EXHIBIT 2.16
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SERVICE AND LOGISTICS AGREEMENT
THIS SERVICE AND LOGISTICS AGREEMENT (this "Agreement") is entered into
effective as of May 1, 2004 (the "Effective Date") between APPLIED MATERIALS,
INC. a Delaware corporation ("Applied"), and XXXXXX AUTOMATION, INC. a Delaware
corporation ("Xxxxxx").
BACKGROUND
X. Xxxxxx develops and markets integrated automation solutions for the
semiconductor and related manufacturing industries, including integrated
software, hardware, services and components for the optimization of the flow of
material and data throughout a manufacturing facility;
B. Applied is the leading supplier of products and services to the global
semiconductor industry;
X. Xxxxxx performs, for customers of Xxxxxx'x products, certain inventory
management and logistics services for spare parts and certain maintenance and
support services. Xxxxxx desires for Applied to undertake to perform such
services for the Xxxxxx products identified in this Agreement for the benefit of
certain Xxxxxx customers specified in addenda to this Agreement agreed upon from
time to time, and Applied desires to undertake to perform such services on the
terms and conditions of this Agreement.
AGREEMENT
LIMITED RIGHT OF * * *
1. DEFINITIONS. As used in this Agreement:
1.1 "Applied Technology" means all Technology, and Intellectual Property
Rights therein, developed, licensed, or acquired by Applied (other than from
Xxxxxx), either in connection with or independently of the activities undertaken
pursuant to this Agreement.
1.2 "Applied Personnel" means Applied employees and contractors performing
Services under this Agreement.
1.3 "Base Monthly Service Charge" has the meaning given on Exhibit F.
1.4 "Xxxxxx Facilities" has the meaning given in Section 4.5.
1.5 "Xxxxxx Materials" has the meaning given in Section 4.2.
1.6 "Xxxxxx Products" means the Xxxxxx products specified on Exhibit A.
1.7 "Xxxxxx Technology" means all Technology, and Intellectual Property
Rights therein, developed, licensed, or acquired by Xxxxxx (other than from
Applied), either in connection with or independently of the activities
undertaken pursuant to this Agreement.
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1.8 "Xxxxxx Parts Supplier" means a third party that supplies Covered
Parts to Xxxxxx.
1.9 "Commencement Date" means, for each Customer Site, the date that
Transition Activities are complete and Applied assumes responsibility for
performing Services.
1.10 "Code" means the Internal Revenue Code of 1986, as amended.
1.11 "Covered Parts" means the parts for Xxxxxx Products specified on
Exhibit C.
1.12 "Customer" means a wafer fabrication facility owner that is
identified on a Site Addendum and has an agreement directly with Xxxxxx for the
supply of spare parts and/or the provision of support services for Xxxxxx
Products.
1.13 "Customer Agreement" has the meaning given in Section 2.5.
1.14 "Customer Site" means a Customer wafer fabrication facility
identified on a Site Addendum.
1.15 "Field Services" means making available the Applied Personnel for the
hours specified on each Site Addendum (as well as any Overtime Service agreed by
Applied) to perform services within the scope specified on Exhibit B related to
the maintenance and support of Xxxxxx Products.
1.16 "Intellectual Property Rights" means all past, present, and future
rights of the following types, which may exist or be created under the laws of
any jurisdiction in the world: (a) rights associated with works of authorship,
including exclusive exploitation rights, copyrights, moral rights, and mask work
rights; (b) trademark and trade name rights and similar rights; (c) trade secret
rights; (d) patent and industrial property rights; (e) other proprietary rights
in Technology of every kind and nature; and (f) rights in or relating to
registrations, renewals, extensions, combinations, divisions, and reissues of,
and applications for, any of the rights referred to in clauses (a) through (e)
of this sentence.
1.17 "Logistics Costs" has the meaning given in Section 3.6(c).
1.18 "Non-* * *" has the meaning given in Section 9.1.
1.19 "Overtime Charge" has the meaning given on Exhibit F.
1.20 "Overtime Service" has the meaning given on Exhibit F.
1.21 "Parts Services" means performance of Applied's responsibilities
specified in Section 3 related to the forecasting and planning, inventory
management, logistics and distribution, and purchasing for Covered Parts.
1.22 "Pass Through Expenses" has the meaning given on Exhibit F.
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1.23 "Required Consents" means all licenses, consents, permits, approvals,
and authorizations that are necessary for Applied to perform its obligations
under this Agreement (other than governmental licenses and permits necessary for
Applied to carry on its business generally irrespective of this Agreement),
including all licenses, consents, permits, approvals, and authorizations
necessary to allow (a) Applied and its employees, contractors, and agents to
use, in connection with performing the Services, (i) the Xxxxxx Facilities, (ii)
services related to the Covered Products that are provided for the benefit of
Xxxxxx and Customers under their respective third party services contracts, and
(iii) the Xxxxxx Materials and other software, hardware, documentation, manuals,
and technical information in the possession of Xxxxxx or Customers related to
the Covered Products; and (b) Applied to order Covered Parts from Xxxxxx Parts
Suppliers.
1.24 "Service Level" means the performance targets established by the
parties in accordance with Section 5.1.
1.25 "Services" means the Field Services and Parts Services, as well as
any other services that Applied agrees to perform in a written amendment to
Exhibit B.
1.26 "Site Addendum" means a written document that identifies, among other
things, one or more Xxxxxx customer business locations for which Applied will
supply Services under this Agreement as well as other agreed upon transactional
details relating to that location.
1.27 "Stock Plan" has the meaning given in Section 3.3.
1.28 "Subsidiary" means, with respect to either party, a direct or
indirect wholly-owned subsidiary of such party, but only as long as it remains
such.
1.29 "Technology" means all algorithms, apparatus, concepts, Confidential
Information, data, databases and data collections, designs, diagrams,
documentation, drawings, flow charts, formulae, ideas and inventions (whether or
not patentable or reduced to practice), know-how, materials, marketing and
development plans, marks (including brand names, product names, logos, and
slogans), methods, models, procedures, processes, protocols, schematics,
software code (in any form including source code and executable or object code),
specifications, subroutines, techniques, test vectors, tools, interfaces, works
of authorship, and other forms of technology.
1.30 "Transition Activities" means the activities, tasks, and
responsibilities of Applied, Xxxxxx, and the Customer set forth in the
applicable Transition Plan.
1.31 "* * *" will have the meaning set forth in Section 9.1.
1.32 "Transition Plan" means a written document agreed upon by the parties
that covers, among other things, the topics identified on Exhibit E, pursuant to
which Applied, Xxxxxx, and the Customer will transition the Services to Applied.
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2. SERVICES
2.1 Provision of Services. During the term of this Agreement, Xxxxxx
appoints Applied as Xxxxxx'x exclusive supplier of field maintenance services
and Covered Parts and related logistics services for Xxxxxx Products. Beginning
on the Commencement Date for each Customer Site, Applied will supply the
Services for such Customer Site set forth in this Agreement or the applicable
Site Addendum, pursuant to the terms of this Agreement and the applicable Site
Addendum. Xxxxxx'x existing contracts with service providers for services not
related to Xxxxxx Products and parts other than Covered Parts will not be
covered by this Agreement. * * *.
2.2 Customer Sites. Except for the initial Services for the initial
Customer Sites under this Agreement, Xxxxxx will notify Applied within a
reasonable period, if Xxxxxx is considering or negotiating toward performing
Services at any new Customer Site or performing new services at an existing
Customer Site, and in any event least * * * prior to the planned commencement of
Services at each new Customer Site or any requested new services to be provided
to an existing Customer Site. Prior to the Commencement Date for each Customer
Site for which Applied will supply Services under this Agreement (whether
contemplated as of the Effective Date or added thereafter), Applied and Xxxxxx
will agree to and execute a Site Addendum identifying (a) the Customer and
Customer Site, (b) the Xxxxxx Products located at such Customer Site, (c) a
detailed description of any Services in addition to the Field Services specified
in Exhibit B to be performed in respect of the Xxxxxx Products located at such
Customer Site, (d) the Service Levels for such Customer Site, as agreed, (e) the
scheduled Commencement Date for the Customer Site, and (f) any other
transactional details relating to the Customer Site. Applied will not be
required to perform any Parts Services or Field Services or meet any Service
Levels unless a Site Addendum for the applicable Customer Site has been executed
by both parties, nor will Applied be required to perform any such Services that
vary from the descriptions and terms set forth in Section 3 and on Exhibit B
unless Applied has otherwise agreed in writing. For the initial Customer Sites
contemplated under this Agreement, Section 1 of Exhibit B defines the resource
levels for Applied Personnel that the parties anticipate will be included under
the first Site Addenda. Applied will not be required to provide Applied
Personnel resources in excess of those defined in Section 1 of Exhibit B unless
otherwise agreed in Applied's discretion.
2.3 Transition Plan. For each Customer Site, Applied and Xxxxxx will agree
upon a Transition Plan that specifies each party's and the applicable Customer's
obligations with respect to the transition of the Services to Applied and
identifies any Xxxxxx and Customer systems (including hardware, software,
networks, peripherals, etc.) that Applied will use to provide the Services.
Applied will be responsible for performing Applied's obligations set forth in
the Transition Plan, subject to Xxxxxx and the Customer performing their
respective obligations under the Transition Plan.
2.4 Services Changes. If either party desires to make any changes to the
Services or the Service Levels applicable to a Customer Site after the execution
of the applicable Site Addendum, including a request that Applied perform
additional tasks or responsibilities not set forth on Exhibit B or in such Site
Addendum, the requesting party will notify the other party and the parties will
discuss in good faith whether or not to make such a change and the modifications
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to the terms, conditions, and prices under this Agreement to implement such
change. Applied is not required to change the Services or the Service Levels
applicable under any Site Addendum unless such change is agreed upon in writing
by the parties. Notwithstanding the foregoing, Applied may in its discretion
determine the manner and means it uses to perform the Services, except that
Applied will not make a change that imposes a material additional cost on Xxxxxx
without Xxxxxx'x consent, and Applied may in its discretion determine the
Applied Personnel that Applied will utilize to perform the Services and their
assignments, * * *.
2.5 Customer Agreements. Xxxxxx will be responsible for negotiating and
entering into agreements with its Customers for service of Xxxxxx Products
("Customer Agreements"). Unless Applied has specifically agreed otherwise in
writing, Applied will be responsible only for providing Parts Service hereunder
and performing the Services specified on Exhibit B at the Service Levels agreed
to and specified in an executed Site Addendum, regardless of the terms of any
Customer Agreement entered into before or after the Effective Date. Without
limiting the foregoing, if Xxxxxx includes, or has included, in any Customer
Agreement obligations to provide services related to the Xxxxxx Products other
than the Services described in this Agreement then (i) Xxxxxx will notify
Applied in writing of such services, and, (ii) as between the parties, Xxxxxx
will be responsible for providing such services to the Customer unless and until
such services are specified on the applicable mutually agreed upon Site
Addendum. As between the parties, Xxxxxx will be responsible for managing the
relationship with the Customer and enforcing the terms of the Customer
Agreement.
2.6 Cooperation. In order to enable Applied to perform Services, Xxxxxx
will perform its responsibilities under this Agreement (including Exhibit B and
each Site Addendum) and provide Applied personnel with such other cooperation
and assistance as Applied reasonably requests. Such cooperation and assistance
will include providing to Applied the following in a timely manner upon
reasonable request: answers to questions, approvals, management decisions,
information, technical consultation, and reasonable efforts to ensure that the
Customer performs the Customer responsibilities under the applicable Site
Addendum, Transition Plan and Customer Agreement. If Xxxxxx or a Customer fails
to perform its obligations or responsibilities, Applied will be excused from
performing the affected Services until such obligations and responsibilities are
performed and will be entitled to an extension of time to complete the affected
Services commensurate with the delay caused by the failure to perform.
2.7 * * *
(a) * * *
(b) * * *
(c) * * *
(d) * * *
(e) * * *
(f) * * *
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3. SUPPLY OF COVERED PARTS
3.1 Supplier Agreements
(a) XXXXXX SUPPLIERS. * * * Xxxxxx will * * * ensure that each of
Xxxxxx'x supply arrangements for Covered Parts will permit Applied to order
Covered Parts directly from the Xxxxxx Parts Supplier at the same (or better)
terms and conditions (including prices) as the terms and conditions (including
prices) under which the supplier supplies to Xxxxxx.
(b) * * *
3.2 First Article Inspections. For each new Covered Part and each new
Applied supplier, Applied will furnish to Xxxxxx an inspection report of samples
of the Covered Parts to be provided ("FIRST ARTICLES") based on Applied's
then-existing first article inspection procedures. Upon receipt, Xxxxxx will
review such report and conduct any additional inspections Xxxxxx requires. To
the extent available from the supplier, Applied will provide documentation to
assist Xxxxxx in inspecting a First Article. In any event, Xxxxxx will notify
Applied of its approval or disapproval of the First Articles within forty-eight
(48) hours after receipt of the inspection report from Applied. Xxxxxx'x
approval of a First Article will mean that Xxxxxx is satisfied with the overall
quality, performance, form, fit, and finish of the corresponding Covered Parts
from the applicable supplier, that Applied may rely on such approval, and that
subsequently delivered Covered Parts of substantially-conforming quality, form,
fit, and finish are acceptable to Xxxxxx. Subject to Section 3.7, Applied will
be responsible for managing the relationship with suppliers to ensure that
Covered Parts purchased from such suppliers substantially conform to the
applicable specifications provided by Xxxxxx for First Article inspection
thereof. Applied will obtain from its suppliers a warranty against defects in
Covered Parts for not less than * * * after delivery, with a remedy of repair or
replacement.
3.3 Stock Plans. Not later than the end of the second week of each month
of Applied's fiscal calendar, Applied and Xxxxxx will agree upon a stock plan
for the following month that includes the following information: (a) the
locations where Covered Parts inventory is stored, (b) the stocking levels of
Covered Parts inventory at each storage location, (c) the current levels of
Covered Parts inventory remaining at each storage location, and (d) * * * (a
"STOCK PLAN"). Notwithstanding the foregoing, for "inactive" Covered Parts,
Stock Plans will not be developed and the parties will mutually agree upon a
procedure for inventory replenishment and maintaining appropriate stocking
levels.
3.4 Orders. Applied will be responsible for ordering Covered Parts from
suppliers. Applied may in its discretion place Covered Parts orders * * *.
Applied will communicate its request to Xxxxxx'x parts buyer in writing or by
electronic mail, and Xxxxxx'x parts buyer will respond * * *either granting the
approval or stating the reasons for denying approval. Xxxxxx will not
unreasonably withhold its approval of any purchase in excess of the * * *.
3.5 Demand Reductions. If Xxxxxx determines at any time that usage of
Covered Parts in a month will be less than the usage projected in the current
Stock Plan, Xxxxxx will notify Applied. Following receipt of such notice,
Applied will use commercially reasonable efforts to cancel orders for excess
Covered Parts in accordance with Section 3.10.
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3.6 LOGISTICS
(a) Shipping, Receipt, and Logistics. Applied will arrange for
shipping of Covered Parts purchased by Applied, from the supplier to Applied's
delivery address determined by Applied in its discretion (the "Delivery
Address"). From such Delivery Address, Applied will arrange for receiving,
storage, and logistics (using Applied's warehouse and logistics network) and
shipping to Customer Sites (or Xxxxxx manufacturing locations, as appropriate)
in response to appropriate demand signals received from Xxxxxx.
(b) Export and Import Documents. Applied will complete and submit on
Xxxxxx'x behalf all export and import related documents necessary for the
purchase and receipt of Covered Parts. Xxxxxx will provide to Applied all
necessary information and assistance for the timely completion and submission of
such documentation, including information related to classification or
licensing, country of origin, harmonized codes, and hazardous materials All
permits and licenses necessary for the export and import of Covered Parts will
be deemed Required Consents for which Xxxxxx is responsible.
(c) Shipping and Logistics Costs. Xxxxxx will pay Applied for
shipping charges (including shipping from the supplier to the Delivery Address,
shipping for quality inspections, shipping within Applied's logistics network,
and shipping to final destination) at the rates set forth on Attachment 3 to
Exhibit F, as such Attachment may be amended by the parties from time to time,
provided, that in the absence of the adjustments referred to in Section 4.1 of
Exhibit F or to the rates set forth on Attachment 3 to Exhibit F (as such
Attachment may be amended), Xxxxxx'x Landed Cost (as defined below) for a
Covered Part supplied by a vendor selected by Applied * * *. As used herein
"Landed Cost" means vendor price for the Covered Part plus shipping charges.
Unless otherwise paid by the Customer, all other costs of handling, processing,
insurance, storage, management, and other logistics costs and expenses
("Logistics Costs") will be * * *.
Where Applied is utilizing its logistics network for Covered Parts as well as
other Applied parts not subject to this Agreement (e.g., if a warehouse fee
covers both Covered Parts and other Applied parts), the Logistics Costs payable
by Xxxxxx (other than shipping charges) * * *.
(d) Annual Review. On or about each anniversary of the Effective
Date, Applied and Xxxxxx will meet to review the shipping costs and Logistics
Costs for the preceding year. As part of such review, Applied and Xxxxxx will
update the freight charges on Exhibit F. Each year, the freight charges on
Exhibit F will be increased or decreased * * *.
3.7 Title Transfer. Title to each Covered Part will transfer automatically
to Xxxxxx immediately upon transfer of title to such Covered Part to Applied
pursuant to Applied's contract with the supplier of the Covered Part.
Notwithstanding the foregoing, Applied will * * *under Section 3.2, provided
that Xxxxxx notifies Applied of such defect before the expiration of the
supplier's warranty for such Covered Part.
3.8 Risk of Loss. As between the parties, * * *.
3.9 Inspection. Upon arrival at the Delivery Address, Applied will use
commercially reasonable efforts to (a) determine whether quantities received
correspond to the shipping
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invoice and (b) notify the supplier of any differences between quantities
received and quantities indicated on the shipping invoice. If Xxxxxx has
designated in writing that one or more particular Covered Parts require quality
inspection (other than direct Xxxxxx quality inspection), Applied will
coordinate with the testing contact designated by Xxxxxx to jointly conduct
further quality inspection of the Covered Parts based on quality documentation
provided by Xxxxxx. If Xxxxxx has designated in writing that one or more
particular Covered Parts require direct Xxxxxx quality inspection, Applied will
ship such Covered Parts to Xxxxxx for inspection, and Xxxxxx will promptly
conduct such inspection and ship the Covered Parts to the address designated by
Applied.
3.10 Cancellation. If Applied cancels any order for Covered Parts
following notice under Section 3.5 or for any reason attributable to Xxxxxx
(e.g., cancellation, termination, or reduction in scope of a Customer Contract,
inaccuracy of an Xxxxxx forecast or request for Covered Parts, etc.), then
Applied will attempt to obtain a waiver of any supplier cancellation,
restocking, or other similar charges (unless in Applied's judgment it is
unlikely that such a waiver would be granted), but in any case Xxxxxx will be
responsible for, and will reimburse Applied for, any cancellation, restocking,
or other charges associated with such cancellation provided the Covered Parts
were ordered in accordance with the Stock Plan.
3.11 Covered Parts Changes. If either party desires to add or remove
Covered Parts from Exhibit C, the requesting party will notify the other party
and the parties will discuss in good faith whether or not to make such a change
and the modifications to the terms, conditions, and prices under this Agreement
to implement such change. Applied is not required to add or remove Covered Parts
unless such change is agreed upon in writing by the parties, with adequate lead
time for Applied's planning purposes. Each new Covered Part will receive First
Article Inspection under Section 3.2. Notwithstanding the foregoing, Applied may
in its discretion determine and change the source of the Covered Parts at any
time, subject to Section 3.2.
4. CERTAIN XXXXXX RESPONSIBILITIES
4.1 Advanced Technical Support. Xxxxxx will retain high-level specialists
for the Xxxxxx Products to perform Advanced Technical Support for Xxxxxx
Products. As used herein, "Advanced Technical Support" will include all support
and maintenance tasks and responsibilities other than basic preventive and
corrective maintenance. Xxxxxx will be responsible for all Advanced Technical
Support as well as all support and maintenance tasks not performed by Applied
pursuant to Exhibit X. Xxxxxx will perform Advanced Technical Support in
accordance with the escalation procedures set forth on Exhibit B.
4.2 Information and Materials. Xxxxxx will furnish the following to
Applied (the "Xxxxxx Materials"):
(a) all current technical information and other documentation (e.g.,
manuals, drawings, specifications, bills of materials, best-known-methods
("BKMS")) as well as all test fixtures, in each case relevant to the inspection,
installation, operation, maintenance, and servicing of the Xxxxxx Products and
the manufacturing and supply of Covered Parts;
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(b) all current information relating to the management of its spare
parts and logistics functions (e.g., supplier names, parts lists,
specifications, pricing, parts consumption histories, and maintenance repair
procedures);
(c) all current information requested by Applied regarding Covered
Parts, including country of origin, commodity, usage, manufacturer and cost as
well as the amounts of Xxxxxx'x on-hand inventory of Covered Parts, and
documentation and other information regarding any unresolved liability claims
with Xxxxxx'x suppliers of Covered Parts;
(d) a detailed historical report of Xxxxxx'x and * * * usage of
Covered Parts at each of the Customer Sites. This report will include monthly
usage data for one (1) year immediately preceding the Effective Date and will be
broken down by Customer Site, Covered Part, and other metrics as reasonably
requested by Applied;
(e) within ten (10) days after the end of each month during the term
of this Agreement, an update of the report described in clause (d) above
covering the month just-ended;
(f) once per week, all Xxxxxx manufacturing resource planning data,
in an agreed upon format that shows all demand and usage of Covered Parts; and
(g) all significant and unique tooling and equipment required by
Applied to perform Field Services.
All of the foregoing will be provided by Xxxxxx at no charge to Applied. Xxxxxx
will provide the information and documentation described in clauses (a), (b),
(c), and (d) above on the Effective Date and will update such information and
documentation within a reasonable time prior to release of each new update or
version of the Xxxxxx Products or Covered Parts and otherwise as requested by
Applied from time to time. In addition, Xxxxxx will notify Applied immediately
of any changes to such information and documentation relating to safety and
safety retrofits for Xxxxxx Products.
4.3 Training. Xxxxxx will provide to Applied the following training as
requested by Applied from time to time:
(a) Xxxxxx will provide, at no charge, as many hours as Applied
requires of initial training for Applied personnel in topics requested by
Applied relevant to performance of the Services, at dates and times to be agreed
within thirty (30) days after the Effective Date.
(b) Xxxxxx will provide, at no charge, as many hours as Applied
requires per calendar quarter, during the term of this Agreement, of training
for Applied personnel in topics requested by Applied relevant to performance of
the Services.
(c) Xxxxxx will provide, at no charge, training and certification
for Applied personnel in use of the information technology systems described in
Section 4.5(b).
(d) Within forty-five (45) days after the Effective Date, Xxxxxx
will provide and complete at no charge, for a reasonable number of Applied
personnel, as Applied requests,
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as many hours of training as Applied requires on safety matters related to the
Xxxxxx Products and the activities contemplated by this Agreement.
4.4 Required Consents. Xxxxxx will at its own expense obtain all Required
Consents. Xxxxxx will use commercially reasonable efforts to obtain all initial
Required Consents within twenty-one (21) days after the Effective Date. Xxxxxx
will use commercially reasonable efforts to obtain all Required Consents for
each particular Site Addendum within ten (10) days after execution of such Site
Addendum. Xxxxxx will at its own expense maintain and comply with the Required
Consents during the term of this Agreement. * * *.
4.5 Xxxxxx Facilities
(a) Facilities. During the term of this Agreement, Xxxxxx will
provide to Applied, at no charge, the space, office furnishings, janitorial
service, telephone service, utilities (including air conditioning), information
technology system access, and office-related equipment, supplies, and
duplicating services in Xxxxxx'x and Customers' premises that Applied may
reasonably require to perform the Services, including the inventory storage
space, cubicles, furnishings, hardware, software, Customer network access for
internet access, peripherals and other equipment used by the * * * and the Non-
* * * before the effective date of the applicable Site Addendum including any
additional space, furnishings, and equipment specifically identified in each
Site Addendum, and the information technology systems described in clause (b)
below (collectively, the "Xxxxxx Facilities").
(b) Spares and Operations IT Systems; Systems Integration. As part
of the Xxxxxx Facilities, Xxxxxx will furnish to Applied access to Xxxxxx'x
information technology systems in use by Xxxxxx as of the Effective Date for
forecasting, planning, ordering, tracking, and managing Covered Parts and Field
Service. All Applied personnel who will access such systems will receive
Xxxxxx'x standard training certification for such systems, without charge to
Applied. Promptly after the Effective Date, the parties will agree upon a work
plan for integrating the foregoing Xxxxxx systems with Applied's corresponding
systems to facilitate smooth data transfer between the parties. The parties have
a target date of six (6) months after the Effective Date for completion of such
integration work. In connection with such integration work, * * * in connection
with any modifications of its own systems.
(c) Access. To the extent reasonably necessary to perform the
Services, Applied personnel will have reasonable access to the Xxxxxx Facilities
twenty-four (24) hours a day, seven (7) days a week. In addition, Xxxxxx will
provide necessary storage space for backup data files and will provide
additional storage space that may be required by any change in retention
schedules required by any regulatory authority with jurisdiction over Xxxxxx'x
business.
(d) Relocation. If Xxxxxx or a Customer contemplates or makes a
final decision to alter or relocate the Xxxxxx Facilities, and the alteration or
relocation could reasonably be expected to impact Applied's performance of the
Services or costs to provide the Services, then Xxxxxx will provide Applied with
sufficient advance notice of that fact to allow Applied a reasonable amount of
time to prepare for the alteration or relocation as it impacts Applied. Before
requiring Applied to relocate from any Xxxxxx Facilities, the parties will agree
on any adjustments to (i) the Service Levels that may be required as a result of
the alteration or
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relocation, and (ii) Applied's charges that may be required to equitably
compensate Applied for any additional costs it may incur in connection with the
alteration or relocation.
(e) Use of Facilities. Except as may be specifically authorized by
Xxxxxx, Applied will use the Xxxxxx Facilities solely to perform the Services.
4.6 Safety
(a) Xxxxxx retains sole responsibility for the safety of its
products, including without limitation, assessing the severity of reported
safety incidents in the field, official communications with customers regarding
safety issues, and financial and engineering responsibility for any retrofits,
recalls, or other measures taken to mitigate any identified safety issues.
Provided that Xxxxxx furnishes to Applied in writing all safety policies,
information, and recommendations regarding Xxxxxx Products, Applied will be
responsible for any actions or omissions with respect to safety issues of
Applied personnel contrary to such written policies or recommendations. As part
of Field Services, Applied personnel may install a retrofit upon receiving the
kits and complete instructions from Xxxxxx. Applied agrees to direct the Applied
Personnel to report promptly to Xxxxxx any safety issues such Applied Personnel
discover in the course of performing Field Services under this agreement, in a
manner and by a means or method the parties jointly agree upon.
(b) Prior to commencement of Field Service at any location, Xxxxxx
shall provide Applied with true and correct copies of all safety notices
pertaining to all products that will be serviced under this Agreement, including
without limitation, recall, retrofit or instructional notices. Xxxxxx agrees to
notify Applied of any new safety notices at or before the time such notices are
transmitted to Xxxxxx'x customer base. Xxxxxx agrees to provide Applied with
true and correct copies (including electronic versions) of all written safety
materials on the products covered under this Agreement, including, without
limitation, safety manuals, and shall timely provide Applied with an electronic
copy of any revisions, updates or new versions of such materials at or before
the they are transmitted to Xxxxxx'x customer base.
(c) As soon as possible, and no later than thirty (30) days after
the Effective Date, Xxxxxx shall cause an Xxxxxx safety representative to (i)
respond to the Applied safety inquiries set forth on Exhibit J, (ii) meet with
Applied's designated safety representative and answer such representative's
questions, and (iii) provide all safety information. Xxxxxx'x failure to perform
any of the foregoing in accordance with the preceding sentence will be deemed a
material breach of this Agreement, and without limiting any other rights or
remedies of Applied, Applied will be excused from its obligations to perform
Services under this Agreement unless and until Xxxxxx has performed all of its
obligations under this Section 4.6.
4.7 Transfer of Certain Assets. On the Effective Date, Xxxxxx will assign
to Applied, for no additional consideration, all right, title and interest in
and to the following assets, free and clear of all liens, claims and
encumbrances, pursuant to a xxxx of sale acceptable to Applied in its
discretion: all laptop computers and toolboxes and their contents as used by the
* * * immediately prior to the Effective Date and all lifts, hoists, and test
fixtures used to service the Xxxxxx Products immediately prior to the Effective
Date.
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4.8 Covered Parts System Conversion Costs. If Xxxxxx requests that Applied
provide any Covered Parts related reports hereunder in formats other than
Applied's standard formats, Xxxxxx will reimburse Applied for any reasonable
costs incurred in changing Applied's information technology systems in order to
provide such non-standard reports to Xxxxxx. If Applied agrees to make such
changes, Applied will provide Xxxxxx with a written proposal for the work to be
performed and an estimated budget for Applied's costs. Xxxxxx will reimburse
Applied, * * * in connection with such changes, up to the budgeted amount. If
Applied determines at any time that its costs may exceed the budgeted amount,
Applied may request additional reimbursement from Xxxxxx, and if Xxxxxx fails to
approve such increase, Applied will have no obligation to complete the changes
to its systems.
4.9 Central Parts Ordering and Accounting System. Applied's commitments
under this Agreement are based in part on Xxxxxx'x representation that it will
use commercially reasonable efforts to convert its parts ordering and accounting
system to one common system accounted for in U.S. dollars and operated by a U.S.
business unit. Applied will establish its infrastructure for the Services based
on the assumption that such a common system will be in place and the parties
will agree as to reimbursement of reasonable expenses incurred by Applied as a
direct result of any failure by Xxxxxx to effect such conversion.
4.10 Logistics Personnel Costs. Xxxxxx will reimburse Applied, * * * for
all costs incurred in connection with up to * * * full time or full-time
equivalent Applied employees who will perform supply chain and logistics tasks
for Covered Parts for Customers, including base salary, benefits, overtime,
controllable spending, and variable overhead costs (all as defined by GAAP). * *
*.
4.11 Inventory; Materials; Equipment; Consumables.
(a) Xxxxxx will be responsible for maintaining any Xxxxxx inventory
of Covered Parts at the Customer Sites. Xxxxxx will be responsible for inventory
tracking and generating and delivering to Applied appropriate demand signals for
replenishment of inventory.
(b) Xxxxxx will provide at its expense all materials (e.g. gases,
lubricants), equipment (e.g. hoists, hand tools), and consumables (e.g. safety
goggles, gloves, wipes) required to perform the Field Services, except to the
extent that the Customer Agreement makes the Customer responsible for such
items.
4.12 Offsite Repair and Refurbishment. Xxxxxx will perform all offsite
parts repair or refurbishment, including dealing with suppliers for such
services.
5. SERVICE LEVELS
5.1 Service and Resource Levels. Xxxxxx represents and warrants that the
service level targets and resource levels set forth in Exhibit G are the
resources used and the service level targets used by Xxxxxx in its performance
of tasks and responsibilities within the scope of the Services under the
Customer Agreements for all periods preceding the Effective Date. Absent
approval by Xxxxxx, Applied shall maintain the resource levels defined in
Section 1 of Exhibit B. Such service level targets will be Applied's non-binding
targets for its performance during the * * * after the Commencement Date. During
such * * * period, Applied will record
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its performance of Services in each category of the service levels initially
specified on Exhibit G. Following such * * * period, the parties will meet to
compare Applied's actual performance against the service level targets on
Exhibit G, and Exhibit G will be adjusted as necessary to reflect Applied's
actual performance during the * * * period. Such adjusted service level targets
will be the Service Levels under this Agreement. Once the Service Levels are
established in accordance with this Section 5.1, Applied will use reasonable
commercial efforts to provide the Services at a level of service at least equal
to the applicable Service Levels.
5.2 Adjustment of Service Levels; Continuous Improvement Plan. The parties
will meet to review the Service Levels annually (or as requested by a customer)
and to develop a mutually agreed continuous improvement plan therefor. As a
result of those meetings and as necessary from time to time during the term of
this Agreement, the parties may by mutual agreement add to, delete, adjust, or
improve the Service Levels. The reasons for those additions, deletions,
adjustments, or improvements may include improved performance capabilities
associated with advances in the technology and methods used to perform the
Services or agreed upon changes in the nature of the Services. Where the parties
agree to make such an addition, deletion, adjustment, or improvement the parties
will also agree on any adjustment in the resources to be dedicated by each party
to meeting the Service Levels and to Applied's charges under this Agreement. The
parties agree that it is their goal that within * * *.
5.3 Service Levels to Customers. Xxxxxx will be responsible for
negotiating service level agreements with Customers, provided that in no event
will Applied be responsible for performing Services at a level higher than the
Service Levels set forth in this Agreement unless otherwise agreed in writing by
the head of Applied's service organization for Xxxxxx.
5.4 Responsibility for Achieving Service Levels. Each of Applied and
Xxxxxx acknowledge and agree that achievement of the Service Levels is dependent
on the efforts and performance by both parties under this Agreement, including
the specific responsibilities of each party identified on Exhibit B and each
Site Addendum Without limiting the foregoing, the parties agree that Applied
will not be responsible for the Service Levels to the extent failure to achieve
the Service Levels is caused in whole or in part by (i) Xxxxxx'x failure to
perform its obligations under this Agreement; (ii) the wrongful acts or
omissions of Xxxxxx, Customer or their respective third party vendors or
contractors; (iii) the failure of any of Xxxxxx'x or the Customer's employees to
adequately perform their tasks related to the Services; (iv) untimely,
incomplete or inaccurate information from Xxxxxx, Customer or their agents; (v)
Xxxxxx'x or the Customer's failure to make information, Covered Parts and other
materials, software, hardware, equipment or personnel available to Applied in
the manner required by this Agreement; (vi) defects in the design or manufacture
of the Xxxxxx Products or the failure of any equipment owned or leased by Xxxxxx
or Customer; or (vii) the occurrence of a Force Majeure Event (as defined in
Section 17.2).
6. EXCLUSIVITY
6.1 Exclusive Supplier. During the term of this Agreement, Xxxxxx agrees
that Applied will be Xxxxxx'x exclusive supplier of field maintenance services,
Covered Parts and related logistics services for Xxxxxx Products (the "Exclusive
Services"). Accordingly, Xxxxxx will not perform itself, or enter into any
agreement or arrangement for a third party to perform,
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all or any part of the Exclusive Services. * * * If Applied commits a material
breach of its obligations under this Agreement to perform Exclusive Services,
and fails to cure such breach within thirty (30) days after notice of such
breach from Xxxxxx, then the matter will be escalated to the Executive Committee
to determine a corrective action plan, and if the breach has not been cured
within thirty (30) days after the determination of a corrective action plan,
then foregoing exclusivity obligation will not apply to the Customer Site
affected by such Applied breach. Xxxxxx'x existing contracts with service
providers for services not related to Xxxxxx Products and parts other than
Covered Parts will not be covered by this Agreement.
6.2 Right of First Refusal. Before Xxxxxx enters into any agreement or
arrangement pursuant to which a third party would perform any part of Xxxxxx'x
spare parts and logistics management services or field service other than the
Services (whether on a subcontract basis or otherwise), Xxxxxx will notify
Applied in writing and provide Applied with a right of first refusal to provide
such services under the terms of this Agreement. Accordingly, if Xxxxxx becomes
aware of an opportunity for performance of spare parts and logistics management
services or field service not already being performed by Applied as part of the
Services, then Xxxxxx will notify Applied in writing of such opportunity,
describing the services to be provided and providing all available information
helpful to Applied in developing a proposal. Applied will respond in writing
within fourteen (14) days after receipt of Xxxxxx'x notice, notifying Xxxxxx
whether or not Applied desires to engage in further discussions regarding such
services. If Applied notifies Xxxxxx that Applied desires to engage in such
further discussions, the parties will discuss such services, including their
scope and requirements, in good faith for a period of thirty (30) days after
Applied's notice. After then end of such discussion period, Applied will have a
period of thirty (30) days to prepare and submit to Xxxxxx a proposal for
performance of such services. After the end of such proposal period, if Xxxxxx
desires to accept Applied's proposal, the parties will negotiate in good faith
the terms and conditions under which Applied would provide to Xxxxxx the
services described in Applied's proposal.
7. COMMUNICATION AND COORDINATION
7.1 Relationship Managers. Each party will appoint an individual manager
(a "Relationship Manager") who will serve as that party's principal
representative under this Agreement. Each Relationship Manager will (a) have
overall responsibility for managing and coordinating the performance of his or
her party's obligations under this Agreement, and (b) be authorized to act for
and on behalf of his or her party concerning all matters relating to this
Agreement, except that the Relationship Manager will have no authority to amend
this Agreement or modify the Services or Service Levels. Each party may replace
its Relationship Manager upon ten (10) days prior written notice to the other
party.
7.2 Reports. As soon as reasonably practicable after the Effective Date,
the parties will determine an appropriate set of periodic reports to be issued
by Applied to Xxxxxx.
7.3 Management Committee. Each Party will appoint its Relationship
Manager, a Field Service representative and a Parts Service representative to a
"Management Committee" to coordinate activities under this Agreement. Once each
calendar month during the first six (6) months after the Effective Date, and
thereafter once each calendar quarter during the term of this Agreement, and
otherwise in accordance with Section 7.5 and Exhibit F the Management
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Committee will meet in person or by teleconference. At each meeting, the parties
will review performance during the previous period, address escalated issues
from the Relationship Managers, and evaluate any proposed changes to this
Agreement.
7.4 Executive Committee. Each Party will appoint a senior executive to
serve on an "Executive Committee" for this Agreement. The Executive Committee
will meet once annually, at least thirty (30) days prior to the anniversary of
the Effective Date, to review performance during the previous year and discuss
plans and directions for the coming year, and otherwise in accordance with
Section 7.5. The Executive Committee will meet at a mutually agreeable location.
7.5 Operational Issues. The parties will attempt in good faith to settle
all operations issues and disputes (e.g., related to maintenance, logistics,
etc.) arising out of or relating to this Agreement, but excluding any disputes
related to payment hereunder ("Operations Issues") in accordance with the
following provisions. First, the parties' Relationship Managers will attempt to
resolve the Operations Issue. Second, if the Relationship Managers are unable to
resolve the Operations Issue, the matter will be escalated to the Management
Committee for resolution, and the Management Committee will attempt to resolve
the Operations Issue. Third, if the Management Committee is unable to resolve
the Operations Issue, then the parties will call an emergency meeting of the
Executive Committee to resolve the Operations Issue. Nothing in this Section
will restrict either party from exercising its rights or remedies at law or in
equity for breach of this Agreement at any time.
7.6 Communication Plan. Applied and Xxxxxx will mutually agree to a
communication plan ("Communication Plan") which will set forth the manner and
timing in which the existence of this Agreement and the activities contemplated
herein will be communicated to Xxxxxx'x employees (including the employees
listed on Exhibit H), Xxxxxx'x customers, and through press releases or other
public announcements. The requirements of the Communication Plan are set forth
on Exhibit I.
8. COLLABORATIVE MARKETING
8.1 * * *
8.2 Cooperative Marketing of Xxxxxx Products. If Xxxxxx desires that
Applied market to one or more existing Applied customers certain Xxxxxx
automation products and systems, and extensions of those products, then Xxxxxx
may furnish to Applied a written proposal for such marketing. If Applied
determines, in its discretion, that it desires to pursue such proposal, Applied
will notify Xxxxxx and the parties will discuss the details of such marketing
efforts. Each party may in its discretion determine whether or not to continue
discussions related to such marketing efforts or to undertake such marketing
efforts.
8.3 * * *
8.4 Sub-Lease of Space to Xxxxxx in Certain Locations. Within ninety (90)
days after the Effective Date, Applied will ascertain and discuss with Xxxxxx
its ability to sub-lease to Xxxxxx, on mutually agreeable terms and conditions,
office space for service functions and
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manufacturing space related to the activities contemplated by this Agreement.
Any sublease will be given in Applied's discretion and on mutually agreed upon
terms and conditions.
8.5 * * *
8.6 Information and Training. * * *
8.7 Transition. * * *. Applied and Xxxxxx will work together to transition
Xxxxxx'x Customer Agreements from * * * as soon as practicable after the
Effective Date. Xxxxxx will use its best efforts to effect this transition and
facilitate corresponding and mutually agreeable changes to this Agreement.
9. Personnel Matters
9.1 * * *
(a) * * *
(b) * * *
(c) * * *
(d) * * *
(e) * * *
9.2 * * *
9.3 * * *
9.4 * * *
9.5 * * *
10. Fees and Payment
10.1 * * *
10.2 * * *
(a) * * *
(b) * * *
(c) * * *
(d) * * *
* * *
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10.3 Taxes. The parties' respective responsibilities for taxes arising
under or in connection with this Agreement are as follows:
(A) Taxes Generally. All fees and payments stated herein are
exclusive of all taxes, duties, import fees, and similar fees now in force or
enacted in the future that may be imposed on the Services, Covered Parts, or the
payments made hereunder. Xxxxxx will pay any sales, use, value-added, or any
other tax, as well as duties, import fees, and similar fees, related to the
parties' performance of their obligations, including payment of fees and
purchase of Covered Parts, or the exercise of their rights under this Agreement,
exclusive of taxes based on Applied's net income (except as provided below).
Xxxxxx will make all payments free and clear of, and without reduction for, any
withholding taxes; any such taxes imposed on payments by Xxxxxx hereunder will
be Xxxxxx'x sole responsibility, and Xxxxxx will provide Applied with official
receipts or such other evidence as Applied may reasonably request, to establish
that such taxes have been paid.
(B) Segregation of Payments. If a tax is assessed on the provision
of any of the Services, the parties will work together to segregate the payments
into (i) those for taxable Services, and (ii) those for nontaxable Services.
(C) Cooperation. The parties will cooperate to enable each to more
accurately determine its own tax liability and to minimize that liability to the
extent legally permissible. Applied's invoices will separately state the amounts
of any taxes Applied is collecting from Xxxxxx. Each party will provide and make
available to the other any resale certificates, information regarding
out-of-state or out-of-country sales or use of equipment, materials or services,
and other exemption certificates or information reasonably requested by either
party.
(D) Claims for Taxes. Applied will promptly notify Xxxxxx of, and
coordinate with Xxxxxx the response to and settlement of, any claim for taxes
asserted by applicable taxing authorities for which Xxxxxx is responsible under
this Agreement, it being understood that with respect to any claim arising out
of a form or return signed by a party, that party will have the right to elect
to control the response to and settlement of the claim, but the other party will
have all rights to participate in the responses and settlements that are
appropriate to its potential responsibilities or liabilities. If Xxxxxx requests
that Applied challenge the imposition of any tax, Xxxxxx will reimburse Applied
for the reasonable legal fees and expenses Applied incurs. Xxxxxx will be
entitled to any tax refunds or rebates granted to the extent those refunds or
rebates are of taxes that were paid by Xxxxxx.
10.4 Payment Due. Xxxxxx will pay all invoices * * * after receipt. Any
amount not paid when due will thereafter bear interest paid at a rate equal to *
* * per annum, pro-rated on the basis of a 365 day year, or (ii) the highest
rate allowed by applicable law.
10.5 * * * For Certain Applied Services * * *. If during the term of this
Agreement (1) Applied * * * for a Customer Site that is receiving Services under
* * * Customer Agreement and (2) the * * * includes the provision of the
Services that were being provided under the Customer Agreement, then the
following terms will apply.
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(a) * * *
(b) * * *
(i) * * *
(ii) * * *
(iii) * * *
(iv) * * *
11. CONFIDENTIALITY
11.1 Definition of Confidential Information. As used in this Agreement,
"Confidential Information" means, subject to Section 11.2, any documents,
materials, and information of a party including data, know-how, algorithms,
computer programs, processes, improvements, designs, devices, systems, test
results, sketches, photographs, research and development plans, drawings,
product concepts, specifications, reports, laboratory notebooks, business and
financial plans, strategies, budgets, names of vendors or customers or
distributors, pricing information, production or manufacturing information,
sales information or forecasts, inventions, and ideas that (a) in the case of a
written disclosure, are labeled or marked as being confidential or proprietary
or (b) in the case of an oral or visual disclosure, are identified at the time
of disclosure as being confidential or proprietary or are summarized and
identified as being confidential or proprietary in writing within thirty (30)
days after the initial disclosure.
11.2 Exceptions. Confidential Information does not include any information
that (a) becomes a matter of public knowledge through no fault of the receiving
party, (b) is rightfully received by the receiving party from a third party
without restriction on disclosure, (c) is independently developed by the
receiving party without use of the disclosing party's Confidential Information,
or (d) is in the possession of the receiving party prior to its disclosure by
the disclosing party.
11.3 Confidentiality Obligations. Each party acknowledges that it will, in
the course of performing under this Agreement, have access to Confidential
Information of the other party. Accordingly, each party agrees that: (i) it will
use the other party's Confidential Information only for purposes of performing
its obligations under this Agreement or exercising its rights hereunder; (ii) it
will disclose the other party's Confidential Information only to those of its
employees and contractors who have a need to know such information, are informed
of its confidential nature, and who are under a duty of confidentiality at least
as restrictive as this Section 11 with respect to the Confidential Information;
(iii) it will not disclose or license the other party's Confidential Information
to any third party except pursuant to lawful judicial, administrative, or
governmental order after providing the disclosing party an opportunity and
cooperating with the disclosing party to avoid or limit such disclosure; (iv) it
will protect the other party's Confidential Information with at least the same
degree of care with which it protects its own Confidential Information of a
similar nature, but in no case with less than a reasonable degree of care; and
(v) it will promptly notify the disclosing party if it becomes aware of any
unauthorized use or disclosure of the disclosing party's Confidential
Information.
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11.4 Residual Knowledge; Independent Development. The parties acknowledge
and agree that employees and contractors of the receiving party who have
received or have been exposed to the disclosing party's Confidential Information
may further develop their general knowledge, skills and experience (including
general ideas, concepts, know-how and techniques), which may be based in whole
or in part on such Confidential Information. Notwithstanding anything in this
Agreement to the contrary, the subsequent use by these employees and contractors
of such general knowledge, skills and experience, as retained in their unaided
memories, will not constitute a breach of this Agreement. The receipt of or
exposure to the disclosing party's Confidential Information under this Agreement
will not in any way limit or restrict the work assignments of any of the
receiving party's employees and contractors. The disclosing party further
acknowledges that the receiving party may currently or in the future be
developing information internally, or receiving information from other parties,
that is similar to the disclosing party's Confidential Information. Accordingly,
nothing in this Agreement will be construed as a representation or agreement
that the receiving party will not develop or have developed for it products,
concepts, systems or techniques that are similar to or compete with the
products, concepts, systems or techniques contemplated by or embodied in such
Confidential Information, provided that the receiving party does not violate any
of its other obligations under this Section 11 in connection with such
development.
11.5 Agreement Terms. Neither party may disclose the terms and conditions
of this Agreement to any third party (other than its attorneys, accountants, and
other professional advisors under a duty of confidentiality) without the prior
consent of the other party except as may be required by law, a court order, or a
governmental agency with jurisdiction, provided that such party: (i) promptly
notifies the other party of the required disclosure and (ii) provides reasonable
assistance to the other party in seeking a protective order against disclosure
or confidential treatment, and provided that in the case of a disclosure under
the federal securities laws, the following paragraph will apply.
Either party may disclose the terms of this Agreement to the extent required by
the federal securities laws; provided, however, that such party shall seek
confidential treatment of key business terms contained in this Agreement
requested by the other party, including all pricing and payment related terms.
The party not making such disclosure shall have the right to review, provide
comments to, and approve any such confidential treatment request before it is
submitted to the Securities and Exchange Commission. The party making the
disclosure shall not withdraw or amend any aspect of such confidential treatment
request without the prior written consent of the other party and shall not file
a copy of this Agreement as an exhibit to any filing with the Securities and
Exchange Commission or otherwise disclose the terms of this Agreement in a
manner that is not consistent with such confidential treatment request, as
approved by the party not making the disclosure.
11.6 Return of Confidential Information. Upon the disclosing party's
written request, and in any event upon termination of this Agreement, the
receiving party will promptly return to the disclosing party all of the
disclosing party's Confidential Information, provided that the party returning
Confidential Information will be excused from performing its obligations
hereunder to the extent that such obligations require use of or access to the
Confidential Information returned.
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11.7 Injunctive Relief. Each party acknowledges that its breach or
threatened breach of Section 11 would result in irreparable injury to the other
party and that, in addition to its other remedies, the other party will be
entitled to injunctive relief to restrain any such threatened or continuing
breach, without being required to post bond or other security.
12. INTELLECTUAL PROPERTY
12.1 Ownership. Applied will have and retain exclusive ownership of all of
Applied Technology and Intellectual Property Rights therein. Xxxxxx will have
and retain exclusive ownership of all of Xxxxxx Technology and Intellectual
Property Rights therein. All rights not expressly granted herein with respect to
Applied Technology and Xxxxxx Technology are reserved to the owner thereof.
12.2 Xxxxxx License. Xxxxxx hereby grants to Applied all licenses under
Xxxxxx'x Intellectual Property Rights necessary for Applied to perform the
Services. Such licenses are nonexclusive, royalty-free, and paid-up and will
continue during the term of this Agreement and the Transition Assistance Period.
12.3 * * *
(a) * * *
(b) * * *
(c) * * *
(d) * * *
(e) * * *
(f) * * *
(g) * * *
(h) * * *
(i) * * *
(j) * * *
(k) * * *
(l) * * *
(m) * * *
(n) * * *
* * *
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13. WARRANTIES AND DISCLAIMER
13.1 Authorization. Each party represents and warrants to the other that
(i) it has the requisite corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated by this Agreement,
including the giving or withholding of any approval, acceptance, consent, notice
or other action required or permitted by this Agreement, and (ii) the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement have been and will be duly
authorized by the requisite corporate action on the part of that party.
13.2 Compliance with Laws. Each party represents and warrants to the other
that it is duly licensed, authorized or qualified to do business and is in good
standing in every jurisdiction in which a license, authorization or
qualification is required for the ownership or leasing of its assets or the
transaction of business of the character transacted by it, except where the
failure to be so licensed, authorized or qualified would have no material
adverse effect on its ability to fulfill its obligations under this Agreement.
13.3 Outstanding Liabilities. Each party represents and warrants to the
other that it is not a party to any outstanding litigation, arbitrated matter or
other dispute known to that party that, if decided unfavorably to that party,
would reasonably be expected to have a material adverse impact on that party's
ability to fulfill its obligations under this Agreement.
13.4 Sufficiency; Suppliers. Xxxxxx represents and warrants that the * * *
constitute all personnel required, and are sufficiently skilled and trained, to
perform the Services under this Agreement and the Customer Agreements in effect
as of the Effective Date in conformance with the terms thereof, that nothing in
Xxxxxx'x agreements with Covered Parts suppliers will inhibit Applied from
utilizing different suppliers for Covered Parts or commits Applied to purchase
from such existing suppliers; and that the Covered Parts * * * set forth on
Exhibit C * * * which Xxxxxx was purchasing Covered Parts from its suppliers as
of * * *.
13.5 Services. Applied warrants the services will be performed in a
professional and workmanlike manner and will conform to generally accepted
industry standards and practices and that Applied will use reasonable commercial
efforts to meet the Service Levels once they have been finally established under
Section 5.1 and as amended from time to time thereafter in accordance with
Section 5.2.
13.6 Covered Parts; Subassemblies. As Xxxxxx'x sole and exclusive remedy
for defects or errors in Covered Parts, Applied agrees to comply with the terms
of Section 3.7. If Applied performs subassembly work for Covered Parts, Applied
warrants that such work will substantially comply with the specifications
therefor agreed upon by Applied and Xxxxxx for a period of * * * after delivery
of the subassemblies (the "Warranty Period") and if Xxxxxx notifies Applied of a
breach of such warranty within the Warranty Period, Applied will, as Xxxxxx'x
sole and exclusive remedy and Applied's sole liability, * * *.
13.7 Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 13, NEITHER
PARTY MAKES ANY REPRESENTATIONS, WARRANTIES, OR CONDITIONS (WHETHER EXPRESS,
IMPLIED, STATUTORY, OR OTHERWISE) TO THE OTHER
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PARTY CONCERNING THIS AGREEMENT OR ANY SERVICES, PRODUCTS, OR TECHNOLOGY
FURNISHED TO THE OTHER PARTY UNDER THIS AGREEMENT, EACH PARTY DISCLAIMS ANY
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE,
AND NON-INFRINGEMENT. EACH PARTY ACKNOWLEDGES THAT IT HAS NOT RELIED ON ANY ORAL
OR WRITTEN INFORMATION OR ADVICE, WHETHER GIVEN BY THE OTHER PARTY, ITS
SUPPLIERS, DEALERS, BUYERS, AGENTS, OR EMPLOYEES.
14. INDEMNIFICATION
14.1 * * *
(a) * * *
(b) * * *
14.2 Infringement Indemnification
(a) Indemnification by Applied. Applied will defend, indemnify, and
hold Xxxxxx harmless from and against, * * * third party claims or suits, * * *
arising from or relating to * * * of the Intellectual Property Rights of a third
party by * * * to Xxxxxx under this Agreement for purposes of performing the
activities contemplated by this Agreement.
(b) Indemnification by Xxxxxx. Xxxxxx will defend, indemnify, and
hold Applied harmless from and against, and will solely and exclusively bear and
pay, any and all third party claims or suits, and all resulting liabilities,
losses, penalties, and damages and the associated costs and expenses (including
attorneys' fees, experts' fees, and costs of investigation), arising from or
relating to (i) any actual or alleged misappropriation or infringement of the
Intellectual Property Rights of a third party by the Xxxxxx Materials, Xxxxxx
Products, Xxxxxx Facilities, or Covered Parts or (ii) Xxxxxx'x failure to obtain
a Required Consent.
14.3 Indemnification Procedures. If any third party claim is commenced
against a person or entity entitled to indemnification under Section 14.1 or
Section 14.2 (the "Indemnified Party"), notice thereof will be given to the
party that is obligated to provide indemnification (the "Indemnifying Party") as
promptly as practicable. If, after such notice, the Indemnifying Party
acknowledges that it is obligated to provide indemnification hereunder with
respect to such claim, then the Indemnifying Party will be entitled, if it so
elects, in a notice promptly delivered to the Indemnified Party, but in no event
less than ten (10) days prior to the date on which a response to such claim is
due, to immediately take control of the defense and investigation of such claim
and to employ and engage attorneys reasonably acceptable to the Indemnified
Party to handle and defend the same, at the Indemnifying Party's sole cost and
expense. If a party receiving a notice requesting indemnification does not
acknowledge that this Agreement applies with respect to such claim, then the
party seeking indemnification may defend or settle the claim as it deems
appropriate in its discretion, without prejudice to its rights to claim
indemnification hereunder. The Indemnified Party will cooperate, at the cost of
the Indemnifying Party, in all reasonable respects with the Indemnifying Party
and its attorneys in the investigation, trial and defense of such claim and any
appeal arising therefrom; provided,
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however, that the Indemnified Party may, at its own cost and expense,
participate, through its attorneys or otherwise, in such investigation, trial
and defense of such claim and any appeal arising therefrom. No settlement of a
claim that involves a remedy other than the payment of money by the Indemnifying
Party will be entered into without the consent of the Indemnified Party. If the
Indemnifying Party does not assume full control over the defense of a claim
subject to such defense as provided in this Section, the Indemnifying Party may
participate in such defense, at its sole cost and expense, and the Indemnified
Party will have the right .to defend the claim in such manner as it may deem
appropriate, at the cost and expense of the Indemnifying Party.
15. LIABILITY LIMITATION
15.1 Consequential Damages. Except for breach by either party of Section
11 or infringement or misappropriation by one party of the other party's
Intellectual Property Rights, in no event will either Applied or Xxxxxx be
liable for any lost data or lost profits or any indirect, incidental, special,
consequential, exemplary, or punitive damages arising out of or relating to this
Agreement, even if advised of the possibility of such damages.
15.2 Direct Damages. Except for the failure of Xxxxxx to make payments
under this Agreement, each of Applied's and Xxxxxx'x * * * liability arising out
of or related to this Agreement, whether * * * under this Agreement in the * *
*.
15.3 Basis of the Bargain. Each party acknowledges that the foregoing
limitations are an essential element of the Agreement between the parties and
that in the absence of such limitations the pricing and other terms set forth in
this Agreement would be substantially different.
16. TERM AND TERMINATION
16.1 Term. The term of this Agreement will commence on the Effective Date,
and unless earlier terminated or extended as provided herein, will end on the
date * * * . On each anniversary of the Effective Date, unless either party has
provided to the other notice of its desire not to renew this Agreement at least
* * * to such anniversary, the term of this Agreement will automatically extend
for an additional * * *. It is the intent of the parties that this Agreement
continuously have * * * term unless either party gives such notice of
non-renewal.
16.2 Termination for Cause
(a) If either party commits a material breach of this Agreement or
persistently fails to perform in accordance with the terms of this Agreement
(and such material breach or failure is not caused by a Force Majeure Event as
defined in Section 17.2), then (i) such party will have a period of sixty (60)
days following written notice of such failure from the non-breaching party to
correct such failure; (ii) if the failure is not corrected at the end of such
period, the parties will call an emergency meeting of the Executive Committee
within ten (10) days, and the Executive Committee will resolve any dispute
regarding such failure or develop a corrective action plan to resolve such
failure; and (iii) if after implementation of such corrective action plan the
failure remains unresolved then the non-breaching party may provide written
notice of such continued failure and if such failure is not corrected within
thirty (30) days after such notice,
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
then, upon notice to the other party the non-breaching party may terminate the
Site Addenda materially affected by such failure, or, if substantially all of
the Site Addenda are so affected, then the non-breaching party may terminate the
entire Agreement.
(b) If Xxxxxx defaults in the payment when due of any amount under
this Agreement, and does not cure the default within thirty (30) days after
receiving written notice of the default, then Applied may, by giving written
notice of the default to Xxxxxx, suspend performance or terminate this Agreement
as of a date specified in the notice of termination.
(c) Applied's obligations under this Agreement are conditioned upon
* * *.
16.3 * * *
16.4 EFFECTS OF TERMINATION
(a) Services. Except as provided in clause (b) below, Applied's
obligations to perform the Services will cease on the effective date of
termination or expiration of this Agreement for any reason.
(b) * * *
(i) * * *
(ii) * * *
(A) * * *
(B) * * *
(C) * * *
(D) * * *
(E) * * *
(iii) * * *
(c) Certain Employees. In the event of termination of this Agreement
for any reason, * * *.
(d) Survival. The following provisions will survive termination or
expiration of this Agreement for any reason: * * *.
17. GENERAL
17.1 Publicity. Other than references by Applied to Xxxxxx in its
promotional, marketing and related materials, all media releases, public
announcements and public disclosures by either party relating to this Agreement
or its subject matter will be subject to the other party's review and approval
prior to release. This restriction does not apply (a) to any announcement
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
intended solely for internal distribution or (b) any disclosure required by law.
This Agreement does not confer and neither party will have any right to use the
other party's trademarks or logos without the other party's prior written
consent.
17.2 FORCE MAJEURE
(a) Force Majeure Event. Each party will be excused from any default
or delay in the performance of its obligations under this Agreement (excluding
payment obligations hereunder) if and to the extent it is unable to perform due
to a Force Majeure Event. For purposes of this section, a "Force Majeure Event"
means fire, flood, earthquake, elements of nature or acts of God, acts of war,
terrorism, riots, civil disorders, rebellions, revolutions in any country, acts
or threats of terrorism, strikes, labor disputes, acts or omissions of third
parties, or any other cause beyond the reasonable control of that party.
(b) Excused from Performance. If and for so long as a Force Majeure
Event occurs, the non-performing party is excused from further performing or
observing the obligation(s) affected. In the event of a strike or labor dispute,
the parties will meet to agree upon a workaround for the issues preventing
performance.
17.3 Notices. Any notice, approval, authorization, consent, or other
communication required or permitted to be delivered to either party under this
Agreement and intended to have legal effect must be in writing and will be given
(1) personally; (2) by overnight express courier with confirmation of delivery;
or (3) by facsimile with confirmation of receipt. Notice will be deemed given on
the date delivered, if delivered personally; on the date of delivery, if by
overnight express courier; and on the date of confirmed transmission, if by
facsimile. Notices will be sent to the addresses of the parties set forth below
(which may be changed by each party by notice to the other):
If to Applied, to:
Applied Materials, Inc.
0000 Xxxxx Xxxxxxxxx, X/X 0000
Xxxxx Xxxxx, XX 00000
Attn: * * *
* * *
Facsimile: * * *
and to:
Applied Materials, Inc.
0000 Xxxxx Xxxxxxxxx, X/X 0000
Xxxxx Xxxxx, XX 00000
Attn: * * *
* * *
Facsimile: * * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
with a copy to:
Applied Materials, Inc.
0000 Xxxxx Xxxxxxxxx, M/S 2062
X.X. Xxx 00000
Xxxxx Xxxxx, XX 00000
Fax: * * *
Attn: * * *
If to Xxxxxx, to:
Xxxxxx Automation, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxx Xxxxxx
Senior Vice President
Global Sales and Service
with a copy to
Xxxxxx Automation, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxx Xxxxx
General Counsel
17.4 Governing Law; Venue; Disputes. This Agreement will be construed in
accordance with, and governed in all respects by, the laws of the State of
California (without giving effect to principles of conflicts of laws that would
require the application of the laws of any other state). Any legal action or
other legal proceeding relating to this Agreement or the enforcement of any
provision of this Agreement may be brought or otherwise commenced in any state
court located in the County of Santa Clara, California or any federal court
located in the Northern District of California. Each party expressly and
irrevocably consents and submits to the jurisdiction of each such state and
federal court (and each appellate court located in the State of California) in
connection with any such legal proceeding.
17.5 Assignment. Except as otherwise provided in this Section 17.5,
neither party may assign, sublicense, or otherwise transfer (whether by
operation of law or otherwise) any of its rights, or delegate any of its
obligations, under this Agreement to any third party without the prior written
consent of the other party, which the other party may grant or deny in its
discretion. Applied may assign this Agreement to any of its affiliates or to a
third party in connection with a merger, reorganization, or sale of all or
substantially all of Applied's services business, with or without Xxxxxx'x
consent, provided that notice of any such assignment is given to Xxxxxx. * * *.
Any purported assignment, delegation, or other transfer of rights or obligations
under this Agreement in violation of this paragraph will be null and void from
the beginning. Except as
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otherwise provided in this Agreement, this Agreement will be binding upon each
party and its successors and permitted assigns.
17.6 Remedies. Except as otherwise provided in this Agreement, the rights
and remedies of the parties will be cumulative (and not alternative). If any
legal action is brought to enforce, or an action must be defended, respecting
this Agreement, the prevailing party will be entitled to receive its attorneys'
fees, court costs, and other collection expenses, in addition to any other
relief it may receive.
17.7 Waiver. All waivers must be in writing and signed by an authorized
representative of the party to be charged. Any waiver or failure to enforce any
provision of this Agreement on one occasion will not be deemed a waiver of any
other provision or of such provision on any other occasion. There will be no
waiver or amendment by course of dealing, performance, trade, usage or custom.
17.8 Amendment. This Agreement may not be amended, modified, altered, or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of both Applied and Xxxxxx.
17.9 Severability. If any provision of this Agreement is determined to be
invalid or unenforceable to any extent, the remainder of this Agreement will not
be impaired or otherwise affected and will continue to be valid and enforceable,
and the affected provision will be deemed valid and enforceable to the fullest
extent permitted by applicable law.
17.10 Third Party Beneficiaries. This Agreement does not, and neither
party intends that this Agreement will, confer any legal rights on any third
party or to be enforceable in any part by a third party.
17.11 Independent Contractors. The parties are independent contractors
with respect to one another, and this Agreement is not intended to establish any
partnership, joint venture, employment, or other relationship between the
parties except that of independent contractors. Neither party will have any
power or authority to make any commitment or undertake any obligation on behalf
of the other party, and each party agrees not to hold itself out as having any
such power or authority.
17.12 Regulatory Compliance. The parties agree to comply with all relevant
regulations of the U.S. Department of Commerce, the U.S. Export Administration
Act, and the export and technology-control laws and regulations of any foreign
jurisdiction with respect to its own Technology, and will be responsible for
ensuring that such Technology is not exported in violation of United States law
or the law of any other jurisdiction in connection with any of the activities
contemplated by this Agreement.
17.13 Construction. The section headings in this Agreement are for
convenience of reference only, will not be deemed to be a part of this
Agreement, and will not be referred to in connection with the construction or
interpretation of this Agreement. Any rule of construction to the effect that
ambiguities are to be resolved against the drafting party will not be applied in
the construction or interpretation of this Agreement. As used in this Agreement,
the words "include" and "including," and variations thereof, will not be deemed
to be terms of limitation, but rather
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
will be deemed to be followed by the words "without limitation." References in
this Agreement to a party's "discretion" mean sole and absolute discretion
unless expressly stated otherwise. All references in this Agreement to
"Sections" are intended to refer to Sections of this Agreement. This Agreement
may be executed in several counterparts, each of which will constitute an
original and all of which, when taken together, will constitute one agreement.
17.14 Entire Agreement. This Agreement incorporates by reference the
Exhibits attached hereto and all Site Addenda, and this Agreement sets forth the
entire understanding of the parties relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings between
the parties relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the Effective Date.
APPLIED MATERIALS, INC. XXXXXX AUTOMATION, INC.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxx
---------------------------- ---------------------------
Name: Xxxxx Xxxxx Name: Xxxxxx X. Xxxxx
-------------------------- -------------------------
Title: Corporate Vice President Title: President and Chief Operating
Officer
------------------------- ------------------------
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
EXHIBIT LIST
EXHIBIT A: Xxxxxx Products
EXHIBIT B: Field Services
EXHIBIT C: Covered Parts
EXHIBIT D: [Reserved]
EXHIBIT E: Transition Plan
EXHIBIT F: Fees
EXHIBIT G: Initial Resource Baselines
EXHIBIT H: Xxxxxx Employees and Contractors
EXHIBIT I: Communication Plan Requirements
EXHIBIT J: Safety Inquiries
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
EXHIBIT A
XXXXXX PRODUCTS
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
EXHIBIT B
FIELD SERVICES
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
EXHIBIT C
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
EXHIBIT E
TRANSITION PLAN
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
EXHIBIT F
FEES
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
ATTACHMENT 1
TO
EXHIBIT F
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
ATTACHMENT 2
TO
EXHIBIT F
COVERED PARTS PRICES
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
ATTACHMENT 3
TO
EXHIBIT F
SHIPPING CHARGES
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
ATTACHMENT 4
TO
EXHIBIT F
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
EXHIBIT G
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
EXHIBIT H
XXXXXX EMPLOYEES AND CONTRACTORS
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
EXHIBIT I
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
EXHIBIT J
SAFETY INQUIRIES
* * *
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DELETED PORTIONS ARE MARKED WITH ASTERISKS.
Site Addendum
List of Initial Customer Sites
* * *
43
