EXHIBIT 10
SALE AGREEMENT
This agreement made this 28th day of June 1996 between Photran Corporation ,
hereinafter referred to as "SELLER" and Wintek Corporation, hereinafter referred
to as "BUYER".
W I T N E S S E T H
WHEREAS SELLER desires to sell and BUYER desires to purchase an apparatus to be
designated PVAC to be designed, manufactured and assembled by SELLER to the
specification in Appendix A to this agreement.
Now, therefore it is agreed as follows:
1.0 THE EQUIPMENT. SELLER will design, manufacture and assemble one vacuum
glass coating system hereinafter designated "PVAC", conforming generally to
the description set forth in Specification No. 96.001/U as show in Appendix
A to this agreement.
2.0 PURCHASE PRICE AND PAYMENT TERMS. The BUYER will pay to SELLER the sum of
$2,866,500 in payment for the system. This purchase price shall be paid
in accordance with the following schedule and on the following terms:
A. US$500,000 on contract signing.
B. US$2,000,000 payable upon shipment by irrevocable letter of
credit.
C. US$425,000 payable upon completion of installation and the Final
Acceptance Test as specified in this agreement by irrevocable
letter of credit.
3.0 DELIVERY SCHEDULE. The PVAC system shall be delivered in accordance with
the following delivery schedule:
Week Number Activity
----------- ----------------------------------------
1 Contract acceptance
3 Submission of machine layout drawings for approval
10 Completion of in-factory assembly
11-13 In-factory acceptance test
16 Shipment
Week Number Activity
----------- --------------------------------------------------
19 Commence installation
21 Complete installation
23 Final acceptance test
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25 Commence production
4.0 TESTING IN SELLER'S PLANT. Prior to shipment of the PVAC system SELLER
will conduct such tests of the various components and sub- assemblies as it
deems necessary to assure that the PVAC system functions properly. In
addition the SELLER shall operate the PVAC system on a full production
basis for a period of four (4) weeks. During this time the BUYER shall be
present to monitor the performance of the PVAC system. The PVAC system
shall be deemed to have passed this In-factory acceptance test if it
operates at full production capacity for a minimum of 22 hours out of 24
hours for six consecutive days. During this period the aggregate
production output shall equal a minimum of 90,000 pieces of which at least
92% or more shall have met the quality standards as specified in Appendix B
to this agreement.
5.0 DELIVERY. SELLER shall purchase insurance and make shipping arrangements
which have been included in the purchase price paid by BUYER. SELLER'S
good faith estimate of the date of shipment is 16 weeks from the date of
execution of this agreement. In the event of late delivery BUYER'S sole
remedy shall be to reduce the purchase price paid to SELLER by the amount
of 1% for each four week period that the system is shipped late. In the
event that the system is shipped more than four weeks late such penalty
shall be increased to 2% for each four week period or part thereof. Such
penalty shall not apply provided SELLER can provide evidence that the cause
of such delay was due to or arising from, but not limited to, acts of God,
acts of BUYER, acts of subcontractors including the failure of suppliers of
materials or components to timely delivery the same or to comply with
specifications, modifications of design of the apparatus or specifications
requested by BUYER, acts of civil or military authorities, fires, strikes,
labor disputes, sabotage, quarantine restrictions, war or riot. In the
event of any delay caused by the reasons described above the date of
delivery shall be extended for a length of time equal to the period of
delay but in any case not in excess of three months, which period SELLER
shall use his best efforts to minimize.
6.0 SCOPE OF WORK TO BE PERFORMED BY THE BUYER. Buyer will supply
an appropriate facility located within Taiwan of sufficient size and
quality to properly accommodate the PVAC system. This will include
appropriate foundations, trenches, ceiling heights, floor space, water
piping, electrical services, compressed air quality and temperatures as
specified in Appendix A of this agreement. The BUYER'S facility shall have
the appropriate cooling water, compressed air, electrical power, sputter
gases, city water and de-ionized water, material handling, cranage and such
other services as identified by SELLER in the Specification Appendix A of
this agreement needed to enable the PVAC system to be properly installed
and tested. Further, BUYER shall be responsible for providing facility
drawings to accurately reflect the position where the PVAC system is to be
installed.
To enable the Seller to perform the scope of work outlined in Section 7.0
the BUYER will be responsible for performing the following work:
1.0 Provide skilled project engineer to coordinate site preparation work
with Seller. This person shall be responsible for providing accurate
drawings and answering all questions concerning availability of
utilities and other needed facilities to assist Seller in the
installation of the equipment.
2.0 Provide machine unloading upon arrival at Buyer's facility.
3.0 Provide skilled personnel for uncrating, moving and installation of
the PVAC system and supporting equipment in its permanent location.
4.0 Provide required electrical service supply and distribution.
5.0 Provide appropriate cooling water and clean dry air supply.
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6.0 Provide skilled electricians for making electrical connections from
electrical supply switch gear to power supplies, control panels,
motor control centers, washing machines, conveyors, clean rooms, and
inspection stations.
7.0 Provide skilled mechanical tradesman for installing air, water and
vacuum piping to the PVAC system.
8.0 Provide appropriate technical personnel to be trained in the
operation and maintenance of the PVAC system.
9.0 Arrange for all required permits and approvals to facilitate
equipment installation.
10.0 Provide any needed foundations, cable trenches or water supply
piping.
11.0 Provide process gas supply and piping.
12.0 Provide City and DI water supply and piping.
13.0 Provide all consumable materials and supplies needed to test machine.
14.0 Provide glass racks for storing and transporting raw, in-process and
finished glass.
7.0 SCOPE OF WORK TO BE PERFORMED BY SELLER. BUYER shall notify SELLER
immediately upon arrival of the PVAC system at the BUYER'S plant. SELLER
shall be responsible for supplying skilled personnel to supervise the
installation of the PVAC system in the BUYERS facility.
Seller will perform the following scope of work in the supply of the PVAC
system:
1.0 Supply PVAC system in accordance with this specification.
2.0 Perform a full operational test of the PVAC system for a period of 30
days in the Seller's facility in accordance with the terms of the
Sales Agreement.
3.0 Arrange export crating and shipping to Buyer's facility.
4.0 Provide supervision of the installation of the system in the Buyers
facility.
5.0 Perform the acceptance test as specified in the Sales Agreement in
Buyer's facility.
6.0 Provide comprehensive training program for Buyer's personnel.
7.0 Assist Buyer in pilot scale-up of production for a period of one
month after the machine has passed acceptance tests. Additional
technical assistance for a period of up to three months available
at Buyer's expense.
Work to be performed by Seller will be done in a professional and xxxxxxx
like manner. Work will be performed in accordance with the delivery and
installation schedule per Section 3.0 of this agreement.
To the extent that the installation requires a coordination of work between
the SELLER and BUYER the SELLER shall have authority to direct BUYER'S
personnel in the proper techniques and methods for completing the
installation of the machine in a timely manner. BUYER shall be responsible
for providing access for up to sixteen hours per day to the BUYER'S
facility to facilitate the efficient installation of the PVAC system.
Each party shall be responsible for any delays which it causes which result
in an inability to proceed in an efficient manner with the installation of
the PVAC system. To the extent that such
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delays are caused by the SELLER but are remedied in such a manner that the
overall delivery and installation schedule is not changed SELLER shall
have no further liability to the BUYER. To the extent that such delays
caused by SELLER result in a delay in the installation schedule as
specified in Section 3.0 of this agreement, SELLER shall be liable for a
penalty of up to $1000.00 per working day for each day of such delay. To
the extent that such delays are caused by actions of the BUYER but do not
result in a delay in the overall completion of the installation and
acceptance testing of the PVAC, BUYER shall have no obligation to the
SELLER. To the extent that such delays caused by BUYER do result in a
delay in the installation of the machine BUYER shall be liable to pay
SELLER the sum of $1000.00 for each working day of delay caused by the
BUYER'S actions.
8.0 FINAL ACCEPTANCE TEST. Upon completion of the installation of the PVAC
system SELLER shall notify BUYER that the system is ready for the Final
Acceptance test. SELLER shall demonstrate the operation of the PVAC system
for a period of 22 hours out of 24 hours for six consecutive days. The
PVAC system will be deemed to have passed the Final Acceptance Test if it
operates in at full production capacity for an aggregate of 125 hours
during the six day test period and further if the aggregate production
output equals a minimum of 90,000 pieces of ITO coated glass which meets
the specification in Appendix B of this agreement. The acceptable output
quantity and production yield will be reduced be the number of defective
pieces attributable to defects in materials or due to defects caused by
Buyers cleaning or handling equipment or personnel. Upon successful
completion of the acceptance test by SELLER the BUYER shall sign the
acceptance affidavit acknowledging acceptance of the machine and the
corresponding liability for final payment.
9.0 WARRANTY. SELLER warrants that the PVAC system will comply with the
specifications set forth in the Specification in Appendix A to this
agreement. SELLER further warrants that for a period of twelve months from
the date of acceptance of the PVAC system it will be free from functional
defects in materials and workmanship. This warranty is subject to the
limitation that the PVAC system and its components are operated in
accordance with the SELLER'S recommendations and that regular periodic
maintenance and service is performed and that appropriate consumable
replacement parts are installed in accordance with instructions provided by
SELLER.
This warranty shall not apply to any components or parts which have been
repaired or replaced by other than SELLER or SELLER'S representative or as
a result of written notification from SELLER for such alterations. This
warranty does not apply to disposable parts normally requiring periodic
replacement.
The BUYER'S sole and exclusive remedy under the above warranty is limited
to the repair or replacement of defective parts by the SELLER or the
SELLER'S representative. This warranty shall only apply if the defect has
been properly reported to the SELLER, and if so advised by the SELLER the
BUYER returns the part or component to the SELLER within twenty-one days
after such notification. The SELLER shall be responsible for promptly
repairing or replacing any defective item and for paying the cost of
transportation charges to and from the BUYER. Prior to shipment of any
defective or damaged component BUYER will be responsible for obtaining
return authorization from the SELLER.
10.0 LIMITATION OF LIABILITY. SELLER'S liability shall be limited solely to its
responsibilities under the warranty as set forth in Section 9 above and
further to the remedy for late delivery as set forth in Section 3. IN NO
EVENT SHALL THE SELLER BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING FROM ANY SOURCE SUCH AS, BUT NOT LIMITED TO,
THE MANUFACTURE, USE, DELIVERY, INCLUDING LATE DELIVERY, OR TRANSPORTATION
OF THE PVAC SYSTEM, ITS PARTS OR COMPONENTS WHETHER SUCH DAMAGES ARE CAUSED
BY THE SELLER'S NEGLIGENCE OR OTHERWISE, PROVIDED HOWEVER THAT SELLER SHALL
BE RESPONSIBLE FOR ITS INTENTIONAL MISCONDUCT AND GROSS NEGLIGENCE.
FURTHER SELLER SHALL NOT BE LIABLE FOR COST OF CAPITAL, COST OF SUBSTITUTE
EQUIPMENT TO THE PVAC SYSTEM, COST OF SERVICES,
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REPAIRS, COMPONENTS OR PARTS, LOSS OF PROFIT OR REVENUE, COST OF ELECTRICAL
POWER OR UTILITIES WHETHER PURCHASED OR PRODUCED BY THE BUYER, LOSS OF USE
OF THE PVAC SYSTEM OR ANY PART THEREOF OR ANY OTHER PROPERTY OWNED BY THE
SELLER. SELLER SHALL NOT BE LIABLE FOR CLAIMS OR COSTS OF BUYER'S
CUSTOMERS OR DAMAGES TO ANY PROPERTY. IN ANY EVENT THE MAXIMUM LIABILITY
FOR WHICH THE SELLER CAN BE HELD LIABLE SHALL BE LIMITED TO THE AMOUNT PAID
BY THE BUYER FOR THE PVAC SYSTEM.
11.0 RESOLUTION OF DISPUTES. Any dispute or controversy or claim relating to
any matter within this agreement which cannot be resolved amicably by the
parties within twenty-one days after written notice by either party of the
existence of such dispute shall be settled by arbitration under the rules
of the American Arbitration Association before a board of three arbitrators
appointed in accordance with said rules. Provided, however, that the
arbitration shall be completed within thirty consecutive days thereof and
the arbitrator shall have no authority to award damages or to change the
express terms of this agreement. The arbitration proceedings shall be held
at the location chosen by the party against whom the claim or complaint is
made. The decision of the arbitrator shall be final and binding upon the
parties but shall be dispositive only of the issue of whether the PVAC
system complies with the specifications if such issue is raised before any
court of competent jurisdiction.
12.0 TRAINING. Upon completion of the acceptance test and acceptance of the
PVAC system by the BUYER the SELLER will provide qualified personnel to
assist BUYER in training of BUYER'S personnel in the operation and
maintenance of the PVAC system. Such training shall consist of four weeks
of on-site training by the SELLER'S personnel. In no event shall the
SELLER be responsible for damage to the PVAC system caused by BUYER'S
personnel during the training and start-up period.
13.0 AFTER INSTALLATION SERVICE. After the installation has been completed and
the acceptance and training activity fulfilled SELLER shall provide to
BUYER appropriate after installation service. In no event, however, shall
SELLER be liable or responsible for damage or losses caused by its failure
to meet its obligations for after-installation service.
14.0 DESIGN CHANGES FROM SPECIFICATION. The PVAC system will be designed and
manufactured in accordance with the specification in Appendix A to this
agreement. Notwithstanding the SELLER reserves the right to change its
specifications, drawings and any component to such an extent that it sees
fit provided, however, that such change will not impair the performance of
the system or its ability to meet the acceptance test as specified in this
agreement. Such changes will be made by the SELLER at its own expense. If
the SELLER determines that a change involving a material amount of
additional expense would provide a significant improvement to the
performance of the PVAC system it will notify BUYER of the nature of the
change and the additional time required to implement the change (if any)
and the price of the change. BUYER shall have the option to approve the
change and agree to pay any additional purchase price by executing an
appropriate amendment to this agreement reflecting the increased price and
the change in the estimated delivery date.
15.0 LOCAL GOVERNMENT CODES. The PVAC system is not designed to meet specific
requirements of any country, state, province, city, or other governmental
body. Specification in Appendix A to this agreement does not specify any
equipment or approval testing. BUYER is responsible for carefully
reviewing the specification and seeking clarification from the SELLER of
any such matters prior to executing this agreement. Further the BUYER
shall have a period of twenty-one days after the execution of this
agreement to notify the SELLER of any specific governmental requirements
which the PVAC system must comply. SELLER shall have a period of fourteen
days after receiving such notification to notify BUYER whether such
requirements can be complied with without additional cost or, if not, what
the additional cost will be as well as any changes in delivery times which
such compliance will cause. BUYER shall have fourteen days upon receipt of
such notification to accept or reject the additional costs and changed
delivery caused by such compliance requirements. If the BUYER accepts such
additional costs or delivery
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delays he shall execute an appropriate amendment to this agreement
reflecting such. If the BUYER does not accept such additional costs or
delivery delays he will notify the SELLER in writing of his desire to
cancel this contract and to pay a cancellation charge of $50,000. Such
cancellation charge to be paid promptly upon receipt of invoice from the
SELLER.
Any delays or changes which occur subsequent to such notification will be
for BUYER'S account. Any extra costs incurred to meet such requirements
will be added to the purchase price together with a profit not to exceed
10% thereof.
16.0 PVAC SYSTEM DOCUMENTATION. SELLER will deliver to BUYER a preliminary
operating manual and supporting documentation concerning the operation and
maintenance of the PVAC system not later than the completion of the
installation of the system. Within one month after the acceptance of the
PVAC system by the BUYER the SELLER will provide the BUYER with final
documentation concerning the operation and maintenance of the system.
17.0 PATENTS. SELLER indemnifies the BUYER against any claims by third parties
related to the infringement of patents rights for any component of the PVAC
system. Concurrent with the execution of this agreement BUYER agrees to
execute the technology license agreement between Photran Corporation and
the BUYER.
18.0 ASSIGNMENT. This agreement may not be assigned by either party without the
express written consent of the other party. However this agreement may be
assigned by either party to any successor who assumes substantially the
entirety of such party's business.
19.0 CONTRACT IN THE ENTIRETY. This agreement and the technology license
agreement constitute the entire contract and understanding between the
parties concerning all matters related to the sale of the PVAC system and
the licensing of Photran's technology. Both parties agree that they have
not relied upon any other representation or agreement or undertaking not
expressly set forth in this agreement. Catalogs, literature, proposals,
reports and other documentation which the SELLER may have provided to the
BUYER were provided solely for general information and shall not be deemed
to modify the provisions of this agreement.
20.0 TAXES AND DUTIES. It shall be the BUYER'S responsibility to pay any import
duties or taxes levied related to the purchase of the PVAC system. Further
it shall be the BUYER'S responsibility to obtain the appropriate
governmental approvals for the importation of the PVAC system to the
Republic of China.
21.0 BUYER'S RESPONSIBILITY TO SELLER'S PERSONNEL. When SELLER'S personnel are
present at BUYER'S facility SELLER shall provide such personnel with
reasonable office space and telephone service.
22.0 LIMITATION OF CLAIMS. No action or suit shall be brought by either party
for damages arising out of the purchase, manufacture, use, delivery or
transportation of the PVAC system whether such suit or action is for breach
of contract, breach of warranty or otherwise unless such action is
commenced within twelve months after the cause of action has occurred.
23.0 GOVERNING LAW AND VENUE. Except as expressly set forth in this agreement
any action, arbitration or suit relating to this agreement for the PVAC
system shall be commenced before a court within the jurisdiction in which
the defendant resides. This agreement and the rights of the parties shall
be interpreted and governed by the laws of the State of Minnesota.
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In witness thereof the parties have caused this agreement to be executed by
their duly authorized officers as of the date shown below.
SELLER BUYER
By /S/ Xxxxx X. Xxxxxxxxx By /S/ X. Xxxxx
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Name Xxxxx X. Xxxxxxxxx Name X. Xxxxx
---------------------- -------------------------
Title President Title M.D.
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Date June 28, 1996 Date June 28, 1996
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