EXCLUSIVE
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this February 23, 1998, effective January 1, 1998.
BY AND BETWEEN
XXXXXXX MEASUREMENT SYSTEMS, INC., a company organized and existing under the
laws of the State of Oregon, U.S.A., having its registered office at 0000 XX
Xxxxxxx Xx., Xxxxxxxx, Xxxxxx 00000, represented hereto by Xx. Xxxxx X. Case,
acting in his capacity as President and Chairman of the board (hereinafter
referred to as "SMS").
AND
XXXXX TECHNOLOGY INC. (DBA VEECO PROCESS METROLOGY), a company organized and
existing under the laws of the State of California, U.S.A., having its
registered office at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxxxx 00000,
represented hereto by Xx. Xxxxxxx Xxxxxx, Vice-President and General Manager
(hereinafter referred to as "Veeco").
WHEREAS
Veeco has committed to promote and sell the SMS products listed in Appendix (1)
hereto to Customers in the Territory, under the terms and conditions herein set
forth.
NOW THEREFORE IT HAS BEEN AGREED AS FOLLOWS:
ARTICLE 1 - DEFINITIONS
Whenever used in this Agreement, the following terms and expressions, whether
used in the singular or in the plural, shall have the meaning set forth in the
Article 1, except where the context clearly otherwise requires:
- "Contractual Period" shall mean a period of twenty-four consecutive
months starting from the date of entry into force of the Agreement or
from any anniversary date of entry into force of this Agreement.
- "Customers" shall mean those persons and entities comprising the micro-
electronics markets, including, without limitations semi-conductor,
device, materials and equipment manufacturers, data storage products,
materials and equipment manufacturers, flat panel display products,
materials and equipment manufacturers, and university and research
laboratories engaged in the development, production and/or
characterization of micro-electronic materials and devices.
- "Products" shall mean the products listed in Appendix 1, attached hereto,
which products are manufactured and/or sold by SMS.
- "TERRITORY" SHALL MEAN THE TOTAL WORLD MICROELECTRONICS MARKETS FOR THE
PRODUCTS.
- "Trademarks" shall mean the trademark "SMS" and its associated logo as
well as the trademarks registered by Veeco (or of its affiliated
companies) in the Territory.
- "Patents" shall mean issued and pending SMS Patents applicable to the
products.
ARTICLE 2 - PURPOSE OF THIS AGREEMENT
2.1 SMS HEREBY APPOINTS VEECO AS ITS EXCLUSIVE DISTRIBUTOR FOR THE PROMOTION
AND SALE OF THE PRODUCTS TO MICROELECTRONICS CUSTOMERS IN THE TERRITORY,
UNDER THE TERMS AND CONDITIONS OF THIS AGREEMENT.
2.2 During the term of this Agreement, Veeco shall purchase the Products
exclusively from SMS for the purpose of their exclusive resale by Veeco
to Customers in the Territory. Veeco shall resell the Products purchased
from SMS under the names of one or more of the Trademarks and Patents of
SMS.
ARTICLE 3 - LEGAL STATUS
Veeco is an independent legal entity acting for its own account and at its own
risk in its capacity as distributor. Its relationship with SMS is that of a
purchaser and a seller. Nothing in this Agreement shall be construed as
conferring upon Veeco any authority, express or implied, to bind or commit SMS
to any third party in any way.
ARTICLE 4 - EXCLUSIVITY - NON COMPETITION
4.1 During the term of this Agreement, SMS undertakes not to appoint,
directly or indirectly, any other distributor, agent or representative
for the promotion or sale of the Products to Customers in the Territory.
SMS also undertakes not to sell, directly or indirectly, the Products to
the Customers in the Territory. Notwithstanding the foregoing, SMS may
upon the written consent of Veeco, sell Products to Customers in the
Territory provided that such Customers request that SMS sell Products to
them in lieu of Veeco selling Products to them, in the event of such a
sale, SMS shall pay to Veeco, as a commission, a sum to be agreed to by
SMS and Veeco prior to the effectuation of any such sale but which shall
not be less than ten percent (10%) of the gross sales price of the
Products sold, such commission to be paid to Veeco upon SMS' receipt of
the sale proceeds.
ARTICLE 5 - OBLIGATIONS OF VEECO
5.1 Veeco agrees to use reasonable efforts (i) to promote and sell the
Products to customers in the Territory, (ii) to provide the customers in
the Territory to whom Veeco sells the Products with reasonably diligent
and efficient services, in particular after-sale services, and (iii) to
purchase the agreed quantities of products as detailed in Appendix 3.
5.2 In order to carry out these responsibilities, Veeco, at its sole expense,
agrees:
(I) to take all measures reasonably necessary to ensure the promotion,
sale and service of the Products to Customers in the Territory;
(II) to treat its Customers and conduct its business activities with a
view to maintaining and increasing the public goodwill and
reputation attached to the Products and to the Trademarks;
(III) to distribute to prospective purchasers of the Products such
commercial or technical catalogues, booklets, leaflets and other
printed documentation as SMS may, at its own expense, supply to
Veeco for such purpose;
(IV) to prepare, with the assistance of SMS, and distribute to
potential Customers any other booklets or documentation which are
reasonably necessary for the sale of the Products to Customers in
the Territory;
(V) to participate, at its own expense, in fairs, exhibitions or other
trade shows which are likely to promote the sale of the Products
to Customers in the Territory;
(VI) to apply its general conditions of sale and warranty in compliance
with the requirements of the laws, regulations and practices
applicable to the sale of the Products to Customers in the
Territory;
(VII) to ensure adequate after-sales service for the Products in the
Territory by itself (or through any third party);
(VIII) to obtain all permits and authorizations required for the import
of the Products in the Territory; and
(IX) to purchase and maintain all necessary insurance policies
reasonably required in connection with the promotion and sale of
the Products to Customers in the Territory;
(X) to provide SMS with a running 90 day advanced schedule of product
models and quantities to be purchased by Veeco.
ARTICLE 6 - OBLIGATIONS OF SMS
6.1 SMS shall provide to Veeco, upon the request of Veeco, reasonable
assistance in promoting the sale of the Products to Customers in the
Territory. To this effect, SMS shall provide, at its offices, training
to Veeco's personnel with respect to the specifications, promotion, sale
and usage of the Products; the specifics of this training program shall
be jointly defined and agreed to in advance between the parties.
Traveling and living expenses incurred by Veeco for the training of its
staff shall be borne by Veeco.
6.2 SMS shall furnish to Veeco, at no charge to Veeco, specifications,
promotional material and other documentation relevant to the Products
which are currently in its possession. SMS shall also furnish to Veeco
at the prices set forth herein, demonstration units of the Products which
are currently in its possession.
6.3 SMS shall ensure an adequate Product flow so that it is able to promptly
deliver to Veeco Products ordered by Veeco hereunder.
6.4 SMS shall promptly deliver to Veeco all Products ordered by Veeco
hereunder, in the condition warranted by SMS hereunder.
6.5 SMS shall produce all production products to ISO 9001 standards and have
all such products CE certified.
6.6 SMS shall use its best efforts to respond to specific market
requirements, as indicated by Veeco, to ensure adequate product
availability to suit market needs with short lead times.
ARTICLE 7 - WARRANTY
7.1 SMS warrants to Veeco that each Product sold and delivered to Veeco shall
be fit for the purpose intended, free from defects in material and
workmanship, and be of the quality described in the Product
specifications.
7.2 In the event Veeco receives notice from a purchaser of a Product, within
twenty-four (24) months of the delivery of a Product to such purchaser,
that the purchased Product fails to satisfy the warranty set forth in
Section 7.1, Veeco shall make such product available for inspection by
SMS and, within ten (10) days of such inspection, SMS shall at its own
expense, either (I) correct the defect by repairing the Product or, at
its option, (ii) replace the defective Product, and deliver the repaired
or replaced Product to Veeco.
ARTICLE 8 - PRICES - METHODS OF PAYMENT
8.1 The discounted prices applicable to the sales of Products by SMS to Veeco
shall be those appearing in Appendix 2, attached hereto.
8.2 The prices set forth in Appendix 2, both list and discounted, shall
remain constant during the first Contractual Year. Such prices may be
increased for subsequent Contractual Years upon the written agreement of
SMS and Veeco.
8.3 All monies due to SMS from Veeco for purchased Products shall be paid
within forty-five (45) days of the date of invoicing, and shall be paid
in United States dollars.
8.4 Veeco shall sell the Products to Customers at the list prices listed on
Appendix 2, unless otherwise agreed upon in writing by SMS and Veeco.
ARTICLE 9 - CHANGES IN THE PRODUCTS
9.1 SMS shall have the right to modify any of the Products provided, however,
(i) the modification does not change the performance to the
specifications of the Products, and (ii) SMS furnishes Veeco with three
(3) months prior written notice of any such modification, or immediately
with Veeco's agreement.
ARTICLE 10 - TRADEMARK/PATENTS - ASSISTANCE AGAINST UNFAIR COMPETITION AND
INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS
10.1 SMS hereby authorizes Veeco to use the Patents and Trademarks owned by it
but only in connection with the promotion and sale of the Products
pursuant to this Agreement and under the terms and conditions described
in Article 10.2 hereafter.
10.2 Veeco agrees in particular:
- to use the Patents and Trademarks owned by SMS only in connection
with the promotion and sale of the Products and the performance of
this Agreement;
- to inform forthwith SMS of any Patent or Trademark infringement of
which Veeco becomes aware of in the Territory;
- to cease and desist from using the Patents or Trademarks owned by
SMS at the expiry or termination of this Agreement for any reason
whatsoever.
10.3 Veeco shall inform SMS of any act of unfair competition, and of any
infringement of the intellectual property rights of SMS, of which Veeco
may be aware.
10.4 SMS represents and warrants that it is the sole owner of the Products and
the intellectual property rights associated therewith, and that the
Products do not infringe on intellectual property rights of third
parties. SMS agrees to defend,
indemnify and hold Veeco (and its affiliated companies) harmless with
respect to any claims by others that the promotion and sale of any of the
Products constitutes an act of unfair competition or infringes on the
intellectual property rights of another.
10.5 SMS and Veeco shall together aggressively defend the Patents and
Trademarks against those who are unfairly competing with the Products, or
otherwise infringing on the intellectual property rights associated with
the Products.
ARTICLE 11 - TERM
This agreement shall enter into force on its date of signature by both parties
and shall remain in force for an initial period of two (2) Contractual Years.
This Agreement shall be automatically renewed for an additional two years unless
either party notifies the other party, by certified letter with return receipt
requested, of its intention not to renew this Agreement six (6) months prior to
the expiry of the current Contractual Year or any following Contractual Year.
ARTICLE 12 - EARLY TERMINATION
12.1 Either party shall have the right to terminate this Agreement by sending
a ninety (90) day notice, by certified mail with return receipt
requested, in the event that the other party fails to perform any of its
material obligations under this Agreement, and has not ceased such
failure within thirty (30) days after receipt of notice in writing to
that effect from the first party, sent by certified letter with return
receipt requested, without prejudice to any damages which might be
claimed by the non-defaulting party.
12.2 Either party shall have the right to terminate forthwith this Agreement
by sending a notice, by certified mail with return receipt requested, to
the other party should this other party be subject to bankruptcy
proceedings or to a reorganization plan with creditors (whether amicable
or decided by the court), or in the event of appointment of a bankruptcy
trustee, arrangement for the benefit of creditors, or should this other
party be subject to winding-up or any other procedure evidencing the
insolvency of this other party.
ARTICLE 13 - CONSEQUENCES OF EXPIRY OR EARLY TERMINATION
Upon expiry or termination of this Agreement as provided for in Articles 11 and
12 hereabove, SMS shall have the option:
(i) either to authorize Veeco to sell, on a non-exclusive basis, the
remaining stock of Products in its possession for a limited period of
time, to be defined by SMS and Veeco according to the magnitude of the
remaining stock of Products at the time of expiry or termination, or
(ii) to repurchase all Products still existing in Veeco's stock and which were
purchased by Veeco from SMS, at a price equivalent to the net price (all
taxes excluded), paid to SMS by Veeco for such Products, less a 10%
restocking charge.
ARTICLE 14 - TERMINATION OF EXCLUSIVITY
The exclusive nature of Veeco's right to promote and sell a Product to
Customers in the Territory may be terminated by SMS in the event Veeco fails to
purchase from SMS a minimum number of units of such Product, as set forth on
Appendix 3, attached hereto. Any such termination may be effected by furnishing
to Veeco ninety (90) days written notice thereof, to be sent by certified mail,
return receipt requested. The termination of the exclusive nature of Veeco's
right to promote and sell any one Product shall not affect the exclusive nature
of Veeco's right to promote and sell other Products, which exclusive right shall
continue unabated.
ARTICLE 15 - FORCE MAJEURE
Neither party hereto shall be in default hereunder by reason of its delay in the
performance or failure to perform any of its obligations hereunder due to any
event, circumstance or cause beyond its control such as, but not limited to,
Acts of God, strikes, lock-out, acts or restrictions of governmental
authorities, wars, threats of war, hostilities, shortage in the raw materials or
means of transportation, revolution, riots, epidemics, fire, floods, all of
which shall be considered as events of force majeure.
The party affected by any such event shall notify the other party within fifteen
(15) days of its occurrence. The performance of this Agreement shall then be
suspended for as long as any such event shall prevent the affected party from
performing its obligations hereunder. If such suspension lasts more than three
(3) months, either party may terminate forthwith this Agreement by sending a
thirty (30) day written notice to this effect to the other party by certified
letter with return receipt requested.
ARTICLE 16 - CONFIDENTIALITY
Each party agrees at any times, even after the expiry or termination of this
Agreement, for any reason whatsoever, to keep and maintain secret and in strict
confidence all proprietary information received from the other party under this
Agreement and not to permit such proprietary information to be disclosed to
third parties as long as this information is not in the public domain, except
for the purpose of the promotion, sale and/or servicing of the Products as
provided for in this Agreement. See the secrecy agreement singed by both
Parties.
ARTICLE 17 - APPENDICES
The appendices to this Agreement form an integral part thereof. There are three
(3) appendices.
ARTICLE 18 - NOTICES
Any notice required or permitted hereunder, made by any party to the other
party, shall be in writing and sent by certified mail with return receipt
requested at the addresses shown herein or at the last address notified by
either party to the other.
ARTICLE 19 - ENTIRE AGREEMENT - MODIFICATIONS
This Agreement contains the entire agreement of the parties hereto relating to
the subject matter hereof and supersedes all previous agreements between the
parties pertaining to subject matters covered by this Agreement.
ARTICLE 20 - APPLICABLE LAW
This Agreement shall be governed by and interpreted in accordance with Oregon
Law.
ARTICLE 21 - JURISDICTION
All disputes between the parties which may arise under this Agreement shall be
submitted to the exclusive jurisdiction of the Courts of Oregon, even where
there are multiple defendants or appeals.
Dated Portland, Oregon, February 23, 1998.
/s/ Xxxxx X. Case /s/ Xxxxxxx Xxxxxx
---------------------------------------- -----------------------------------
Xxxxx X. Case, President Xx. Xxxxxxx Xxxxxx, Vice President
Xxxxxxx Measurement Systems, Inc. Xxxxx Technology Inc. dba Veeco
Process Metrology
Exclusive
Distribution Agreement
by and between
Xxxxxxx Measurement Systems, Inc. and
Xxxxx Technology Inc. dba Veeco Process Metrology.
APPENDIX 1
PRODUCTS
SMS Light Scatter Surface Measurement Systems for application to the
microelectronics markets.
XXX-0000
XXX-0000X
TMS-3000W
DTM-2000
It is understood and agreed between the parties that new products to service the
microelectronics markets may be required and developed by SMS at Veeco's
request. These products will be added to this agreement by mutual consent.
Exclusive
Distribution Agreement
by and between
Xxxxxxx Measurement Systems, Inc. and
Xxxxx Technology, Inc. dba Veeco Process Metrology
APPENDIX 2
[The text of Appendix 2 has been deleted and filed separately
with the Securities and Exchange Commission pursuant to a
request for confidential treatment.]
Exclusive
Distribution Agreement
by and between
Xxxxxxx Measurement Systems, Inc. and
Xxxxx Technology, Inc. dba Veeco Process Metrology
APPENDIX 3
[The text of Appendix 3 has been deleted and filed separately
with the Securities and Exchange Commission pursuant to a
request for confidential treatment.]
