Exhibit 10.27
PRIVATE AND CONFIDENTIAL
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PRI Automation, Inc.
and
Shinsung Eng. Co., Ltd.
MASTER MANUFACTURING SERVICES AGREEMENT
PRIVATE AND CONFIDENTIAL
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MASTER MANUFACTURING SERVICES AGREEMENT
This MASTER MANUFACTURING SERVICES AGREEMENT (the "Agreement") is made and
entered into as of the 26th day of October, 1999 (the "Effective Date") by and
between PRI Automation, Inc., a Massachusetts corporation having offices at 000
Xxxxxxxxx Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, XXX ("PRI") and Shinsung
Eng. Co., Ltd., a South Korean corporation with its principal place of business
located at 000 Xxxxxx-Xxxx, 0Xx, Xxxxxxxxxxxx-Xx, Xxxxx, 000-000, Xxxxx
("Shinsung") with references to the following premises.
RECITALS
A. PRI designs and manufactures factory automation systems primarily used
by fabricators of integrated circuit devices to automate the
fabrication of such devices.
B. PRI wishes to engage Shinsung from time to time to manufacture certain
Products (as defined below) and Shinsung wishes to, and represents that
it has the capability and expertise to, manufacture the Products in a
timely manner and on the terms and conditions set forth below.
C. The parties intend that the terms of this Agreement will govern the
manufacture by Shinsung and purchase by PRI of all Products which
Shinsung is engaged by PRI to manufacture and sell to PRI from time to
time.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS. In addition to terms defined in context (indicated by the use of
initial capitalization), the terms set forth in the Schedule of Definitions
attached as EXHIBIT A will have the meanings set forth therein.
2. MANUFACTURE OF PRODUCTS.
2.1. MANUFACTURE OF PRODUCTS. Shinsung will manufacture for PRI and
sell to PRI such quantities and types of Products as PRI may from time to time
order pursuant to this Agreement. Shinsung will not, unless otherwise specified
in a written agreement entered into by PRI, manufacture or sell any Product
except as directed by PRI hereunder. Except as expressly provided hereunder, in
no event will PRI (i) be obligated either to purchase any goods or services,
from Shinsung, or (ii) be responsible for any work undertaken by Shinsung.
2.2. ASSIGNMENT AND SUBCONTRACTING.
2.2.1. Shinsung will not assign or otherwise transfer,
sublicense, or subcontract this Agreement, any Purchase Order, or any rights or
obligations hereunder or under any
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Purchase Order, including in connection with a sale or transfer of all or part
of Shinsung's business, in whole or in part, except with the written consent of
PRI, which consent will be at PRI's sole discretion. Any purported assignment,
sublicense, or subcontract made without PRI's consent will be void, and (i) will
not relieve Shinsung of any obligations hereunder or under any Purchase Order;
(ii) will relieve PRI of any liability hereunder or under any Purchase Order;
and (iii) will constitute cause sufficient for termination under Section 9.l.
In addition to an assignment of this Agreement, any Purchase Order, or any
rights or obligations hereunder or under any Purchase Order, an assignment by
Shinsung will be deemed to include (x) the acquisition by any third party, for
cash or other consideration, of shares of the voting stock of Shinsung with
aggregate voting power of more than twenty percent (20%) of the total
outstanding voting power of Shinsung; (y) a merger of Shinsung with a third
party, whether or not Shinsung is the surviving entity, where the holders of all
of the outstanding voting stock of Shinsung immediately prior to the merger hold
less than a majority of the voting stock of the surviving entity immediately
following the merger; (z) the sale of all or substantially all of either
Shinsung's assets or those assets of Shinsung to which this Agreement relates.
2.2.2. PRI may assign or otherwise transfer, sublicense, or
subcontract this Agreement, any Purchase Order, and any rights acquired by PRI
hereunder or under any Purchase Order in whole or in part.
2.3. LOCATION OF MANUFACTURING OPERATIONS. Shinsung will manufacture
all Products in its plant in Chumgbuk Province, Eumsung-kun, Samsung-myun,
Sunjung-ri 409-1, Korea, unless PRI authorizes Shinsung in writing signed by an
Authorized Representative of PRI to manufacture any Products in another plant
location.
2.4. MANUFACTURE BY PRI. This Agreement is non-exclusive. PRI retains
the right to manufacture any Product itself. PRI may evaluate and qualify other
sources to have such Product manufactured however PRI will only purchase from
another source if the agreement could be terminated for cause as defined in
section 9.1. PRI has no minimum purchase obligations under this Agreement.
2.5. PURCHASE PERIOD. The initial term of this Agreement during which
Shinsung will manufacture and PRI may purchase or otherwise obtain Products
pursuant to this Agreement will last five (5) years from the Effective Date (the
"Purchase Period"). The terms and conditions of this Agreement will apply to, at
a minimum, any Purchase Order issued by PRI during the Purchase Period until
delivery and acceptance of Products thereunder is made, even if the Purchase
Period expires before such delivery and acceptance.
2.6. ACCESS TO FACILITIES. PRI will have the right to review and
inspect Shinsung's facilities (including any Test Facility), operations, and
procedures at any reasonable time for purposes of determining compliance with
the requirements of this Agreement and any Purchase Order issued by PRI
hereunder. From time to time PRI's customers may request the right to review
Shinsung's facilities and operations for the purpose of qualification. Shinsung
agrees to
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permit such customer surveys upon at least five (5) Business Days prior notice
from PRI.
3. PURCHASE ORDERS. From time to time during the Purchase Period, PRI shall
provide Shinsung with a purchase order for the manufacture and purchase of
Products ("Purchase Order") in a commercially reasonable format determined by
PRI and signed by an Authorized Representative of PRI. The Purchase Order will
state, among other things: (1) the identity of any Product that Shinsung shall
manufacture and PRI may purchase from Shinsung; (ii) the Purchase Price; (iii)
the terms of payment of the Purchase Price by PRI; (iv) the quantity of such
Product that PRI will purchase; and (v) the delivery dates, times and terms for
such Product. PRI's current form of Purchase Order is attached hereto as Exhibit
C. PRI's obligation to purchase Product specified in any Purchase Order will be
limited to, and governed by, the terms and conditions of this Agreement and the
Purchase Order Terms and Conditions except to the extent otherwise stated, or
supplemented by PRI, in such Purchase Order. For the purposes of this Agreement,
a valid Purchase Order may be delivered to Shinsung in the form of a physical
copy or by electronic transmission.
4. PROJECT MANAGERS. PRI and Shinsung will appoint a project manager to
coordinate and manage each parties' performance hereunder (the "Project
Managers"). The Project Managers as of the Effective Date are identified on
EXHIBIT B attached hereto.
5. CONFIDENTIALITY.
5.1. GENERAL OBLIGATIONS. Shinsung agrees that the existence and terms
of this Agreement and all information disclosed by PRI to Shinsung in connection
with the manufacture and purchase of Products by PRI, including all information
concerning any Specifications, Change Orders, Change Proposals, Purchase Orders,
Special Tooling, PRI's Independently Developed Technology, Developments, the
manufacture of any Product (including any manufacturing line on which Product,
or any component thereof, is manufactured), and any documents that contain or
report on such information (collectively, the "Confidential Information") are
confidential, and agrees to take all steps reasonably necessary to protect the
secrecy and confidentiality of such information and PRI's proprietary interest
thereof, including the following:
5.1.1. Shinsung will use Confidential Information only for
purposes contemplated by this Agreement and in the manner specified by this
Agreement, and, except as permitted by this Agreement, will not make any copies
of, reproduce, attempt to copy, disclose, sell, assign, sublicense, or transfer,
in whole or in part, any Confidential Information.
5.1.2. Except as permitted by this Agreement or otherwise
permitted by PRI in writing, Shinsung may disclose Confidential Information only
to those of its employees and agents required to have knowledge of the same to
perform duties authorized by this Agreement; provided, however, that Shinsung
may disclose to any Approved Vendor, subject to confidentiality obligations in
the Purchase Order in connection with any Approved Vendors,
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Confidential Information necessary for any Approved Vendor to provide any
component and/or material for use in, or for the manufacture of, any Products.
Shinsung will, upon PRI's request, identify any Approved Vendor to which
Shinsung has disclosed such information and any disclosed information.
5.1.3. Shinsung will promptly report to PRI any conduct
relating to Confidential Information inconsistent with the provisions of this
Section 5, and take such action as may be reasonably necessary and legally
permissible to terminate such conduct.
5.1.4. Immediately upon termination of this Agreement for any
reason, Shinsung will return to PRI, or if so requested by PRI, destroy, all
Confidential Information in Shinsung's possession or control.
5.1.5. PRI will be free to disclose Confidential Information
at its sole discretion.
5.2. EXCEPTIONS. Except as permitted hereof, Shinsung's foregoing
obligations of confidentiality will not apply to Confidential Information to the
extent that such information (i) is rightfully possessed by Shinsung prior to
its receipt hereunder; (ii) is or later becomes publicly available through no
fault of Shinsung; (iii) is or becomes available to Shinsung from third parties
who in making such disclosure breach no confidentiality relationship; (iv) is
disclosed by PRI on an unrestricted basis to other persons not privy to this
Agreement; (v) is independently developed by Shinsung without reference to such
information; or (vi) is required by governmental or court order, or by law or
regulation, to be disclosed, provided Shinsung provides advance notice to PRI
prior to such disclosure. Shinsung will have the burden of proof with respect to
any claimed exception set forth in this Section 5.2.
5.3. NOTICES. Shinsung agrees to reproduce and include PRI's
proprietary rights notices or reasonable equivalents on any item that contains
Confidential Information. In addition, Shinsung agrees to comply with PRI's
marking requirements regarding any patented item.
5.4. PUBLICITY. Shinsung will not disclose the existence, terms, or
conditions of this Agreement or any Purchase Order issued hereunder to any
person or make any public statement respecting this Agreement or any Purchase
Order issued hereunder without the prior written consent of PRI, except that
Shinsung may make such disclosures as are required by applicable law. Shinsung
will make any such required disclosures available to PRI in advance of release.
5.5. ENFORCEMENT. Shinsung acknowledges that use of Confidential
Information in a manner contrary to the provisions of this Agreement would cause
PRI irreparable harm for which money damages alone could not make PRI whole and,
without limiting any other remedies to PRI, hereby consents to the full extent
that it is able to do so to any injunctive relief entered by any court of
competent jurisdiction prohibiting it from such violation of this Agreement.
Shinsung will allow PRI reasonable access to documentation to demonstrate
compliance with this Agreement.
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PRIVATE AND CONFIDENTIAL
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5.6. DURATION. Subject to extension by written agreement of the
parties, the obligations for Shinsung set forth in this Section 5 will remain in
force during the term and will survive any termination or expiration of this
Agreement and any Purchase Order issued hereunder.
6. BUSINESS PROTECTION. PRI and Shinsung mutually acknowledge (1) the importance
to PRI's business of the manufacture and supply of Products to PRI, and (ii) the
need to protect Technology related to the Products and the manufacture thereof.
Accordingly, the parties agree that during the term of this Agreement and for
five (5) years thereafter, Shinsung will not, directly or indirectly, (i)
participate in the development, manufacture, sale or provision of any goods or
services in connection with factory automation systems for the manufacture of
integrated circuit devices; or (ii) employ, attempt to employ or solicit the
employment of, any employee of or consultant to PRI or otherwise induce or
attempt to induce any employee of or consultant to PRI to leave the employ of
PRI.
7. GENERAL WARRANTY.
7.1. SHINSUNG. Shinsung expressly represents and warrants that Shinsung
is a duly organized corporation, in good standing and with full power to enter
into and complete the transactions required hereunder. This Agreement, and any
Purchase Order issued hereunder, are enforceable against Shinsung in accordance
with their respective terms and neither the execution nor performance of this
Agreement or any Purchase Order issued hereunder by Shinsung does or will
conflict with or constitute a breach of or default under Shinsung's organizing
documents, any contracts or commitments to which Shinsung is a party, or any
applicable law or regulation in the jurisdiction in which Shinsung is
incorporated or otherwise organized.
7.2. PRI. PRI expressly represents and warrants that PRI is a duly
organized corporation, in good standing and with full power to enter into and
complete the transactions required hereunder. This Agreement is enforceable
against PRI in accordance with its terms and neither the execution nor
performance of this Agreement by PRI does or will conflict with or constitute a
breach of or default under PRI's certificate of incorporation or by-laws, any
contracts or commitments to which PRI is a party, or any applicable U.S. law or
regulation.
8. INDEMNIFICATION. Shinsung agrees to defend, indemnify and hold PRI and its
customers harmless from and against all allegations, claims, or demands (whether
threatened or pending), costs, fees and charges (including reasonable attorneys
fees and the fees of other consulting professionals) and losses, damages,
judgements and liabilities of any kind whatsoever, arising from or relating to
any representation, action or omission by Shinsung, including, without
limitation, Shinsung's performance or failure to perform under this Agreement
and any Purchase Order hereunder.
9. TERMINATION.
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9.1. TERMINATION FOR CAUSE. Upon written notice to the other party
either party may terminate this Agreement, and/or (at PRI's election) any
obligations under any Purchase Order, for cause in the event the other
breaches or fails to perform or comply with any of the terms and conditions
of this Agreement or any Purchase Order. The causes permitting PRI to
terminate this Agreement, and/or (at PRI's election) any obligations under
any Purchase Order, include, without limitation: late delivery of Products;
delivery of Products that are defective or that do not conform to warranty;
and failure, upon request of PRI, to provide reasonable assurances of future
performance. In the event of any termination pursuant to this Section 9.1,
PRI will not be liable to Shinsung for any amount, except for any unpaid
balance due Shinsung for nondefective Product conforming to warranty received
by PRI before notice of such termination for which Shinsung has provided PRI
an Invoice (less any permitted set-off), PRI will be entitled to exercise the
PRI License, and Shinsung will be liable to PRI for any and all damages
sustained by reason of Shinsung's default. Shinsung may terminate this
agreement for cause if PRI fails to perform any obligation under this
agreement.
9.2. TERMINATION FOR CONVENIENCE. PRI may terminate this Agreement or
any Project initiated pursuant to this Agreement for business and/or financial
considerations and upon written notice to Shinsung. In such event, Shinsung
shall immediately stop work hereunder as specified in the notice. Shinsung shall
be paid reasonable termination charges consisting of a percentage of any payment
for any Milestone provided for in a Statement of Work corresponding to the
percentage of work performed for such Milestone prior to the notice of
termination, plus reasonable costs resulting directly from termination, minus
resale or salvage value of any work so terminated. Shinsung shall complete
performance of any portion of a Project not so terminated.
9.3. TERMINATION FOR INSOLVENCY. This Agreement, and any Purchase Order
issued hereunder, will immediately terminate upon written notice to such effect
by PRI Shinsung, without the necessity of prior notice, and PRI will be entitled
to exercise the PRI License, (1) in the event of Shinsung's voluntary or
involuntary bankruptcy or insolvency, (ii) in the event Shinsung will make an
assignment for the benefit of creditors, (iii) in the event that petition will
have been filed against Shinsung under applicable bankruptcy law, or any other
applicable law for the relief of debtors, or other applicable laws similar in
purpose or effect, the effect of which is to cause Shinsung to have its business
effectively discontinued. Shinsung may terminate this agreement or any accepted
purchase order (i) in the event of PRI's voluntary or involuntary bankruptcy or
insolvency, (ii) in the event PRI will make an assignment for the benefit of
creditors, (iii) in the event that petition will have been filed against PRI
under applicable bankruptcy law, or any other applicable law for the relief of
debtors, or other applicable laws similar in purpose or effect, the effect of
which is to cause PRI to have its business effectively discontinued.
9.4. OTHER TERMINATION RIGHTS. The rights of termination set forth in
this Section 9 are in addition to, and will not limit, any other rights of
termination provided for in this Agreement or under any Purchase Order issued
hereunder.
9.5 NO PAYMENTS FOR CERTAIN LOSSES. No indemnity or other payment will
be payable by
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PRI to Shinsung on account of goodwill, lost profits or any other factor in the
event that this Agreement or any Purchase Order issued hereunder is terminated
for any cause or expires. Should the law to be applied to the construction and
enforcement of this Agreement be altered by any legislation to the contrary, PRI
and Shinsung will negotiate in good faith to amend this Agreement or any
Purchase Order hereunder to preserve PRI's right to terminate or cause
expiration of this Agreement or such Purchase Order, in accordance with the
terms hereof without cost to PRI.
10. GENERAL.
10.1. SURVIVAL. The following sections of this Agreement will survive
termination or cancellation of this Agreement for any reason, notwithstanding
delivery of, acceptance of, and/or payment for any Products ordered hereunder:
1, 2.1, 2.2, 2.6, 3, 5, 6, 7, 8, 9 and 10.
10.2. DISPUTE RESOLUTION. Any and all disputes arising in connection
with this Agreement shall be finally settled by one or more arbitrators
designated in conformity and in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce by one or more arbitrators
appointed in accordance with said rule, by which each party is finally bound.
Arbitration shall take place in the International Court of Justice World Court,
Hague, Netherlands or such other location that both parties may agree.
10.3. NO AGENCY RELATIONSHIP. Nothing herein or in any Purchase Order
issued hereunder will be deemed to create any association, partnership, joint
venture, or relationship of principal, agent, master, or servant between the
parties hereto or any affiliates or subsidiaries thereof, or to provide either
party with the right, power, or authority to incur any obligation or make any
representations, warranties, or guarantees on behalf of the other party.
10.4. NOTICES. All notices required or permitted to be sent hereunder
and under any Purchase Order issued hereunder will be sent by reputable private
international courier with established tracking capability (such as DHL, FedEx,
or UPS), postage pre-paid, marked for delivery within one (1) business day, and
addressed to the applicable officer of the party to be notified at the address
for such party set forth below (or such other address as the party to be
notified may provide in writing from time to time):
If to PRI to : PRI Automation, Inc.
000 Xxxxxxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
XXX
Attention: President
If to Shinsung to: Shinsung Eng. Co., Ltd.
000 Xxxxxx-Xxxx
0Xx, Xxxxxxxxxxxx-Xx
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PRIVATE AND CONFIDENTIAL
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Xxxxx, 000-000
Xxxxx
Attention:
All notices sent in conformity with this Section 10.4 will be deemed to be
received by the party to be notified on the later of two (2) Business Days after
such notice is delivered to the appropriate courier for delivery or, at such
later date as the courier's tracking records demonstrate actual delivery
occurred.
10.5. MODIFICATION AND WAIVER. No modification, amendment, supplement
to, or waiver of this Agreement or any document referred to hereunder, including
any Exhibit, Specifications, or Purchase Order, will be binding upon PRI unless
expressly authorized hereunder, made in writing, and duly signed by an
Authorized Representatives of PRI. A failure or delay of either party to this
Agreement to enforce at any time any of the provisions hereof, or to exercise
any option which is hereof provided, or to require at any time performance of
any of the provisions hereto will in no way be construed to be a waiver of such
provisions of the Agreement.
10.6. REMEDIES. Except as expressly provided otherwise hereunder, no
remedy referred to in this Agreement or in any Purchase Order issued hereunder
is intended to be exclusive, but each will be cumulative and in addition to any
other remedy referred to hereof or otherwise available at law or equity.
10.7. SEVERABILITY. The provisions of this Agreement, any Purchase
Order issued hereunder, any Specifications, or any other document referred to
hereunder are severable, and in the event that any provisions of any such
agreement or other document are determined to be invalid or unenforceable under
any controlling law, such invalidity or unenforceability will not in any way
affect the validity or enforceability of the remaining provisions of such
agreement or other document.
10.8 ENTIRE AGREEMENT; CONFLICT. This Agreement consists of terms
herein and the Exhibits attached hereto. In the event of any conflict or
inconsistency between the terms and conditions of this Agreement and any
provisions stated in any Specifications, Purchase Order, Change Order, the
Purchase Order Terms and Conditions or other documents provided by PRI to
Shinsung and signed by an Authorized Representative of PRI, the following order
of precedence shall govern: (i) this Agreement; (ii) any Change Order; (iii) any
Purchase Order; (iv) the Purchase Order Terms and Conditions; and (v) the
Specifications. Notwithstanding the foregoing order of precedence, the Purchase
Price for any Products from any Purchase Order shall take precedence over any
other price for such Products listed in any of the above identified documents.
10.9. CAPTIONS; SECTION HEADINGS; COUNTERPARTS. As used in this
Agreement, "including" means "including but not limited to", and "herein";
"hereof", and "hereunder" refer to this
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Agreement as a whole. Except as otherwise stated, all section references in this
Agreement refer to sections of this Agreement. The section headings used hereof
are for reference and convenience only, and will not enter into the
interpretation of this Agreement. This Agreement may be executed in multiple
counterparts.
10.10. GOVERNING LAW; CHOICE OF FORUM. The validity of this Agreement
and any Purchase Order issued hereunder, the construction and enforcement of
their respective terms, and the interpretation of the rights and duties of the
parties thereunder, will be governed by the laws of The Commonwealth of
Massachusetts as such law is applied to contracts entered into and entirely
performed therein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the Effective Date.
SHINSUNG ENG. CO., LTD. PRI AUTOMATION, INC.
By:/s/ X X Xxx By:/s/ Xxxxxx X. Xxxxxx
----------------------- ----------------------------------
Xxx Xxxx, Xxx Xxxxxx X. Xxxxxx
President Vice President & General Manager
Factory Systems
Date: 10/26/99 Date: 10/26/99
-------------------- -------------------------------
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EXHIBIT A
SCHEDULE OF DEFINITIONS
1.1. "Agreement" will have the meaning set forth in the first sentence
of this Agreement.
1.2. "Approved Vendor" will have the meaning set forth in the Purchase
Order Terms and Conditions.
1.3. "Authorized Representative" will mean: (i) Project Managers; (ii)
the person(s) set forth on EXHIBIT B; (iii) any person(s) occupying the
position(s) set forth on EXHIBIT B; and (iv) any persons designated by the
aforesaid in writing as their successors or delegates for one or more particular
purpose.
1.4. "Business Day" will mean business days, Monday through Friday,
excluding national holidays, in the country in which performance of an
obligation is due.
1.5. "Change Order" will have the meaning set forth in the Purchase
Order Terms and Conditions.
1.6. "Change Proposal" will have the meaning set forth in the Purchase
Order Terms and Conditions
1.7. "Confidential Information" will have the meaning set forth in
Section 5.1.
1.8. "Deposited Material" will have the meaning set forth in the
Purchase Order Terms and Conditions.
1.9. "Developments" will have the meaning set forth in the Purchase
Order Terms and Conditions.
1.10. "Effective Date" will have the meaning set forth in the first
sentence of this Agreement.
1.11. "Escrow Agent" will have the meaning set forth in the Purchase
Order Terms and Conditions.
1.12. "Independently Developed Technology" will mean Technology that is
in existence and owned by a party prior to the Effective Date or created or
obtained by a party after the Effective Date entirely independently of any work
or services performed, or information exchanged, in connection with this
Agreement or any Purchase Order.
1.13. "Intellectual Property" will mean any and all patents and rights
to patent, copyrights,
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trademarks, trade secrets, Confidential Information, know-how and proprietary
information of any kind or nature whatsoever.
1.14. "Invoice" will have the meaning set forth in the Purchase Order
Terms and Conditions.
1.15. "PRI" will have the meaning set forth in the first sentence of
this Agreement.
1.16. "PRI License" will have the meaning set forth in the Purchase
Order Terms and Conditions.
1.17. "Products" will mean the goods and/or services set forth in a
Purchase Order issued by PRI in accordance with this Agreement.
1.18. "Project Managers" will have the meaning set forth in Section 4.
1.19. "Purchase Order" will have the meaning set forth in Section 3.
1.20. "Purchase Order Terms and Conditions" will mean the terms and
conditions set forth in EXHIBIT D attached hereto.
1.21. "Purchase Period" will have the meaning set forth in Section 2.5.
1.22. "Purchase Price" will have the meaning set forth in the Purchase
Order Terms and Conditions.
1.23. "Shinsung" will have the meaning set forth in the first sentence
of this Agreement.
1.24. "Special Tooling" will have the meaning set forth in the Purchase
Order Terms and Conditions.
1.25. "Specifications" will mean the requirements and specifications
for any Product as attached to the Purchase Order for such Product and signed by
an Authorized Representative of both parties. "Specifications" will include for
any Product: (i) general specifications; (ii) technical specifications; (iii)
PRI's testing requirements; (iv) PRI's requirements for form, fit, function,
performance and reliability; and (v) PRI's instructions relating to finish,
packaging, packing and labeling.
1.26. "Technology" will mean all scientific, technical and
manufacturing information and techniques that are used in connection with or
that describe physical materials, processes and procedures. "Technology"
includes, without limitation, know-how, inventions (whether or not patented or
patentable), copyright-protected works, mask-work protected devices, designs,
schematics, technical information, data and manufacturing processes.
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1.27. "Test Facility" will have the meaning set forth in the Purchase
Order Terms and Conditions.
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EXHIBIT B
AUTHORIZED REPRESENTATIVES
FOR SHINSUNG:
The Project Manager will be:
The Authorized Representatives will include:
FOR PRI:
The Project Manager will be:
The Authorized Representatives will include:
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EXHIBIT C
FORM OF PURCHASE ORDER
PRI AUTOMATION, INC.
000 Xxxxxxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
PURCHASE ORDER
Purchase Order No:
-------------------------
Manufacturer's Name: Shinsung Eng. Co. Ltd.
----------------------
Shipping Address:
--------------------------------------------------------------
Quotation No:
------------------------------------------------
Shipping Date:
-----------------------------------------------
Item Unit Total Shipment
No. Quantity Description of Product Price Price Days
--- -------- ---------------------- ----- ----- ----
Payment Terms:
Warranty Period:
Parts Requirements:
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Other Matters:
THIS PURCHASE ORDER IS EXPRESSLY SUBJECT TO THE PURCHASE ORDER TERMS
AND CONDITIONS (THE "TERMS AND CONDITIONS") SET FORTH IN EXHIBIT D TO THE
MASTER
MANUFACTURING SERVICES AGREEMENT DATED AS OF ___________,1999 BETWEEN PRI
AUTOMATION, INC. AND SHINSUNG ENG. CO., LTD., WHICH TERMS AND CONDITIONS ARE
HEREBY INCORPORATED IN, AND MADE PART OF, THIS PURCHASE ORDER AS THOUGH EACH
PROVISION WERE SEPARATELY SET FORTH HEREIN, EXCEPT TO THE EXTENT OTHERWISE
STATED OR SUPPLEMENTED BY PRI HEREIN.
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EXHIBIT D
PURCHASE ORDER TERMS AND CONDITIONS
EXCEPT TO THE EXTENT OTHERWISE STATED OR SUPPLEMENTED BY PRI ON THE FACE OF THIS
PURCHASE ORDER ("ORDER"), THE FOLLOWING TERMS AND CONDITIONS WILL APPLY TO THE
MANUFACTURE AND PURCHASE OF THE PRODUCTS ("PRODUCTS") SET FORTH ON THE FACE OF
THIS ORDER.
1. MANUFACTURE IN ACCORDANCE WITH SPECIFICATIONS. Shinsung will manufacture the
Products in strict conformity with all applicable Specifications and all
applicable laws and regulations. Shinsung will not make any change in or deviate
in any way from such Specifications except pursuant to a Change Order approved
as provided in this Order.
2. APPROVED VENDORS.
2.1. Shinsung will provide to PRI a list of vendors and the components
that Shinsung proposes to purchase from such vendors for use in the manufacture
of the Products for approval by PRI. Shinsung will not purchase any component
for use in the manufacture of the Products from any vendor other than those
approved in writing by PRI (each an "Approved Vendor"). PRI reserves the right
to qualify any proposed vendor. The process for such qualification will be
determined by PRI at its sole discretion and may include, without limitation,
inspection of the proposed vendor's facilities. Shinsung may from time to time
request that an Approved Vendor be substituted by another vendor. PRI reserves
the right to accept or reject any such request in its sole discretion.
2.2. Before Shinsung may disclose any Confidential Information of PRI
to any Approved Vendor, Shinsung will first seek consent of PRI, and in no event
will Shinsung disclose any Confidential Information to any Approved Vendor until
such Approved Vendor has agreed to confidentiality obligations to protect
Confidential Information at least equivalent to those set forth in Section 5 of
the
Master Manufacturing Services Agreement dated as of _______________, 1999
between PRI Automation, Inc. and Shinsung Eng. Co., Ltd. (the "Master
Agreement").
3. CHANGE ORDERS. PRI may from time to time request Shinsung to incorporate a
change to the Products or the Specifications for the Products by delivering a
"Change Order" to Shinsung. Each Change Order will be in writing signed by an
Authorized Representative of PRI and will include a description of the proposed
change sufficient to permit Shinsung to evaluate the feasibility of such change.
Within seven (7) Business Days of receipt of a Change Order, Shinsung will
inform PRI in writing of the earliest possible implementation date for the
proposed change, of any increase or decrease in the price of the Product as a
result of such change, and of any effect on production scheduling or quality
assurance testing. Shinsung will use its best efforts to accept and implement
all reasonable changes to the Products or the Specifications for the Products.
4. CHANGE PROPOSALS. Shinsung may from time to time suggest that a change be
made to the Products or to the Specifications for the Products by delivering
a "Change Proposal" to PRI. Each Change Proposal will be in writing signed by
an Authorized Representative of Shinsung and will include a description of
the proposed change, a description of any improvements in the Products or
cost reductions which will result from the change, and the effect of the
change, if any, on production scheduling or quality assurance testing. Each
Change Proposal will provide detail sufficient to permit PRI to evaluate the
desirability of such change. PRI agrees to consider each Change Proposal it
receives from Shinsung, but reserves the right to accept or reject each such
Change Proposal in its sole discretion.
5. AMENDMENTS TO SPECIFICATIONS. The Specifications will be amended to reflect
any Change Order. All such amendments to Specifications will be in writing and
signed by an Authorized Representative of both parties. Minor changes in
Specifications not constituting a Change Order may be effected by delivery by
PRI to Shinsung of a written notice of such changes executed by an Authorized
Representative of PRI. Shinsung will have accepted any minor amendments to
Specifications not constituting a Change Order either by (i) acknowledging such
amendment, or (ii) by not properly rejecting such amendment within three (5)
Business Days after receipt by Shinsung; which ever occurs first. If Shinsung
rejects any such amendment, then Shinsung will (i) set forth the reason(s) for
Shinsung's rejection in writing, and (ii) indicate which portion, if any, of
such amendment Shinsung is able to accept, and such amendment will be deemed to
be a Change Order for the purposes of Section 3. In no event will Shinsung
reject any such amendment that is generally consistent with the scope and
purpose of this Order and/or the course of conduct of the parties hereunder.
PRIVATE AND CONFIDENTIAL
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6. PRICING.
6.1. The price of the Products, and any spare parts for the Products,
purchased hereunder will be the price set forth on the face of this Order (the
"Purchase Price"). Shinsung expressly warrants to PRI that the Purchase Price,
and any discounts granted herein, are lawful. The Purchase Price will be
denominated and paid in U.S. dollars.
6.2. The Purchase Price will include all costs of commercially reasonable
packaging and packing. PRI may provide Shinsung with special packing
instructions for any shipment of the Products, and if Shinsung agrees to such
special packing instructions, then PRI will be responsible for the cost of such
special packing unless the parties otherwise agree.
6.3. All taxes, fees, duties and charges of any kind now in force or
enacted in the future (whether federal, state, local, foreign or otherwise)
incurred in connection with the manufacture, sale or delivery of the Products,
or with Shinsung's performance under this Order, will be borne by Shinsung.
7. PAYMENT.
7.1. Upon shipment of the Products, Shinsung will submit to PRI a written
invoice (the "Invoice") indicating at a minimum (i) Shinsung's name and address;
(ii) the number of this Order; (iii) description and quantity of the Products
shipped; (iv) Purchase Price of the Products and aggregate price; and (v) any
special packing costs. All information on the Invoice must be consistent with
this Order.
7.2. The Purchase Price will be due and payable by PRI will be specified
on the purchase order. For sub systems the payment will be 100% 45 days shipment
and for full systems the payment will be 85% 45 days after shipment and 15% 100
days after shipment. All payments assume that a Shinsung invoice for the amount
due will be sent and received by PRI within 48 hours of shipment. PRI will have
the right to apply credits due to rejection of the Products or discrepancies on
Invoices already paid against any outstanding Invoice, provided that PRI sends
written notice and explanation of the application of such credits to Shinsung.
Notwithstanding anything herein to the contrary, PRI may offset from any and all
amounts owing to Shinsung by PRI hereunder any amounts or claims owed or owing
by Shinsung to PRI hereunder. Payment of any Invoice by PRI will not constitute
acceptance of the Products and will be subject to adjustment for errors,
shortages, defects in the Products or any other failure of Shinsung to meet the
terms and conditions of this Order.
8. NON-RECURRING EXPENSES. PRI and Shinsung may from time to time meet to
discuss and agree upon the terms of the acquisition or provision of specialized
equipment or tooling, single occurrence training (in addition to any training to
be provided by Shinsung hereunder), or the incurring of other non-recurring
expenses (collectively, "Non-Recurring Expenses") in connection with the
manufacture, sale or maintenance of the Products. The terms upon which such
Non-Recurring Expenses will be acquired, provided or incurred will be set forth
in a separate purchase order issued by PRI. Any items comprising Non-Recurring
Expenses will be the sole property of PRI and, to the extent practical, will be
clearly marked as such. Shinsung will not move any items comprising
Non-Recurring Expenses from its premises without PRI's consent. All
Non-Recurring Expenses will be considered Confidential Information of PRI. PRI
may obtain possession of any items comprising Non-Recurring Expenses at any time
upon the termination or expiration of this Order.
9. TESTING FACILITY.
9.1 Shinsung will provide a test facility (the "Test Facility") at
Shinsung's manufacturing facility to enable Shinsung to perform quality
assurance testing, verification of configuration and other required testing of
the Products in accordance with the Specifications. The Testing Facility will be
constructed and configured in accordance with PRI's requirements. Shinsung will
at all times, at its expense, maintain the Testing Facility in good condition,
repair and cleanliness consistent with PRI requirements and practices for
similar PRI facilities.
9.2 Shinsung will not permit any third party including, without
limitation, any existing customer or potential customer of PRI, to have access
to, inspect, or view the testing procedures at, the Testing Facility without the
prior written consent of PRI.
10. ACCEPTANCE. Shinsung will have accepted this Order by (i) acknowledging this
Order; (ii) commencing performance of this Order, or (iii) not properly
rejecting this Order within [five (5)] Business Days after receipt by Shinsung;
which ever occurs first. If Shinsung rejects this Order, then Shinsung will (i)
set forth the reason(s) for Shinsung's rejection in writing, and (ii) indicate
which portion, if any, of such order Shinsung is able to accept. In no event
will Shinsung reject any such order that is generally consistent with the scope
and purpose of the Master Agreement. Acceptance of this Order is limited to the
express terms contained herein. Any additional or different terms and any
attempt by Shinsung to vary in any respect any of the terms of this offer in
Shinsung's acceptance are hereby objected to and rejected. However, such
variances will not operate as a rejection of this offer unless they are
variances in the terms of the description,
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quantity, price or delivery schedule of the goods or services, but rather will
be deemed a material alteration thereof, and this offer will be deemed accepted
by Shinsung without such additional or different terms. If this offer will be
deemed an acceptance of a prior offer by Shinsung, such acceptance is similarly
limited to the express terms contained herein. Additional or different terms in
Shinsung's offer will be deemed material and are objected to and rejected, but
this Order will not operate as a rejection of the Shinsung's offer unless it
contains variances in the terms of the description, quantity, price or delivery
schedule of the goods or services.
11. SHIPPING. Shinsung will follow all instructions on the face of this Order
regarding the shipment of the Products. If shipping instructions are not
specified by PRI, Shinsung will deliver the Products in accordance with standard
commercial practices. Shinsung will pay all shipping charges and be responsible
for dealing with all carriers unless otherwise specified on the face of this
Order or in an addendum hereto.
12. DELIVERY AND RISK OF LOSS. The delivery date and time (the "Delivery Date
and Time") and the location of the facility of PRI's customer to whom the
Products are to be delivered (the "Customer's Facility") for the shipment of the
Products will be as set forth on the face of this Order. TIME IS OF THE ESSENCE
for this Order, and delivery of any shipment by the Delivery Date and Time is an
essential term of this Order. A shipment will be deemed on time if it arrives at
designated discharging airport on the Delivery Date and Time. Shinsung will
promptly notify PRI of any delay or likely delay in any shipment. In the event
that a shipment either will not be or is unlikely to be delivered by the
Delivery Date and Time, PRI reserves the right either: (i) to require a routing
change to ship by premium transportation, with the entire cost of such premium
transportation to be borne by Shinsung, or (ii) to cancel all or part of this
Order without liability. Shinsung assumes all risks of loss or damage of the
goods or services until delivery is completed at PRI's designated discharging
airport. Shinsung assumes all risks of loss or damage of goods rejected by PRI
and returned to Shinsung.
13. UNDERSHIPMENTS AND OVERSHIPMENTS. Any undershipment will be completed by
subsequent shipment referencing the number of this Order. An undershipment will
not constitute complete performance of this Order, and Shinsung will remain
obligated to perform in accordance with this Order, unless Shinsung obtains
written consent of PRI. PRI may retain or return to Shinsung any overshipment of
Product. Overshipments to be returned to Shinsung will be held by PRI at
Shinsung's risk and expense for a reasonable time awaiting shipping instructions
from Shinsung, and return shipping charges will be at Shinsung's expense.
14. PACKING. Unless otherwise specified by PRI, Shinsung will package and pack
the Products in conformity with the Specifications. However, in all events
Shinsung will package and pack the Products in a manner which is (i) in
accordance with good commercial practice; (ii) acceptable to common carriers for
shipment at the lowest rate for the Products; (iii) in accordance with I.C.C.
regulations; and (iv) adequate to ensure safe arrival of the Products at the
named destination. Shinsung will xxxx all containers with necessary lifting,
handling and shipping information and with the number of this Order. An itemized
packing list must accompany each shipment indicating: (i) the number of this
Order; and (ii) the description and quantity of the Products shipped.
15. QUALITY ASSURANCE PROCEDURES
15.1. Shinsung will adopt the quality assurance procedures and perform
the quality control tests described in the Specifications.
15.2. PRI will have the right, but not the obligation, to inspect any of
the Products before packing. No inspection or other action by PRI will in any
way obligate it to purchase any defective or nonconforming Products or to retain
any Products which, upon subsequent inspection or use, prove to be defective or
nonconforming Products.
15.3. Before packing and shipment of any of the Products, Shinsung will
certify that it has taken all commercially reasonable steps to ensure that each
Product has been tested according to the Specifications.
16. PRODUCT WARRANTY.
16.1. Shinsung expressly warrants to PRI for the warranty period set
forth on the face of this Order (the "Warranty Period") that (i) all Products
furnished under this Order will conform strictly with the requirements of this
Order, including the Specifications, drawings, samples, and/or descriptions
provided or incorporated herein; (ii) all such Products will be free from any
defects in design, materials, workmanship and title, and will be adequately
contained, packaged, marked and labeled; (iii) all such Products will be fit and
safe for the purpose for which Products of that kind are normally used; (iv) all
such Products will accept as input, use and provide as output date data without
error or interruption and that the Products will operate in accordance with the
Specifications and any other requirements of this Section 16 on all dates
before, on and after January 1, 2000 without impairment arising out of date data
representing such dates; and (v) all such Products will function in accordance
with the design and system requirements of the assembly in which the Products
are put to use and/or integrated by PRI or PRI's licensee, sublicensee, or
subcontractor, notwithstanding whether the Products satisfy any or all other
requirements provided for
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hereunder (including the Specifications), and will be fit and safe for any.
other particular purpose of PRI of which Shinsung knows-or has reason to know
(collectively, the "Warranty"). The Warranty will survive delivery, inspection,
acceptance, payment and termination of the Master Agreement and/or this Order
and will run to PRI, its customers, and successors and assigns.
16.2. In the event that any of the Products is determined to be defective
or in nonconformance with the Warranty during the Warranty Period, PRI will have
the right, at PRI's option: (i) to require Shinsung to, if possible, correct any
defect or nonconformity at any location, including the Customer's Facility, as
PRI may request; (ii) to reject such Product and return it to Shinsung for
refund or credit; (iii) to return such Product to Shinsung for correction by
Shinsung; and (iv) to accept such Product with an equitable adjustment in
Purchase Price. PRI will be under no obligation to pay Shinsung for defective or
nonconforming Products, and Shinsung will promptly reimburse PRI for any and all
damages sustained by PRI as a result of such Products. If PRI elects to reject
or return any defective or nonconforming Product, or if Shinsung has failed to
correct such Product at such location as PRI may have requested within [ (24)]
Business Days of such request, then Shinsung will, at PRI's request, immediately
replace such Product by delivery of nondefective and conforming Product.
16.3. If any of the Products released to PRI is determined to be
defective or in nonconformance with the Warranty, PRI may request that Shinsung,
within [five (5)] Business Days of receiving such a request, provide PRI a
written report (i) analyzing such Product; (ii) explaining the nature of any
defect and/or nonconformity in such Product; (iii) indicating how Shinsung
intends to correct such defect and/or nonconformity. Upon PRI's request,
Shinsung will promptly meet with PRI to discuss Shinsung's proposed corrective
action.
16.4. Any cost or expense resulting from correction, rejection, return or
replacement of any Product or any part thereof under this Section 16, including
cost for labor, material, inspection, customs duties, shipping to and from
Shinsung's facilities and other costs associated with removing, replacing or
correcting any Product or any part thereof, will be borne exclusively by
Shinsung, and Shinsung will assume all risk of loss or damage for such Product
or any part thereof.
16.5. For repair or replacement of any Product or any part thereof
pursuant to this Section 16, Shinsung will maintain, at Shinsung's expense, a
quantity of Products, or parts thereof, at one or more locations that PRI may
designate from time to time (the "Warranty Inventory"). Shinsung will hold title
to, and will assume all risk of loss or damage for the Warranty Inventory. The
quantity of any Product, or components thereof, required for the Warranty
Inventory will be determined by PRI. In determining the appropriate level of
Warranty Inventory, PRI will take into account, among other things, the volume
of previous orders for such Product, maintenance experience in relation to such
Product or part, potential orders for such Product from PRI's customers, and the
manufacturing lead times for such Product or part. In the event of an emergency
down at a Customer's Facility, at PRI's request, Shinsung will provide and
deliver the necessary replacement parts for the Product to such Customer's
Facility within twenty-four(24) hours of receipt of such request. Shinsung will
use any Product or part in Warranty Inventory on a first-in/first-out basis for
any such repair or replacement.
17. INTELLECTUAL PROPERTY.
17.1. In the course of Shinsung's manufacture and sale of the Products to
PRI pursuant to this Order, Shinsung, or Shinsung and any other party or
parties, including PRI or any Approved Vendor, may conceive, develop or make
inventions, improvements, computer programs, works of authorship, data, know-how
or other developments relating to the Products that are designed for or by PRI,
including any component thereof or any process for their manufacture,
(collectively, the "Developments"). PRI will own all right, title, and interest
throughout the world, including all Intellectual Property rights, in any and all
Developments. Shinsung hereby assigns and, to the extent any such assignment
cannot be made at the present time, agrees to assign, to PRI all right, title,
and interest, including all Intellectual Property rights, which it or any of its
employees, subcontractors, or any Approved Vendor may have, including the right
to file and to own wholly and without restriction any applications anywhere in
the world for patents and any patents issuing therefrom, in any Developments.
Shinsung agrees to execute, and to cause its employees, subcontractors, and
Approved Vendor to execute, such documents, including patent applications, and
to take such other actions as PRI may request to secure, confirm, or protect the
rights in Developments. Shinsung will enter into appropriate agreements with its
employees, consultants, and other persons furnishing materials or services in
connection with this Order to effectuate the purposes of this Section 17.
Shinsung will maintain full and accurate records relating to Developments for
the purpose of documenting them, and such records will be made available to PRI
upon request. Shinsung will deposit copies of such records with the Escrow Agent
in accordance with Section 17.5. Shinsung will cooperate with PRI, at PRI's
request, in maintaining and enforcing any intellectual Property rights relating
to Developments.
17.2. Shinsung stipulates and agrees that PRI owns any and all right,
title and interest throughout the world in Developments and PRI's Independently
Developed Technology, and that under this Order Shinsung will acquire no right,
title or interest in or to any of the
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foregoing, except for the license expressly granted in Section 17.4.
17.3. Shinsung hereby grants to PRI a non-exclusive, worldwide, fully
paid-up, royalty-free license, with right to sublicense, to use Shinsung's
Independently Developed Technology, including any Intellectual Property rights
therein, solely for the purpose of, and solely to the extent necessary for,
carrying out this Order, including, without limitation the manufacture, sale,
re-sale and utilization of the Products by PRI and PRI's customers. Nothing
herein will be construed as granting PRI, by implication, estoppel or otherwise,
any license or other right in Shinsung's Independently Developed Technology,
except for the licenses and rights expressly granted under this Order. In the
event of termination of the Master Agreement and/or this Order pursuant to
Sections 9.1 and 9.3 of the Master Agreement and pursuant to Section 22 herein,
Shinsung will, and does hereby, grant to PRI an irrevocable, non-exclusive,
transferable, worldwide, perpetual, fully paid-up license, with right to
sublicense, to make, have made, use, have used, sell, have sold, offer for sale,
have offered for sale, and otherwise exploit in any fashion any Product, any
derivative or improvement relating to any Product, or any component thereof or
any process for its manufacture, incorporating or made using Technology owned or
licensed by Shinsung or any Approved Vendor, including Shinsung's Independently
Developed Technology (the "PRI License"). In the event PRI becomes entitled to
exercise such license in accordance with any of the aforementioned Sections,
Shinsung will promptly deliver to PRI copies of all documents describing any of
the Technology covered by such license.
17.4. PRI hereby grants to Shinsung a nonexclusive, non-transferable
worldwide, fully paid-up license to use PRI's Independently Developed Technology
and Developments, including any Intellectual Property Rights therein, solely for
the purpose of, and solely to the extent necessary for, carrying out this Order.
Shinsung will have no right under any license granted Shinsung hereunder: (i) to
assign, sublicense or transfer any such license; or (ii) to sell or otherwise
provide the Products, any derivative or improvement relating to the Products or
any component thereof or any process for their manufacture, to any third party
without PRI's consent, which will be at PRI's sole discretion. Notwithstanding
anything herein to the contrary, PRI reserves the right, in its sole discretion,
to terminate upon notice any license granted to Shinsung hereunder; provided,
however, that Shinsung will be excused from any obligation hereunder that
Shinsung may not lawfully perform without such license. Nothing herein will be
construed as granting Shinsung, by implication, estoppel or otherwise, any
license or other right in PRI's Independently Developed Technology or
Developments, except for the license expressly granted in this Section 17.4.
17.5. At the request of PRI. Shinsung will promptly deposit, at its sole
cost and expense, copies in electronic or tangible form (at the option of PRI)
of all available engineering drawings, software, firmware, manuals, technical
bulletins, notes, schematics, designs, test results and other information
relating to or in connection with the Products, any derivative or improvement
relating to the Products, or any component thereof or any process for their
manufacture (the "Deposited Material") with [ ________], as escrow agent (the
"Escrow Agent"). The Escrow Agent will release the Deposited Material to PRI
upon termination of this Order in accordance with Section 9.1 or Section 9.3 of
the Master Agreement and upon release of the Deposited Material to PRI, Shinsung
grants to PRI an irrevocable, non-exclusive, transferable, worldwide, perpetual,
fully paid-up license, with right to sublicense, to make, have made, use, have
used, sell, have sold, offer for sale, have offered for sale, and otherwise
exploit in any fashion the Products, any derivative or improvement relating to
the Products, or any component thereof or any process for their manufacture,
incorporating or made using the Deposited Material and the Intellectual Property
rights embodied therein. The parties will enter into an escrow agreement with
the Escrow Agent to provide for the deposit and release of the Deposited
Material in accordance with the foregoing.
18. INFRINGEMENT WARRANTY. Shinsung expressly represents and warrants that (i)
the Products, the manufacture of the Products, and the purchase and use thereof
does not and will not infringe any Intellectual Property right of any third
party anywhere in the world; (ii) there are no claims, suits or other
proceedings which Shinsung knows of in which a third party claims infringement
of any Intellectual Property right by the Products, the production of the
Products or the use thereof anywhere in the world; (iii) Shinsung will disclose
to PRI any of such claims, suits or other proceedings of which Shinsung becomes
aware. The representations and warranties of this Section 18 will not apply to
any claim of infringement of any third party Intellectual Property right based
upon infringement resulting from Shinsung's compliance with the Specifications,
provided that the Product conforms in every material respect with such
Specifications and such infringement would not have occurred but for such
Specifications.
19. INTELLECTUAL PROPERTY INDEMNIFICATION.
19.1. Except as provided in Section 19.2., Shinsung will defend, at its
expense, any claim against PRI alleging that the Products, any part or any item
furnished under this Order, or any component or process used in the production
of the foregoing by Shinsung, infringes any third party Intellectual Property
right, and will pay all costs and damages awarded, if Shinsung is notified
promptly in
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writing of such a claim. If an injunction against PRI's or any of its customer's
use of the Products results from such a claim (or, if such claim is actually
threatened and PRI reasonably believes such a claim is likely to result in the
commencement of legal proceedings or action against PRI and/or Shinsung)
Shinsung will, at its expense, and as PRI may request: (i) obtain for PRI and
its customers the right to continue making, selling, offering for sale and using
the Products; or (ii) replace or modify the Specifications for such Products to
become non-infringing but functionally equivalent.
19.2. The obligations of Shinsung set forth in Section 19.1 will not
apply to any claim that the Products infringe any third party Intellectual
Property right based upon infringement resulting from Shinsung's compliance with
Specifications, provided that the Products conform in every material respect
with such Specifications and such infringement by the Products would not have
occurred but for such Specifications. In such an event, PRI will defend, at its
expense, any such claim against Shinsung alleging that the Products infringe any
third party Intellectual Property right based upon infringement resulting from
Shinsung's compliance with Specifications, and will pay all costs and damages
awarded, if PRI is notified promptly in writing of such a claim and has sole
control over the conduct of all legal proceedings in connection with such a
claim. If an injunction against Shinsung's production of the Products results
from such a claim (or if such claim is actually threatened and PRI reasonably
believes such a claim is likely to result in the commencement of legal
proceedings or action against PRI and/or Shinsung), PRI will be entitled to
cancel this Order, or at its expense and option: (i) obtain for Shinsung the
right to continue producing the Products, or (ii) replace or modify
Specifications for the Products to become non-infringing but functionally
equivalent.
20. INSURANCE
20.1. Shinsung will maintain insurance policies, including public
liability insurance and product liability insurance, with companies authorized
to do business in the United States and having agents upon whom service of
process may be made in the United States, and will contain as a minimum the
following provisions, coverage and policy limits of liability:
20.1.1. Insurance coverage will protect PRI, its subcontractors, agents
and employees from claims for damages for personal injury, including accidental
or wrongful death, as well as property damage which may arise from Shinsung's
negligence or misconduct. The limits of liability provided by such policy or
policies will be no less than [TWO (2) MILLION DOLLARS] per occurrence combined
single limit and [TWO (2) MILLION DOLLARS] aggregate; and
20.1.2. Product liability or completed operations insurance with bodily
injury limits of liability of not less than [FIVE (5) MILLION DOLLARS] per
person and [FIVE (5) MILLION DOLLARS] per occurrence.
20.2. Shinsung will furnish to PRI within ten (10) days of the date of
this Order a certificate of insurance, or duplicate policies of insurance
described above, that specifically protects PRI by naming PRI as an additional
insured under the policy and provide an endorsement under terms which the
insurer specifically agrees to pay not only any claims incurred by or resulting
to PRI, but also to any and all suits or actions in which the liability of PRI
is vicarious and is predicated upon allegations of acts or omissions by
Shinsung, its subcontractors or agents. Such certificate must contain a
provision for notification to PRI thirty (30) days in advance of any material
change in coverage or cancellation.
21. TRAINING. Upon request by PRI, Shinsung will provide, at its cost, the
training to PRI service and other personnel in connection with the Products as
set forth on the face of this Order.
22. FORCE MAJEURE. Neither Shinsung nor PRI will be liable for its failure to
perform any of its obligations hereunder during any period in which such
performance is delayed by reason of fire, flood, war, earthquake, other
comparable natural disaster, embargo, strike, riot, intervention of any
government authority, or other act outside the reasonable control of the party,
provided that the party suffering such delay immediately notifies the other
party. If, however, Shinsung's performance hereunder is delayed for any such
reason, for a cumulative period of more than [(THIRTY (30)/ SIXTY (60)/ NINETY
(90)] Business Days from the date of Shinsung's notification to PRI, then PRI,
notwithstanding anything herein to the contrary, may terminate without penalty
this Order, without further notice, and PRI will be entitled to exercise the PRI
License. In the event of such termination, PRI's sole liability hereunder will
be for the payment to Shinsung of any unpaid balance due Shinsung for
nondefective Products conforming to the Warranty received by PRI before notice
of such termination for which Shinsung has provided PRI an Invoice, less any
set-off as permitted herein.
23. COMPLIANCE. Shinsung expressly warrants that in performance of work under
this Order it has complied with and will comply with all applicable
international, Federal, state, local laws, rules, regulations, statutes,
ordinances and orders now or hereafter enacted or made including, laws
restraining the use of convict labor. Without limiting the foregoing, Shinsung
warrants that in performance of work under this Order it has complied with and
will comply with all laws, rules, regulations, statutes, ordinances and orders
of all governmental entities including local, state, federal or international,
now or hereafter enacted, which regulate any material because it is radioactive,
toxic, hazardous or
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otherwise a danger to health, reproduction or the environment. In addition,
Shinsung will secure and maintain adequate workmen's compensation insurance in
accordance with the laws of the state or states from which Shinsung will furnish
the Products and/or services for PRI. In addition to the foregoing, Shinsung
will not directly or indirectly export or re-export the Products, any
Confidential Information, or any goods or services of any of the foregoing,
outside the United States, without complying with all applicable U.S. and
foreign export control and other laws and regulations (including providing PRI
any required assurance regarding export and re-export). In addition, Shinsung
agrees to comply with all foreign and international laws, rules, statutes,
treaties, orders and understandings similar to any of the aforesaid. Upon
request, Shinsung agrees to issue certificates certifying compliance with any of
the aforementioned laws or regulations as may be applicable to the Products
and/or services being furnished hereunder. Shinsung's failure to comply in any
material respect with this Section 23 will constitute cause sufficient for
termination of the Master Agreement and/or this Order pursuant to Section 9.1 of
the Master Agreement.
24. SURVIVAL. The following Sections of this Order will survive termination or
cancellation of this Order for any reason, notwithstanding delivery of,
acceptance of, and/or payment for the Products ordered hereunder: 2, 6, 7, 8,
10, 11, 12, 16, 17, 18, 19, 20, 22, 23, 24 and 25.
25. DEFINITIONS OF TERMS. Except as expressly defined herein, all capitalized
terms will have the meaning given to those terms in the Master Agreement.
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