Exhibit 10.3
AUGUST TECHNOLOGY CORPORATION
INTERNATIONAL DISTRIBUTOR
AGREEMENT
This, Agreement is made as of the 10th day of September, 1999, between AUGUST
TECHNOLOGY CORPORATION, a Minnesota (USA) corporation with a principal place of
business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, (hereafter
referred to as "August Technology") and Metron Technology B.V., an entity
organized and existing under the laws of The Netherlands, having its principal
place of business at Almere, The Netherlands, (hereafter referred to as
"Distributor").
AGREEMENT
In consideration of the mutual covenants and agreements hereinafter set forth,
the parties agree as follows:
1. DEFINITIONS:
The terms listed below will have the following meaning, unless the
context clearly indicates otherwise:
1.1 "AGREEMENT" means this International Distributor Agreement and
all Exhibits.
1.2 "PRODUCTS" means image inspection technology, vision system
controlled manufacturing tools, licensed software programs and related
spare parts manufactured and supplied by August Technology and
specified in Exhibit A.
1.3 "COMPETITIVE PRODUCTS" will mean image inspection technology,
vision system controlled manufacturing tools, licensed software
programs, and related spare parts, providing substantially the same
functionality as the Products.
1.4 "PRICE LIST" will mean the published prices that August
Technology shall issue from time to time.
1.5 "Territory" will mean the countries specified in Exhibit D.
2. APPOINTMENT AND TERRITORY:
August Technology hereby appoints Distributor as its exclusive
authorized Distributor for the purpose of selling and servicing the
Products to customers in the Territory only (except to those customers
listed in .Exhibit C, which are considered exclusive August
Technology-accounts). Distributor agrees that it will resell Products
to end-user of the
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Products only and not to resellers through its staff of employees and
not through or by means of third-party dealers, sub-agents or
representatives. Distributor agrees not to establish a branch office or
other entity or association for the purpose of selling or distributing
Products outside the Territory.
3. PRICE, PAYMENT, TAXES, DUTY & DISCOUNT:
3.1 Prices for the Products purchased under this Agreement,
including discounts, are subject to change upon thirty (30) days'
notice, are quoted in U.S. Dollars and are exclusive of taxes, duties,
freight insurance, or other similar handling costs. All applicable
duties, sales, use or excise taxes or other charges assessed or levied
will be added to the purchase price and itemized and/or invoiced
separately. Price changes will not apply to unfilled purchase orders
that have been accepted by August Technology prior to the effective
date of the price change. All prices are F.C.A./F.O.B. point of origin
or manufacture.
3.2 The Distributor shall pay for all Products by wire transfer to
the account of August Technology as specified on Exhibit B or at such
other bank as may be directed from time to time by August Technology.
Payment terms for each order are also specified on Exhibit B. If any
amount remains unpaid after the due date, the outstanding amount will
incur interest at the rate of one and one-half percent (1.5%) per month
or at the highest rate allowed by law, which ever is higher. In
addition, if any amount is not paid when due, August Technology may
suspend further shipments to the Distributor until all outstanding
amounts are paid in full and thereafter may require the Distributor to
open an irrevocable letter of credit for each order in favor of August
Technology at a bank acceptable to August Technology payable thirty
(30) days after sight.
3.3 Both Distributor and August Technology agree that a customer
order has three primary components: (1) project/equipment
specification, (2) purchasing/negotiations, and (3) training,
installation, and follow-on service support. The-Distributor's
purchasing discount from the August Technology published list price
will be effected by these primary components (see Table-1).
TABLE-1: Equipment Discount Schedule
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LOCATION LOCATION
WHERE LOCATION WHERE %OF STANDARD
ORDER PROJECT WHERE EQUIP. EQUIP.
POSSIBILITY SPECIFIED P.O. ISSUED INSTALLED DISCOUNT
---------------------------------------------------------------------------------------
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 100%
---------------------------------------------------------------------------------------
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Not in 66 1/3%
Territory
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3 Not in Territory Territory 66 1/3%
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4 Territory Not in
Territory Territory 66 1/3%
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5 Territory Not in Not in 33 ▇/▇%
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------------------------------------------------------
6 Not in Territory Not in ▇▇ ▇/▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------------------------------------------------------
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LOCATION LOCATION
WHERE LOCATION WHERE %OF STANDARD
ORDER PROJECT WHERE EQUIP. EQUIP.
POSSIBILITY SPECIFIED P.O. ISSUED INSTALLED DISCOUNT
---------------------------------------------------------------------------------------
7 Not in Not in Territory 33 ▇/▇%
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------------------------------------------------------
8 Not in Not in Not in 0%
Territory Territory Territory
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4. TITLE, SECURITY AGREEMENT, RISK OF LOSS:
4.1 Title and ownership of the Products shall remain in August
Technology until payment is made in full including any additional
charges provided for herein.
4.2 August Technology reserves a purchase money security interest
in the Products sold hereunder as security for performance of the
Distributor's obligations set forth herein. A copy of this
International Distributor Agreement in addition to a specific purchase
order or orders may be filed as evidence thereof. In addition, and as
may be allowed by local law, the Distributor will record any
reservation of title or liens in favor of August Technology in such a
format and at all places directed by August Technology including,
without Stations on all purchase orders or invoices issued to customers
of the Distributor prior to delivery of Products to the customer if
payment or any portion thereof remains outstanding at the time of
delivery to customer.
4.3 Risk of loss shall pass to the Distributor or the
Distributor's customer upon transfer of the Products to the
Distributor's or customer's common or specified carrier. The
Distributor expressly agrees to keep in force fire, theft, and accident
insurance for the benefit of both parties as their interests appear on
the date of shipment. Freight, insurance, export arrangements and other
similar costs and duties shall be solely the responsibility of the
Distributor or the Distributor's customer; August Technology takes no
responsibility therefor.
5. PURCHASE ORDERS, SHIPMENTS, CANCELLATIONS & CHANGES, DELIVERY:
5.1 The Distributor agrees to deliver to August Technology a hard
copy purchase order, in substantially the form attached hereto as
Exhibit E, before August Technology will accept an order. August
Technology reserves the right to amend the contents of Exhibit E from
time to time, as the need for different or additional information
required to process a purchase order is deemed to be necessary.
Distributor purchase orders are subject to acceptance at August
Technology.
August Technology reserves the right to reject any order which does not
comply with the provisions of this Agreement and conform to Exhibit E.
AR orders accepted for delivery will be governed exclusively by the
terms and conditions of this Agreement and its incorporated Exhibits.
Unless August Technology expressly agrees in writing, no additional or
different terms and conditions appearing on the face or reverse side of
any order issued by Distributor will become part of such order.
Acknowledgment of a
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Distributor purchase order by August Technology will not constitute
acceptance of any additional or different terms and conditions.
5.2 No purchase order will be binding on August Technology until
accepted by August Technology in writing. August Technology agrees to
use its best efforts to accept or reject a purchase order, and notify
Distributor within three (3) working days from receipt of order.
5.3 Distributor may cancel a shipment or request a change in a
scheduled shipment date at no charge up to ninety (90) days prior to
shipment. In the event Distributor cancels or requests a schedule
change within ninety (90) days prior to shipment a portion of the
purchase order amount (price) will be charged as provided below. No
cancellation or changes in a scheduled shipment may be made within
fifteen (15) days of shipment.
5.3.1 RESCHEDULING. (LATER DELIVERY).
Distributor may reschedule shipment of Products for up to
sixty (60) days upon written notice, on a one-time basis per
purchase order, without cost or liability. Distributor agrees
to immediately provide August Technology with a written notice
of any rescheduling.
5.3.2 CANCELLATION.
Distributor may cancel any purchase order in advance of
shipment upon written notice to August Technology, subject to
the following:
(i) No cancellation is possible within fifteen
(15) days of the shipment date on the
purchase order.
(ii) If cancellation occurs during the LAST 1/3
of the quoted delivery schedule, the charge
will be 25% of the total purchase order
amount - except as provided in "(i)," which
states that no cancellation is possible
within fifteen (15) days of the shipment
date.
(iii) If cancellation occurs during the MIDDLE 1/3
of the quoted delivery schedule, the charge
will be 17.5% of the total purchase order
amount.
(iv) If cancellation occurs during the FIRST 1/3
of the quoted delivery schedule, the charge
will be 10% of the total purchase order
amount.
[GRAPHIC OMITTED]
5.4 August Technology reserves the right to delete a Product from
Exhibit A if August Technology ceases manufacturing the Product or in
the event the Product or technology is sold or otherwise transferred to
a third-party.
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5.5 August Technology may refuse to ship, or delay the shipment of
any Products on order, if Distributor becomes delinquent in performance
of its obligations or fails to meet other credit or special
requirements established by August Technology. No such cancellation,
refusal or delay will be deemed a termination of this Agreement by
August Technology, unless August Technology advises Distributor.
5.6 All Products will be considered delivered to distributor
F.C.A./F.O.B. point of origin or MANUFACTURE upon transfer to
Distributor's or customer's common or specified carrier.
6. INDEPENDENT CONTRACTOR:
6.1 The Distributor agrees that it has been granted the right to
distribute and market the Products for resale to Distributor's
customers and to conduct its business as an independent agent with
respect to August Technology. The Distributor agrees that it will at
all times, represent to third persons and to the public generally and
to all governmental bodies and authorities that the business conducted
by Distributor with respect to August Technology is that of an
independent agent and that is the sole relationship and exclusive
relationship between the Distributor and August Technology. It is
expressly understood that the Distributor is not in any way constituted
the legal representative of August Technology for any purpose
whatsoever with respect to the Products. It is further expressly
understood that the sole compensation to be received by the Distributor
shall be derived from sales of the Products. The Distributor has no
claim or right against August Technology for compensation for efforts
to market August Technology's Products except as herein provided.
It is further understood that the Distributor may have its employees
and agents in the Territory engage in the solicitation of orders for
selling and/or servicing of August Technology's Products, and in that
event those persons shall be employees or agents of the Distributor and
not of August Technology. All financial obligations associated with
Distributor's business are the sole responsibility of Distributor. The
Distributor shall hold August Technology harmless from all losses,
damages, costs, and expenses of any nature, including attorneys' fees,
arising from or in any way connected with an act failure to act, or
negligence of the Distributor or its employees or agents, or others
acting with authority from the Distributor in the sale, transportation,
possession, or use of the Products. Distributor and August Technology
agree that this Agreement does not establish a franchise, joint
venture, or partnership.
6.2 Any commitment made by Distributor to its customers with
respect to quality, delivery, modifications, interfacing, capability,
suitability of software, or suitability in specific applications, will
be Distributor's sole responsibility, unless prior written approval is
obtained from August Technology. Distributor has no authority to modify
the Product Warranties.
6.3 Distributor has the right to determine its own resale prices,
and no August Technology representative will require that any
particular price be charged by Distributor.
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6.4 Distributor agrees that August Technology may market and sell
Products, other than those listed in Exhibit A, without making them
available to Distributor.
6.5 August Technology assigns each distributor based on their
respective expertise and comprehensive knowledge of the Territory,
including regional customs, culture, and specific customer business
practices. Distributor agrees that the standard distributor equipment
discount is provided by August Technology in order that August
Technology can fully rely on the Distributor for all sales, marketing,
training, service, and financial responsibilities (in order to satisfy
the agreed upon payment terms m this Agreement).
7. PRODUCT ACCEPTANCE:
Distributor agrees to inspect all Products immediately upon receipt at
their facility, and may reject any Products that fail to meet the
August Technology published specifications. Any Products not rejected'
within fifteen (15) days after receipt by Distributor will be
considered accepted. Distributor agrees to provide a detailed written
notification to August Technology of any and all reasons for rejection
within the fifteen (I 5) day inspection period. Upon receipt of
rejection notification, August Technology will promptly determine an
appropriate course of action to be taken regarding the rejected
Products. All returns of rejected Products to August Technology will
require prior written approval by August Technology.
8. OBLIGATIONS OF AUGUST TECHNOLOGY:
During the term of this Agreement August Technology agrees to perform
the following:
8.1 August Technology will furnish to Distributor circulars,
catalogs, advertising literature, samples, information on new product
releases, current technical data and all other sales materials
pertinent to the sale and distribution of the Products in the Territory
in the English language only and will otherwise assist the Distributor
in the sale of its Products as requested by the Distributor. In
addition, August Technology will identify Distributor as its exclusive
distributor in the Territory for Products in appropriate advertising
and other promotions.
8.2 August Technology agrees to provide training for Distributor
personnel for Products. Training will be available (at a minimum) as
follows:
8.2.1 August Technology will provide factory training at a
minimum of one (1) time per year. August Technology
will pay for all training material and class room
time. All other expenses, including air travel and
hotel accommodations, will be paid for by
Distributor.
8.2.2 In addition to factory training, August Technology
may provide at Distributor's facility on a mutually
agreed upon bases (for example, during a trade show
in Distributor's Territory). This additional training
is in no way intended to be a substitute for factory
training.
PAGE 6
8.3 August Technology agrees to actively support the marketing,
sales, and service efforts of Products by Distributor, give priority
responses to Distributor's requests, and keep Distributor informed of
lead times and any related changes to Products.
9. OBLIGATIONS OF DISTRIBUTOR:
During the term of this Agreement Distributor agrees to perform the
following:
9.1 Distributor agrees to use its best efforts in good faith to
promote, demonstrate, and sell Products on a face-to-face basis and in
an end-user environment within the Territory. Distributor agrees to
ensure the highest quality of pre-sale and post-sale support to the
customers, and to promote the goodwill, name and interests of August
Technology and its Products. August Technology expects the Distributor
to provide the following basic marketing activities in the Territory -
[a] industry trade shows, [b] print advertising, [c] direct mail
campaigns, [d] marketing literature and data sheets in local language
(if necessary). In connection with the foregoing, the Distributor also
agrees to do the following:
9.1.1 Provide each customer at the time of order acceptance
a written copy of the August Technology statement of
warranty ("August Technology Statement of Warranty")
attached hereto as Exhibit F.
9.1.2 Solicit potential and existing customers on a regular
basis and deliver to August Technology, not later
than the end of each month, a written report of all
activities of the, Distributor with respect to key
customers during that month.
9.1.3 Keep August Technology continuously informed of the
progress of the Distributor's marketing efforts, and
the efforts of all of the Distributor's sales
representatives.
9.1.4 Deliver to August Technology, not later than June 30
each year, a forecast of potential sales of Products
in the Territory for the next twelve month period,
including the names of customers, type and quantity
of Products likely to be purchased. In addition, not
later than the end of each calendar quarter,
Distributor agrees to provide updates of the
foregoing to August Technology in a similar format to
roll the forecast forward, with actual sales against
the forecasted sales, and projecting sales out
continuously for each twelve month period.
9.2 Distributor agrees to purchase demonstration Products, within
thirty (30) days of this Agreement, to be used to actively promote,
demonstrate, and sell Products to the customers. A demonstration unit
may be purchased for each Product at a special discount of 32.5% off
published list pricing. This demonstration discount is available
one-time per year, beginning from the date of first demonstration
equipment purchase. Distributor has the right to re-sell the
demonstration equipment at any time, provided that it is immediately
replaced (physically) with another similar or functionally enhanced
unit (replacement of the demonstration equipment will be at the
standard Distributor Products
PAGE 7
discount price if the replacement occurs before the one-time per year
special discount period expires). At the end of this agreement,
Distributor has the right to return the demonstration unit to August
Technology for the value that was paid for it originally, provided that
effort has been made to first sell the demonstration unit in the
Region.
9.3 Distributor agrees to maintain adequate facilities and to
actively train and maintain an adequate number of employees to properly
promote, demonstrate, sell, and service the Products. Distributor will
ensure that its employees complete appropriate training courses (at a
minimum of one time per year at August Technology's facility). August
Technology will pay for all training material and class room time. All
other expenses, including air travel and hotel accommodations, will be
paid for by Distributor.
9.4 Distributor agrees to promptly handle customer complaints,
inquiries and orders, and will provide and support Territory based
services such as applications assistance, operation and maintenance
training, Factory Acceptance Testing (F.A.T. - held at August
Technology), final on-site acceptance testing, warranty labor services,
post-warranty spares and service support systems retrofits, up-grade
kit installation, and the like. Distributor agrees to stock adequate
spare parts for Products to meet the requirements of this Agreement as
defined in Exhibit A.
9.5 Distributor agrees to handle all warranty claims of customers
and comply with August Technology policy for in-warranty repairs and
post-warranty support of Products.
9.6 Distributor agrees to conduct its marketing, sales and service
activities in compliance with local laws, rules and regulations. Both
August Technology and the Distributor acknowledge each and every
authorized representative or distributor of August Technology Products
is an integral part of a worldwide network and that not -only August
Technology but all other representatives and distributors of August
Technology are relying upon the Distributor to perform in accordance
with this Agreement. For this reason, the Distributor will maintain the
highest standards of performance in sales, service, physical
facilities, financial responsibility and general conduct toward the
public.
9.7 Distributor agrees to bear all of its operating expenses
during the term of this Agreement. Distributor will maintain sufficient
net worth and working capital and devote sufficient financial resources
to allow Distributor to perform its obligation as outlined in this
Agreement.
9.8 If, during the term of this Agreement, Distributor receives
any inquiry or order regarding Products from any person or business
entity outside the Territory, Distributor agrees to immediately refer
the inquiry or order to August Technology, and agrees not to receive
compensation for this referral.
9.9 Distributor agrees to, at its expense, arrange for the
violation of any documentation for the use and operation of the
Products in the Territory (as required or determined to be necessary by
Distributor). Distributor shall use its best efforts to make any
translation accurate.
PAGE 8
9.10 Distributor agrees to establish a cleanroom at it's facility
in Taiwan for the purposes of displaying, operating and using the
demonstration unit and to provide August Technology's Field
Applications Engineer an office space and phone at this same facility.
10. INTELLECTUAL PROPERTY:
10.1 Products shall bear only the trademarks, trade names, other
marks, or intellectual property rights of August Technology
(hereinafter referred to as the "Trademarks") as designated by August
Technology from time to time. To the extent applicable, August
Technology may grant to the Distributor during the term of Trademarks,
however, will be strictly to the marketing and sale solely of the
Products as specifically set forth in this Agreement and does not
include the right to use the Trademarks generally in the name of the
Distributor's business or for any other products or services offered by
the Distributor. In addition, the Distributor will execute, separate
agreements acknowledging this license, including a registered user
agreement, if appropriate, for filing with appropriate trademark
offices. The Distributor shall at all times comply with the reasonable
instructions or requests of August Technology with respect to the
application, fixation, manner, and styling of the Trademarks, its
packaging, and all other documents, marketing, or promotional material.
10.2 The Distributor acknowledges that August Technology has the
sole right, title, and interest in the Trademarks, and all other rights
associated with the Products, including, but not limited to, any
patents, know-how, approvals, certifications of Products (in the
countries of the Territory), and all other records or information of
August Technology with respect to the sale, distribution, and servicing
of the Products, and all catalogs and other printed information of
August Technology, whether or not prepared by the Distributor (the
"Property").
10.3 Upon request by August Technology the Distributor agrees, on
behalf of August Technology to assist August Technology in securing any
approvals, certifications, registrations, letters patent or any other
registrations to protect the Property in the Territory.
10.4 The Distributor agrees to promptly inform August Technology
upon the assertion of a claim, institution of a proceeding by a third
party, or any circumstances giving rise to any claim by August
Technology against a third party with respect to the Products, August
Technology, the Trademarks, or the Property. August Technology shall
have complete control of any litigation or proceeding related to
alleged or actual pirating, infringement or imitation of Products, the
Property, or the Trademarks. The Distributor will advise all employees,
officers, directors, and agents of the Distributor that the Property is
the property of August Technology.
10.5 The Distributor represents and warrants that the Distributor
has not sought or obtained, and agrees not to seek or obtain, in the
Territory, or elsewhere, unless for the benefit and at the request of
August Technology any certification, registration, or approval
embodying the Property, including, but not limited to, patents,
copyrights, trademarks, trade names, product certifications; and agrees
further to discontinue all use
PAGE 9
of the Property or the Trademarks immediately upon termination of this
Agreement for any reason. Furthermore, in the event the Distributor
obtains registrations or certifications of Products in the countries of
the Territory at the request of August Technology, the parties agree
those registrations and certifications are solely for the benefit of
August Technology, they may be canceled or referred by August
Technology at any time, and the Distributor shall execute all documents
appropriate to accomplish the cancellation or transfer thereof.
10.6 The Distributor agrees not to use the Property or the
Trademarks and any goodwill related thereto except solely as approved
by August Technology, and only in connection with advertising and
promoting the Products. Any such use, value, or goodwill shall inure
solely to the benefit of August Technology and shall not give rise to
any license to the use thereof by or to further compensate the
Distributor.
10.7 The Distributor shall communicate promptly to August
Technology all engineering, applications, ideas, developments,
improvements or changes, whether patentable or not, conceived or made
by the Distributor or the Distributor's representatives,
sub-distributors, or agents, alone or in conjunction with others during
the term of this Agreement relating to the Products (the "Distributor's
Suggestions").
10.8 The Distributor and August Technology shall make every effort
to agree upon reasonable terms to allow August Technology to acquire
the rights to the Distributor's Suggestions. The Distributor shall not
sell grant, or otherwise offer to third parties any title to the
Distributor's Suggestions. August Technology shall have the sole right
to acquire the title or license to the Distributor's Suggestions, and
the Distributor agrees to offer such rights to August Technology on
request.
10.9 The parties understand that, except as may be otherwise
expressly stated herein, neither the terms and conditions of this
Agreement nor the acts of either party arising out of this Agreement or
in connection with performance hereunder, may be considered in any way
as a grant of any license whatsoever under any of August Technology's
present or future patents, copyrights, trademarks, trade secrets or
other proprietary rights; nor is any such license granted by
implication, estoppel or otherwise.
11. PRODUCT LIABILITY; TECHNICAL INFORMATION; WARRANTY:
11.1 The Distributor shall have no responsibility for the Products
manufactured by August Technology to the purchasers of such Products or
to persons claiming through such purchasers; unless the Distributor has
assembled and/or serviced such Products and has failed to do so
pursuant to August Technology's instructions and warranty, or has
represented or warranted the Products beyond the scope of August
Technology's written warranty, if any, without the express written
authority of August Technology. Except as herein provided, any product
liability which may result from the sale or distribution of August
Technology's Product shall be the sole responsibility of August
Technology and not of the Distributor. The Distributor agrees not to
make any such representations concerning August Technology's Products,
other than such representations as may be made by August Technology
from time to time in writing.
PAGE 10
11.2 IN NO EVENT SHALL AUGUST TECHNOLOGY OR THE DISTRIBUTOR BE
LIABLE TO ONE ANOTHER FOR GENERAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
OR FOR LOSS OF ANTICIPATED PROFITS ON ANY CLAIM OF ANY KIND STEMMING
FROM A PURCHASE ORDER, A PRODUCT, OR FROM PERFORMANCE OR BREACH OF THIS
AGREEMENT EXCEPT FOR BREACH OF SECTION 11.1.
11.3 No warranties exist with respect to the Products except
express warranties explicitly provided in customer quotations, catalogs
and other materials provided to the Distributor for delivery to
ultimate customers. August Technology EXPRESSLY DISCLAIMS ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND
ANY OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
ANY IMPLIED WARRANTY ARISING OUT OF A COURSE OF DEALING OR PERFORMANCE,
CUSTOMER USAGE OR TRADE USAGE, EXCEPT EXPRESS WRITTEN WARRANTIES, IF
ANY, PROVIDED TO ULTIMATE CUSTOMERS IN WRITTEN MATERIALS PROVIDED BY
AUGUST TECHNOLOGY RELATING TO THE PRODUCTS.
11.4 August Technology warrants that August Technology Products
sold and delivered to the Distributor hereunder are in accordance with
August Technology's Statement of Warranty attached hereto as Exhibit F
(the "August Technology Statement of Warranty").
11.5 August Technology reserves the right to change technical
specifications without notice. Some information contained within
Product catalogs has been obtained from sources other than August
Technology, but is believed to be reliable. No warranty, express or
implied, is made or intended as to the accuracy or the completeness
thereof. August Technology cannot anticipate all applications or
variations in the use, application or manufacturing methods intended by
end users of the Products; therefore, August Technology does not assume
liability for use thereof in association with any technical information
contained in Product catalogs.
12. POST-WARRANTY SPARE PARTS SUPPORT:
August Technology agrees to use its best efforts to maintain the
ability to provide spare parts and documentation for any Products
shipped to the Territory for as long as technologically and
economically feasible. If a direct replacement spare part can not be
maintained to exact specifications, August Technology will make every
effort to supply an equal or superior substitute spare part. For a
period of five (5) years -following Product purchase, under no
circumstances will the customer be forced to abandon the use of an
August Technology Product (or accept inferior performance) due to
unavailable post-warranty service or spare parts.
13. WARRANTY PROCEDURES:
13.1 Distributor agrees to request approval from August Technology
before returning any defective Products. Once approval is granted,
August Technology will provide
PAGE 11
Distributor with a Return Material Authorization (RMA) number to be
displayed on the shipping container of the defective Products. Once
August Technology approves-the return of any defective Product,
Distributor agrees to ship the Products to August Technology's factory
using an August Technology approved shipping method. August Technology
will attempt to make all necessary repairs or replacements, and will
ship the Product or a substitute of substantially the same form and
function back to Distributor or its customer, freight prepaid.
13.2 All returned Products found to be free of defects will be
subject to an inspection charge of ten (10) percent of the purchase
order amount, plus shipping charges. Repairs and replacements due to
reasons not covered by the warranty will be invoiced at August
Technology's then current prices and will be payable under the terms of
this Agreement.
14. CONFIDENTIALITY:
The Distributor agrees and shall cause its employees, officers and
agents: (a) not to communicate, divulge, or use for the benefit of any
other firm, person, or organization, any of the business secrets or
methods, business policies, manuals, instructions, reports, and lists
of names of customers of August Technology; (b) to exercise caution at
all times in protecting confidential information of August Technology
pertaining to the Products, its pricing, business, or assets with at
least the same degree of care as is by the Distributor for the
protection of its own confidential and proprietary information; and (c)
not to reveal any other confidential information of August Technology.
The provisions of this Section 14 shall survive termination of this
Agreement and the Distributor shall return to August Technology, and
refrain after the termination of this Agreement from any use of, all
samples, manuals, product information letters, and similar material
supplied to it by August Technology, including, but not limited to, all
documents and copies thereof designated confidential by August
Technology.
15. TERM AND TERMINATION:
15.1 EFFECTIVE DATE. This Agreement shall become effective on the
date executed (the "Effective Date").
15.2 TERM - This Agreement shall continue in effect for a period of
two(2) years from the Effective Date unless terminated sooner in
accordance with provisions contained herein (the "Initial Term"). This
Agreement shall continue after the Initial Term, until voluntarily
terminated by either party upon written notice delivered at least one
(1) year prior to the end of the Initial Term or ongoing period. Notice
will be deemed given on the date that the party mails notice as set
forth in Section 20 below. However, termination in this manner shall
not release the Distributor from any accrued obligations of this
Agreement, which will be satisfied promptly. Except as otherwise
provided, termination, for whatever reason, shall terminate all rights
of the Distributor set forth herein, including without limitation, the
right to market or sell the Products or use the Trademarks.
PAGE 12
15.3 Notwithstanding the provisions of Section 15.2, either
Distributor or August Technology may terminate this Agreement, to be
effective upon receipt of written notice, based on the occurrence of
any of the following events:
15.3.1 If the other party commits a breach of any obligation
in this. Agreement which is not cured within thirty
(30) days after written notice thereof specifying the
nature of the breach.
15.3.2 The commencement by either party of a voluntary
action under the federal bankruptcy laws, or any
other applicable federal state, or foreign
bankruptcy, insolvency, or other SIMILAR laws.
15.3.3 The consent of either party to the appointment of a
receiver, assignee, or e (or other similar official).
15.3.4 The admission by either party of its inability to pay
its debts as they become due.
15.3.5 If Distributor is acquired or in the event of a
change in control.
15.3.6 The nationalization of either party's assets or
business.
15.3.7 The passage of any legislation by a country, or
subdivision of a country, granting Distributor extra
contractual compensation upon termination or
non-renewal of this Agreement.
15.3.8 By mutual consent at any time and with a written
notice of termination signed by both parties.
15.4 Except as provided for herein, each party acknowledges that
the other has made no commitments regarding the renewal of this
Agreement. Neither August Technology or Distributor will be liable to
the other for damages of any kind, including incidental or
consequential damages, or for any losses or claims whatsoever on
account of or arising out of the termination of this Agreement.
Distributor waives any and all benefit of any law or regulation
providing compensation arising from the termination or non-renewal of
this Agreement.
16. POST TERMINATION COOPERATION:
Upon receipt of notice of termination, and during the remaining period
of this Agreement, Distributor agrees to use its best efforts to carry
out an orderly transition in the marketing, sales, and service of
Products in the Territory and to facilitate a transfer of the customers
to a new distributor or to August Technology, as the case may be.
Distributor's best efforts shall include, but not be limited to,
introducing August Technology representatives to each customer,
providing each customer's corporate name and buyer name, relevant
addresses, communications information, historical prices charged for
the Products as well as any other information or actions deemed
necessary to facilitate the transition.
PAGE 13
17. NON-COMPETE:
The Distributor agrees that August Technology would be substantially
harmed if the Distributor were to compete with August Technology by
manufacturing, selling, marketing or distributing Competitive Products
in the Territory, except as provided by the terms of this Agreement In
partial consideration for the benefits provided to the Distributor
hereunder, the Distributor agrees as follows: Du ring the term of this
Agreement and for a period of one (1) years following the termination
of this Agreement for whatever reason, the Distributor shall not,
directly or indirectly, manufacture, sell market or distribute
Competitive Products in the Territory, except as provided by the terms
of this Agreement.
18. FORCE MAJEURE:
Neither party will be liable, or deemed to be in breach of this
Agreement, by reason of any act, delay or omission caused by labor
disputes, lockouts, or other labor disputes, regulations; ordinances,
or order of a court of competent jurisdiction, act of government, act
of God, war, riot, epidemic, flood, earthquake or like natural
disaster, embargo or quarantine, or any other cause beyond the
reasonable control of the party claiming force majeure. The party whose
performance will have been prevented or delayed must provide immediate
written notice to the other party explaining the nature of the act,
delay or omission, and the date such condition commenced. The party
also agrees to provide further written notice when the condition has
ended.
19. GOVERNMENT EXPORT RESTRICTIONS:
Distributor agrees that the Products purchased will not be exported y
or indirectly, separately or as part of a system, without complete and
full compliance with the export and re-export restrictions imposed by
U.S. export laws and regulations. Distributor also agrees to take
reasonable action to assure that no customer contravenes the U.S. laws
and regulations.
20. NOTICES:
20.1 Notices - Any notices required or permitted to be given under
this Agreement shall be sufficient if in writing and sent by registered
or certified mail to the address of the party set forth below. The
parties hereto may change the address to which notices may be sent by
giving written notice of such change of address to the other party:
PAGE 14
If to August Technology:
Vice President, Sales and Marketing
August Technology, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Distributor:
----------------
----------------
----------------
With a copy to:
----------------
----------------
----------------
21. GENERAL PROVISIONS:
21.1 ASSIGNMENT - This Agreement shall be binding upon and inure to
the benefit of August Technology and the Distributor, and their
respective successors and permitted assigns. August Technology may
assign or transfer this Agreement without the permission of
Distributor.' Any attempted assignment or further in violation of the
Agreement will be void or effect a termination at the election of
August Technology. Both parties agree to advise each other of any
change in ownership, control or operating arrangements.
21.2 WAIVER - Either party's failure to enforce any provisions of
this Agreement will not be deemed a waiver of that provision or of the
right to enforce it in the future.
21.3 APPLICABLE LAW, MERGER - This Agreement will be governed by
the laws of the State of Minnesota, USA and specifically excludes the
United States Convention on Contracts of International Sales of Goods.
This Agreement, including the attached Exhibits, contains the entire
and only understanding between the parties, and supersedes all prior
agreements, either written or oral relating to the subject matter of
this Agreement. No modifications to this Agreement will be binding on
either party, unless in writing and signed by both parties.
21.4 SEVERANCE - If any provision of this Agreement will be
determined illegal, invalid, or unenforceable, that provision will be
understood and enforced as if it had been more narrowly drawn so as not
to be illegal, invalid or unenforceable. Any determination will have no
effect upon the enforceability of any other provision of this
Agreement.
21.5 ARBITRATION - All disputes, controversies or differences which
may arise between the parties hereto, out of, in relation to or in
connection with this Agreement or any purchase order for Products
entered into pursuant hereto, or for the breach hereof or
PAGE 15
thereof, which cannot be resolved amicably by the parties shall be
finally settled by arbitration in Minneapolis, Minnesota, pursuant to
the Commercial Arbitration Rules of the American Arbitration
Association or its successor, before a panel of one (1) arbitrator to
be selected in accordance with said rules. Arbitration proceedings
shall be conducted in the English language. The parties to the
arbitration shall be provided the opportunity to conduct reasonable
discovery in accordance with the Federal Rules of Civil Procedure. The
arbitrator shall establish a discovery schedule and shall rule on all
discovery issues. The arbitration award rendered shall be final and
binding upon all the parties and may be reduced to a judgment in a
court of competent jurisdiction. The arbitration and all proceedings
related thereto and any award of the arbitrator shall be held in strict
confidence by the parties. The nonprevailing party shall pay the
prevailing party's attorney's fees and costs including the arbitrator's
fees and costs. The award will include interest from the date of any
damages incurred for breach or other violation of the Agreement until
the award is paid in full at a rate to be fixed by the arbitrator, but
in no event less than the London Interbank Offering Rate "LIBOR") per
annum quoted for the corresponding period by the Bank of America in the
London Interbank Market of United States Dollars for immediately
available funds.
21.6 INJUNCTIONS, OTHER REMEDIES AND PERFORMANCE - The parties
agree that a breach or a threat of a breach of any provision of
Sect-ions 10, 14 or 17 herein would result in irreparable injury. The
parties agree that a party may seek to enforce any or all of Sections
10, 14 or 17 by applying to the State or Federal District Court in and
for the State of Minnesota, or any other court of general jurisdiction,
for injunctive relief only pending commencement and completion of
arbitration proceedings. The court shall refer proceedings to the
arbitrator selected herein to determine whether any injunctive relief
issued hereunder shall be made permanent or be dissolved. The
arbitrator's finding shall be binding and conclusive upon the parties.
The non-prevailing party shall pay the prevailing party's attorney's
fees and court costs.
21.7 COUNTERPARTS - This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective, duly authorized representatives as of the day and year
first above written.
DISTRIBUTOR: ACCEPTED BY:
Metron Technology August Technology Corporation
WITH CONTINGENCIES (SEE BELOW)
------------------------------------- ------------------------------------
Authorized Signature Authorized Signature
Title: Title:
------------------------------- ------------------------------
PAGE 16
The agreement is being signed with the understanding that Exhibit C will be
negotiated further during the week of September 13, 1999. Ratification of this
agreement is contingent upon consent by both parties on the contents of Exhibit
C after those discussions.
PAGE 17
EXHIBIT A: PRODUCTS
Distributor is granted the right to distribute the following August Technology
Products under the terms of this Agreement.
(1) CV SERIES - AUTOMATIC CASSETTE INSPECTION SYSTEMS
(2) NSX SERIES - AUTOMATIC 2ND OPTICAL DEFECT INSPECTION SYSTEMS
Spare parts agreement for each product granted will be as follows:
(1) CV SERIES - AUTOMATIC CASSETTE INSPECTION SYSTEMS - because the CV
Series is generally considered to be a "non-production critical" tool,
it is the Distributor's responsibility to determine each individual
customer's requirements for spare parts (August Technology will provide
a recommended spare parts list). Once determined, the Distributor or
customer is responsible for purchasing these spare parts for local
stocking.
(2) NSX SERIES - AUTOMATIC 2ND OPTICAL DEFECT INSPECTION SYSTEMS - because
the NSX Series is considered to be a "production critical" tool locally
stocked spare parts are highly recommended. It is the Distributor's
responsibility to determine each individual customer's requirements for
spare parts (August Technology will provide a recommended spare parts
list). Once determined, the Distributor or customer is responsible for
purchasing these spare parts for local stocking.
NOTE:
Additional Products may be added from time to time by mutual consent and
official amendment to this Exhibit A.
PAGE 18
EXHIBIT B: PRICING, DISCOUNT, AND TERMS
Distributor agrees to pay August Technology for Products purchased based on a
set discount from official published Price Lists, or a set discount from special
pricing quoted by August Technology for mutually agreed to custom projects. The
current applicable Price List for Products and spare parts will be provided and
updated by August Technology on a regular basis.
All pricing is Ex-works (INCOTERMS 1990) at August Technology's factory,
including airfreight.
Distributor agrees to pay all freight insurance, requested interim storage fees,
bank transfer fees, and all international taxes and customs duties assessed on
each order.
Distributor's set discount from official published International Price Lists
will be: 17.5%
Distributor agrees to make all payments in US$ for Products based on the
following terms:
100% on shipment net 45 days.
Note: August Technology views each Distributor as its only
"customer" in the Territory, and provides a set discount based
on this business model. Payment terms are also based on this
business model. Any changes to this model may require August
Technology to assume additional business risk, and will
require changes to the set discount. August Technology does
not expect to participate or be directly involved with any
individual customer negotiations (such as pricing, payment
terms, delivery, training, warranty, etc.) - this is the full
responsibility of the Distributor.
Distributor agrees to make all payments to August Technology by the
following method:
Direct wire transfer to August Technology's bank. Detailed
bank account information is:
Norwest Band N.A.
Routing # ▇▇▇▇▇▇▇▇▇
Swift Code: ▇▇▇▇▇▇▇▇
Beneficiary Bank: Marquette Capital Bank
Account Number 6355010918
Phone Wire Transfer at: ▇-▇▇▇-▇▇▇-▇▇▇▇
For further credit to:
Beneficiary Name: August Technology
Beneficiary Account # 1810820753
PAGE 19
NOTES:
August Technology agrees that the following customers should be approached in a
global strategy with regards to pricing and that both parties will work together
to develop pricing that will allow a global price yet protect both parties gross
margin interests: Intel, Motorola, AMD, Philips and STM.
August Technology agrees that further development is needed on global pricing
and the International Price List. August Technology commits to have this
developed by the end of Ql 2000 and to work with Distributor in the development
of this pricing strategy so that it protects both parties gross margins.
Engineering services, field service labor charges, and personnel travel expenses
are not subject to discounting or commission.
PAGE 20
EXHIBIT C: SPECIAL ACCOUNTS
The following customers who have offices, facilities, factories, fabs, or any
other business facilities within the Territory will be considered Special
Accounts, which will remain exclusive to August Technology regarding all
business activities (including, but not limited to, sales, marketing, and
service support):
August Technology's previous distributor in the Region, ▇▇▇▇▇▇/SET, will
continue to represent August Technology at the following accounts for the
specified products until either a purchase order is received from the customer
for the unit described or December 31, 1999, whichever occurs first.
NSX Series
Philips, KaoHsiung, Taiwan
ASE KaoHsiung, Taiwan
Chipbond, Taiwan
Winbond, Taiwan
Amkor, Phillipines
Linear Technology, Penang, Malaysia
CV Series
TSMC Hsinchu Taiwan
USC Hsinchu, Taiwan
SIS Taiwan
PAGE 21
EXHIBIT D: TERRITORY
August Technology hereby appoints Distributor as an authorized, independent,
exclusive Distributor for the Products, for the purpose of reselling and
servicing the Products directly to its customers in the following countries:
South Korea
China
Hong Kong
Taiwan
Thailand
Malaysia
Phillipines
Singapore
India
PAGE 22
EXHIBIT E: PURCHASE ORDER
In order to receive Products, Distributor agrees to deliver to August Technology
a hard copy purchase order. All purchase orders issued by Distributor will
include the following information:
a) Final customers name (end user) , location and customers official
purchase order number
b) Distributor purchase order number
c) Ship To location
d) ▇▇▇▇ To location and accounts payable contact person
e) Method of shipment, including contact person and phone number
f) Quantity and description of each item being purchased
g) Details of any options purchased
h) Pricing
i) Requested ship dates
j) Power requirements
k) Environmental Requirements, if any (cleanroom specifications, etc)
l) Any other special requirements, such as customer part number, drawing
numbers or samples.
PAGE 23
EXHIBIT F: AUGUST TECHNOLOGY STATEMENT OF WARRANTY
Hardware Products - August Technology warrants that it will repair or replace,
at its option, hardware Products which are found to be defective in material or
workmanship. August Technology must receive written notification of any defect
within fourteen (14) months from date of shipment. All transportation charges
associated with hardware Products warranty will be arranged and paid for by
August Technology.
Software Products - August Technology warrants that it will repair or replace,
at its option, software Products which fad in a manner which significantly and
adversely affects operating performance as specified in August Technology's
published Products description. August Technology must receive written
notification of any failure to conform within fourteen (14) months from date of
shipment. August Technology does not warrant that the software Products are free
from errors. All transportation charges associated with software Products
warranty will be arranged and paid for by August Technology.
The foregoing warranties will not apply to any deficiency or defect resulting
from:
(a) Normal wear and tear, or items subject to deterioration,
breakage, or burnout through use.
(b) Installation or maintenance by customer or any third party
(other dm Distributor).
(c) Modifications or alterations made by customer or any third
party without August Technology's written consent.
(d) Misuse or abuse.
(e) Failure of customer to maintain the equipment site, and
environmental conditions as required for the normal operation
of the Products.
(f) Causes beyond August Technology's reasonable control.
August Technology makes no other warranty, either expressed or implied,
including, but not limited to, any implied warranty of merchantability or
fitness for a particular purpose, or arising from course of dealing or usage of
trade. The foregoing constitutes August Technology's sole obligation and the
exclusive remedies of the customer for any breach by August Technology of the
warranties contained in this Agreement. August Technology's total liability
under this Section will be limited to the repair or replacement of Products and
will in no case exceed the value of the purchase order.
PAGE 24
EXHIBIT G: WORLDWIDE SALES AND SERVICE SUPPORT PLAN
AUGUST TECHNOLOGY CORPORATION
WORLDWIDE SALE'S & SERVICE SUPPORT PLAN
This Plan will define how each Distributor is compensated (paid) when equipment
is shipped into their Territory, August Technology recognizes three (3) periods
of time as shown below.
(1) Pre-Warranty Period (Installation & Training)
(2) Warranty Period / Local Service Support (12 months after ship date from
August
(3) After Warranty Period (Ongoing Service Support - billable by
Distributor)
THE PRE- WARRANTY period is for INSTALLATION AND TRAINING of a system once it
has been shipped to the customer. The WARRANTY period is for 12 MONTHS AFTER
SHIPMENT FROM AUGUST TECHNOLOGY. The AFTER-WARRANTY period is for ON-GOING
SERVICE SUPPORT once the standard equipment warranty expires. August Technology
recognizes that the Distributor must be compensated for providing customer
service support during each of these periods.
FOR EXAMPLE: When Distributor "A" takes a purchase order for a CV system in
their Territory, and the customer requests shipment of the system into
Distributor "▇" ▇▇▇▇▇▇▇▇▇, special arrangements must be made for Installation &
Training and Local Service Support. In this case, DISTRIBUTOR "B" IS RESPONSIBLE
FOR ALL THREE periods -
(1) Pre-Warranty Period (Installation & Training): Distributor "N' pays
for the PRE- WARRANTY (Installation & Training) period.
(2) Warranty Period (one (1) Year Local Service Support): August Technology
pays Distributor "B" a 1/3 commission' for the WARRANTY period.
Distributor "A' receives 1/3 less "commission" on the order.
(3) After Warranty Period (Ongoing Service Support): Distributor "B"
charges their normal service support rates for the AFTER- WARRANTY
PERIOD.
[GRAPHIC OMITTED]
PAGE 25
AUGUST TECHNOLOGY'S WORLDWIDE SALE AND SERVICE PLAN IS OUTLINED BELOW.
(1) REQUEST FOR QUOTATION - when Distributor "A" plans to ship a system
outside their Territory, they must first contact August Technology and
request a quotation for the Pre-Warranty Period (Installation &
Training) at the location where the system will be installed. August
Technology will contact Distributor "B", request a quotation, and
forward this quotation to the Distributor "A".
(2) PRE-WARRANTY PERIOD (INSTALLATION & TRAINING) Distributor "A" must
include in their pricing the cost of the PreWarranty Period
(Installation & Training) quoted by Distributor "B". When Distributor
"A" orders the system from August Technology, their purchase order will
include: [a] Pre-Warranty Period (Installation & Training), [b]
equipment, [c] any options ordered.(3) DISTRIBUTOR DISCOUNT ADJUSTMENTS
MADE - August Technology provides every Distributor and equipment
purchase discount. This Discount has three (3) parts:
[1] 1/3, for Project Specification.
[2] 1/3, for Purchase Order.
[3] 1/3, for (In-Warranty) Service Support.
in the example shown on the first page, Distributor "A" would receive a 2/3
equipment purchase discount from the list price (for project specification and
purchase order). Distributor "B" would be paid by August Technology for the
Pre-Warranty Period (Installation & Training) of the system (based on the
earlier quotation from Distributor plus 1/3 of the system list price for local
service support during the WARRANTY period.
TO COMPLETE THE EXAMPLE ON THE FIRST PAGE:
Distributor "A" completes the negotiations with LG (Lucky Goldstar) for the
equipment specification and purchase order. LG plans to have the system shipped
to their new factory in the U.K. In this case, Distributor "X' would first
contact August Technology and inform them of these plans.
August Technology would immediately contact Distributor "B" and request
a-quotation for installation and training of the system at LG's site in the U.K.
This quotation is reviewed by August Technology and then forwarded to
Distributor ")V'. Distributor "A" would then add this amount to their quotation
to LG for a complete system package (equipment, options, and local installation
and training).
Once LG places the order, Distributor "A" would order from August Technology,
including equipment, any options, and local installation and training support
for the U.K. NOTE THAT DISTRIBUTOR "A" WILL RECEIVE 2/3 OF THEIR NORMAL
EQUIPMENT DISCOUNT FOR THIS order. Distributor "B"` will be paid their quoted
price, by August Technology, for local installation and (FOR PRE-WARRANTY
support), plus 1/3 of their normal equipment discount for this order (for
Warranty support).
PAGE 26
FOR EXTENDED WARRANTY PERIODS (BEYOND 12 MONTHS FROM SHIP DATE FROM AUGUST
TECHNOLOGY.
Should Distributor "A" choose to offer an EXTENDED WARRANTY PERIOD to the
customer, then Distributor "B" will provide a separate quote for this item. When
Distributor "A" orders the system from August Technology, their purchase order
will include: [a] Pre-Warranty Period (Installation & Training), [b] equipment,
[c] any options ordered and [d] EXTENDED WARRANTY PERIOD.
PAGE 27
