items in accordance with the
modified Authorized Demand Signal and Applied shall pay costs resulting
therefrom, provided such costs are (i) reasonable; (ii) authorized by Applied in
writing in advance of delivery; and (iii) identified separately from the unit
price on Supplier's invoice to Applied.
GLOBAL SUPPLY AGREEMENT
(d) Reduction or Cancellation of an Authorized Demand Signal. If Applied
requires a reduction in the quantity of Items in any Authorized Demand Signal,
or cancels any Authorized Demand Signal, the Parties' respective rights and
obligations shall be as specified in Section 21[b].
(e) Purchases by Authorized Third Party. Certain Items may be (i) incorporated
into subassemblies or other products made for Applied by a Third Party; or (ii)
otherwise processed by a Third Party. In such event, Applied may designate the
Third Party in writing as authorized to purchase such Item(s) from Supplier and,
upon Supplier's receipt of notice thereof, Supplier may enter into a similar
agreement with such Third Party to sell such Item(s) to such Third Party, [**]
the terms set forth in this Agreement, including all terms and conditions.
Notwithstanding this Agreement, determination of favorable terms will consider
any financial burden to Supplier resulting from Third Party relationships.
Supplier understands that the selection and responsibility for sourcing
subassembly components will generally be the responsibility of the Third Party.
[**] such Third Party [**].
(f) No Volume Commitment. Applied does not commit to purchase a specific volume
of any Item from Supplier except as specified in an Authorized Demand Signal
and, subject to Supplier's IP Rights (as defined in Section 11(b)), Applied may
manufacture or buy goods and/or services from Third Parties that are identical
or similar to the Items. However, Applied agrees to continue to be bound by any
pre-existing Volume Purchase Agreement, or other agreement committing Applied to
the purchase of a certain quantity of Items.
4. PRICING.
(a) Contract Price. "Contract Price" means the domestic price in U.S. Dollars
for an Item as set forth on Attachment 1; provided, that if a price for an Item
is not specified on Attachment 1, then the Contract Price shall be the price set
forth in an Authorized Demand Signal that is accepted by Supplier in accordance
with this Agreement.
(i) The Contract Price for each Item set forth on Attachment 1 shall
remain in effect throughout the Term, whereas the Contract Price for each Item
set forth on an accepted Authorized Demand Signal shall remain in effect for the
term of such Authorized Demand Signal.
(ii) [**] Purchases [**] -
(1) MKS agrees [**]. These will [**]. The Contract Price for these
[**] purchases will be [**] under this provision will [**] be made by [**] an
Authorized Demand Signal for the above Items.
(2) For these [**] the Authorized Demand Signal will [**] as
stated [**] that such [**] for those [**] purchases [**] the Items [**] for the
[**] to the [**].
(3) In the event that such [**] purchases [**] purchases, [**] for
the remainder of the Term.
(4) Supplier agrees that [**] purchases [**] the Authorized Demand
Signal. Supplier also agrees [**]. Unless otherwise specified in Attachment 1,
[**], if applicable, [**].
(5) Applied and MKS agree that [**] purchases [**] between MKS and
Applied [**].
(b) Pricing Components. The Contract Price, and any quotations for Items, shall
include all finishing, testing, inspecting and packaging fees, applicable
royalties and all applicable taxes (excluding sales, use and similar taxes). Any
quotations for Items shall include all costs relating to standard supplier
warranties. Any quotations for Items shall not include any amounts relating to
(i) initial set-up charges;
GLOBAL SUPPLY AGREEMENT
(ii) costs for special dies, tools, patterns or test fixtures; and (iii)
non-recurring engineering fees amortized into the per unit price, unless
separately identified and itemized. Quotations for prototypes shall reflect the
total value of Applied's business with Supplier. In this regard, Supplier shall
consider providing a specific number of prototype Items [**] and/or pricing
prototypes [**].
(c) Transportation Costs. For Items to be delivered to a destination within the
country of origin, pricing in a quotation or as set forth in Attachment 1 shall
not include any transportation costs other than insurance expense, which shall
be separately identified and itemized. For Items to be delivered outside the
country of origin, all costs for shipping, import/export fees, customs,
insurance and other transportation expenses shall be separately identified and
itemized in a quotation. In any case, where Applied approved carriers are used
per Applied's Transportation Routing Guide, transportation costs shall not be
included in a quotation.
(d) Price Reductions/Adjustments. Supplier shall implement all mutually agreed
price adjustments. All quantities of Items purchased by Applied and its
subsidiaries purchasing under this Agreement will be aggregated for purposes of
calculating applicable price reductions. Any significant change in circumstances
(such as an increase in Applied's purchase volume, an increase in Supplier's
material cost, or a decline in industry conditions), may result in a review of
Agreement terms and/or negotiated adjustments in the Contract Price. Subject to
Section 9 of this Agreement regarding prohibited activities and confidentiality,
[**] any Item [**] and for [**], then Supplier [**] thereof and, [**].
(e) Taxes. Applied will pay any applicable sales, use or similar tax imposed in
connection with the sale of Items to Applied; provided, that Supplier shall not
charge or collect, and Applied shall have no liability for, taxes on any sale of
Items for which Applied has provided Supplier with an appropriate resale
certificate or other documentation evidencing an exemption from such taxes. For
all sales of Items upon which tax reimbursement to Supplier is applicable,
Supplier shall separately identify and itemize all applicable taxes on invoices
submitted to Applied.
(f) [**]. Subject to Section 9 of this Agreement regarding prohibited activities
and confidentiality, Supplier warrants and agrees that, if such sales are
permitted, it will not sell to any third party goods or services similar or
identical to any Items [**] set forth in this Agreement. [**], Supplier shall
[**] between Supplier and Applied. [**] Supplier will [**], this Agreement [**]
an Item [**] Supplier will [**] and the [**] on the date [**] from the date
[**]. Notwithstanding the foregoing, in no event shall Supplier offer or sell
Items to Applied at prices or on terms that would be unlawfully discriminatory
under applicable law.
(g) [**] Pricing. Applied may require MKS to use specified sources of supply for
build to print assembly components. In such instances, Applied will [**] pricing
for those components. Upon notification by Supplier [**] as directed, Applied
will, [**] with the specified source of supply, [**] to Supplier [**] with the
specified source of supply, [**] supply for these components.
5. DELIVERY OF ITEMS.
(a) Delivery Requirements. Time is of the essence as to the delivery of all
Items ordered under this Agreement. Supplier shall meet the (i) negotiated lead
time; (ii) order adjustment requirements as set forth in Section 3; and (iii)
time, date, location and other delivery requirements for Items, as specified in
Attachment 1 or, if not set forth in Attachment 1, as set forth in the
Authorized Demand Signal for said Items, irrespective of which Applied
organization or division has issued the Authorized Demand Signal. Delivery will
be considered timely only if Items are delivered in the correct quantity, and at
the time, date and location specified in the Authorized Demand Signal. If
necessary for Supplier to meet its delivery requirements, Supplier at its
expense, will use expedited delivery methods to complete and deliver the Items.
GLOBAL SUPPLY AGREEMENT
(b) Delivery Requirements for Spares Down Orders. Supplier acknowledges that it
may be necessary to provide expedited support and delivery service for the
division of Applied responsible for furnishing spare parts and service to
Applied's customers, referred to as Customer Productivity Support ("CPS") or its
successor entity. As to any Authorized Demand Signal identified as a "Spares
Down Order," Supplier shall (i) respond (via telephone or electronically) within
[**] to any Applied inquiry relating to a Spares Down Order; (ii) ship the Items
set forth in the Spares Down Order [**], or as soon as possible [**], following
receipt of a Spares Down Order if such Order is sent to Supplier [**] Supplier
local time; or if the Spares Down Order is sent to Supplier [**] Supplier local
time [**]; and (iii) notify (via telephone or electronically) Applied when the
Item set forth in the Spares Down Order leaves the Supplier's facility. If
Supplier cannot meet all of Applied's delivery requirements for Items ordered,
then Supplier shall (A) provide notice to Applied of such event, and (B)
prioritize Items set forth in a Spares Down Order over other Items ordered via
any other Authorized Demand Signal. Supplier shall comply with any special
packaging and labeling requirements as to any Spares Down Order, as set forth in
the Packaging Specification (0250 00098), Unit Packaging Label Specification
(0250-60124), Supplier Packaging and Handling Requirements (0251-05100) and
Supplier and Engineering Requirements for Supplier Identification (0250-01033)
located on the Applied Web Site, [**].
(c) Remedies. If Supplier fails to deliver any Item at the time and place set
forth in the Authorized Demand Signal, Applied shall have the right, at its sole
option, to (i) require Supplier, [**] to complete and deliver the Items; or (ii)
allocate or redirect the Supplier's deliveries of Items to certain Applied
facilities, or (iii) [**] Supplier with [**] the Contract Price [**].
6. SHIPPING AND RISK OF LOSS.
(a) Shipping and Packaging Requirements.
(i) Supplier will ship all Items in accordance with the Transportation
Routing Guide located on the Applied Web Site, including use of approved
carriers as may be applicable given the classification of the shipment (i.e.,
domestic or international).
(ii) Supplier shall comply with any special packaging and labeling
requirements for Items as set forth in the Unit Packaging Label Specifications
(0250-60124), Supplier Packaging and Handling Requirements (0251-05100) and
Supplier and Engineering Requirements for Supplier Identification (0250-01033)
located on the Applied Web Site, [**]. In the event such Business Processes are
not applicable to an Item, the Item shall be packaged, marked and labeled in
accordance with best commercial practices. In all events, however, Supplier must
include a valid packing slip number or package ID on each package or shipment of
Items.
(b) Shipments and Insurance.
(i) US-Based Shipments. For Items manufactured in the United States
where the applicable destination point is also in the United States, [**] shall
be responsible for all costs and expenses (other than insurance) to deliver the
Items to the applicable destination point once such Items have been tendered to
the carrier, provided that [**]. All delivery costs and expenses for such
shipment shall be specified as [**] on bills of lading or shipping receipts, to
be paid directly [**]. Unless specifically approved by [**] in advance, Applied
shall not be responsible for, delivery costs and expenses (i) in excess of the
costs determined [**]; (ii) payable to carriers not approved [**], (iii)
incurred as a result of [**] need to use expedited delivery methods, unless such
expedited delivery methods are approved [**] in advance in writing, or (iv)
incurred in connection with the transportation of Items between [**].
(ii) Other Shipments. For Items not covered by Section 6(b)(i) above, (i)
[**] shall be responsible for all delivery costs and expenses to deliver the
Items to the applicable destination point when using a carrier [**], otherwise
(ii) [**] shall be responsible for all costs and expenses (other than
GLOBAL SUPPLY AGREEMENT
insurance) once such Items have been tendered to the carrier. All delivery costs
and expenses for such shipment shall be specified as [**] on bills of lading or
shipping receipts, to be paid directly [**].
(iii) Insurance and Risk of Loss. In all events, Supplier shall be
responsible for risk of loss for all Items during transport, up to at least the
Contract Price of such Item, until delivered to the applicable destination point
and accepted by Applied. In addition, Supplier's responsibility for risk of loss
continues with respect to any Item rejected by Applied, or as to any Item for
which acceptance is revoked, except if such loss is caused by the gross
negligence of Applied's employees acting within the scope of their employment.
7. ACCEPTANCE AND TITLE TRANSFER. Title to an Item will only transfer to Applied
upon acceptance of an Item. Acceptance shall occur only in the event that: (i)
Applied or its designee has received the Item at the specified destination
point; and (ii) either (1) Applied or its designee has entered the Item into
Applied's internal enterprise systems (Oracle, SAP, etc.), or (2) a period of
[**] from the delivery of the Item has elapsed. At any point prior to
acceptance, Applied may reject and return any Item that does not conform to the
applicable Specifications and incur no liability or obligation related to such
Item. As to Items that are rejected and returned, Applied may recover and offset
or adjust payments in respect of such Items.
8. PAYMENT.
(a) Payment Terms. Payment by Applied for an Item will be made [**] from the
later of the date of (i) Applied's receipt of an invoice for the Item consistent
with the terms of this Agreement and (ii) Applied's acceptance of the Item. [**]
to make payments under this Agreement by either check or electronic funds
transfer, and Supplier shall provide Applied with the information necessary for
electronic funds transfer capability.
(b) Invoices. Upon mutual agreement, Supplier shall participate in Applied's
Evaluated Receipts Settlement ("ERS") Program, whereby Supplier is paid based on
the quantity of Items received and the Contract Price for such Items, without
Supplier providing an invoice. The terms and conditions of the ERS Program are
as set forth in the ERS Program Requirements located on the Applied Web Site. If
the Parties agree that Supplier will not participate in the ERS Program, then
Supplier will remit an Item invoice to Applied no earlier than when the Item is
shipped to Applied and adhere to the section of the ERS Program Requirements
entitled "Invoicing Requirements for Non-ERS Suppliers" located on the Applied
Web Site.
(c) [**] Payment [**]. Applied's payment for an Item shall [**]. All payments
shall [**].
(d) Reconciliation of Payment Discrepancies. As to any payment discrepancy,
including any claim by Supplier against Applied for payment, nonpayment, damages
or other adjustments as to delivered Items (a "Payment Discrepancy"), Supplier
must, as a condition precedent to any such claim, give notice of its Payment
Discrepancy claim by properly completing and delivering to Applied a Payment
Discrepancy notification for all delivered Items within [**] from the earliest
of any of the following which discloses a Payment Discrepancy: (i) the issuance
of an ERS report under the ERS Program; (ii) the date on which an invoice is
returned to Supplier; (iii) the date of partial payment or (iv) the date of
delivery of notice to Supplier of a Payment Discrepancy. The required Payment
Discrepancy form, submission procedures and contact information are as set forth
in the Supplier Payment Discrepancy Claims Process located on the Applied Web
Site.
9. CONFIDENTIALITY AND PROHIBITED ACTIVITIES.
GLOBAL SUPPLY AGREEMENT
(a) General. "Confidential Information" means all information obtained by,
disclosed to, or developed by Supplier and that is based on, incorporates,
constitutes or derived from any of the following: (i) samples, schematics,
drawings, designs, Specifications, manuals, Applied Forecasts or other
forecasts, Authorized Demand Signals, customer information and other technical,
business, financial or trade secret information obtained from or through Applied
including Internal Applied Data; and (ii) all other proprietary, technical,
business, financial or trade secret information obtained by Supplier during the
term of Applied and Supplier's business relations, or in connection with the
negotiation, performance or enforcement of the Agreement. Confidential
Information does not include information that (A) is or becomes a matter of
public knowledge through no fault or act of Supplier; (B) is rightfully received
by Supplier from a third party not subject to restriction on disclosure of such
information; (C) is independently developed by Supplier without the use of any
Confidential Information; or (D) was rightfully in the possession of Supplier
prior to its disclosure by or on behalf of Applied; provided, however, that such
information shall be Confidential Information to the extent that (1) such
information constitutes specific information, even if it is embraced by more
general information which is a matter of public knowledge or in the possession
of Supplier, or (2) such information is a combination of individual items of
information, even if that combination could be reconstructed from
non-confidential sources if none of the non-confidential sources shows the whole
combination and its principle of operation; and, provided further, that the sale
or unrestricted disclosure of an Item or other article or product made through a
confidential manufacturing process of Applied shall not be deemed to constitute
a public disclosure of the process. Supplier shall use reasonable care to
protect the confidentiality of Confidential Information, and in any event,
Supplier shall use at least that degree of care that Supplier uses to protect it
own like information.
(b) Permitted and Prohibited Activities. Except as expressly authorized in this
Section 9(b), Supplier (i) may use Confidential Information solely for the
purpose of providing Items to Applied and may provide Confidential Information
only to those individuals who need to know such Confidential Information to
provide Items to Applied, provided it is clearly marked as "Applied Materials
Confidential Information"; and (ii) shall not use or disclose any Confidential
Information for any purpose, including: (a) reverse engineering the Items; (b)
developing, designing, manufacturing, engineering, refurbishing, selling or
offering for sale, any good or service which may be used or sold as a
replacement for any Item or other good used on or with Applied equipment for
which Applied provided Supplier with Confidential Information at any time,
including modifications to any Item; or (c) assisting any third party in any
manner to perform any such activities. In addition, Supplier shall not make or
sell to any third party any good or service that may be used or sold as a
replacement for any Item or other good used on or with Applied equipment for
which Applied provided Supplier with Confidential Information at any time,
including modifications to Items. Further, Supplier agrees not to disclose to
Applied any information that Supplier or any third party regards as proprietary
or confidential, except pursuant to a written Non-Disclosure Agreement between
the Parties. Supplier's obligations under this section shall not apply to any
disclosure required by applicable law, regulation, court order or legal process,
provided that (1) with respect to any disclosure required pursuant to court
order or legal process, Supplier shall provide Applied with at least ten (10)
days' advance written notice of any intended disclosure (or such shorter notice
as necessary to comply with the order or legal process) to permit Applied to
seek a protective order and shall reasonably cooperate with Applied in
connection therewith; and (2) with respect to any other disclosure required by
applicable law or regulation, Supplier shall provide Applied with at least ten
(10) days' advance written notice of any intended disclosure (or such shorter
notice as necessary to comply with applicable law) and shall, to the extent
consistent with Supplier's disclosure obligations, use reasonable efforts to
secure confidential treatment of the Confidential Information, reasonably
cooperate with Applied in connection therewith (including keeping Applied
informed about the substance and status of the confidential treatment request),
and disclose only the minimum information necessary to comply with such
requirements.
(c) Other NDA's. During the business relationship between Supplier and Applied
one or more NDA's may be entered into. In the event of an apparent conflict
between or among provision(s) of this Agreement and any NDA, such provisions
shall be read in a mutually consistent way, or if no such reading is reasonably
possible, the provision(s) that are most protective of Confidential Information
shall take precedence over conflicting or less protective provision(s).
GLOBAL SUPPLY AGREEMENT
(d) Equitable Relief. Supplier agrees that Applied would suffer irreparable harm
for which monetary damages are an inadequate remedy, and that equitable relief
is appropriate, if Supplier were to breach or threaten to breach any obligations
in this Section 9.
(e) Press Releases/Publicity Not Authorized. Except as specified in Section 9(b)
above, Supplier will not issue any press release, advertising, publicity or
public statement or in any way engage in any other form of public disclosure
that indicates Applied's relationship with Supplier or implies any endorsement
by Applied of Supplier or Supplier's products or services, without the prior
written approval of Applied.
(f) Disposal of Confidential Information. Upon the termination or expiration of
the Agreement, and otherwise upon the request of Applied, Supplier will promptly
return to Applied all Confidential Information and all documentation that reveal
or are based in any way on Confidential Information, and permanently eliminate
the same from all of its computer and information storage systems. Thereafter,
Supplier shall cease all use of Confidential Information. Supplier may, however,
with Applied's prior written approval, destroy any Applied Confidential
Information or documentation, provided that Supplier certifies to Applied the
destruction of such Confidential Information or documentation reflecting same.
In addition, Supplier agrees it will immediately return to Applied any materials
provided to it to facilitate electronic access to Internal Applied Data,
including any SecureID(R) key, documents, software or other items.
10. ELECTRONIC ACCESS TO INTERNAL APPLIED DATA.
(a) General. If Supplier is granted access to Internal Applied Data then, in
addition to Supplier's obligations under Sections 9 and 11, the terms and
conditions of this Section shall apply. Supplier's access to the Internal
Applied Data is subject to compliance with (i) the terms of use, if any, of the
Applied Web Site or such other database or intranet, as applicable, and (ii) any
technical and security requirements of Applied, including the issuance of
passwords and requirements related to using Applied's Virtual Private Network
and [**]. Applied may terminate Supplier's right of access or change the method
of access to the Internal Applied Data at any time. In no event shall Supplier
facilitate or enable access to Internal Applied Data by any Sub-tier Supplier or
other third party.
(b) Use. If Applied grants Supplier access to the Internal Applied Data, then
Supplier shall have the limited right to download, store, display and use
Applied Internal Data for the sole purpose of performing its obligations under
this Agreement in connection with the design, manufacture and sale of Items to
Applied. Supplier may not use the Applied Internal Data in any other way,
commercially or otherwise. Unless otherwise notified by Applied, Supplier may
store copies of Internal Applied Data on Supplier's networks and information
storage systems, provided, such Internal Applied Data is stored either on
hardware that is dedicated solely to Applied, or otherwise separated from other
information of Supplier, so that the Internal Applied Data is not accessible to
individuals except as authorized by this Agreement. If Applied provides Supplier
with any recommendations for establishing an interface or other methods of
accessing the Internal Applied Data, Supplier assumes all risk in implementing
any such recommendation. Supplier acknowledges that the Internal Applied Data
may be made available via a software program which, for convenience, may
identify Supplier as the "Design Owner" or "Owner" in certain instances, or use
other terms which may appear to be inconsistent with the terms of Section 11
(Intellectual Property Rights). Such inconsistent terms will not apply to nor
affect the terms of Section 11 of this Agreement.
(c) Consent to Monitoring. Supplier agrees that its access to and use of
Internal Applied Data and all acts in connection with Applied's internal systems
are recorded and may be monitored. Supplier expressly consents to such recording
and monitoring. If such recording or monitoring reveals possible evidence of
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criminal activities involving any individual, then Applied may provide such
evidence to the appropriate law enforcement organization and take any other
appropriate action.
11. INTELLECTUAL PROPERTY RIGHTS.
(a) "[**] Rights" means all rights, whether registered or unregistered, arising
from or relating to patents, copyrights, trade secrets, trademarks, service
marks, trade names, mask works, moral rights and other proprietary rights in any
jurisdiction [**] in and to [**] information, [**], and/or [**] that are [**],
or with respect to which [**], whether prior to the [**] or after, and otherwise
independent of [**]; and any [**] thereto.
(b) "[**] Rights" means all [**] Rights in and to [**] information, [**] that is
[**] entered into between Supplier and Applied, and/or [**] that are [**], or
with respect to which [**], whether prior to the [**] or after, and otherwise
independent of [**]; and any [**] thereto.
(c) "[**] Item" means any Item that is [**], in accordance with [**] and
provided by [**] thereto. For avoidance of confusion, [**] Items are based in
whole or in substantial part [**].
(d) "[**] Item" means an Item in which the design, development and/or
configuration (i) [**] (but where such [**] does not qualify as a [**] Item);
(ii) which contains, as a [**] of the [**] either provided [**] to an [**]; or
(iii) contains a [**] of any of the foregoing. Without limiting the foregoing,
the parties acknowledge that [**] provided [**] in connection with [**] will be
considered [**]. In consideration of the above, Supplier agrees that [**] is
specified [**], or unless otherwise agreed upon in writing by Applied and
Supplier.
(e) Categorization of Items on Attachment 1. Applied and Supplier acknowledge
that as of the Effective Date, each Item provided to Applied by Supplier shall
be designated as falling into one of the following categories, each of which
[**]: (i) Items [**], including [**] Items ("[**] Items"), (ii) [**] Items, or
(iii) Items [**] ("[**] Items"). This categorization shall be included in a
separate column on Attachment 1 to this Agreement. In addition, Supplier and
Applied agree [**] after the [**] set forth [**] as belonging [**]. The Parties
hereby agree that, (i) with respect to [**], Supplier shall have [**] any
product that is the [**] an Item, [**] pursuant to the license set forth [**];
(ii) with respect to [**] Items, Supplier shall have [**] Items, [**], only in
accordance with [**], and (iii) with respect to [**] Items, Supplier shall [**].
In addition to the Parties [**] as set forth above, the Parties agree that [**]
1) the Agreement [**] and the parties have [**] of the Agreement or similar
successor[**]agreement [**] and 2) [**] [**] within such [**] then Applied and
Supplier will [**] whether [**] may be [**] other than [**] such [**] period.
(f) Ownership, Assignment and License. Applied owns all right, title and
interest in Applied's IP Rights. Supplier owns all right, title and interest in
Supplier IP Rights. Supplier hereby irrevocably transfers and assigns to
Applied, without further compensation, any and all of Supplier's right, title
and interest in and to Applied's IP Rights. Applied grants to Supplier a
non-exclusive, revocable, royalty-free, limited and non-transferable license to
use Applied's IP Rights solely for the purpose of performing Supplier's
obligations under this Agreement to manufacture and sell to Applied Items under
the Agreement. This license may be revoked by Applied at any time, with or
without cause, and shall expire in any event, if not sooner revoked, on the
expiration or termination of the Agreement. Such license shall not be assigned
or transferred in any way, and shall not succeed to or vest in any successor.
Applied does not grant to Supplier any other license or other right to or under
any Applied IP Right for Supplier's own benefit to use in any other way,
commercially or otherwise, or to provide or offer Items or other products or
services to any Party other than Applied. Supplier further agrees never to make
any claim in or to Applied's IP Rights licensed to Supplier or to any interest
in or derived from same. Notwithstanding this transfer and assignment,
Supplier's IP Rights shall not be assigned or transferred to Applied under this
Section.
(g) Further Assurances. [**], Supplier will take, and will cause its employees,
agents, and Sub-tier Suppliers to take, all actions reasonably requested by
Applied, from time to time, to fully vest or perfect
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Applied's IP Rights. Such actions shall include providing documents and
information useful or necessary to (i) register, apply for or maintain any of
Applied's IP Rights; or (ii) pursue or defend any administrative, court, or
other legal proceeding involving any of Applied's IP Rights. In addition, during
the Term, Supplier shall promptly disclose to Applied any of Applied's IP Rights
of which it is aware.
(h) License to Marks. Applied grants to Supplier a non-exclusive, revocable,
royalty-free, limited and non-transferable license to affix or install on Items
those trademarks, service marks and trade names of Applied's (collectively,
"Marks") that are specified to be installed or affixed under Applied
Specifications for the Items. Such license of Marks is limited, revocable by
Applied, shall not be assigned, sublicensed or transferred in any way. Use by
Supplier of all Marks shall be solely for the benefit of Applied and as directed
by Applied. Supplier shall install and affix the Marks solely in accordance with
Applied's specifications, packaging and labeling requirements and any quality
requirements for the Marks or Items that Applied may establish. Applied may
inspect Supplier's facilities and examine Items at any time during normal
business hours to monitor or evaluate the quality of the Marks affixed to the
Item. Applied agrees to use third party inspectors whenever possible, provide
reasonable notice, and inspect only in areas necessary to monitor or evaluate
the quality of Marks affixed to the Items.
(i) Agreement with Employees or Others. As to any Supplier employee, agent,
Sub-tier Supplier or designated third party who is authorized to receive or
obtain (directly or indirectly) Confidential Information (collectively, the
"Recipients"), Supplier shall ensure that the Recipients have entered into a
written agreement with Supplier, prior to the Recipient obtaining any
Confidential Information, which obligates the Recipient to (i) hold all
Confidential Information in confidence and not to use the Confidential
Information in any way, except on behalf of Supplier in performing its
obligations hereunder for the benefit of Applied and otherwise protect the
Confidential Information upon substantially similar terms to those set forth in
Section 9. Supplier acknowledges Applied's right to audit such agreements in
accordance with Section 19.(d).
(j) Escrow Agreement for Vital Items. "Vital Item" means an Item that, at any
time, Applied is not able to replace with a reasonably practicable commercial
alternative within [**] of Applied desiring to do so. Any Item identified as a
Vital Item will be so designated on Attachment 1. Upon Applied's request,
Applied and Supplier agree to execute a mutually agreeable three party escrow
agreement, substantially in the form set forth in the Technology Escrow
Agreement located on the Applied Web Site, covering a Vital Item.
12. WARRANTY.
(a) Supplier Warranty: Supplier represents and warrants that, for a period of
[**] from the date of shipment to Applied, Items (i) will be free from defects
in workmanship, material, and manufacture; (ii) will comply with the
requirements of this Agreement, including all Applied Specifications and
manufacturing work instructions; and (iii) will be of merchantable quality and
fit and suitable for the purpose intended by Applied. Supplier further
represents and warrants that (A) all new Items will consist of new (not used or
recycled) material, and (B) Applied shall acquire good and marketable title to
all new Items, free and clear of all liens, claims and encumbrances. Further, to
the extent that the design of an Item is Supplier's responsibility, Supplier
represents and warrants that such design will be free from defects.
Notwithstanding the above, Supplier and Applied agree that [**] as set forth in
Attachment 1 will be [**] to Applied.
(b) Services. All Supplier repair and maintenance services performed in
connection with this Agreement will be performed in a competent, professional
and workmanlike manner, free from defects, and in accordance with the best
professional practices in the industry. For the purposes of this Section, the
results of any service performed by Supplier will be considered included in the
term "Item."
(c) Free from Infringement. Supplier represents and warrants that the Items,
including the manufacture, use and sale of the Items, shall not [**], nor be
subject to, any claim or liability for infringement of any
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intellectual property rights, including any patent, copyright, trademark, trade
secrets, moral rights, confidential information or any other proprietary or
intellectual property rights, of any third party, except to the extent that the
infringement was caused by Supplier's compliance with a detailed design
furnished and required by Applied.
(d) Miscellaneous Warranty Items. From time to time Applied may designate
certain third parties, including its customers, to directly avail itself of
Applied's rights under this Section. Applied may assign and transfer, in whole
or in part, the rights provided by Supplier to Applied under this Section to any
of Applied's customers. The warranties set forth in this Agreement are in
addition to all other warranties, expressed or implied, and will survive any
delivery, inspection, acceptance or payment by Applied.
(e) Remedies. If an Item does not meet the warranty requirements set forth in
this Agreement, Applied may, at its option, (i) [**] any defective or
nonconforming Item by, at Applied's option, [**]; or (ii) [**] such defective or
nonconforming Item [**] thereof; or (iii) [**] the defective or nonconforming
Item [**] with any [**] Item under this Agreement [**]. In addition, Applied may
cancel the balance of the undelivered, defective or nonconforming Items and/or
terminate this Agreement in accordance with its terms. As to any Item that is
repaired, replaced, corrected or returned for a credit or price recovery under
this Section, Supplier's warranty shall continue to apply to such Item for (A)
the full remaining balance of the original warranty period applicable to such
Item, or (B) [**] from the date such repaired, replaced or corrected Item is
received and accepted by Applied, whichever period of time is greater. Upon
request from Applied, Supplier shall provide pre-approved returned material
authorization ("RMA(s)") to facilitate return of Items. Applied may notify
Supplier of defects and nonconformances and communicate its elected remedy by
delivery of notice or in accordance with the discrepant material report ("DMR")
and closed-loop corrective action processes as set forth in Applied's Supplier
Corrective Action Request located on the Applied Web Site.
(f) Extended Warranty; Epidemic Failure. Without limiting Applied's rights as
specified elsewhere in this Section 12, if an Item is discovered to be defective
[**] such Item [**] set forth in Attachment 1, then, [**], Supplier will extend
the warranty period for such Item [**] from the date on which the warranty for
the Item would otherwise expire.
(g) Timing. If Supplier receives notice that an Item is defective or
non-confirming, then Supplier will use the most expeditious manner possible to
effect the action specified by Applied, including the use of overnight delivery
services for shipment of Items to Applied. For any Item for which a repair or
replacement timeline is identified in Attachment 1, Supplier will repair or
replace such Item within such timeline. In response to a request for support for
Applied's production or Applied's global field support requirements, Supplier
will contact Applied and acknowledge the request for support within [**] and
will complete the repair and/or replacement as requested by Applied within [**]
unless otherwise agreed by both parties.
(h) Costs. Supplier shall be solely responsible for all costs, fees and expenses
in connection with fulfilling its obligations under this Section, including all
labor, material, parts, shipping, taxes, customs and other costs, fees and
expenses arising from, among other things, the removal, repair, replacement,
reinstallation, inspection, shipping and testing of any defective or
nonconforming Items by Supplier. Any such costs, fees or expenses [**]. Supplier
will provide [**] as required, [**]. [**].
13. SUPPLIER REFURBISHMENT SERVICES. "Refurbishment Services" means services (i)
to correct or repair any defect or non-conformance to an Item (that is not
covered by Section 12); and (ii) to retrofit an Item such that it complies with
the most current released Specification for a newly manufactured version of the
Item, regardless of whether the Item is within its warranty period. Upon
Applied's request for Refurbishment Services, Supplier and Applied shall
negotiate in good faith to enter into an arrangement governing the Refurbishment
Services ("a Refurbishment Agreement") substantially similar in form to that
located on the Applied Web Site. If no pricing for Refurbishment Services is
established for an Item under a Refurbishment Agreement or otherwise, Supplier
agrees that charges for Refurbishment Services
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for Items no longer under warranty shall not exceed [**] percent of the price of
a newly-manufactured Item. Upon request from Applied, Supplier shall provide
pre-approved RMA(s) to facilitate return of Items. Items whose repair costs
exceed [**] percent will be deemed [**] by Supplier and, at Applied's option
[**]. For Items that are [**] agrees to pay all [**]. For Items returned [**] as
set forth [**], or if not set forth [**]:
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[**] TABLE
--------------------
[**] [**] [**]
---- ---- ----
[**] [**] [**]
[**] [**] [**]
[**] [**] [**]
[**] [**] [**]
[**] [**] [**]
[**] [**] [**]
[**] [**] [**]
14. SUPPLIER PERFORMANCE PLAN. Applied and Supplier will jointly develop a
Supplier Performance Plan in the form set forth on the Applied Web Site.
Supplier agrees to self-monitor its performance, at both corporate and
operational site levels, against the performance targets established in the
Supplier Performance Plan. At least once a month, Supplier will submit to
Applied its actual performance against performance targets in the Supplier
Performance Plan.
15. MANUFACTURING REQUIREMENTS.
(a) First Article Inspections. Applied and Supplier shall perform inspections in
compliance with the requirements set forth in the Supplier First Article
Requirements located on the Applied Web Site for those Items designated by
Applied ("First Articles"). Supplier shall provide all documentation necessary
for Applied to inspect a First Article.
(b) Design and Process Change Communication. After Applied has approved the
First Article, Supplier shall not make any change to the design (firmware,
hardware or software) of the Item that may alter the form, fit, or function of
parts without first submitting a Supplier Problem Sheet (SPS) in the form set
forth on the Applied Web Site. Supplier will not make any [**] changes that
affect Item [**] without first submitting a Supplier Notification Form (SNF) in
the form set forth on the Applied Web Site. Notwithstanding the work
instructions set forth in a Supplier SNF Work Instruction or Change
Communication Guideline, any communication of a change to Supplier manufacturing
site location will use the following guideline: (i) Applied approval is required
prior to "First Article" manufacturing site change for any Supplier Series Code
(product family); (ii) once "First Article" manufacturing site change is
approved, other products within the same Supplier Series Code may use the new
manufacturing site upon notification to Applied.
(c) Other Changes and Equitable Adjustments. Applied may, upon notice to
Supplier, submit Engineering Change Orders ("ECOs") or request other changes
within the scope of the Agreement with respect to any of the following: (i)
Specifications; (ii) the place and date of delivery of Items; or (iii) the
place, date and manner of inspection or receipt of Items. Supplier agrees that
it will use reasonable efforts to accommodate such requests in a timely and cost
effective manner. If any request for such changes causes an increase or decrease
in the cost of or time required for performance of the Agreement, Applied will
consider an equitable adjustment in the Contract Price or delivery schedule, or
both, and the Agreement shall be modified in writing accordingly. If Applied and
Supplier are unable to agree upon an equitable adjustment, then [**] this
Agreement [**]. In the event that an ECO renders an Item obsolete, Supplier may
submit a claim in accordance with 16(e) Claim for Reimbursement of Obsolete
Items, or 21(b) Termination for Convenience. No claim by Supplier for adjustment
under this subsection shall be valid unless in writing and received by Applied
within [**] from the date of Supplier's receipt of the notice of such change;
provided, however, that such period may be extended upon the written approval of
Applied. Supplier's expectations and responsibilities associated with the ECO
Process Requirements are set forth on the Applied Web Site. Notwithstanding the
work instructions set forth in the "Engineering Change Orders" section of the
ECO Process Requirements, Supplier agrees to
GLOBAL SUPPLY AGREEMENT
acknowledge any Applied ECO communication within [**] of receipt of said
communication. For Supplier initiated ECO's, Supplier does not [**], any
existing Items (including but not limited to field replaceable units ("FRU")
inventories) [**] and which are located [**].
(d) Quality Requirements. Supplier shall comply with Applied's quality
requirements set forth in the Supplier Quality Requirements located on the
Applied Web Site. Notwithstanding the work instructions set forth in said
Business Process, (i) Supplier shall make available test inspection results
related to repaired Items [**], (ii) Change Communication notice shall be as set
for the in GSA Section 15(b), (iii) Applied's workmanship standards will be
integrated [**], and (iv) any source inspection by Applied will be [**], upon
prior notification, [**].
(e) Ozone Depleting Chemical. Supplier will not deliver any Items manufactured
with or containing Class I ODCs, as defined under Section 602 of the Federal
Clean Air Act (42 USC Section 7671a). Supplier will certify to Applied that each
shipment of Items does not contain any Class I ODCs.
(f) Safety Notices. In addition to any of Supplier's obligations under this
Agreement or imposed by law, Supplier will immediately notify Applied of any
known or suspected safety issues related to an Item (including component or
material issues). Such notification shall be provided as follows: if the safety
issue relates to the design of an Item, notification shall be provided by
submitting a completed Supplier Problem Sheet (SPS); for all other issues,
notification shall be provided by submitting a completed Supplier Notification
Form (SNF).
16. MANAGEMENT OF INVENTORY.
(a) Vendor Managed Inventory. "Vendor Managed Inventory" or "VMI" means a
program whereby the Parties agree that Supplier will stock and maintain certain
Items at specified locations, with Supplier retaining title to, and risk of loss
with respect to, the Items until such Items are procured by Applied or its
designee in accordance with the terms and conditions of such program. In the
event the Parties agree that certain Items will be included within the VMI
program ("VMI Items"), Supplier agrees to manufacture and stock such VMI Items
in accordance with any authorized inventory planning and collaboration tool
provided to Supplier by Applied.
(b) Forecasts. Applied may periodically issue to Supplier rolling forecasts
setting forth projected demand for Items, whether by specific divisions or
otherwise ("Applied Forecasts"). Applied Forecasts are intended for planning
purposes only and shall not constitute a binding purchase commitment of Applied.
(c) [**] Requirements. Unless otherwise designated in Attachment 1 or the [**],
Supplier will maintain a minimum level of [**] of supply and a maximum of [**]
of supply of each [**] set forth in [**] shall be considered [**] under this
Agreement. When Supplier is creating [**], any reduction in quantity [**]
pursuant to [**] that is [**] shall be returned [**] accordingly. Supplier shall
monitor and report [**] to Applied [**].
(d) Claim for Reimbursement of Excess Items. If Applied has not taken delivery
of any unit of a VMI Item in Finished Good Inventory within [**] from the date
of Applied's last receipt of any such unit, Supplier may then submit a claim for
reimbursement for such Excess Items to Applied within [**] from the end of such
[**] period. Supplier's failure to submit such a claim within this [**] period
shall constitute waiver of any claim for reimbursement for such Excess Items and
Applied shall be released from all liability relating to such Excess Item.
(e) [**] Items. [**] will be considered [**] when Applied provides notice to
Supplier that [**] If Supplier desires to [**], then Supplier shall [**] within
[**] from the date on which Applied notifies Supplier that the [**]. Supplier's
failure to [**] within this [**] period shall constitute a waiver of any claim
for [**] and Applied shall be released from all liability relating to [**].
GLOBAL SUPPLY AGREEMENT
(f) Scope [**]. Applied will not be liable for [**] other than as described in
this Section. In addition, [**] shall be made in the following situations: (i)
[**] pursuant to [**]; (ii) if [**]; (iii) [**]; (iv) if [**] for such [**] or
has made [**] for such [**]; or (v) if such [**] that are [**] or have been [**]
in contrast to [**]. Notwithstanding, as to [**] will be considered [**]
identified in Attachment 1, [**] as described in this section.
(g) [**] Process. [**] under this Section will be addressed [**] between Applied
and Supplier. Supplier is [**] and otherwise [**] in any [**] shall be [**]
including [**], as well as a detailed description [**] will be based [**] as a
result [**] shall be considered [**] identified in the claim at any time during
normal business hours. Applied [**] whenever possible, [**]. In those cases [**]
will be mutually agreed upon [**].
(h) [**] Items. [**] Items as directed in writing by Applied. Excess and
Obsolete Items that are to be delivered to Applied's facilities must be
delivered in accordance with the requirements of this Agreement and/or any
supplemental instructions provided by Applied. In lieu of delivery to Applied,
Applied may [**] Items so that [**] with this requirement in accordance with
[**] in the form of the [**] located on the Applied Web Site.
17. MANAGEMENT OF SUB-TIER SUPPLIERS.
(a) Sub-tier Suppliers. After Applied has approved of the First Article of an
Item, Supplier shall not subcontract with a new or different Sub-tier Supplier
[**] of such Item, without notifying Applied. Supplier agrees to inform Applied
of any Sub-tier Supplier [**] changes that affect [**] of such Items (including
any changes in the manufacturing process of a Sub-tier Supplier) not less than
[**] prior to the date the Supplier is contemplating the implementation of the
change by following the notification processes set forth in the Supplier
Notification Form (SNF) located on the Applied Web Site.
(b) Sub-tier Supplier's Obligations to Applied. Supplier will ensure that all
Sub-tier Suppliers have entered into an agreement with Supplier obligating its
Sub-tier Suppliers to comply with all Specifications, quality and other
technical requirements that may be necessary in order for the Sub-tier Supplier
to timely deliver conforming Items, or any portion thereof, to the Supplier.
(c) Mandated Sub-tier Suppliers. "Special Process" means a process that
includes, but is not limited to, causing a metallurgical change to the base
material such as heat treating, forging or hardening processes; joining
materials by welding, brazing, or other bonding process; or providing a coating
or surface treatment such as cleaning, electropolishing, plating, painting, or
anodizing for Applied build-to-print parts per Specification. As to any Item(s)
which require a Special Process, Supplier must use one or more of the suppliers
and otherwise follow the requirements identified in the Applied Materials
Special Process Supplier Approval List located on the Applied Web Site. Supplier
will notify Applied of a change in Special Process Sub-tier Supplier for any
critical OEM part where the Special Process Supplier is specified on the Applied
Specification.
18. PRODUCT AND TRAINING SUPPORT.
(a) Supplier Response. Supplier will provide technical assistance and product
support services to Applied [**], seven (7) days a week, 24 hours a day, at no
additional charge. Supplier is expected to use best efforts to provide a
resolution to Applied's requests for technical assistance and product support
services. Supplier agrees to have an established and, at Applied's request,
deployable global technical assistance and product support service capability.
Applied agrees [**] in accordance with [**] Supplier [**] in the event the
parties agree [**] Supplier [**] or the request for support is made [**] shall
also include [**]. Supplier may utilize a Supplier distributor or other
qualified entity designated by Supplier to meet this requirement. If Supplier is
requested by Applied to provide an in-depth failure analysis of Item failures
occurring at an Applied facility or customer location, Supplier agrees to
provide timely analysis and feedback to Applied.
GLOBAL SUPPLY AGREEMENT
(b) On-Site Support Requirements. As determined by Applied, Supplier may be
asked to provide appropriate or necessary personnel to support on-site
manufacturing and/or material operations at Applied's facilities or at the
premises of a customer of Applied. On-site representatives shall comply with all
requirements of Applied or such customer with regard to such support. Supplier
on-site representatives will meet all Supplier Tier 1 warranty responsibilities
at no additional cost to Applied. [**] provided at Applied's facilities, [**].
As to any of Supplier's personnel who are assigned to Applied's facilities,
Supplier shall require such personnel to execute an On-site Representative
Agreement in substantially the form set forth on the Applied Web Site. [**]
On-site Representative (OSSR) support will be [**].
(c) Training Support. Upon Applied's request, Supplier shall provide user
repair, maintenance and trouble-shooting training and related documentation for
the Items to Applied. The Parties will mutually agree on the Items to be
included in the training and the specific content and level of training to be
provided. If no such training program exists, upon Applied's request, Supplier
shall develop and provide a training program in conjunction with Applied's
Global Technical Training Institute or its successor entity. Training provided
to Applied's Global Technical Training Institute shall be conducted at Applied's
Santa ▇▇▇▇▇ offices at standard training rate. Training provided at Applied's
Austin offices will be conducted [**]. If training outside the U.S. is deemed
necessary by Applied's regional representatives, [**] prior to training, [**].
MKS will provide Applied [**].
19. ELECTRONIC COMMUNICATION AND DOCUMENTATION.
(a) General. The Parties acknowledge that they are relying upon electronic
means, in addition to email and facsimile transmissions, to exchange Authorized
Demand Signals and other delivery and order information. Supplier agrees to
communicate with Applied using the standards designated by Applied. To the
extent communication through electronic means is inaccessible or made otherwise
unavailable due to technical difficulties or due to the effect of any law or
regulation governing electronic transactions, the Parties agree (i) that any
delivery or order information received electronically prior to the date of such
inaccessibility or unavailability will remain valid; and (ii) to conduct, to the
extent possible, their transactions by other than electronic means.
(b) Documentation Format Requirements. With each First Article delivered
hereunder, Supplier shall provide to Applied one (1) set of electronic files of
product, repair, maintenance and support documentation for such Item in
accordance with the Supplier First Article Requirements located on the Applied
Web Site. Electronic files shall be source files in either Adobe(R)
"Framemaker", or Microsoft(R) "Word", or other mutually agreed upon format. If
such documentation is not a part of Applied's IP Rights, then Applied shall have
the right to use, copy, display, modify, reproduce and distribute such
documentation as Applied deems necessary to support the Items. Applied may post,
or require Supplier to post, such documentation on a Web-based tool accessible
by Applied and its customers.
(c) Applied Unique Prototype Items or Subassemblies Documentation. Upon
Applied's request, Supplier shall provide to Applied [**], including [**],
including [**] (collectively, "Support Items"), which are manufactured,
purchased, or produced for Applied [**] and shall further provide [**] as to
Support Items. Supplier agrees to provide a complete ▇▇▇▇ of Materials,
reflecting as-manufactured or produced Support Items, including Supplier part
number and vendor or manufacturers' part number for purchased Support Items and
Applied's part number for cross-reference. Supplier shall provide a list of
recommended spare parts, with associated prices, for all Bills of Materials down
to the lowest user replaceable level. All Support Item Specifications are the
sole property of Applied. Any changes to process or Bills of Materials must
comply with the terms of this Agreement. If Supplier is purchasing Support Items
from Sub-tier Suppliers designated by Applied, Supplier agrees that upon written
notice from Applied, it will assign to Applied any such agreement between
Supplier and such Sub-tier Supplier, and Supplier will not enter into any
agreement restricting such assignment.
GLOBAL SUPPLY AGREEMENT
(d) Financial Statements and Right to Audit. At any time during the Term [**],
an auditor designated by Applied and reasonably acceptable to Supplier shall
have the right, at Applied's expense and upon reasonable notice, to conduct
audits of all of the relevant records, inventory, agreements, data connections,
and other documents of Supplier in order to verify and determine (i) whether all
amounts charged by Supplier comply with this Agreement; and (ii) whether
Supplier is otherwise in compliance with its duties and obligations under this
Agreement. Supplier shall provide, at its expense, reasonable assistance
necessary to enable the auditors to conduct such audit. Any amounts charged by
Supplier in excess of what is allowable under this Agreement shall be adjusted
and reimbursed to Applied within forty-five (45) days of discovery, plus
interest equal to the lesser of (1) [**] percent per annum, or (2) the highest
percentage allowed by law on such amount(s), accruing from the date of Applied's
[**]. Supplier agrees to keep true, complete, and accurate records in compliance
with Generally Accepted Accounting Principals (GAAP). Supplier will make
available to Applied all publicly released financial documents upon request.
20. CONTINUITY OF SUPPLY.
(a) Supplier Manufacturing Flexibility Requirements. Supplier shall perform
regular capacity planning to demonstrate upside/downside manufacturing
flexibility in accordance with changes in demand volume from Applied. Supplier
capacity planning must account for a minimum of (i) human resources and
associated training requirements; (ii) equipment; (iii) facilities; (iv) special
process supplier requirements; (v) supply chain management; and (vi) information
technology requirements. Supplier shall be capable of demonstrating capacity
flexibility in accordance with the table below.
MANUFACTURING RUN [**] [**] [**] [**] [**]
RATE
----------------- ---- ---- ---- ---- ----
CAPACITY +/- [**] [**] [**] [**] [**]
(b) Performance Constraints. Supplier is responsible for anticipating and
promptly notifying Applied of (i) any inability on its part or its Sub-tier's
part to perform their respective obligations under this Agreement; and (ii) any
breach of a provision of this Agreement.
(c) Disaster Recovery Plan. Upon Applied's request, Supplier shall provide to
Applied reasonable information describing its disaster recovery plan that
includes (i) emergency back-up capacity; (ii) escrow of information required in
connection with Vital Items pursuant to Section 11(g); and (iii) appropriate
record protection and recovery.
(d) Tooling. [**], upon Applied's request, Supplier agrees to itemize and/or
sell to Applied any tooling that is built or procured by Supplier that is unique
to the Items and/or relevant to the manufacture, testing or maintenance of Items
[**]. The purchase price of such tooling shall be at the fair market value. If
Applied provides notice of its election to purchase such tooling, upon Applied's
payment, title shall transfer to Applied. If at any time Supplier receives
tooling furnished by or purchased from or by Applied, Supplier shall comply with
the terms of the Applied Tooling Requirements located on the Applied Web Site.
(e) Wind Down. In the event of, or in preparation for, the expiration or a
termination of the Agreement for any reason, Supplier shall use commercially
reasonable efforts to transfer, or cooperate fully with Applied to enable
Applied to transfer, the performance of Supplier's obligations under the
Agreement to Applied or a Third Party supplier designated by Applied, in a
manner that (i) minimizes the time to complete such transfer; (ii) maintains the
highest quality and performance to ensure the adequate supply of Items; and
(iii) causes no disruption to Applied's customers' requirements.
(f) Availability Assurance. Supplier agrees to maintain capabilities necessary
to provide technical and service support to Applied and/or its designated
customers as to any Item for a minimum of [**] from the
GLOBAL SUPPLY AGREEMENT
date of final shipment of an Item to Applied. Alternatively, the Parties may
agree to establish a product support period of less than [**], provided Supplier
agrees to grant to Applied, or its authorized customers, [**], in a form and on
terms acceptable to Applied.
21. TERMINATION.
(a) Termination for Default. Applied may terminate this Agreement, including any
Authorized Demand Signal, in whole or in part, effective upon delivery of
written notice to Supplier if (i) Supplier fails to deliver Items in accordance
with the terms of this Agreement, including specified delivery times, Item
requirements or other Specifications; (ii) Supplier breaches any other provision
of this Agreement; (iii) Supplier anticipatorily repudiates any material
provision of this Agreement; (iv) Supplier becomes insolvent, files a petition
for relief under any bankruptcy, insolvency or similar law, makes an assignment
for the benefit of its creditors, or takes any action for (or in anticipation
of) any of the foregoing; or (v) there is a material adverse change in the
business, properties, prospects, operations or condition (financial or
otherwise) of Supplier. Upon any termination pursuant to this Section, Supplier
shall: (1) continue to supply any portion of the Items for which this Agreement
is not cancelled; (2) be liable for additional costs, if any, incurred by
Applied for the purchase of similar goods and services to cover such default;
and (3) at Applied's request, transfer title and deliver to Applied: (a) any
completed Items, (b) any partially completed Items, and (c) all unique materials
and tooling subject or relating to the termination. Termination of the Agreement
under this Section 21(a) shall constitute "cancellation" under the Uniform
Commercial Code as adopted in California. Applied may provide Supplier with
[**], and the time period and other terms [**] will be as specified in the
termination notice.
(b) Termination for Convenience.
(i) Applied may terminate the Agreement, including any Authorized Demand
Signal, in whole or in part, at any time for Applied's convenience by giving
Supplier written notice which shall state the extent of the termination and the
conduct required of Supplier in connection therewith. Such a cancellation may be
for reasons including a reduction in the quantity of an Item ordered under an
Authorized Demand Signal. Supplier will use commercially reasonable efforts to
mitigate any damages incurred in connection with such termination. Within [**]
from the date on which Supplier receives such notice, [**] in connection with
the termination [**] in the form and containing such [**]. In no event, shall
[**].
(ii) Failure [**] within this [**] period shall [**] such termination.
(iii) If [**], Applied and Supplier will [**]. If Applied and Supplier
[**] within [**] from Supplier, then the [**] of the following as to Items for
which [**] (provided that no [**]): (i) the [**] all Items delivered to Applied
pursuant to an Authorized Demand Signal [**]; (ii) [**] all Items ordered
pursuant to an Authorized Demand Signal and completed in accordance with the
Agreement but not delivered to Applied prior to [**], provided such Items [**];
(iii) [**] relating to Items ordered pursuant to an Authorized Demand Signal,
[**] either manufactured or procured by Supplier, [**] of the Agreement, and
[**]; and (iv) [**] Supplier [**] as a direct result of [**] such Sub-Tier
Suppliers or Supplier's termination of contracts with such Sub-tier Suppliers.
[**] pursuant to clauses (iii) and (iv) above shall be subject to [**].
(iv) This Section 21(b) sets forth Supplier's sole remedies, and
Applied's entire liability to Supplier, in the event of a termination by Applied
for convenience, excluding any termination or cancellation of a VMI Item, for
which Supplier's sole remedy and Applied's entire liability is as set forth in
Section 16.
(v) Notwithstanding Section 4. [**] Items listed on Attachment 1 hereto,
"List of Pricing Mechanisms and Lead Times", [**] Attachment 1, under the
following limited conditions:
GLOBAL SUPPLY AGREEMENT
(a) [**] Item that [**] the Supplier [**] the Item [**] in
Attachment 1. [**] Supplier and Applied are [**] the Item, [**] Attachment 1
[**]; or
(b) [**] the item that [**] Applied, and Supplier [**] for an Item
listed on Attachment 1. [**] Supplier and Applied are [**] the Item, Supplier
will [**] Attachment 1 [**]; or
(c) [**] an Item listed on Attachment 1. [**] Supplier and Applied
are[**] Attachment 1 [**] [**].
For items that [**] the application of this provision will be [**] described
above.
(c) Post Termination Consequences. On the date of termination or expiration of
the entire Agreement for any reason, Supplier shall (i) stop work being
performed by Supplier pursuant to the Agreement, (ii) cancel orders for parts
and/or materials relating to Items with Supplier's Sub-tier Suppliers and cease
ordering any such parts and/or materials, (iii) cancel work being performed by
Supplier's Sub-tier Suppliers relating to Items, (iv) protect all property in
which Applied has or may acquire an interest, (v) fully cooperate with Applied
to minimize any adverse effect on Applied or its customers, and (vi) perform
those other obligations set forth in this Agreement upon the termination or
expiration of this Agreement.
22. DISCLAIMER AND LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING ELSE IN
THIS AGREEMENT, IN NO EVENT SHALL [**] OR TO ANY OTHER PERSON OR ENTITY WITH
RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT, UNDER [**] OR OTHER [**], FOR
ANY (A) [**] OR (B) [**], EVEN IF [**] IN THIS AGREEMENT [**] AND EVEN IF [**]
OF ANY OF THE FOREGOING [**]: PROVIDED, HOWEVER, THAT THIS SECTION SHALL [**]
ARISING OUT OF OR RELATING TO (i) [**] (ii) [**] OR (iii) [**] OR (iv) [**]
OBLIGATIONS UNDER [**].
23. INDEMNITY BY SUPPLIER.
(a) Supplier shall defend, indemnify and hold harmless Applied from and against
any and all third party claims, demands, suits, actions, losses, penalties,
damages (whether actual, punitive, consequential or otherwise), authorized
settlements, and all other liabilities and associated costs and expenses,
including attorney's fees, expert's fees, costs of investigation and other costs
of litigation (all of the foregoing being collectively called "Indemnified
Liabilities"), arising out of or relating to (i) Supplier's breach of any
provision of the Agreement; (ii) any negligent, grossly negligent or intentional
acts, errors or omissions by Supplier, its employees, officers, agents or
representatives relating to the Agreement; or (iii) strict liability or products
liability with respect to or in connection with the Items; (iv) any claim by a
Sub-tier Supplier against Applied relating to the Agreement; or (v) the actual
or alleged infringement or misappropriation of patent, copyright, trademark,
trade secret rights, confidential information, proprietary rights, or other
rights of a third party, except to the extent that the infringement or
misappropriation was caused by Supplier's compliance with a detailed design
furnished and required by Applied. THE INDEMNITY BY SUPPLIER IN FAVOR OF APPLIED
SHALL EXTEND TO APPLIED, ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND
REPRESENTATIVES AND SHALL INCLUDE, AND IS INTENDED TO INCLUDE, INDEMNIFIED
LIABILITIES WHICH ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION TO BE THE
RESULT OF ACTS OR OMISSIONS OF SUPPLIER AS A JOINT TORTFEASOR. IF SUPPLIER IS
LIABLE ONLY AS A JOINT TORTFEASOR, THEN SUPPLIER'S LIABILITY SHALL NOT EXTEND TO
THAT PORTION OF LIABILITY DETERMINED BY THE COURT TO BE THE RESULT OF ACTS OR
OMISSIONS OF APPLIED. The indemnity of Supplier as to Indemnified Liabilities
under clauses (ii) and (iii) above, shall not extend to liabilities and damages
that are caused by the sole negligence of Applied, and as to Indemnified
Liabilities under clause (iv), shall not extend to liabilities and damages that
are caused as described in the "except to the extent" term of such clause (iv).
In addition to Supplier's obligations as to Indemnified Liabilities that arise
under clause (iv), Supplier shall, in order of
GLOBAL SUPPLY AGREEMENT
preference, (1) procure for Applied and its customers the right to continue to
use, sell and resale any affected Item, (2) with respect to a claim for
infringement, modify the affected Item so that it is no longer infringing, or
(3) replace any affected Item with a non-infringing good or service comparable
to the affected Item. If none of these alternatives are possible, Applied shall
have the right to return or destroy, at Applied's option, any affected Items for
a full refund of the purchase price, plus applicable transportation costs.
(b) In the event of any such Indemnified Liabilities, Applied shall (i) promptly
notify Supplier; (ii) at Supplier's expense, reasonably cooperate with Supplier
in the defense of such claim; and (iii) not settle any such Indemnified
Liabilities without Supplier's written consent, which shall not be unreasonably
withheld or delayed. Supplier shall keep Applied informed at all times as to the
status of Supplier's efforts and consult with Applied and/or its counsel
regarding such efforts. Supplier shall not settle any such claim without the
prior written consent of Applied, which shall not be unreasonably withheld or
delayed.
24. IMPORT AND EXPORT REQUIREMENTS.
(a) General. Supplier shall comply with all applicable export control laws or
regulations promulgated and administered by the laws of the United States or the
government of any other country with jurisdiction over the Parties or the
transactions contemplated by this Agreement ("Export Laws") including the
obligation that Supplier shall not export, re-export or otherwise disclose,
directly or indirectly, Items or technical data received from Applied or the
direct product of such technical data or Items to any person or destination when
such export, re-export or disclosure is in violation of Export Laws. Supplier
will provide Applied with any and all information that may be required to comply
with Export Laws, including applicable "Export Control Classification Numbers,"
documentation substantiating U.S. and foreign regulatory approvals for the
Items, and information required by Customs officials to substantiate the value
of imported Items including any adjustments in valuation attributable to
"assists" as defined by U.S. Customs regulations. All required export and import
information shall be sent to the attention of: Manager, Customs Compliance,
Applied Materials, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇/▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇; or any
agent so designated by Applied.
(b) Country of Manufacture. Items shall be marked with the country of origin as
required by Export Laws. Supplier shall provide Applied with a written statement
identifying for each Item delivered the (i) Applied part number and (ii) the
country of manufacture. This data shall be provided to Applied upon Applied's
request and in any event, once per calendar year. If Supplier is a U.S.
manufacturer of any Item supplied to Applied, as defined by U.S. Customs
regulations, Supplier shall, on an annual basis and in accordance with Applied's
written instructions, provide Applied with a signed manufacturer's affidavit.
(c) Duty Drawback. Supplier will provide Applied or its agent with U.S. Customs
entry data and information that Applied reasonably determines is necessary for
Applied to qualify for duty drawback. Such data shall include information and
receipts for duties paid, directly or indirectly, on all Items which are either
imported or contain imported parts or components. Information related to serial
numbers, unique part numbers, lot numbers and any other data which will assist
Applied in identifying imported Items sold to Applied shall also be provided. At
the time of delivery of the Items, but in no event later than thirty (30) days
after each calendar quarter, Supplier will provide said documents accompanied by
a completed Certificate of Delivery of Imported Merchandise or Certificate of
Manufacture and Delivery of Imported Merchandise (Customs Form 331) as
promulgated pursuant to ▇▇ ▇▇▇ ▇▇▇, or successor regulations.
25. INSURANCE.
Supplier shall maintain (i) comprehensive general liability insurance covering
bodily injury, property damage, contractual liability, products liability and
completed operations; (ii) Worker's Compensation and employer's liability
insurance; and (iii) auto insurance, all in such amounts as are necessary to
insure against the risks to Supplier's operations, but in no event less than the
following minimum amounts:
GLOBAL SUPPLY AGREEMENT
Insurance Minimum Limits of Liability
--------- ---------------------------
Worker's Compensation Statutory
Employer's Liability $1,000,000
Automobile Liability $1,000,000 per occurrence
Comprehensive General Liability
(Including Products Liability) $1,000,000 per occurrence
Umbrella/Excess Liability $1,000,000 per occurrence
All policies must be primary and non-contributing and shall include Applied as
an additional insured. Supplier also waives all rights of subrogation. Supplier
will require and verify that each of its Sub-tier Suppliers carries at least the
same insurance coverage and minimum limits of insurance, as Supplier is required
to carry pursuant to the Agreement. Supplier shall notify Applied at least
thirty (30) days prior to the cancellation or implementation of any material
change in the foregoing policy coverage that would affect Applied's interests.
Upon request, Supplier shall furnish to Applied as evidence of insurance a
certificate of insurance stating that the coverage will not be canceled or
materially altered without thirty (30) days prior notice to Applied.
26. MISCELLANEOUS.
(a) Assignment. This Agreement shall be binding on, and inure to the benefit of,
the Parties and their respective permitted assigns. Supplier shall not assign or
otherwise transfer this Agreement or any of Supplier's rights or obligations
hereunder, in any manner, including by way of merger, exchange or combination,
or sale of [**] percent ([**]%) or more of Supplier's capital stock or similar
ownership interests, or sale of all or substantially all of its assets or the
assets of any line of business involved in Supplier's performance of this
Agreement (each a "Change in Control"), or otherwise, [**]. Applied may not
assign or otherwise transfer this Agreement or any of its rights or obligations
hereunder, in whole or part, without prior written notification.
(b) [**]. Supplier will [**] later than the date [**], whichever is earliest.
[**].
(c) Waiver. If either Party fails to insist on performance of any term or
condition, or fails to exercise any right or privilege hereunder, such failure
shall not constitute a waiver of such term, condition, right or privilege.
(d) Survival of Obligations. Termination or expiration of this Agreement will
not relieve either Party of its obligations under Sections 8(c), 9, 11, 12,
19(d), 20(d) - (f), 21 - 24, 26(c) - (e), (g), (i) - (k), (n), (o), (q), (r),
(s) nor will termination or expiration relieve the Parties from any liability
arising prior to the date of termination or expiration.
(e) Severability. Any provision of this Agreement that is held unenforceable or
invalid for any reason by a court of competent jurisdiction shall be severed
from this Agreement, and the remainder of the Agreement shall continue in
effect; provided, that such unenforceable or invalid provision shall be given
effect to the maximum extent then permitted by law.
(f) General Compliance with Laws and EEO Regulations. Supplier represents,
warrants and agrees that (i) Supplier's execution, delivery and performance of
this Agreement will not conflict with or violate any applicable law, rule,
regulation, order, decree, or ordinance; and (ii) Supplier shall comply with the
requirements of 41 CFR Sections 60-1.4(a) - 250.5(a), and - 741.5(a), if
applicable, relating to equal opportunity clauses pertaining to government
contracts.
GLOBAL SUPPLY AGREEMENT
(g) Compliance with Securities Laws. Supplier agrees that certain of the
Confidential Information, including new product plans and Internal Applied Data,
may be "material, nonpublic information" for purposes of federal or state
securities laws, the awareness of which prohibits Supplier and its employees,
contractors, representatives and agents who possess "material, nonpublic
information" from (i) buying or selling Applied's securities (stock, options,
etc.) (i.e., "▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and (ii) passing Confidential Information on to
anyone who may buy or sell Applied securities (i.e., "tipping"), until after the
information has been disclosed to the public and absorbed by the market. Without
limiting any of Supplier's other obligations under this Agreement, Supplier will
comply with all federal and state securities laws prohibiting ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and tipping., and shall immediately notify Applied in the event of material any
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or tipping by Supplier or its employees, contractors,
representatives or agents of which it becomes aware.
(h) No Gratuity; FCPA. Supplier will not offer or give any gratuity to induce
any person or entity to enter into, execute or perform the Agreement or any
other agreement with Applied. Supplier further represents that it has knowledge
and understanding of the Foreign Corrupt Practices Act of the United States of
America, and that no principal, partner, officer, director or employee of
Supplier is or will become an official of any governmental body of any country
(other than the U.S.) in which Supplier provides goods or services for Applied
during the Term. Supplier agrees that it shall not, in the conduct of its
performance under this Agreement, and with regard to any funds, assets, or
records relating thereto, offer, pay, give, or promise to pay or give, directly
or indirectly, any payment or gift of any money or thing of value to (i) any
non-U.S. government official to influence any acts or decisions of such official
or to induce such official to use his influence with the local government to
effect or influence the decision of such government in order to assist Supplier
in its performance of its obligations under this Agreement or to benefit
Applied; (b) any political Party or candidate for public office for such
purpose; or (ii) any person if Supplier knows or has reason to know that such
money or thing of value will be offered, promised, paid, or given, directly or
indirectly, to any official, political Party, or candidate for such purpose. In
the event of any breach by Supplier of this Section, (1) Applied will have a
lawful claim against Supplier for any funds and/or the value of property paid by
Supplier in breach of this provision and (2) this Agreement will automatically
be rendered void.
(i) Applicable Law, Jurisdiction, Venue. This Agreement shall be governed by and
construed under the laws of California, excluding its conflicts of law rules.
Items shall be deemed and shall qualify as goods under the Uniform Commercial
Code as adopted in California. Any suit arising out of this Agreement, at law or
in equity, shall be brought in a state or federal court in California or Texas,
the jurisdiction of which state or federal court includes Santa ▇▇▇▇▇ County,
California or ▇▇▇▇▇▇ County, Texas, provided that such court has jurisdiction
over the subject matter of the suit. Each Party consents to personal
jurisdiction in the above courts. Supplier further consents to such venue as
Applied selects in any of such courts.
(j) CISG. With respect to transactions to which the 1980 United Nations
Convention on Contracts for the International Sale of Goods ("CISG") would
otherwise apply, the rights and obligations of the Parties under the Agreement
shall not be governed by the provisions of the CISG.
(k) General Representations. Supplier represents and warrants as follows: (i)
Supplier is duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its organization; and (ii) Supplier's execution and
delivery of this Agreement and Supplier's performance of its obligations
hereunder will not (1) violate any provision of the charter, bylaws or other
governing document of Supplier, or (2) conflict with, result in a breach of, or
constitute a default under, any other agreement or arrangement by which Supplier
is bound.
(l) Force Majeure. If and to the extent that a Party's performance of any of its
obligations pursuant to this Agreement is prevented, hindered or delayed by
fire, flood, earthquake, elements of nature or acts of God, acts of war,
terrorism, riots, civil disorders, rebellions, revolutions, strikes, labor
disputes or any other similar cause beyond the reasonable control of such Party
(each, a "Force Majeure Event"), then the
GLOBAL SUPPLY AGREEMENT
non-performing, hindered or delayed Party shall be excused for such
non-performance, hindrance or delay, as applicable, of those obligations
affected by the Force Majeure Event for as long as such Force Majeure Event
continues; provided, that such Party continues to use commercially reasonable
efforts to recommence performance whenever and to whatever extent possible
without delay, including through the use of alternate sources, workaround plans
or other means. Notwithstanding the preceding sentence, if the Force Majeure
Event continues for a period of more than thirty (30) days, Applied may
terminate this Agreement effective upon delivery of notice to Supplier and such
termination shall be deemed a termination pursuant to Section 21(a). The Party
whose performance is prevented, hindered or delayed by a Force Majeure Event
shall promptly notify the other Party in writing of the occurrence of a Force
Majeure Event and describe in reasonable detail the nature of the Force Majeure
Event.
(m) No Agency. Each Party shall be deemed to be an independent contractor and
not an agent, joint venturer or representative of the other Party, and neither
Party may create any obligations or responsibilities on behalf of or in the name
of the other Party. Each Party also agrees not to make false or misleading
statements, claims or representations about the other Party, its products or the
relationship of the parties.
(n) Cumulative Remedies. The rights and remedies of the Parties provided under
this Agreement are not exclusive, and may be exercised, alternatively or
cumulatively, with any other rights and remedies available to the Parties under
this Agreement or in law or in equity.
(o) Amendments and Modifications; Captions and Construction. Except as provided
in Section 2(c) (Updating Business Processes), amendments or revisions to this
Agreement must be in writing, signed by both Applied and Supplier duly
authorized representatives, traced by revision numbers and attached to the
original of this Agreement. Captions in this Agreement are for the convenience
of the Parties only and shall not affect the interpretation or construction of
this Agreement. As used in this Agreement, "include" and "including" shall mean
"without limitation." Time is of the essence with respect to Supplier's
performance under this Agreement.
(p) Counterparts and Facsimile. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute the same instrument.
For purposes hereof, a facsimile copy of this Agreement, including the signature
pages hereto, shall be deemed an original.
(q) Notices. Any notice, consent or approval required or permitted under this
Agreement shall be in writing (unless otherwise expressly stated) and shall be
given (1) personally; (2) by postage prepaid registered or certified airmail,
return receipt requested; (3) by overnight express courier; (4) by facsimile
with confirmation of delivery; or (5) by email with confirmation of delivery; to
the Parties as follows:
GLOBAL SUPPLY AGREEMENT
MKS INSTRUMENTS, INSTRUMENTS AND CONTROL PRODUCTS
MKS PMC (MKS) Products General Manager: ▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Product Manager: ▇. ▇▇▇▇▇▇▇▇/
▇. ▇▇▇▇▇▇/▇. ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Account Director: ▇▇▇▇▇ ▇▇▇▇▇▇
MKS CIT (DIP/TeNTA) Products General Manager: ▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Product Manager: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Account Director: ▇▇▇▇▇ ▇▇▇▇▇▇
MKS Spectra Products General Manager: ▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Product Manager: ▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Account Director: ▇▇▇▇▇ ▇▇▇▇▇▇
MKS INSTRUMENTS, POWER AND REACTIVE GAS PRODUCTS
MKS ENI Products General Manager: ▇▇▇▇ ▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Product Manager: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Account Director: ▇▇▇▇▇ ▇▇▇▇▇▇
MKS ASTeX Products General Manager: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Product Manager: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Account Director: ▇▇▇▇▇ ▇▇▇▇▇▇
MKS INSTRUMENTS, VACUUM PRODUCTS
MKS HPS Products General Manager: ▇▇▇▇ ▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Product Manager: ▇▇▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Account Director: ▇▇▇▇▇ ▇▇▇▇▇▇
SEND ALL E-MAIL NOTIFICATIONS TO: ▇▇▇▇_▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Applied:
Applied Materials, Inc.
SAT Lead: ▇▇▇▇ ▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (408)
E-Mail: ▇▇▇▇_▇_▇▇▇▇▇@▇▇▇▇.▇▇▇
Either Party may change the person(s) and/or address(es) designated above
effective ten (10) days following delivery of notice of such change(s). Notice
shall be deemed given on the date delivered, if delivered personally; three (3)
days following the date deposited in the U.S. Mail properly addressed, if by
postage prepaid registered or certified airmail, return receipt requested; on
the date of delivery, if by overnight express courier; and on the date of
confirmed transmission, if by facsimile or email.
(r) Foreign Translation. This Agreement is written in the English language. The
English text of this Agreement shall prevail over any translation thereof.
(s) Entire Agreement. This Agreement, including its Attachments, sets forth the
entire understanding and agreement of the Parties as to the subject matter of
this Agreement and supersedes all prior agreements, understandings, proposals
and representations, oral or written, between the Parties as to the subject
GLOBAL SUPPLY AGREEMENT
matter. In the event of any conflict between or among any documents which are
part of this Agreement, the following order of precedence shall apply: (i)
Global Supply Agreement; (ii) Attachment 1; (iii) Specifications; and (iv)
Authorized Demand Signal.
By execution hereof, the person signing for Supplier below hereby
certifies, represents and warrants that he/she has read this Agreement and that
he/she is duly authorized to execute this Agreement on behalf of the Supplier.
Accepted:
APPLIED MATERIALS, INC. MKS INSTRUMENTS, INC.
BY: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ BY: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
________________________________ _________________________________
Signature Signature
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
____________________________________ ____________________________________
Printed Name Printed Name
Title: VP, GMO Title: Vice President & CFO
______________________________ _____________________________
Date: April 21,2005 Date: April 18, 2005
_______________________________ ______________________________
GLOBAL SUPPLY AGREEMENT
Attachment 1
AMAT MKS
Item Item Current Critical
Number Number Price Revision Description Part [**] Warranty [**] Last Update Date Vendor
Entire price list omitted and filed separately
with the Securities and Exchange Commission.
GLOBAL SUPPLY AGREEMENT
AMAT MKS
Item Item Current Critical
Number Number Price Revision Description Part [**] Warranty [**] Last Update Date Vendor
Entire price list omitted and filed separately
with the Securities and Exchange Commission.
ADDITIONAL APPLIED LIABILITY
AGREEMENT FOR MKS - CIT
PRODUCTS GROUP:
Applied agrees to [**].
VOLUME PURCHASE AGREEMENT
FOR MKS - CIT PRODUCTS:
Applied agrees that [**].