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EXHIBIT 2.8
PARTS SUPPLY AGREEMENT
BY AND BETWEEN
VARIAN ASSOCIATES, INC.
("SELLER")
AND
NOVELLUS SYSTEMS, INC.
("BUYER")
This PARTS SUPPLY AGREEMENT ("Parts Agreement") is entered into this
7th day of May 1997 to be effective as of the Closing Date (as defined in the
Asset Purchase Agreement referred to below) ("Effective Date") by Varian
Associates, Inc. ("Varian"), a Delaware corporation, 0000 Xxxxxx Xxx, Xxxx Xxxx,
XX 00000 ("Seller") and Novellus Systems, Inc., a California corporation, 000 X.
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 ("Buyer").
WHEREAS Seller and Buyer are concurrently herewith entering into that
certain ASSET PURCHASE AGREEMENT dated May 7, 1997 ("Agreement") pursuant to
which Buyer is acquiring Seller's Business as further defined in the Agreement
("Business"); and
WHEREAS Seller currently manufactures and transfers from Seller's
operations other than the Business via intercompany transfer certain parts,
components and subassemblies currently used in the Business for the
manufacturing of products and sales to customers of the Business and currently
purchases from Seller's third party outside vendors ("Vendors") certain parts,
components and subassemblies currently used in the Business for the
manufacturing of products and sales to customers of the Business (collectively
referred to herein as "Seller Supplied Parts").
NOW THEREFORE, in consideration of the mutual covenants, agreements and
representations herein, Seller agrees to supply any and all of Buyer's
requirements for Seller Supplied Parts, all on the terms and conditions set
forth herein.
1. APPLICABILITY
During the Term (as defined below), the terms and conditions of this Parts
Agreement shall apply exclusively to all sales of Seller Supplied Parts by
Seller to Buyer and shall govern over any and all conflicting terms and
conditions in or on any specific Buyer purchase order ("Purchase Order") or
other Buyer documentation, preprinted or otherwise, and any such Buyer terms and
conditions are hereby excluded. During the Term, this Parts Agreement shall
become a part of each quotation issued by Seller to Buyer ("Quotation") and each
Purchase Order issued by Buyer to Seller for Seller Supplied Parts whether or
not referenced on such Quotation or Purchase Order.
2. TERM
The term of this Parts Agreement ("Term") shall be a period of three (3) years
from the Closing Date of the Agreement ("Closing Date"). The parties may use
this Parts Agreement on individual orders beyond the Term on a case by case
basis. If the Agreement shall terminate pursuant to Section 12 thereof, this
Parts Agreement shall terminate concurrently with the termination of the
Agreement.
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3. NONEXCLUSIVITY
Purchases of Seller Supplied Parts shall be nonexclusive, meaning that Buyer may
purchase Seller Supplied Parts, or any parts or components competitive in
function or use therewith, from others at any time, and Seller may sell Seller
Supplied Parts, or any parts or components competitive in function or use
therewith, to others at any time, provided, however, that Seller shall not sell
to third parties any Seller Supplied Parts that are based on the Business's
unique or proprietary designs.
4. PRICES
4.1 SELLER SUPPLIED PARTS MANUFACTURED BY SELLER
With respect to Seller Supplied Parts manufactured by Seller or any affiliate of
Seller for use in whole or in part for sales to customers of the Business,
Seller shall, during the Term, continue to manufacture such Seller Supplied
Parts, or have such Seller Supplied Parts manufactured by others, and in either
case shall sell the same to Buyer at cost plus twenty percent (20%).
4.2 VENDOR SUPPLY ARRANGEMENTS
With respect to Seller Supplied Parts currently purchased from Seller's Vendors
via supply contracts, purchase orders and any other purchase arrangements, of
Seller with Vendors ("Vendor Supply Arrangements") existing on or before the
Closing Date and/or developed thereafter that are not otherwise assigned to
Buyer under the Agreement, Seller shall, during the Term, continue to purchase
such Seller Supplied Parts and sell the same to Buyer at not mom than the
discounted prices paid by Seller. Such prices shall apply as between Seller and
Buyer whether the applicable Vendor Supply Arrangement is for Seller Supplied
Parts to be used only in the Business, or may be used in part in the Business,
so that Buyer shall benefit from the pricing available to Seller under any
Vendor Supply Arrangements not otherwise assigned to Buyer that include Seller
Supplied Parts.
5. PURCHASE QUANTITY FORECASTS AND COMMITMENTS
In order to provide Seller with the assurances it requires in order for Seller
to procure in a cost effective manner, components and materials, or finished
Seller Supplied Parts from its Vendors, Buyer shall transmit to Seller a rolling
twelve (12) mouth forecast of its requirements for Seller Supplied Parts to be
purchased directly by Buyer from Seller hereunder, commencing within thirty (30)
days of the Closing Date and at monthly intervals thereafter throughout the
Term. Any forecasts of Buyer's anticipated purchases of Seller Supplied Parts
submitted to Seller shall be good faith estimates for informational purposes
only and shall not be binding upon Buyer. Authorization by Buyer for Seller to
manufacture and/or purchase and deliver Seller Supplied Parts, and the purchase
quantities thereof, shall be accomplished by means of Buyer's Purchase Orders
which shall be firm and binding on Buyer. Buyer shall be responsible for and
shall reimburse Seller for any expenditures or commitments made by Seller in
response to any such authorizations by Buyer.
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6. STANDARD TERMS AND CONDITIONS
All purchases by Buyer from Seller's Vacuum Products Business shall be in
accordance with, and shall be deemed to incorporate, Varian Instruments Terms
and Conditions of Sale, INS 040694, attached hereto as Exhibit A. All purchases
by Buyer from Seller's Ion Implant System Business shall be in accordance with,
and shall be deemed to incorporate, Varian Semiconductor Equipment Business
Terms and Conditions of Sale, SEB 100294, attached hereto as Exhibit B. All
purchases by Buyer from Seller's Tempe Electronics Center shall be in accordance
with, and shall be deemed to incorporate, the standard Purchase Agreement for
all Products Manufactured by Varian Tempe Electronics Center, attached hereto as
Exhibit C. In the event of any conflict between the terms and conditions set
forth in Exhibits A, B or C on the one hand, and the terms and conditions set
forth in the body of this Parts Agreement on the other hand, the latter shall
govern.
7. MISCELLANEOUS PROVISIONS
This Agreement, including the attached Exhibits, constitutes the entire
agreement of the parties hereto with respect to the sale of Products by Varian
to Buyer and supersedes all prior representations, warranties, agreements, and
understandings, of any kind, written and oral, of the parties hereto. It may not
be modified or amended except by written amendment specifically referencing this
Agreement signed by the authorized representatives of the parties. All notices
shall be given in writing and be personally delivered or sent by postage prepaid
mail, or express delivery company, addressed to the parties at their addresses
first mentioned above or as otherwise designated to the other by notice as
herein required. In the event of any conflict between the provisions of this
Parts Agreement and the Agreement, the terms and conditions of this Parts
Agreement shall govern.
IN WITNESS WHEREOF, the parties hereto have caused this Parts Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
Varian Associates, Inc, ("Seller") Novellus Systems, Inc. ("Buyer")
By /s/ [SIG] By /s/ [SIG]
------------------------------- -------------------------------
Xxxxxx X. Xxxxx Xxxx Xxxxxxxx
Title Vice President, Finance and Title Executive Vice
---------------------------- ----------------------------
Chief Financial officer President, Operations
Date May 7, 1997 Date May 7, 1997
----------------------------- -----------------------------
Exhibit A Varian Instruments Terms and Conditions of Sale
Exhibit B Varian Semiconductor Equipment Business Terms and Conditions
of Sale
Exhibit C Standard Purchase Agreement for all Products Manufactured by
Varian Tempe Electronics Center
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Exhibit A
VARIAN INSTRUMENTS
Chromatography Systems, Optical Spectroscopy, Sample Preparation
Products and Vacuum Products
("Varian")
TERMS AND CONDITIONS OF SALE
1. APPLICABLE TERMS AND CONDITIONS
All Varian Products and services (including Varian-produced hardware, firmware
and software) are furnished only on the terms and conditions stated herein and
on the face of the applicable Varian quotation to the exclusion of any Buyer
terms and conditions in any specific order documentation, preprinted or
otherwise, except as to indentification and quantity of Products. Varian's
performance of any contract is expressly conditional on Buyer's agreement to
Varian's terms and conditions of sale, and in the absence of such agreement
shall be for Buyer's convenience only, shall not create any contractual
obligation and shall not be construed as acceptance by Varian of Buyer's term
and conditions printed or stated in its orders. Buyer's acceptance of any
Product or service shall be deemed acceptance of Varian's terms and conditions
below.
2. ORDERS, QUOTATIONS AND PRICES
Varian's prices, quotations and contracts for Products and services are subject
to the following, unless otherwise stated in Varian's quotation or other writing
signed by an authorized representative of Varian. In case of a conflict between
the terms and conditions stated herein and those appearing on the face hereof,
the latter shall control.
(a) All purchase orders shall be subject to written acceptance by Varian
only at its plant or distribution center from which the Products are
shipped or at Varian's principal office in Palo Alto, California.
Varian's acceptance of any purchase order is expressly conditioned
upon compliance with all applicable codes and regulations affecting
Products.
(b) UNLESS OTHERWISE SPECIFIED IN WRITING, ALL QUOTATIONS ARE FIRM FOR, AND
EXPIRE, THIRTY (30) DAYS AFTER ITS DATE AND CONSTITUTE OFFERS, provided
that, budgetary quotations and estimates, and quotations to non-U.S.
customers, are solicitations for offers to purchase, are for
preliminary information only and shall neither constitute offers, firm
pricing, nor impose any responsibility or liability upon Varian.
(c) All prices quoted are for Products and services only. Varian's prices
exclude and Buyer shall be responsible for all ordinary and necessary
charges incidental to the sale incurred by Varian and billed by Varian
to Buyer, including but not limited to charges for taxes (including,
without limitation, any sales tax, use tax or similar tax), license
fees, customs fees, duties and other related charge. The total price to
Buyer shall be adjusted to include costs of transportation, special
packing and insurance incurred by Varian in accordance with agreed
shipping and risk terms as referred to below.
(d) Clerical and typographical errors are subject to correction.
(e) Prices quoted are for Products only and do not include technical data,
proprietary rights of any kind, patent rights, qualification,
environmental or other than Varian's standard tests, and other than
Varian's normal domestic commercial packaging, unless expressly agreed
to in writing by Varian. All published prices are subject to change
without notice.
(f) Published weights and dimensions are approximate only. Manuals,
programs, listings, drawings, or other documentation required hereunder
must be referenced specifically and will be the latest applicable
version.
3. TERMS OF PAYMENT
UNLESS CREDIT IS GRANTED, PAYMENT IS DUE UPON DELIVERY. The price of each
Product is based upon the payment schedule set forth in Varian's Quotation. Any
alternative payment schedule and resulting price change must be approved in
writing by Varian. All payments for Products released and shipped on approved
credit
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accounts shall be due in full thirty (30) days from date of invoice unless
otherwise provided. Buyer's failure to comply with the above shall be regarded
as a fundamental breach of contract. Past due balances shall be subject to a
service charge up to the maximum amount permitted by applicable law. Varian may
cancel or delay delivery of Products in the event of arrearage in Buyer's
account. Varian may waive any default without waiving my prior or subsequent
default.
Varian shall retain a purchase money security interest in all Products, and the
proceeds thereof, until Buyer has made payment in full in accordance with the
terms hereof. Buyer shall cooperate fully with Varian to execute such documents
and accomplish such filings and/or recordings as Varian may deem necessary for
the protection of its interests in the Products furnished to Buyer.
4. TRANSPORTATION AND RISK OF LOSS
Except as otherwise provided herein, or in accordance with expressly agreed
Incoterms 1990, all shipments are FOB Varian's plant with all transportation and
insurance at the expense of Buyer, and risk of loss or damage to Products shall
pass upon delivery to the transportation company. For Products shipped FOB
destination within the United States, risk of loss or damage shall pass to Buyer
upon arrival of the transportation company at Buyer's dock. For Products
shipped outside the United States and its possessions, title and risk of loss or
damage shall pass from Varian to Buyer when Products arrive at the country of
destination, notwithstanding any shipment terms to the contrary. Unless
otherwise expressly agreed in writing, Varian may insure to full value of
Products shipped at Buyer's expense or declare full value to the transportation
company at time of shipment. Buyer shall inspect all Products upon receipt and
file all claims with the transportation company when them is evidence of
damage, concealed or external.
5. PERFORMANCE
Neither party shall be liable for any delay in delivery or other performance
hereunder which is due to unforeseen circumstances, or to causes beyond its
control, including, without limitation, strike, lockout, riot, war, fire, act of
God, accident, failure or breakdown of components necessary to order completion;
supplier, subcontractor or Buyer caused delays; inability to obtain or
substantial rises in the prices of labor, materials or manufacturing facilities;
curtailment of or failure to obtain sufficient electrical or other energy
supplies, technical difficulties; or compliance with any governmental law,
regulation, or order, including but not limited to U.S. Export Administration
Regulations. Provided any such delay is neither material nor indefinite,
performance shall be deemed suspended during and extended for such time as it is
so delayed, and thereafter the other party shall accept performance hereunder.
Delay in performance shall not be considered material or indefinite unless it
exceeds or is reasonably estimated to exceed six (6) months. Varian may
substitute remanufactured parts and components when, in its opinion,
substitution is appropriate. All substituted items meet the same quality
standards as other materials and are covered by the same warranty.
6. ACCEPTANCE
The furnishing of a Product by Varian to the Buyer shall constitute acceptance
of that Product by Buyer, unless notice of defect or nonconformity is received
by Varian in writing within thirty (30) days of receipt of the Product at
Buyer's designated receiving address; provided that, for Products for which
Varian agrees in writing to perform acceptance testing after installation, the
completion of Varian's applicable acceptance tests, or execution of Varian's
acceptance form by Buyer, shall constitute acceptance of the Product by Buyer.
Notwithstanding the above, any use of a Product by Buyer, its agents, employees,
contractors or licensees, for any purpose after its receipt, shall constitute
acceptance of the Product by Buyer. Varian may repair or, at its option, replace
defective or nonconforming parts after receipt of notice of defect or
nonconformity.
7. ASSIGNMENT AND TERMINATIONS
No order accepted by Varian may be terminated, cancelled, modified or assigned
by Buyer except by mutual agreement in writing. Any attempt to do so without
Varian's written consent shall be void. In any such event, with or without
Varian's consent, for any order accepted by Varian and terminated or cancelled
by Buyer prior to delivery, Buyer agrees to pay Varian a charge of not less than
fifteen percent (15%) of the order value to cover costs of processing and order
handling; for any order terminated or cancelled by Buyer after delivery, Buyer
agrees to pay Varian an additional charge determined solely by Varian to cover
lost profits as determined in accordance with the Uniform Commercial Code or
other applicable law.
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8. PATENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS
Varian shall, at its own expense, defend or settle any claim that the design or
manufacture of any Product furnished in Varian's commercial line of Products, or
manufactured to specifications set by Varian, constitutes infringement of any
patents or other intellectual property rights of the United States, Canada,
Japan, the European Community country in which the Buyer takes delivery of the
Product or in another country where Buyer takes delivery of the Product if
Varian agrees in writing to include such a country; provided Buyer informs
Varian immediately and supports Varian if requested. If the Product is held to
constitute an infringement and its use is enjoined as a result of any lawsuit or
proceeding, Varian shall, at its own expense and sole option, either procure a
license to protect Buyer against the claim, modify or replace the Product with a
noninfringing product, or accept return of the Product and refund its purchase
price, less reasonable depreciation. Varian EXPRESSLY EXCLUDES from liability
and Buyer shall hold Varian harmless from: any other claims, liabilities,
expenses, costs and damages resulting from claimed infringement of patents,
trademarks, copyrights or any other intellectual property riots; any Buyer
expenses of defense and any claims settled by Buyer without Varian's prior
written consent; any claims arising from a use or combination of the Product
with any other equipment, processes, programming applications, apparatus or
materials not furnished by Varian under this contract; any claims based on items
made with the Product furnished by Varian under this contract; or any claims
arising out of compliance by Varian with Buyer's designs, specifications or
instructions. The foregoing states Varian's entire liability for any claim based
upon or related to any alleged infringement of any patent or other intellectual
property rights and is subject to the DAMAGES AND LIABILITY provisions herein.
9. WARRANTY
Varian warrants each standard Product sold by it to be free from defects in
material and workmanship for the periods and in accordance with the terms and
conditions stated below. The warranty period for any Products, parts or
accessories sold hereunder is limited to the period specified by Varian on the
face of Varian's quotation, or as otherwise specified on a "Varian Warranty"
furnished by Varian to Buyer in writing which is incorporated herein by this
reference, or as otherwise mutually agreed upon in writing. If no period of time
is stated, then such warranty is limited to ninety (90) days.
The warranty period begins upon Buyer's acceptance of the Products, parts or
accessories as provided in the ACCEPTANCE provisions herein. For some Products,
the warranty period begins upon completion of installation where installation is
paid for by Buyer or included in the purchase price. However, if Buyer schedules
or delays installation more than thirty (30) days after delivery, then the
warranty period starts on the 31st day from date of shipment. In all other cases
the warranty period begins on the date of shipment from Varian to the original
Buyer.
Software and firmware ("Software") furnished by Varian in or for use with
Varian's Products is warranted only to be free of defects in materials which
cause failure to execute programming instructions and is not warranted against
interruptions or errors in operations. Software warranty shall be for a period
of ninety (90) days from the date of system acceptance and is subject to the
terms and conditions of any applicable Varian license agreement including any
warranty provisions. Varian makes no warranty that the operation of any software
or firmware will be uninterrupted or error free.
The sole and exclusive remedy under warranty shall be replacement of defective
parts, or at Varian's option, repair of instrument malfunctions which in the
sole opinion of Varian are due or traceable to defects in original materials or
workmanship, provided that, Varian may, as an alternative, elect to refund an
equitable portion of The purchase price of the Product Replacement or repair
under warranty does not extend the original warranty period.
If installation is delayed due to Buyer's inability to provide adequate
facilities or utilities, or due to its failure to comply with Varian's
reasonable pre-installation instructions, Varian will charge Buyer for labor and
other expenses involved in making multiple or follow-up installation service
calls.
This warranty does not cover Buyer-supplied software, equipment warranted by
another manufacturer, or replacement of expendable, consumable or limited life
items.
This warranty shall be void in the event of accident, abuse alteration, misuse,
neglect, breakage, improper operation
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or maintenance, unauthorized or improper modification or tampering, use in an
unsuitable physical environment, use with a marginal power supply, or use with
other inadequate facilities or utilities. Reasonable care must be used to avoid
hazards. Varian expressly disclaims responsibility for loss or damage caused by
use of its products other than in accordance with published operating
procedures.
If a Product is returned to Varian for replacement, repair or credit, Buyer
shall prepay the cost of shipping and be responsible for loss or damage in
transit. Varian will return Products to Buyer prepaid and insured and will xxxx
Buyer for shipping costs. Buyer shall file claims for loss or damage in
transmit.
THIS LIMITED WARRANTY IS EXPRESSLY IN LIEU OF AND EXCLUDES ALL OTHER EXPRESS OR
IMPLIED WARRANTIES INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY
AND OF FITNESS FOR A PARTICULAR PURPOSE, USE, OR APPLICATION.
10. DAMAGES AND LIABILITY
VARIAN'S TOTAL LIABILITY IN DAMAGES OR OTHERWISE SHALL NOT EXCEED THE PAYMENT,
IF ANY, RECEIVED BY VARIAN FOR THE UNIT OF PRODUCT OR SERVICE FURNISHED OR TO
BE FURNISHED, AS THE CASE MAY BE, RESULTING IN THE LOSS OR DAMAGE CLAIMED. IN
NO EVENTS SHALL BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, PUNITIVE OR
SPECIAL LOSS OR DAMAGES OF ANY KIND, SUCH AS BUT NOT LIMITED TO LOST BUSINESS
REVENUE, LOST PROFITS OR COSTS OF DOWNTIME RESULTING FROM VARIAN'S PRODUCTS OR
SERVICES, HOWEVER, CAUSED, WHETHER BASED ON CONTRACT, TORT (INCLUDING
NEGLIGENCE) OR ANY OTHER LEGAL THEORY. Liability to third parties for bodily
injury, including death, resulting from Varian's performance or Products shall
be determined in accordance with applicable law and shall not be affected by
the liability limitations stated above in this paragraph.
11. INDEMNITIES
Notwithstanding any fault or neglect attributable to Varian, Varian shall have
no responsibility whatsoever for, and Buyer shall indemnify, defend and hold
Varian harmless from, any and all damage or injury to persons or property which
may arise from or related to: (1) any use, operation or service of any Product
contrary to any written warning or instruction given by Varian with respect to
such Product, including but not limited to unauthorized use and/or modification
of any equipment, components, software or accessories by any user, or (2) any
liability of Buyer with respect to OSHA, toxic substances, air quality, water
quality, hazardous waste, Superfund or other environmental liability, including
but not limited to fines, penalties, cleanup costs or tort, related to the use,
operation or service of any Product, or (3) the design, manufacture, purchase,
sale, installation, replacement, service, use, misuse and/or reuse of any
product supplied by Varian as a convenience to Buyer that is not manufactured by
Varian and is not offered by Varian in its standard published catalog of
Products.
12. DISPUTES/ARBITRATION
All disputes, controversies or claims of any kind arising from or in any way
related to this contract, its breach, its termination, its invalidity, or the
Products, including the jurisdiction of the arbitral panel, shall be settled by
final and binding arbitration. For sales to U.S. customers, arbitration shall
be in Palo Alto, California under the rules and procedures of the American
Arbitration Association ("AAA") and shall be governed by the commercial law of
the state from which the Product is shipped. If the sale is international,
arbitration shall be conducted under the AAA's International Arbitration Rules
and the commercial laws of the UN Convention on contracts for the International
Sale of Goods (CISG). If the sale is between entities within another country,
the commercial law of that country and the Jurisdiction provisions of Varian's
standard terms and conditions of sale for that country shall apply. The
arbitral tribunal shall not award punitive damages. The arbitral tribunal award
shall be final and binding, shall be the sole and exclusive remedy regarding
any and all claims and counterclaims presented, and may not be reviewed by or
appealed to any court except for enforcement. No claims, regardless of form,
arising out of, or in any way connected with this contract, the Products or
services furnished by Varian, may be brought by Buyer more than one (1) year
after the cause of action has accrued or performance under this contract has
been completed or terminated, whichever is earlier.
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EXHIBIT B
VARIAN ASSOCIATES, INC.
SEMICONDUCTOR EQUIPMENT BUSINESS
("VARIAN")
TERMS AND CONDITIONS OF SALE
Ion Implant Systems, Gloucester, MA/Thin Film Systems/Customer Support,
Palo Alto, CA
1. APPLICABLE TERMS AND CONDITIONS
All Varian Products, including Varian-produced hardware, firmware and software
("Products") and services are furnished only on the terms and conditions stated
herein and on the face of the applicable Varian quotation and exclude any Buyer
terms and conditions in any specific order documentation, preprinted or
otherwise, except as to identification and quantity of Products. Varian's
performance of any contract is expressly conditional on Buyer's agreement to
Varian's terms and conditions of sale, and in the absence of such agreement
shall be for Buyer's convenience only, shall not create any contractual
obligation and shall not be construed as acceptance by Varian of Buyer's terms
and conditions printed or stated in its orders. Buyer's acceptance of any
Product or service shall be deemed acceptance of Varian's terms and conditions
below.
2. ORDERS, QUOTATIONS AND PRICES
Varian's prices, quotations and contracts for Products and services are subject
to the following, unless otherwise stated in Varian's quotation or other
writing signed by an authorized representative of Varian. In case of a conflict
between the terms and conditions stated herein and those appearing on the face
hereof, the latter shall control:
(a) All purchase orders shall be subject to written acceptance by Varian
only at its plant or distribution center from which the Products are
shipped or at Varian's principal office in Palo Alto, California.
(b) UNLESS OTHERWISE SPECIFIED IN WRITING, ALL QUOTATIONS ARE FIRM FOR, AND
EXPIRE, THIRTY (30) DAYS AFTER ITS DATE AND CONSTITUTE OFFERS, provided
that, budgetary quotations and estimates, and quotations to non-U.S.
customers, are solicitations for offers to purchase, are for preliminary
information only and shall neither constitute offers, firm pricing, nor
impose any responsibility or liability upon Varian.
(c) All prices quoted are for Products and services only. Varian's prices
exclude and Buyer shall be responsible for all ordinary and necessary
charges incidental to the sale incurred by Varian and billed by Varian
to Buyer, including but not limited to charges for taxes (including,
without limitation, any sales tax, use tax or similar tax), license
fees, customs fees, duties and other related charges. The total price to
Buyer shall be adjusted to include costs of transportation, special
packing and insurance incurred by Varian in accordance with agreed
shipping and risk terms as referred to below.
(d) Clerical and typographical errors are subject to correction.
(e) Prices quoted are for Products only and do not include installation,
technical data, proprietary information, patent rights, qualification,
environmental or other than Varian's standard tests, and other than
Varian's normal domestic commercial packaging, unless expressly agreed
to in writing by Varian. All published prices are subject to change
without notice.
(f) Published weights and dimensions are approximate only. Manuals,
programs, listings, drawings, or other documentation required hereunder
must be referenced specifically and will be the latest applicable
version.
3. TERMS OF PAYMENT
UNLESS CREDIT IS GRANTED, PAYMENT IS DUE UPON DELIVERY. All payments for
Products released and shipped on approved credit accounts shall be due in full
thirty (30) days from date of invoice unless otherwise provided. Buyer's
failure to comply with the above shall be regarded as a fundamental breach of
contract. Varian may cancel or delay delivery of Products in the event of an
arrearage in Buyer's account. Varian shall retain a purchase money security
interest in all Products, and the proceeds thereof, until Buyer has made
payment in full in accordance with the terms hereof. Buyer shall cooperate
fully with Varian to execute such documents and accomplish such filings and/or
recordings as Varian may deem necessary for the protection of its interests in
the Products furnished to Buyer.
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4. TRANSPORTATION AND RISK OF LOSS
Except as otherwise provided herein, or in accordance with expressly agreed
Incoterms 1990, all shipments are FCA Varian's plant with all transportation and
insurance at the expense of Buyer, and risk of loss or damage to Products shall
pass upon delivery to the transportation company. For Products shipped FCA
destination within the United States, risk of loss or damage shall pass to
Buyer upon arrival of the transportation company at Buyer's dock. For Products
shipped OUTSIDE the United States and its possessions, title and risk of loss
or damage shall pass from Varian to Buyer when Products arrive at the country
of destination, notwithstanding any shipment terms to the contrary. Unless
otherwise expressly agreed in writing, Varian may insure to full value of
Products shipped at Buyer's expense or declare full value to the
transportation company at time of shipment. Buyer shall inspect all Products
upon receipt and file all claims with the transportation company when there is
evidence of damage, concealed or external. Products shipped to storage shall be
governed by a separate Storage Agreement.
5. PERFORMANCE
Neither party shall be liable for any delay in delivery or other performance
hereunder which is due to unforeseen circumstances, or to causes beyond its
control, including, without limitation, strike, lockout, riot, war, fire, act
of God, accident, Buyer caused delays, inability to obtain or substantial rises
in the prices of labor, materials or manufacturing facilities, curtailment of
or inability to obtain sufficient electrical or other energy supplies, or
compliance with any governmental law, regulation, or order, including but not
limited to U.S. Export Administration Regulations. Provided any such delay is
neither material nor indefinite, performance shall be deemed suspended during
and extended for such time as it is so delayed, and thereafter the other party
shall accept performance hereunder. Delay in performance shall not be
considered material or indefinite unless it exceeds or is reasonably estimated
to exceed six (6) months. Varian may substitute remanufactured parts and
components when, in its opinion, substitution is appropriate. All substituted
items will meet the same quality standards as other materials and are covered
by the same warranty.
6. ACCEPTANCE
The furnishing of a Product by Varian to the Buyer shall constitute acceptance
of that Product by Buyer, unless notice of defect or nonconformity is received
by Varian in writing within thirty (30) days of receipt of the Product at
Buyer's designated receiving address; provided that, for Products for which
Varian agrees in writing to perform acceptance testing after installation, the
completion of Varian's applicable acceptance tests, or execution of Varian's
acceptance form by Buyer, shall constitute acceptance of the Product by Buyer.
Notwithstanding the above, any use of a Product by Buyer, its agents,
employees, contractors or licensees, for any purpose after its receipt, shall
constitute acceptance of the Product by Buyer. Varian may repair or, at its
option, replace defective or nonconforming parts after receipt of notice of
defect or nonconformity.
7. PATENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS
Varian shall, at its own expense, settle or defend any proceeding or claim
against Buyer alleging that the design or manufacture of any Product furnished
in Varian's commercial line of Products or manufactured to Varian
specifications infringes any patents or other intellectual property rights of
the United States, Canada, Japan or the European Union country in which the
Buyer takes delivery of the Product. Varian shall pay all costs, damages and
attorney's fees that a court finally awards as a result of such proceeding or
claim. To qualify for such defense or payment, Buyer shall (a) give Varian
prompt written notice of any such claim or proceeding, and (b) allow or obtain
for Varian the right to control the defense of such claim or proceeding and all
related settlement negotiations.
If the Varian Product is held to be infringing and its use is enjoined as a
result of any lawsuit or proceeding, Varian shall, at its own expenses and sole
option, either:
(a) Procure a license to protect Buyer against the claim; or
(b) Replace the infringing Product or part thereof with a
non-infringing product or part or modify it to be
non-infringing; or
(c) If all such remedies are infeasible or commercially
unreasonable, accept return of the infringing Product and
refund its purchase price, less reasonable depreciation.
Varian shall have no liability for:
(1) Buyer's own expense of defending such claims; or
(2) Settlements paid by Buyer without Varian's prior written
consent; or
(3) Claims arising from a use or combination of Varian Products
with other equipment or processes not furnished by Varian,
or from modifications made by Buyer or by a third party on
behalf of Buyer; or
(4) Claims based on items made with the Products; or
(5) Claims arising because of Varian's compliance with Buyer's
designs, specifications or instructions for the Product
furnished by Varian.
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This section states Varian's entire liability for any claim based upon or
related to any alleged infringement of patents or other intellectual property
rights, and Varian's obligations hereunder are subject to the DAMAGES AND
LIABILITY provisions herein.
8. WARRANTY
Varian warrants products manufactured and sold by Varian ("Products") and
firmware and software media furnished by Varian in or for use with Products
("Software") to be free from defects in material and workmanship and to comply
with operational features of published Varian specifications at the time of
sale. Warranty for services provided by Varian in connection with Products
("Services") shall be as stated in Varian terms and conditions of service for
specific Products.
WARRANTY PERIODS -- PRODUCTS, PARTS AND SERVICES: Varian's warranty for
Products shall extend for a period of twelve (12) months from the date of
system acceptance (as provided in the ACCEPTANCE provisions herein). Where
Varian provides installation and on-site acceptance testing of Products, the
warranty period shall be twelve (12) months from date of acceptance but in no
event more than fifteen (15) months from date of shipment of the Products from
Varian. Warranty for non-consumable parts, components, accessories, system
retrofits and upgrades, purchased separately from original orders for Products
shall extend for a period of ninety (90) days from the date of shipment.
Warranty for Services including training shall extend for a period of ninety
(90) days from the date Services were provided, or as otherwise stated in Varian
terms and conditions for Services.
SOFTWARE WARRANTY AND PERIOD: Software and firmware ("Software") furnished by
Varian in or for use with Varian's Products is warranted only to be free of
defects in materials which cause failure to execute programming instructions and
is not warranted against interruptions or errors in operation. Software warranty
shall be for a period of ninety (90) days from the date of system acceptance and
is subject to the terms and conditions of any applicable Varian license
agreement including any warranty provisions. Varian makes no warranty that the
operation of any software or firmware will be uninterrupted or error free.
WARRANTY REMEDIES: Buyer's sole and exclusive remedy under warranty shall be
repair or at Varian's option replacement of defective Products, parts,
accessories or Software. If in Varian's opinion such repair or replacement is
not feasible, or if such remedy fails of its essential purpose, Varian may
refund or credit a portion of any sum paid by buyer for the Product, Software
or Service. In-warranty repair or replacement parts are warranted only for the
unexpired portion of the original warranty period.
Varian's warranties shall not apply to the extent that malfunction is caused in
Varian's reasonable opinion by (1) accident, abuse, alteration, misuse or
neglect, (2) failure to use Products under normal operating conditions or
environment, or within Varian specified ratings, or according to any operating
instructions provided by Varian, (3) lack of routine care or maintenance as
indicated in any Varian operating or maintenance instructions, (4) failure to
use or take any proper precautions under the circumstances, (5) user
modification of any Product or Software, or (6) latent defects discovered after
expiration of the applicable warranty period. This warranty does not cover
Buyer-supplied software, equipment warranted by another manufacturer, or
replacement of expendable, consumable or limited life items.
Warranties given by other suppliers of equipment, accessories, components or
computer software not owned by Varian but incorporated by Varian on or into
Products are passed on to Buyer and shall apply only to the equipment,
accessories, components or computer software of which they are a part. Varian
shall have no liability under warranties provided by other suppliers, nor shall
Varian have any liability for failure of other suppliers to perform under their
warranty. Varian's liability under warranty shall be determined solely by
Varian's warranty, including all its exclusions and limitations.
RETURN PROCEDURES AND OBLIGATIONS: Prior to returning any Product or Part to
Varian, Buyer must obtain authorization from the nearest Varian Customer
Support Center and instructions as to how and where it should be shipped. Buyer
must identify the Product or Part by type and serial number and provide a brief
description of the circumstances giving rise to the return. Varian will then
assign a Return Material Authorization ("RMA") number to assist in processing.
Products or Parts returned for examination must be sent prepaid. Buyer and its
shipping agency shall be responsible for all damages resulting from improper
packing or handling, and for loss in transit, notwithstanding any defect or
nonconformity in the Product. Varian will return Products or Parts prepaid and
insured and will xxxx Buyer for shipping costs. Buyer shall file claims for
loss or damage in transit.
THIS LIMITED WARRANTY IS EXPRESSLY IN LIEU OF AND EXCLUDES ALL OTHER EXPRESS OR
IMPLIED WARRANTIES INCLUDING BUY NOT LIMITED TO WARRANTIES OF MERCHANTABILITY
AND OF FITNESS FOR A PARTICULAR PURPOSE, USE, OR APPLICATION. Statements made
by any person, including representatives of Varian, which are inconsistent or
in conflict with the terms of these warranties shall not be binding upon Varian
unless reduced to writing and approved by an officer of Varian.
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9. DAMAGES AND LIABILITY
VARIAN'S TOTAL LIABILITY IN DAMAGES OR OTHERWISE SHALL NOT EXCEED THE PAYMENT,
IF ANY, RECEIVED BY VARIAN FOR THE UNIT OF PRODUCT OR SERVICE FURNISHED OR TO
BE FURNISHED, AS THE CASE MAY BE, RESULTING IN THE LOSS OR DAMAGE CLAIMED. IN
NO EVENT SHALL VARIAN BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT,
PUNITIVE OR SPECIAL LOSS OR DAMAGES OF ANY KIND, SUCH AS BUT NOT LIMITED TO
LOST BUSINESS REVENUE, LOST PROFITS OR COSTS OF DOWNTIME RESULTING FROM
VARIAN'S PRODUCTS OR SERVICES, HOWEVER CAUSED, WHETHER BASED ON CONTRACT, TORT
(INCLUDING NEGLIGENCE) OR ANY OTHER LEGAL THEORY. Liability to third parties
for bodily injury, including death, resulting from Varian's performance or
Products shall be determined in accordance with applicable law and shall not be
affected by the liability limitations stated above in this paragraph.
10. COMPUTER SOFTWARE
Computer Software provided by Varian with the Products remains the property of
Varian or Varian's licensors. Unless otherwise provided in a Software license
agreement between Varian and Buyer, in which case said agreement shall prevail
over any contrary terms and conditions herein, Varian grants Buyer a
non-exclusive right to use such Software only in machine readable form and
only in combination with other Products with which such Software is provided.
No computer Software provided by Varian shall be copied in whole or in part by
Buyer, and Buyer agrees not to provide or disclose any such Software, or any
portion of such Software, to any third party. This license shall terminate when
Buyer discontinues use of the Software or Products with which such Software is
provided, and upon such termination all Software media and materials shall be
returned to Varian by Buyer.
11. COMPLIANCE WITH LAWS
Varian's Products are manufactured in accordance with the generally accepted
engineering standards of Varian's industry. Wherever practical, Varian has
utilized standard UL listed electrical components. Varian will provide
reasonable assistance to Buyer in Buyer's effort to comply with any applicable
Federal, State or local laws or regulations in effect on the date of shipment,
including but not limited to OSHA. Varian agrees to bear the cost of safety
modifications determined in its sole discretion to be necessary for its
Products.
12. ASSIGNMENTS AND TERMINATIONS
No order accepted by Varian may be terminated, cancelled, modified, rescheduled
or assigned by Buyer except by mutual agreement in writing. Any attempt to do
so without Varian's written consent shall be void from the outset. In any such
event, with or without Varian's consent, Buyer agrees to pay Varian charges of
not less than the amounts determined as specified on the face of Varian's
applicable Quotation, and if no charge is so specified, Buyer shall pay Varian
a termination, cancellation, or rescheduling charge as determined solely by
Varian to cover reasonable costs of processing, order handling, retesting and
repackaging, and lost profits.
13. DISPUTES/ARBITRATION
All disputes, controversies or claims of any kind arising from or in any way
related to this contract, its breach, its termination, its invalidity, or the
Products, including the jurisdiction of the arbitral panel, shall be settled by
final and binding arbitration. For sales to U.S. customers, arbitration shall be
in Palo Alto, California under the rules and procedures of the American
Arbitration Association ("AAA") and shall be governed by the commercial law of
the state from which the Product is shipped. If the sale is international,
arbitration shall be conducted under the AAA's International Arbitration Rules
and the commercial laws of the UN Convention on contracts for the International
Sale of Goods (CISG). If the sale is between entities within another country,
the commercial law of that country and the Jurisdiction provisions of Varian's
standard terms and conditions of sale for that country shall apply. The arbitral
tribunal shall not award punitive damages. The arbitral tribunal award shall be
final and binding, shall be the sole and exclusive remedy regarding any and all
claims and counterclaims presented, and may not be reviewed by or appealed to
any court except for enforcement. No claims, regardless of form, arising out of,
or in any way connected with this contract, the Products or services furnished
by Varian, may be brought by Buyer more than one (1) year after the cause of
action has accrued or performance under this contract has been completed or
terminated, whichever is earlier.
14. ENTIRE AGREEMENT
These terms and conditions of sale, Varian Specifications and related documents
expressly agreed to in writing by the parties contain the entire agreement of
the parties with respect to the subject matter hereof, and supercede all prior
understandings, representations and warranties, written and oral. If any part
of these terms and conditions are held void or unenforceable, such part will be
treated as severable, leaving valid the remainder of the terms and conditions.
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Exhibit C
PURCHASE AGREEMENT
FOR
ALL PRODUCTS MANUFACTURED BY
VARIAN TEMPE ELECTRONICS CENTER
("VTEC")
FOR
NOVELLUS SYSTEMS, INC.
("CUSTOMER")
13
VARIAN TEMPE ELECTRONICS CENTER
PURCHASE AGREEMENT
FOR
NOVELLUS SYSTEMS, INC.
("CUSTOMER")
1. GENERAL
1.1 PARTIES. This Purchase Agreement ("Purchase Agreement"), is by and between
Varian Tempe Electronics Center, 000 Xxxxx Xxxxx Xxxxx, Xxxxx, Xxxxxxx 00000
("VTEC") and "CUSTOMER FULL", a "CUSTOMER STATE" registered company, located at
"CUSTOMER ADDRESS" ("CUSTOMER").
1.2 PURPOSE. The purpose of this Purchase Agreement is to establish the terms
and conditions under which VTEC agrees to assemble for CUSTOMER a line of
products, (herein "Product(s) or "unit(s)" according to the drawings,
specifications, and bills of material supplied by CUSTOMER and accepted by VTEC
("Terms and Conditions of Sale").
1.3 APPLICABILITY. All VTEC Products and services are famished only on the Terms
and Conditions stated herein and on the face of the applicable VTEC Quotation to
the exclusion of any CUSTOMER terms and conditions in any specific order
documentation, preprinted or otherwise, except as to identification and quantity
of Products. VTEC's performance of any contract is expressly made conditional on
CUSTOMER's agreement to the Terms and Conditions of Sale of this Purchase
Agreement, and in the absence of such agreement shall be for CUSTOMER's
convenience only, shall not create any contractual obligation and shall not be
construed as acceptance by VTEC of CUSTOMER's terms and conditions printed or
stated in its orders. CUSTOMER's acceptance of any Product or service shall be
deemed acceptance of the Terms and Conditions of Sale hereinbelow.
1.4 EFFECTIVE DATE. The Effective Date of this Purchase Agreement shall be "the
Closing Date" of the Agreement with which the Parts Agreement is concurrent.
2. PRICES
2.1 PER UNIT PRICES. The price per unit ("Per Unit Price") shall be VTEC's cost
as calculated pursuant to Section 4.1 of the Parts Agreement to which this is an
exhibit.
2.2 PER UNIT PRICE CHANGES. In the event of significant unanticipated cost
changes for reasons outside VTEC's control, VTEC may change firm or agreed
prices as follows: VTEC will present the cost change information to CUSTOMER for
review and consideration. Any changes to previously agreed pricing will be
negotiated with CUSTOMER, and VTEC's acceptance of CUSTOMER purchase orders
which contain price changes will confirm the changed prices. In addition, VTEC
may change prices if CUSTOMER requests changes to the drawings, specifications,
or bills of material, resulting in Engineering Change Order (ECO). CUSTOMER
signatures on VTEC generated ECO implementation documentation will constitute
CUSTOMER acceptance of new pricing.
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2.3 NRE CHARGES. In addition to Per Unit Prices, VTEC Will charge CUSTOMER for
the costs of reimbursable nonrecurring engineering (NRE) charges related to
assembly of units for CUSTOMER. VTEC shall quote NRE charges to CUSTOMER on or
with quotations for the associated Products. Issuance of Purchase Order by
CUSTOMER for such Products will confirm acceptance of NRE Charges.
2.4 VTEC COST INFORMATION. VTEC shall not be required to provide cost breakdown
information with its quotations for Products; provided, however, in the event
VTEC provides such data, it shall be used only for engineering the Products to
be assembled by VTEC for CUSTOMER. Any such information supplied by VTEC shall
be considered the confidential information of VTEC subject to the obligations
not to use or disclose the same as provided in any nondisclosure agreement that
may be entered into by the parties with respect to this Purchase Agreement.
2.5 TAXES. All taxes or charges, other than those based upon net income, imposed
by any taxing authority upon the manufacture, sale, shipment, or use of the
units which VTEC is obligated to pay or collect shall be the responsibility of
CUSTOMER and if not paid directly by CUSTOMER shall be added to the purchase
price paid by CUSTOMER to VTEC. CUSTOMER will notify VTEC in writing via
purchase order or advise of any units that arc not intended for resale; so that
applicable sales and/or use taxes may be applied. If CUSTOMER does not provide
such notice, CUSTOMER will accrue and pay appropriate authorities directly.
3. DELIVERY
The forecasting, scheduling and delivery of Products will be handled in the
following manner in order to enhance the ability of CUSTOMER and VTEC to
optimize asset flow. In order to provide this flexibility in VTEC's normal mode
of operation, commitment to material flow in the VTEC "pipeline" will be
governed by forecasts provided by CUSTOMER, and not outstanding Purchase Orders
which will be limited in scope and duration in order to optimize the needed
flexibility. The actual implementation of Purchase Order activity will change
from time to time as the parties may agree, including but not limited to the
possible use of "blanket" purchase orders, use of Electronic Data Interchange
(EDI), etc.
3.1 FORECAST FIND COMMITMENT
CUSTOMER will provide VTEC with a monthly rolling forecast as required by
Section 5 of the Parts Agreement of which this is an exhibit in monthly periods
by Product, subject to the flexibility parameters specified in Section 3.3
below, if any. Changes to forecasts during the first one hundred twenty (120)
days (4 monthly periods) of a rolling forecast commitment will be limited to the
changes permitted by the flexibility parameters listed in Section 3.3 of this
Purchase Agreement CUSTOMER will be liable for the material commitments made by
VTEC for the first one hundred twenty (120) days at the forecast and flexibility
parameters desired by CUSTOMER and agreed to by VTEC as specified in section 3.3
below, in cases of Product cancellation and/or ECO changes to individual parts.
VTEC commits to make every reasonable effort to utilize such material elsewhere,
return it to suppliers, or limit cancellation charges on all material in this
one hundred twenty (120) day period. CUSTOMER will be
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liable for a longer period for CUSTOMER specific parts which require a longer
time frame. VTEC Will apprise CUSTOMER of these parts no less than quarterly.
3.2 DELIVERY SCHEDULES
(1) CUSTOMER will deliver to VTEC Purchase Order(s) releases consistent with
forecasts furnished according to Section 3.1. The vehicle for releases will
change from time to time as technology changes occur. Terms and conditions of
sale for all such releases will be controlled by the terms and conditions of
this Purchase Agreement. CUSTOMER commits to providing the necessary information
for delivery no later than thirty (30) days prior to scheduled delivery date.
(2) Schedules for delivery must remain consistent with the forecast provided and
the flexibility parameters detailed in Section 3.3 below. Any requests for
delivery outside these parameters must be agreed to by VTEC in writing. In the
event of Engineering Product holds, delivery will be rescheduled per agreement.
Unless otherwise specifically agreed by VTEC in writing CUSTOMER's liability for
the flow of material for Products on hold will continue to accrue per Section
3.1.
3.3 SCHEDULE FLEXIBILITY CHANGE PARAMETERS
To compensate for changes in demand, VTEC and CUSTOMER agree to the following
flexibility parameters within which VTEC will maintain resource commitments for
which CUSTOMER will remain liable. Changes may be made to CUSTOMER forecasts and
outstanding "releases" (Purchase Orders, etc.) as follows:
Schedule for delivery
-------------------------------------------------------------------------------
0-4 weeks 5-9 weeks 10-13 weeks 13-16 weeks 17-->
Flexibility Parameters + 0% +20% +40% + 50% +100%
(maximum and minimum) - 0% -20% - 40% --50% --100%
for forecast + orders
Maximum material liability 100% 100% 100% 100%
Note: These guidelines are for normal business transactions. All requests for
change will be reviewed when requested.
3.4 OBSOLESCENCE
On a quarterly basis, material Obsolescence will be evaluated for the
"CUSTOMER" and all material declared obsolete will be billed to the CUSTOMER at
current cost plus 20%. Obsolescence is defined as material procured for "the
CUSTOMER" for which their are no supporting orders or forecast by the "CUSTOMER"
requiring that material.
All efforts will be utilized to minimize this obsolescence but
consideration must be given for the minimum buy and form factor requirements
that will cause excessive levels of some material.
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4. TEST
As a condition of VTEC performing testing of Products hereunder, CUSTOMER will
provide VTEC with both applicable and required board-level and completed unit
test hardware, software and procedures, and associated training of VTEC
personnel. VTEC shall conduct testing at its factory in accordance with final
test requirements as set forth in the appropriate Test Plans and requirements as
specified by CUSTOMER and accepted by VTEC. If the test fixtures are developed
by VTEC, CUSTOMER shall reimburse the agreed amount to VTEC. VTEC holds such
tooling, fixtures, and programs in trust for CUSTOMER and shall reimburse
CUSTOMER for loss or damage other than normal wear and tear. All such property
of CUSTOMER shall be returned within five (5) business days after the
termination of the Purchase Agreement or upon the request of CUSTOMER.
5. ACCEPTANCE
CUSTOMER shall have thirty (30) days from the date of shipment of each unit
within which to reject each unit. Reasons for rejection will be limited to
violation of agreed upon workmanship standards and/or failure of mutually agreed
CUSTOMER supplied tests. CUSTOMER shall notify VTEC of any nonconformity; such
notice shall be received by VTEC in writing within said thirty (30) day period
and shall specify the nature of the claimed nonconformity. Failure by CUSTOMER
to provide such notice within said time period shall constitute acceptance by
CUSTOMER of each unit Damage to a unit, or any portion thereof, resulting from
shipment shall not constitute cause for rejection under this Section.
Notwithstanding the foregoing, any use of a unit by CUSTOMER, its agents,
employees, contractors or licensees, for any purpose other than acceptance
testing upon deliver thereof, shall constitute acceptance of that unit by
CUSTOMER. After acceptance, CUSTOMER's sole and exclusive rights and remedies
regarding any claimed nonconformity shall be as provided in Section 9 below,
entitled "Warranty", and CUSTOMER shall not, after acceptance, attempt to revoke
acceptance of, or reject said shipment or any portion thereof.
6. CHANGES
Either CUSTOMER or VTEC may, by mutual written agreement, make changes within
the scope of this Purchase Agreement. If any such change shall cause either
increase or decrease in VTEC's cost or period of performance, VTEC may suspend
performance hereunder without being in default until a mutually acceptable
adjustment in prices is agreed to in writing. CUSTOMER shall be responsible for
all material cost due to Engineering Change Orders that create obsolete parts.
7. TERMS OF PAYMENT
Unless credit is granted, payment shall be due according to agreed progress
payments schedule on an attached Appendix, or CUSTOMER shall post an irrevocable
letter of credit from a bank or other financial institution acceptable to VTEC
for the estimated value of 4 months of planned production at the sales price for
that 4 month period. This letter will secure accounts receivable, work in
process (WIP), raw inventory, and VTEC purchase commitments not yet realized for
CUSTOMER's Products. This letter of credit shall be executable in full at any
time that accounts receivable for invoiced Products in any amount exceed 60
days, unless CUSTOMER has exercised its right of rejection under Section 5 for
the overdue amount. If exercised, all Products and related materials secured by
this letter of credit shall become the property of CUSTOMER and will be
delivered to CUSTOMER within thirty (30) days
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after VTEC's receipt of full payment therefor.
VTEC will invoice CUSTOMER for units of Products as shipped. VTEC will invoice
CUSTOMER for all non-recurring costs as incurred. All payments shall be due in
full thirty (30) days from date of invoice, except with respect to Products
CUSTOMER has returned to VTEC as allowed under Section 5. Past due balances
shall be subject to a service charge of 1.5% per month. Partial shipments will
be billed as made and payments are subject to the above terms. VTEC may delay
delivery of Products if CUSTOMER fails to make prompt payment.
8. TRANSPORTATION AND RISK OF LOSS
Except as otherwise expressly provided in this Purchase Agreement or in a
shipping term mutually agreed to in writing and attached hereto as an Appendix,
a transportation shall be at the expense of CUSTOMER, and all shipments are FOB
VTEC's plant. Either CUSTOMER or VTEC, subject to approval by CUSTOMER, will
select the transportation company. VTEC will prepay and add shipping and
insurance costs. Risk of loss and/or damage shall pass from VTEC to CUSTOMER
upon delivery of the units by VTEC to the transportation company at VTEC's
plant. Confiscation, destruction, or damage to units shall not release, reduce
or in any way affect the liability of CUSTOMER. Notwithstanding any defect or
nonconformity or any other matter, such risk of loss shall remain with CUSTOMER
until the units are returned at CUSTOMER's expense to such place as VTEC may
designate in writing. CUSTOMER shall inspect all units upon receipt and shall
file a claims with the transportation company when there is evidence of shipping
damage, either concealed or external.
9. WARRANTY
VTEC warrants that at the time of shipment Products manufactured by VTEC shall
be free from defects in material and workmanship and shall be in substantial
compliance with operational features of specifications agreed to in writing by
VTEC. VTEC's warranty shall begin upon acceptance by CUSTOMER (as provided in
the ACCEPTANCE provisions herein), and shall continue for a period of thirty
(30) days from the date of manufacture, subject to the conditions below. If no
period of time is stated, then VTEC's warranty is limited to thirty (30) days
from the date the Product is received by CUSTOMER.
Repair or rework, or at VTEC's option, replacement of defective Products or
parts shall be the sole and exclusive remedy under warranty. If in VTEC's
opinion such repair or replacement is not feasible, or if such remedy fails of
its essential purpose, VTEC may refund or credit an equitable portion of any
sums paid by Buyer for the Product or Service. In-warranty repair or replacement
parts are warranted only for the unexpired portion of the original warranty
period.
All warranty repair, rework, or replacement of units under warranty shall be
limited to unit malfunctions which are determined by VTEC to be due and
traceable to defects in either materials or workmanship furnished by VTEC. The
standard of workmanship for units is that they shall meet the VTEC Quality
Assurance manual standards. VTEC's warranties shall not apply to the extent that
malfunction is caused in VTEC's reasonable opinion by (1) accident, abuse,
alteration, misuse or neglect, (2) failure to use Products under normal
operating conditions or environment, or within VTEC specified ratings, or
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according to any operating instructions provided by VTEC, (3) lack of routine
care or maintenance as indicated in any VTEC operating or maintenance
instructions, (4) failure to use or take any proper precautions under the
circumstances, (5) user modification of any Product, or (6) latent defects
discovered after expiration of the applicable warranty period.
Units being returned to VTEC for warranty service shall be shipped by mutually
agreeable means. Freight costs shall be prepaid by CUSTOMER and refunded by VTEC
for valid warranty returns. Shipment costs for return to CUSTOMER of such units
repaired by VTEC under provisions of this Warranty shall be borne by VTEC.
CUSTOMER shall contact VTEC prior to any warranty return and VTEC shall issue a
Return Authorization to CUSTOMER authorizing all such warranty returns. VTEC
shall not accept any return of units for warranty service without having issued
such Return Authorization to CUSTOMER. VTEC will return repaired items within
fourteen (14) days of receipt.
THIS LIMITED WARRANTY IS EXPRESSLY IN LIEU OF AND EXCLUDES ALL OTHER EXPRESS OR
IMPLIED WARRANTIES INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY
AND OF FITNESS FOR A PARTICULAR PURPOSE, USE, OR APPLICATION.
VTEC shall perform out of warranty repair of field returned units for
Engineering Change updating if so requested by CUSTOMER. The charge for such
updating shall be based on material cost and labor rate calculated at VTEC's
warranty labor rate, which shall be agreed upon by the parties.
10. DAMAGES AND LIABILITY
VTEC'S TOTAL LIABILITY IN DAMAGES OR OTHERWISE SHALL NOT EXCEED THE PAYMENT, IF
ANY, RECEIVED BY VTEC FOR THE UNIT OF PRODUCT OR SERVICE FURNISHED OR TO BE
FURNISHED, AS THE CASE MAY BE, RESULTING IN THE LOSS OR DAMAGE CLAIMED. IN NO
EVENT SHALL VTEC BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, PUNITIVE OR
SPECIAL LOSS OR DAMAGES OF ANY KIND, SUCH AS BUT NOT LIMITED TO LOST BUSINESS
REVENUE, LOST PROFITS OR COSTS OF DOWNTIME RESULTING FROM VTEC'S PRODUCTS OR
SERVICES HOWEVER CAUSED, WHETHER BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE)
OR ANY OTHER LEGAL THEORY. This limitation applies whether the damages or other
relief are sought based on breach of warranty, breach of contract, negligence,
strict liability in tort, or otherwise of anyone, under this Purchase Agreement
or any nondisclosure or confidentiality agreement, or any other legal or
equitable theory of applicable law. This limitation does not apply to direct
damages caused by breach of a material obligation under this Purchase Agreement
or claims for personal injury by a third party.
11. PATENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS
CUSTOMER shall indemnify, defend and hold VTEC harmless from and against any
expense, loss, costs, damages, or liability resulting form claimed infringement
of patents, trademarks, copyrights, or other intellectual property rights with
respect to units, including, but not limited to, claims:
a. arising from a use of or a combination of units with other
equipment, processes, programming applications, or materials
not furnished by VTEC hereunder;
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b. based on items made with the units furnished by VTEC
hereunder; and/or
C. arising out of compliance by VTEC with Customer's designs,
specifications or instructions.
VTEC shall notify CUSTOMER in writing of any such claim within sixty (60) days
of its receipt.
THE FOREGOING STATES VTEC's ENTIRE LIABILITY FOR ANY CLAIM BASED UPON OR RELATED
TO ANY ALLEGED INFRINGEMENT OF ANY PATENT OR OTHER INTELLECTUAL PROPERTY RIGHTS.
12. TERMINATION FOR CONVENIENCE
Subject to the initial three (3) year term of the Parts Agreement of which this
is an exhibit, either CUSTOMER or VTEC may thereafter terminate this Purchase
Agreement at any time, for any reason of its own choosing, provided that the
party initiating termination gives at least one hundred and twenty (120) days
advance written notice to the other party specifying the effective date of
termination, after which date neither party shall have any further liability or
obligation to the other, except as expressly provided herein, subject to any
limitations stated herein.
12.1 TERMINATION BY CUSTOMER
In the event of termination by CUSTOMER under this provision, CUSTOMER shall
reimburse VTEC for any unrecovered costs incurred by VTEC in the discharge of
its obligations under this Purchase Agreement, which shall consist of the
following specific items:
a. Any unpaid balance due for conforming units ordered by
CUSTOMER and delivered to CUSTOMER prior to VTEC receipt of
CUSTOMER's termination notice, and
b. The full purchase price for units forecasted by CUSTOMER and
scheduled by CUSTOMER for delivery within one hundred twenty
(120) days after the date on which VTEC received CUSTOMER's
termination notice.
C. For units forecasted by CUSTOMER and/or orders accepted by
VTEC, should CUSTOMER wish to waive their manufacture and
payment of the full purchase price under b. above, CUSTOMER
shall purchase the material for which VTEC has made
commitments (and for which CUSTOMER is liable) for Products
scheduled for delivery in this one hundred twenty (120) day
period, CUSTOMER's purchase obligations under this option will
include:
(1) Any material which VTEC has received for manufacture
of the units. Such material purchased by CUSTOMER
shall be at supplier invoiced cost plus 20%; and
(2) Any unique material not returnable by VTEC bought for
CUSTOMER Products
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per non-cancelable, non-returnable contractual terms.
The usage period of this material may exceed one
hundred twenty (120) days. This category will
contain programmed parts, and special devices etc.,
with minimum lot buys. Such material purchased by
CUSTOMER shall be at supplier invoiced cost plus 20%;
and
(3) Any cancellation charges incurred by VTEC for
material not yet received, but committed to by VTEC
for Products previously scheduled for delivery to
CUSTOMER in this one hundred twenty (120) day period.
Upon payment by CUSTOMER to VTEC of all amounts set forth in this provision for
termination by CUSTOMER, VTEC shall deliver to CUSTOMER all material held and
not returned to VTEC's vendors.
12.2 TERMINATION BY VTEC
In the event of termination by VTEC under this Section 12, CUSTOMER shall have
no obligation to purchase any Product or inventory, except Products or inventory
and material for which VTEC has made commitments pursuant to confirmed P.O.'s
within the one hundred twenty (120) day period prior to the effective date of
termination. CUSTOMER shall, however, have the option to purchase at VTEC's cost
any partial or completed inventory held by VTEC, but not material or parts
ordered and not yet shipped to VTEC for the production of units.
13. TERMINATION FOR CAUSE
Either VTEC or CUSTOMER may terminate this Purchase Agreement at any time if the
other party is in material breach of any of the provisions herein. In the event
of termination under this provision, the defaulting party shall have thirty (30)
days from the date of receipt of written notice from the party initiating
termination in which to remedy the default. Should the defaulting party fail to
remedy the breach, termination shall become effective without further notice at
the end of said thirty (30) day period. Either VTEC or CUSTOMER may initiate
termination under this provision for any one or more of the following:
a. the other party petitions for reorganization under the
Bankruptcy Act,
b. the other party is adjudicated as bankrupt,
c. a receiver is appointed for the other party's business,
d. the other party makes an assignment for the benefit of its
creditors,
e. the other party fails to perform or observe any material
obligation under this Purchase Agreement, or
f. VTEC may terminate if it becomes necessary to exercise the
letter of credit.
Termination by either party under this provision shall be without prejudice to
any other remedy either party may have under applicable law, subject to the
limitations stated in this Purchase Agreement.
14. PERFORMANCE
Neither party to this Purchase Agreement shall be liable for any delay in
delivery or other performance
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hereunder which is due to unforeseen circumstances, or to causes beyond its
control including, without limitation, strike, lockout, riot, war, fire, act of
God, or compliance with any governmental law, regulation, or order, including
but not limited to U.S. Export Administration Regulations. Provided any such
delay is neither material nor indefinite, performance shall be deemed suspended
during and extended for such time as it is so delayed, and thereafter the other
party shall accept performance hereunder. In the event such contingencies last
more than one hundred and twenty (120) days after either party provides written
notice of such inability to perform, either party may immediately terminate this
Purchase Agreement upon a written notice subject to the terms of Section 12.
TERMINATION FOR CONVENIENCE.
15. DISPUTES/ARBITRATION AND APPLICABLE LAW
All disputes, controversies or claims of any kind arising from or in any way
related to this Purchase Agreement, its breach, its termination, its invalidity,
or the Products, including the jurisdiction of the arbitral panel, shall be
settled by final and binding arbitration in Palo Alto, California under the
Rules of the American Arbitration Association (AAA). The arbitral tribunal shall
not award punitive damages. The arbitral award shall be final and binding, shall
be the sole and exclusive remedy regarding any claims and counterclaims
presented, and may not be reviewed by or appealed to any court except for
enforcement. VTEC shall, however, have the exclusive right to bring legal action
against CUSTOMER for failure to pay for Products or services furnished or other
causes. This Purchase Agreement shall be governed by and construed according to
the laws of the State of California without reference to its rules of conflicts
of law. No claims, regardless of form arising out of, or in any way connected
with this contract, the Products or services furnished by VTEC, may be brought
by CUSTOMER more than one (1) year after the cause of action has accrued or
performance under this contract has been completed or terminated, whichever is
earlier.
16. NOTICE
Any notice, demand, request or other instrument which may be or is required to
be given under this Purchase Agreement shall be delivered in person or sent by
Certified Mail, postage prepaid, and shall be sent to the addresses listed below
for the respective parties or to such other address as either party may
designate by written notice.
Xx. X. X. Xxxx (company officer)
VP & General Manager (title)
Varian Tempe Electronic Center CUSTOMER
000 X. Xxxxx Xxxxx (company address 1)
Xxxxx, Xxxxxxx 00000 (company address 2)
17. CONFIDENTIAL INFORMATION
The confidential information of either party shall be governed by the
nondisclosure or confidentiality agreement attached hereto, if any, applicable
solely to this Purchase Agreement.
18. ASSIGNMENT
Neither VTEC nor CUSTOMER shall have the right to assign its rights or
obligations under this Purchase Agreement without the written consent of the
other party. Neither party shall unreasonably
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withhold such consent. Any prohibited assignment shall automatically be null and
void.
19. RIGHTS OF SUCCESSOR
A successor in interest by merger, operation of law, assignment, purchase, or
otherwise of the entire business of either party shall acquire all interests and
obligations of such party thereunder.
20. ENTIRE AGREEMENT
This Purchase Agreement, including only modifications or additions agreed to in
writing and incorporated herein by reference and including Appendices attached
hereto, together with the Parts Agreement of which this is an exhibit, are the
entire and sole understanding of the parties with respect to the subject matter
hereof, and supersede all prior understandings, representations and warranties,
written and oral. No representations or agreements modifying or supplementing
the terms of the Purchase Agreement shall be valid unless expressed in writing
and signed by person authorized to sign agreements on behalf of both parties. If
any part of these terms and conditions are held void or unenforceable, such part
will be treated as severable, leaving valid the remainder of the terms and
conditions.
AGREED AS ABOVE PROVIDED:
Signed: Signed:
------------------------------- -------------------------------
Xx. X. X. Xxxx (company officer)
VP & General Manager (title)
Varian Tempe Electronic Center CUSTOMER
000 X. Xxxxx Xxxxx (company address 1)
Xxxxx, Xxxxxxx 00000 (company address 2)
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