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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OR OF 1934
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Date of Report (Date of earliest event reported): MAY 22, 1996
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IBIS TECHNOLOGY CORPORATION
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(Exact name of registrant as specified in its charter)
MASSACHUSETTS 0-23668 04-2987600
- --------------- ------------ -------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
32 CHERRY HILL DRIVE, DANVERS, MASSACHUSETTS 01923
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508) 777-4247
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Exhibit Index on Page 5
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ITEM 5. ACQUISITION OR DISPOSITION OF ASSETS.
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On May 22, 1996, the Registrant and International Business Machines
Corporation ("IBM") closed a transaction (the "Transaction") pursuant to which
IBM will purchase an Ibis 1000 oxygen implanter (an "Ibis 1000") from the
Registrant pursuant to a Equipment Purchase Master Agreement (the "Agreement")
between the Registrant and IBM. On March 14, 1996, the Registrant filed a
Current Report on Form 8-K (the "March 1996 8-K") announcing that it had
received a purchase order from an unnamed semiconductor manufacturer for
purchase of an Ibis 1000, and that the purchase order was subject to
finalization of the Agreement. The semiconductor manufacturer referenced in the
March 1996 8-K was IBM.
The Agreement governs all purchases of equipment by IBM from the
Registrant, and specifically the purchase of an unspecified number of Ibis
1000's, which are used to manufacture SIMOX (Separation by IMplantation of
OXygen) wafers which enable the production of integrated circuits. The Agreement
provides that when IBM desires to consider the Registrant for purchase of
equipment, IBM will issue a Request for Quotation (an "RFQ") to the Registrant
inviting Registrant to submit a quotation to IBM. Contingent upon IBM's
acceptance of Registrant's quotation, IBM will issue a purchase order to the
Registrant. The Registrant may choose to reject a purchase order in writing
within 10 days of receipt. If it does not reject the Purchase Order, the
Registrant is bound to deliver the equipment specified therein and in the
Agreement. IBM has issued only one purchase order which is subject to the terms
of the Agreement, which was received by the Registrant in March 1995 for the
purchase of one Ibis 1000 implanter.
IBM may terminate the Agreement, or any purchase order issued under the
Agreement, at any time and without cause, by delivering written notice to the
Registrant, subject only to certain payments by IBM to the Registrant for
reasonable costs incurred by.the Registrant in performance of the Agreement. The
Agreement may also be terminated by the Registrant or IBM upon the occurrence of
certain events. The Agreement does not obligate IBM to issue an RFQ, to accept
the Registrant's quotation, to issue a purchase order to the Registrant, or to
purchase any equipment from the Registrant. The Agreement includes certain
restrictions on IBM's ability to use the Ibis 1000 implanter and to sell the
SIMOX wafers manufactured thereby.
The summary of the Agreement set forth above is qualified in its entirety
by the more detailed information contained in the Exhibit filed herewith, and
the information contained in the Agreement is incorporated herein by reference
and filed as an Exhibit herewith.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(c) Exhibits.
10.1 Equipment Purchase Master Agreement dated as of May 22, 1996
between the Registration and IBM
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Ibis Technology Corporation
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(Registrant)
Date: September 12, 1996 /s/ Timothy J. Burns
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Timothy J. Burns
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
Number Description
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10.1 Equipment Purchase Master Agreement dated as of May 22,
1996 between the Registrant and IBM
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Exhibit 10.1
IBM
EQUIPMENT PURCHASE MASTER AGREEMENT
BETWEEN
INTERNATIONAL BUSINESS
MACHINES CORPORATION
AND
IBIS TECHNOLOGY CORPORATION
NO. 07482
April 3, 1996
Burlington Facility
1000 River Road
Essex Junction, VT 05452
East Fishkill Facility
1580 Route 52
Hopewell, Junction, NY 12533
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TABLE OF CONTENTS
1.0 DEFINITIONS........................................................ 4
2.0 SCOPE OF AGREEMENT................................................. 4
3.0 COORDINATORS AND NOTICE............................................ 4
4.0 QUOTATIONS AND PURCHASE ORDERS..................................... 5
5.0 DELIVERABLES....................................................... 5
6.0 PACKAGING/SHIPPING................................................. 5
7.0 SPECIFICATION CHANGES.............................................. 5
8.0 IBM CONFIDENTIAL INFORMATION....................................... 6
9.0 DRAWINGS AND OTHER MATERIAL PROVIDED TO SUPPLIER................... 6
10.0 PRICING............................................................ 7
11.0 CONSIGNMENT........................................................ 7
12.0 SOFTWARE........................................................... 7
13.0 LICENSE AND SUPPORT FROM SUPPLIER.................................. 7
14.0 SCHEDULES.......................................................... 7
15.0 EXCUSABLE DELAYS (FORCE MAJEURE)................................... 8
16.0 ACCEPTANCE/REJECTION OF EQUIPMENT.................................. 8
17.0 PAYMENT, RECORDS, AUDIT AND INSPECTION, TRANSFER OF WAFERS......... 9
18.0 INSURANCE/LIABILITY/REPRESENTATIONS/WARRANTIES..................... 9
19.0 WARRANTY...........................................................11
20.0 TERMINATION........................................................11
21.0 INDEPENDENCE OF ACTION.............................................13
22.0 COMPLIANCE OF LAWS.................................................13
23.0 ASSIGNMENT, DELEGATION AND SUBCONTRACT.............................13
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24.0 PASSTHROUGH AGREEMENTS.............................................14
25.0 REQUIREMENTS FOR SUPPLIER PERSONNEL WHILE ON IBM PREMISES..........14
26.0 GIFTS AND GRATUITIES...............................................14
27.0 SEVERABILITY.......................................................14
28.0 NO WAIVER..........................................................15
29.0 MISCELLANEOUS......................................................15
30.0 SURVIVAL...........................................................15
31.0 CHANGES OR AMENDMENTS..............................................15
32.0 ORDER OF PRECEDENCE................................................15
33.0 SOLE AGREEMENT.....................................................15
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This is an EQUIPMENT PURCHASE MASTER AGREEMENT, No. 07482 (hereinafter referred
to as "Agreement"), by and between INTERNATIONAL BUSINESS MACHINES CORPORATION,
a corporation incorporated under the laws of the State of New York (hereinafter
referred to as "IBM") and IBIS TECHNOLOGY CORPORATION having an office for the
transaction of business at 32A Cherry Hill Drive, Danvers, MA 01923 (hereinafter
referred to as "Supplier").
Supplier and IBM hereto agree as follows:
1.0 DEFINITIONS
1.1 - ALLIANCE PARTNER(S) For the purpose of this Agreement, the term "Alliance
Partner(s)" shall mean a corporation, company, joint venture or other business
entity in which IBM has neither an ownership interest of more than fifty percent
(50%), nor control of more than fifty percent (50%) of any outstanding shares or
securities, but which is directly associated, through contractual agreement,
with the furtherance of the semi-conductor manufacturing business at IBM.
1.2 - DERIVATIVE WORK(S) For purposes of this Agreement, the term "Derivative
Work(s)" shall mean a work which is based on one or more pre-existing works such
as a revision, modification, translation, abridgment, condensation, expansion or
any other form in which such pre-existing works may be recast, transformed or
adapted, and which, if prepared without authorization by the owner of the
pre-existing work, would constitute a copyright infringement.
1.3 - EQUIPMENT The term "Equipment" as used herein shall include products in
Suppliers standard product line as well as products designed, modified and built
for sale to IBM. The term Equipment shall also include software and other items,
data, and services (including maintenance services) associated with such
products including, but not limited to, those identified in the section of the
Agreement entitled "DELIVERABLES".
1.4 - HARMFUL CODE For purposes of this Agreement, the term "Harmful Code" means
any computer code, programming instruction or set of instructions that is
intentionally constructed with the ability to damage, interfere with or
otherwise adversely affect computer programs, data files, or hardware without
the consent or intent of the computer user. This definition includes, but is not
limited to, self-replicating and self-propagating programming instructions
commonly called viruses and worms.
1.5 - PURCHASE ORDER For purposes of this Agreement, the term "Purchase Order"
or "IBM Purchase Order" shall refer to IBM Purchase Order(s), Alterations(s)
and/or Release(s) issued by IBM.
1.6 - SUBSIDIARY For purposes of this Agreement, the term "Subsidiary" shall
mean a corporation, company or other entity:
1.6.1 - more than fifty percent (50%) of whose outstanding shares or securities
(representing the right to vote for the election of directors or other managing
authority) are now, or hereafter, owned or controlled, directly or indirectly,
by a party hereto, but such corporation, company or other entity shall be deemed
to be a Subsidiary only so long as such ownership or control exists; or
1.6.2 - which does not have outstanding shares or securities, as may be the case
in a partnership, joint venture or unincorporated association, but more than
fifty percent (50%) of whose ownership interest representing the right to make
the decisions for such corporation, company or other entity is, now or hereafter
owned or controlled, directly or indirectly, by a party hereto, but such
corporation, company, or other entity shall be deemed to be a Subsidiary only so
long as such ownership or control exists.
2.0 SCOPE OF AGREEMENT
The terms and conditions of this Agreement shall govern the purchase of
Equipment from Supplier. Supplier agrees to design, build, modify, test,
deliver, provide, install and sell Equipment to IBM in accordance with the
following terms and conditions herein. Purchases may be made hereunder by the
IBM Corporation, its Subsidiaries or Alliance Partners. This Agreement is
nonexclusive and shall not prevent IBM or Supplier from having similar
agreements with third parties.
3.0 COORDINATORS AND NOTICE
3.1 - Supplier and IBM shall each assign a Purchasing Coordinator and a
Technical Coordinator to coordinate activities under this Agreement.
Coordinators shall be identified in each Purchase Order issued for the purchase
of Equipment. Purchasing Coordinators shall be responsible for:
3.1.1 - Keeping its respective management informed of the activity performed
under this Agreement;
3.1.2 - Representing the parties in all matters relating to the performance of
the work under this Agreement;
3.1.3 - Arranging such meetings, visits and consultations between Supplier and
IBM as may be deemed necessary or desirable for the successful accomplishment of
such work;
3.1.4 - Submission and receipt of change requests, proposals, or responses and
authorization of changes as contemplated by Section entitled "SPECIFICATION
CHANGES" hereof; and
3.1.5 - Periodically discussing appropriate practices and procedures to assure
the security of the items generated and/or delivered under this Agreement.
All communications and notices between the Supplier and IBM concerning this
Agreement shall be deemed to be sufficiently made or given on the date of
mailing if sent to the other party's Purchasing Coordinator by first class
mail at addresses designated in the applicable Purchase Order.
3.2 - Each party shall advise the other in writing of any successor or designee
of its named Coordinators.
3.3 - The IBM Purchasing Coordinator shall be responsible for maintaining
business liaison with Supplier and for determining Supplier's compliance with
the terms and conditions of this Agreement.
3.4 - The IBM Technical Coordinator, his successor or designee shall be
responsible for maintaining technical liaison with Supplier's Technical
Coordinator and for determining for IBM the acceptability of Equipment supplied
by Supplier hereunder.
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3.5 - Supplier shall be responsible for supervision and direction of the work to
be performed hereunder by Supplier's employees. If work is done on IBM's
premises, Supplier shall at all times provide supervisory personnel acceptable
to IBM to provide on-premises Supervision and control of Supplier's personnel
who are working on such premises.
4.0 QUOTATIONS AND PURCHASE ORDERS
4.1 - QUOTATIONS
When IBM desires to consider Supplier for the purchase of Equipment, IBM
Purchasing will issue an IBM Request for Quotation (hereinafter referred to as
RFQ). IBM's RFQ will include Equipment specifications, quantities, delivery
schedule requirements and related information. The IBM RFQ shall constitute the
only authorization for Supplier to submit quotations to IBM. Supplier agrees to
respond to the RFQ to IBM Purchasing. Supplier also agrees that all information,
including any related documentation, provided to IBM in response to the RFQ, is
non-confidential and non-proprietary to Supplier or any third party.
4.2 - PURCHASE ORDERS
Contingent upon IBM's acceptance of quotations provided by Supplier pursuant to
the Subsection entitled "Quotations" of this Section, IBM will issue a Purchase
Order. IBM will deem Supplier to be in agreement with the terms set forth in the
Purchase Order, unless Supplier notifies the IBM Purchasing Coordinator, in
writing by certified mail, within ten (10) days of receipt of Purchase Order,
identifying the reasons for the non-acceptance.
The Purchase Order shall be included as an addendum to this Agreement and the
provisions of this Agreement shall be applicable thereto, with the exception of
provisions specifically stated on the face of the Purchase Order agreed to in
writing by both parties. The Purchase Order shall constitute the only
authorization for Supplier to take any action, expend any money or provide
Equipment to IBM hereunder.
5.0 DELIVERABLES
5.1 - THE EQUIPMENT
The Equipment shall be designed, built, tested, delivered and installed in
accordance with the "General Procurement Specifications for Process Equipment -
IBM Microelectronics", attached hereto as Attachment D, made a part hereof, and
referred to herein as "Procurement Specification."
Tool specific specifications (hereinafter referred to as "Equipment
Specifications") shall be issued by IBM with each Purchase Order and will
include the Equipment description, performance requirements, including
acceptance criteria, and quality requirements. The Procurement Specifications
and Equipment Specifications agreed to by the Supplier and IBM and set forth in
the Purchase Order shall form the criteria for IBM's acceptance of work
performed and products delivered. Supplier agrees to comply with the Procurement
Specification and Equipment Specification unless it is altered in accordance
with Section entitled "SPECIFICATION CHANGES". IBM Procurement and Equipment
Specifications are the property of IBM and shall not be used by Supplier,
without approval of IBM, for any other purpose other than performance under this
Agreement.
5.2 - DOCUMENTATION AND MANUALS
Supplier agrees to comply with all requirements set forth in the Procurement and
Equipment Specifications for documentation and manuals, including, but not
limited to, requirements set forth for software, maintenance, and layout.
Supplier agrees to deliver documentation to IBM in sufficient detail to support
the operation and maintenance of the Equipment.
5.3 - MISCELLANEOUS ITEMS
Supplier shall provide other items (such as replacement parts, instrumentation,
and special tools) to support the operation and maintenance of the Equipment, as
specified in Attachment D (OR OTHER ATTACHMENT).
5.4 - TRAINING
Supplier agrees to provide IBM personnel with training as specified in the
Procurement Specification
6.0 PACKAGING/SHIPPING
6.1 - All Equipment shall be packaged as to avoid damage in shipping and as
specified in the Procurement Specification. Packages shall include a packing
slip bearing the IBM Purchase Order number, product description and quantity. In
the event that there are multiple packages associated with a single Equipment
shipment, the number of packages shall be indicated on the packing slip, each
package shall be numbered, and the IBM Purchase Order number shall be indicated
on each.
6.2 - Terms of shipment and carriers will be specified in the Purchase Order.
IBM will not accept premium transportation charges unless authorized in advance
by the IBM Purchasing Coordinator.
7.0 SPECIFICATION CHANGES
7.1 - IBM shall maintain engineering control over IBM requirements set forth in
the Equipment Specifications. Equipment Specifications, including those portions
which include or reference Suppliers original specifications in whole or in part
may not be changed except in accordance with the following two (2) paragraphs,
as appropriate:
7.1.1 - IBM may make changes to the specifications or requirements relating to
Equipment purchased hereunder by providing written notice, from IBM Purchasing,
to Supplier. Supplier agrees to make a best effort to comply with changes by the
dates specified in the change notice. Supplier will provide IBM Purchasing with
a written response indicating acceptance or rejection of the changes by the date
specified on the request. In the event that the change is presented as an
emergency matter, Supplier agrees to respond orally as soon as practical and
confirm within five (5) business days. Supplier's response shall include any
effect of the changes on the Equipment price, delivery schedule, quality,
reliability and the like, as well as the reasons therefore. All changes must be
approved in writing by the IBM Purchasing Coordinator prior to implementation.
In the event that precise information cannot be
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provided within five (5) days, Supplier's response may be an estimate with
additional precise information provided as soon as practical. In the event that
Supplier rejects the change in whole, or in part, an explanation of the
rejection shall be provided.
7.1.2 - If Supplier determines that change is necessary and/or advantageous or
would improve quality, price and/or delivery schedules, Supplier is encouraged
to propose such a change in writing to the IBM Technical Coordinator. Supplier's
written proposal shall include the IBM Purchase Order Number or Request for
Quotation Number and a description of the proposed change and the estimated
effect on quality, price, and/or delivery schedules. IBM will evaluate
Supplier's proposal and notify Supplier in writing within five (5) business days
whether the change is approved by IBM. In the event that the change is not
approved, IBM will provide Supplier with an explanation. Supplier shall not
proceed with changes to Equipment Specifications without the express written
approval of IBM Purchasing.
SUPPLIER UNDERSTANDS THAT IBM WILL HAVE NO OBLIGATION TO PAY SUPPLIER FOR ANY
CHANGES THAT ARE NOT PROCESSED AND APPROVED IN ACCORDANCE WITH THIS SECTION.
7.2 - Supplier agrees to maintain a record of all changes made to the Equipment
Specifications. Supplier's record shall include applicable Purchase Order
number(s), assigned Engineering Change No. and requester, the date and nature of
the change and IBM's authorization to proceed. Supplier agrees to deliver a copy
of the record to IBM with the Equipment or upon request from the IBM Purchasing
Coordinator.
8.0 IBM CONFIDENTIAL INFORMATION
8.1 - IBM Confidential Information shall mean all information disclosed in
confidence by IBM to Supplier or obtained by Supplier from IBM which relates to
IBM, its Subsidiaries or Alliance Partners past, present and future research,
development, manufacturing or business activities including, but not limited to,
the following information:
8.1.1 - Information related to IBM product or processes, specifications, or
technology discussed with Supplier or obtained by Supplier in relation to the
purchase or maintenance of Equipment;
8.1.2 - corresponding information related to joint projects that IBM may be
involved in;
8.1.3 - and information given to or obtained by Supplier while performing
services on an IBM location.
8.2 - Supplier agrees to hold all IBM Confidential Information in trust and
confidence for IBM and not to use such information other than for the benefit of
IBM, for the period of fifteen (15) years from date of receipt. During such
period, Supplier agrees not to publish, disseminate, disclose to any person, or
to use such information for any purpose other than to prepare a response to an
IBM Request For Information/Quotation or to perform services pursuant to IBM
Purchase Order hereunder. It is to be understood that by disclosing such
information to Supplier, IBM does not grant any express, implied, or other
license or right to Supplier to use IBM Confidential Information, other than as
directed by IBM.
8.3 - Supplier agrees not to make copies of IBM Confidential Information without
the prior written approval of the responsible IBM Purchasing Representative who
may provide additional copies to Supplier rather than authorize Supplier to
reproduce copies.
8.4 - Supplier agrees that IBM Confidential Information shall be exposed only to
Supplier's employees having a need to know such confidential information for the
purpose of carrying out the terms of this Agreement, and who agree in writing to
be bound by, and comply with, the terms of this Section.
8.5 - Supplier agrees that IBM Confidential Information shall be segregated at
all times from material of others so as to prevent any commingling of such
material with IBM Confidential Information disclosed under this Agreement. IBM
and Supplier may negotiate a mutually agreeable amount, if any, to be paid to
Supplier for all reasonable cost to be directly incurred by Supplier and
associated with such segregation. All costs in this category to be reimbursed by
IBM must be agreed to by IBM in writing prior to any such expenditure by
Supplier.
8.6 - Supplier agrees to secure documents, items of work in process and work
products that embody IBM Confidential Information in locked files or areas
providing restricted access to prevent their unauthorized disclosure or use.
Supplier agrees to implement security procedures necessary to protect IBM
Confidential Information. IBM will be notified immediately of any loss of IBM
Confidential Information.
8.7 - Supplier's obligations regarding IBM Confidential Information shall not
apply to information that was already known to Supplier prior to disclosure of
it to Supplier by IBM, that is or becomes publicly available through no act of
Supplier or agents of Supplier, that is rightfully received by Supplier from
third parties without accompanying secrecy obligation, that is independently
developed by Supplier or that is approved in writing by IBM for Supplier to
release.
8.8 - Supplier agrees that IBM may periodically review Supplier's compliance
with provisions of this Section with reasonable notice during normal business
hours.
8.9 - Supplier agrees to return or deliver to IBM all written or descriptive
matter or other media which contain IBM Confidential Information including all
authorized reproductions, upon IBM's request or upon termination or expiration
of this Agreement.
9.0 DRAWINGS AND OTHER MATERIAL PROVIDED TO SUPPLIER
All drawings, routings, forecasts, prices, specifications, instructions, and
other information provided by IBM pursuant this Agreement, or authorized copies
thereof made by Supplier, are the property of the IBM Corporation and are not to
be disclosed by anyone except those employees of Supplier who require them for
performance of work directly related to this Agreement. In no event is the
aforementioned data to be copied or reproduced without the prior written consent
of IBM. Supplier agrees that all the aforementioned data will be used only for
the benefit of IBM.
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10.0 PRICING
10.1 - The price for the Equipment shall be that which is set forth in the
Purchase Order. Supplier agrees that all prices shall be firm unless changed
pursuant to the Section of this Agreement entitled "SPECIFICATION CHANGES" and
shall be the full selling price, inclusive of all costs associated with delivery
of the finished Equipment to IBM in accordance with this Agreement, applicable
Purchase Order and Procurement Specifications and Equipment Specifications,
except applicable sales taxes payable by IBM and other associated expenses
expressly agreed to be paid by IBM herein or in the IBM Purchase Order.
10.2 - Supplier agrees that if, during the term of this Agreement, Supplier
shall sell or offer to sell to any third party, other than an Equipment
Distributor, or a Technology Alliance partner of Supplier, in any country a
comparable product in quantities which are equal to or less than the quantities
anticipated to be purchased under this Agreement at a price which is lower than
the IBM price or with more favorable payment terms, Supplier shall promptly
notify IBM of such lower offering price, sale price and/or payment terms.
Thereafter, at IBM's option and request, (1) Supplier shall offer the same
price, payment terms and/or any other terms and conditions to IBM, and IBM may
thereafter purchase items under this Agreement at the lower price and/or
applicable terms; or (2) the parties shall negotiate lower prices and the new
prices and/or discounts shall apply to all items ordered thereafter and to the
unshipped balance of any Purchase Order open as of the negotiation date.
11.0 CONSIGNMENT
IBM may from time to time consign to Supplier, IBM parts, and/or materials for
test or qualification of Equipment. Consigned parts and/or materials will be
identified on the Purchase Order. Supplier agrees to hold all parts consigned
hereunder in accordance with the terms and conditions of Appendix C hereto
entitled "SUPPLEMENTAL TERMS AND CONDITIONS FOR CONSIGNMENT OF IBM PARTS AND
MATERIALS".
12.0 SOFTWARE
Supplier agrees to the following Security Obligations regarding Harmful Code.
12.1 - Ensure that there are written procedures in place to prevent any code
provided by the Supplier to IBM, its Subsidiaries or Alliance Partners and its
or their distributors or customers from being contaminated by Harmful Code; and
12.2 - Make the procedures available to IBM for approval. Such approval shall
not relieve Supplier of any responsibilities assumed in this agreement; and
12.3 - Notify IBM immediately if Supplier subsequently suspects that any of the
code it has provided contains Harmful Code, and make every effort to ensure that
it is removed from all effected computer programs, data files, and hardware; and
12.4 - Indemnify IBM, its Subsidiaries or Alliance Partners against all claims
arising from Supplier's breach of its security obligations; and
12.5. - Supplier certifies that, to the best of Supplier's knowledge and belief,
any code provided by the Supplier to IBM does not contain any Harmful
Code.
13.0 LICENSE AND SUPPORT FROM SUPPLIER
13.1 - Supplier hereby grants and agrees to grant to the extent that it has the
right to do so, a nonexclusive,worldwide, irrevocable, royalty free fully
paid-up license to IBM with the right to sublicense its Subsidiaries and
Alliance Partners under Supplier's rights in any copyright or any claim in any
patents pertaining to the Equipment owned or licensable by Supplier at any time
to modify, make Derivative Works of, repair, or reconstruct the Equipment or
Derivative Works of the Equipment, to exercise any right under any copyright
involved in the use of the Equipment, to use such Equipment and to practice and
have practiced any process, including those involving computer software,
involved in the use of the Equipment and Derivative Works of the Equipment. This
constitutes a license to make and have made the Ibis 1000 Equipment design
technology. IBM shall refrain from exercising this license to make and have made
unless Ibis fails to deliver the Equipment or IBM terminates this Agreement or
any IBM Purchase Order under subsection 20.2, below. Activities licensed
hereunder may be carried out by the employees of IBM, its Subsidiaries or
Alliance Partners or by contractors engaged by IBM, its Subsidiaries or Alliance
Partners, but only for the purposes which are necessary for the proper operation
of the Equipment and in accordance with the specifications, or to exercise IBM's
right as detailed herein, to transfer the Equipment. Equipment purchased
hereunder may be sold and the licenses granted herein shall be transferable to a
purchaser of the Equipment from IBM; provided, however, the Equipment purchased
hereunder may not be sold by IBM to a buyer who is primarily in the business of
manufacturing for resale silicon on insulator (SOI) wafers or ion implantation
equipment used for manufacturing SOI wafers, unless (1) IBM first offers the
Equipment for sale to Supplier on the same terms and conditions that the
Equipment is offered for sale to the prospective buyer, with a price to Supplier
not to exceed the total price paid by IBM to Supplier for the Equipment, and (2)
Supplier rejects the foregoing IBM offer. Supplier will be deemed to have
rejected any such IBM offer if Supplier does not accept the offer in writing
within ten (10) days after Supplier gets notice of the offer from IBM. Nothing
in this Section 13.1 or anywhere else in this Agreement shall prohibit IBM from
charging a buyer of the Equipment (other than Supplier) any price IBM desires,
in IBM's sole discretion.
13.2 - Supplier agrees to supply to IBM, on a time and materials basis and at
the same rates that it charges other customers for similar services, blueprints,
interface, form, fit and function and other technical data, source code and flow
charts, and technical assistance for the purpose of exercising the licenses
granted above.
14.0 SCHEDULES
The scheduled delivery date shall be as set forth in the Purchase Order.
Failure to deliver Equipment to IBM by the delivery date specified in the
applicable Purchase Order may result in: 1) penalties, as mutually agreed to
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by Supplier and IBM and referenced in section 14.2, below; or 2) termination of
the applicable Purchase Order due to a material breach. Remedies for and/or
consequences of material breach are detailed in the section of this Agreement
entitled "TERMINATION". Not withstanding the above, Supplier and IBM may elect
to implement a new delivery date at the sole discretion of IBM, in an attempt to
complete the sale of the Equipment as otherwise originally intended.
14.1 - Supplier may not deliver Equipment purchased by IBM hereunder more than
three (3) days prior to the delivery date set forth in IBM Purchase Order
without the approval of the IBM Purchasing Coordinator. Supplier agrees to make
all requests for early delivery at least ten (10) days before Supplier's planned
early shipment date. Acceptance of early deliveries shall be at IBM's sole
discretion.
14.2 - In the event that Supplier fails to deliver Equipment to IBM by the
delivery date set forth in the applicable Purchase Order, Supplier agrees that
the price set forth in the Purchase Order for the affected Equipment or portion
thereof may be reduced by one percent (1%) per calendar week of delay not to
exceed ten (10) weeks or ten percent (10%) of the total payment obligation. If
late delivery terms are available in the IBM Volume Purchase Agreement (VPA),
those terms shall apply in lieu of the above.
14.3 - If, at the end of ten (10) weeks, Supplier is unable to deliver the
Equipment, Supplier shall be considered to be in default of this Agreement and
IBM may proceed to terminate as defined in the second paragraph of Section
entitled "TERMINATION". Supplier shall not be responsible for failure to deliver
Equipment by the delivery date if such failure arises out of causes beyond the
reasonable control of the Supplier. Such causes are limited to those identified
in Section entitled "EXCUSABLE DELAYS (FORCE MAJEURE)" of this Agreement.
15.0 EXCUSABLE DELAYS (FORCE MAJEURE)
Neither Supplier nor IBM shall be in default by reason of any failure in the
performance hereunder in accordance with any terms, if such failure is due to
acts of God or of the public enemy, acts of the Government in either its
sovereign or contractual capacity, fires, floods, epidemics, quarantine
restrictions, freight embargoes and civil commotions. Not-withstanding the
above, labor disputes are not regarded as excusable delays for the Supplier. The
party experiencing excusable delay shall notify the other party promptly in
writing with full details. If the notifying party cannot remedy the
circumstances causing such delay or default and resume performance within sixty
(60) calendar days of the notice, the other party may at its option terminate
the applicable Purchase Order.
16.0 ACCEPTANCE/REJECTION OF EQUIPMENT
16.1 - PRE-ACCEPTANCE
Pre-acceptance testing of all Equipment to be delivered hereunder shall be
determined in accordance with IBM Procurement and Equipment Specifications.
Pre-acceptance shall be made at the Supplier's facility. If Equipment fails
pre-acceptance testing, Supplier agrees to reimburse IBM for all reasonable
travel expenses incurred by IBM in connection with the preacceptance testing.
Supplier shall be entitled to cure the Equipment failure within thirty (30)
calendar days after the date of pre-acceptance. If, at end of the 30 day cure
period, Supplier is unable to bring Equipment into compliance, Supplier shall be
considered to be in default of this Agreement and IBM may proceed to terminate
as defined in the second paragraph of Section entitled "TERMINATION". If
Equipment passes pre-acceptance testing, IBM will issue a document of
pre-acceptance, signed by the IBM Technical Coordinator and the authorized IBM
manager.
16.2 - ACCEPTANCE
Final acceptance of all Equipment delivered hereunder shall be determined in
accordance with IBM Procurement and Equipment Specifications. If the Equipment
Specification requires final acceptance testing, acceptance shall be made by IBM
at IBM's facility (location of delivery) following demonstration of Equipment
compliance with performance criteria set forth in the specifications. If no
final acceptance test is required, final acceptance shall be determined by IBM
within thirty (30) days of Equipment delivery. If Equipment passes final
acceptance testing, IBM will issue a document of final acceptance, signed by the
IBM Technical Coordinator and the authorized IBM manager.
16.3 - CORRECTION OF REJECTED EQUIPMENT
Equipment which does not meet the Procurement and Equipment Specifications will
be rejected unless off-specification is approved by the IBM Purchasing
Coordinator in writing. Acceptance by IBM of off-specification Equipment or
portions thereof shall not be construed as setting a precedent and may require
an equitable reduction in the price which Supplier agrees to negotiate with IBM
if requested by the IBM Purchasing Coordinator.
In the event Equipment is rejected, IBM will provide Supplier with written
notice of rejection and the reasons therefore. Supplier agrees to develop a plan
for bringing the rejected Equipment into compliance with the Procurement
Specification and applicable Equipment Specification and submit the plan in
writing to the IBM Purchasing Coordinator within five (5) days of receipt of
IBM's notice of rejection. Supplier's plan shall include a completion date. IBM
will review the plan and may at IBM's sole discretion exercise one of the
following options:
16.3.1 - Terminate the Purchase Order for the rejected Equipment pursuant to the
terms of Section entitled "TERMINATION". In the event this option is exercised,
notice of termination shall be deemed given as of the date of Supplier's receipt
of IBM's rejection notice. Supplier agrees to promptly refund any payments made
by IBM following which IBM will return the Equipment to Supplier, freight
collect. If the Equipment requires special packaging and/or services prior to
transport, Supplier agrees to provide such packaging and services promptly upon
request of the IBM Purchasing Coordinator, at no cost to IBM.
16.3.2 - Negotiate with Supplier to finalize an action plan for bringing the
Equipment into compliance with the Procurement and Equipment Specifications and
establish a new delivery date. In the event this option is exercised the action
plan agreed to be implemented and the new delivery date will be confirmed by IBM
in an alteration to the original Purchase Order. Supplier agrees that the
elapsed time in business days, minus three (3),
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between the original delivery date and the new date shall be subject to the
terms of Section entitled "SCHEDULES". Supplier agrees that IBM may terminate
the Purchase Order for the affected Equipment pursuant to the terms of Section
entitled "TERMINATION" if Supplier fails to bring the Equipment into compliance
with the Procurement and Equipment Specifications by or before the newly
established delivery date.
17.0 PAYMENT, RECORDS, AUDIT AND INSPECTION, TRANSFER OF WAFERS
17.1 - PAYMENT
17.1.1 - Invoices for Equipment shall be rendered by Supplier to IBM for payment
in accordance with the following schedule:
17.1.1.1 - $(90% of price) following pre-acceptance and shipment; and
17.1.1.2 - $(10% of price) after final acceptance of the equipment by IBM
including all of the deliverable items.
17.1.1.3 - or as agreed to and specified in the Purchase Order.
17.1.2 - IBM will pay Supplier within thirty (30) days after the receipt of an
acceptable invoice.
17.1.3 - Payment of an invoice by IBM pursuant to this Agreement shall not be
construed as and shall not constitute an acceptance of Equipment that does not
conform to the Procurement Specification, Equipment Specification or is
otherwise unsatisfactory, nor shall such payment be construed as or constitute a
waiver of any of IBM's legal rights or remedies.
17.1.4 - Supplier shall send all invoices to the address set forth in the
applicable Purchase Order.
17.1.5 - If a Volume Purchase Agreement (VPA) is in place between IBM and
Supplier, then the VPA shall apply in lieu of sections 17.1.1 through 17.1.1.2,
above.
17.2 - MAINTAINING RECORDS
17.2.1 - With respect to all work performed, Supplier shall maintain complete
and accurate accounting records in a manner and form consistent with standard
accounting practices to substantiate Supplier's charges hereunder.
17.2.2 - Supplier agrees to substantiate charges with documentation acceptable
to IBM for any contracted labor hour services. Such documentation includes, by
way of illustration but not limitation, payroll records, time cards, job
summaries, and supplier invoices together with appropriate and relevant
substantiating data. Supplier shall retain such records for three (3) years from
the date of final payment by IBM. IBM shall have access to such records for
purposes of audit at normal business hours during this Agreement and during the
period in which Supplier is required to maintain such records.
17.3 - MONITORING
Supplier agrees that IBM may monitor Equipment production and quality control
test methods and procedures to determine if performance is consistent with
agreed-to criteria. Visits to Supplier's facility may be made and Supplier
agrees to render reasonable assistance to IBM during visits, as required to
determine compliance with such criteria. Such monitoring shall not, however,
relieve Supplier of its responsibility to build Equipment in accordance with the
Equipment Specifications, Procurement Specifications, or the terms and
conditions hereof.
17.4 - TRANSFER OF WAFERS
17.4.1 - IBM may, in its sole discretion, transfer, in any quantities,
unpatterned SOI wafers manufactured on the Equipment to third parties to which
IBM currently owes a duty to provide wafers; Subsidiaries other than SiBond,
LLC; and Alliance Partners. IBM may, in its sole discretion, transfer
unpatterned SOI wafers manufactured on the Equipment to any third parties,
including but not limited, to SiBond, LCC, in developmental quantities for the
purposes of development or evaluation by IBM or the third party. IBM is not
required to provide an accounting of the wafers.
17.4.2 - Not withstanding anything to the contrary herein, there are no
limitations on IBM on the transfer of wafers processed on the Equipment after an
additional process step has been performed on the wafers.
18.0 INSURANCE/LIABILITY/REPRESENTATIONS/WARRANTIES
18.1 - INSURANCE
Supplier agrees to maintain the following insurance:
18.1.1 - Workers' Compensation Insurance in accordance with the laws of the
states in which Supplier performs services for IBM.
18.1.2 - Contractual Liability (General Liability) Insurance in amounts
sufficient to cover the liability assumed by Supplier under Subsection entitled
"Indemnification for Acts of Supplier" of this Section.
18.1.3 - Automobile Liability Insurance. The minimum liability limits for the
insurance specified above shall be $1,000,000 for each person and $1,000,000 for
property damage for each accident. Certificates evidencing such insurance shall
be furnished to IBM at the commencement of this Agreement and at the renewal
date or date of any such insurance policies so long as this Agreement is in
effect. Such certificates shall provide for IBM to be notified within thirty
days (30) of cancellation or expiration. Supplier will provide to IBM insurance
certificates which evidence that the requirements of this Section have been met.
18.2 - INDEMNIFICATION FOR ACTS OF SUPPLIER
Supplier agrees to indemnify, defend, and hold harmless IBM, its Subsidiaries,
Alliance Partners, officers, directors, agents, and employees, from any and all
liability, losses, damages or expenses associated with claims, suits, or actions
brought by or on behalf of any third party of any nature, including, but not
limited to, personal injury (including death), environmental liability, or
property damage arising from, or alleged to arise from, Supplier's negligence or
other wrongful acts or omissions resulting from or in any way related to this
Agreement.
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18.3 - INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT
18.3.1 - Supplier shall defend at Supplier's expense and pay all final awarded
costs, fines, attorney fees and damages (including royalties on semiconductor
chip products) resulting from all proceedings or claims against IBM, its
Subsidiaries or Alliance Partners for Infringement of patents (including utility
models and registered designs) copyrights or protection provided for
semiconductor chip products (or similar intellectual property rights) now or
hereafter existing in the United States and any other country where Supplier,
Supplier's Subsidiaries or affiliates have furnished or furnish similar items as
furnished under this Agreement, or by any use thereof: a) in substantial
conformity with Supplier's recommended method of operation; or b) for the
intended purpose of such items. Supplier may, at its expense and subject to
IBM's prior written consent, either: a) procure for IBM the right to continue
the use of such Items or processes; b) modify the Equipment or substitute
equivalent noninfringing items or processes that meet IBM specification; or c)
otherwise settle such proceeding or claim.
18.3.2. - Supplier shall notify IBM if Supplier is aware of or becomes aware of
any right of or protection accorded to a third party as set forth above that
might affect Supplier's ability to provide goods under this Agreement or limit
IBM's freedom to use or sell such goods anywhere in the world.
18.3.3 - IBM shall provide notice to Supplier of any proceeding or claim of
which IBM becomes aware. IBM may actively participate in any such proceedings at
IBM's own expense.
18.3.4 - Supplier shall have no liability for any proceeding resulting from: a)
the combination of the items furnished hereunder with apparatus not provided or
proposed by Supplier; or b) for required compliance by Supplier with written
specifications furnished by IBM, other than performance specifications, for the
design of Equipment or for process steps if such infringement cannot be avoided
by Supplier in complying with such specifications.
18.3.5 - This Subsection entitled Intellectual Property Rights Infringement
states the entire rights and obligations of Supplier and IBM regarding
infringement and shall survive expiration or termination of the Agreement.
18.4 - LIENS
Supplier agrees that all Equipment delivered pursuant to this agreement shall be
free and clear of all liens, claims and encumbrances.
18.5 - SUPPLIER REPRESENTATIONS
18.5.1 - Supplier represents and warrants that Supplier is under no obligation
or restriction nor will Supplier assume any such obligation or restriction which
would in any way interfere or be inconsistent with, or present a conflict of
interest concerning, the Equipment or services to be furnished by Supplier under
this Agreement.
18.5.2 - Supplier represents and warrants the originality of the items prepared
for and submitted to IBM hereunder and that no portion of such items, or their
use or distribution, infringes or is protected by any copyright or similar right
of any third party.
18.5.3 - Supplier warrants that no individual who is a former officer or
employee of the Department of Defense (DOD) -- who left DOD service on or after
April 16, 1987; and served in a civilian position for which their rate of pay is
equal to or greater than the minimum rate of pay for GS-13; or served in the
Armed Forces in a pay grade of 04 or higher--shall be employed or compensated
for services rendered under this Agreement within two years after they left
service in DOD, without specific written approval of IBM. If Supplier requests
such approval, Supplier agrees to provide IBM with any information needed to
comply with 10 USC 2397 (b) and (c).
18.5.4 - Supplier warrants that all copyrightable works, including software and
documentation prepared pursuant to IBM Purchase Orders issued hereunder shall be
written by employees of Supplier acting within the scope of his or her
employment or others who are obligated to assign to Supplier all copyrights,
including those to software and documentation, and who are writing the same as a
work for hire, unless otherwise approved by IBM.
18.5.5 - Supplier represents that it is a duly organized corporate entity and is
duly authorized to enter into this Agreement.
18.5.6 - Supplier represents and warrants that the deliverable items shall
comply with the Equipment and Procurement Specifications and that IBM shall,
upon receipt of the deliverable items, be granted good and clear title to such
items free and clear of all liens and encumbrances.
18.5.7 - Supplier represents, warrants and agrees that all drawings, reports,
manuals, documents, information, programming and software provided in response
to this Agreement, or any related Purchase Order, are nonconfidential and
non-proprietary to Supplier or any third party. No confidential information or
trade secrets of Supplier or any third party shall be provided to IBM, except as
otherwise provided for in this agreement.
18.6 - INDEPENDENT SUPPLIER
It is understood and agreed by the parties that Supplier is retained and will at
all times during the life of this Agreement remain an independent supplier.
Personnel provided by Supplier will be deemed employees of Supplier and will not
for any purpose be considered employees or agents of IBM. Supplier assumes full
responsibility for the actions of such personnel while performing services
pursuant to this Agreement, and shall be solely responsible for their
supervision, daily direction and control, payment of salary (including
withholding of income taxes and social security), worker's compensation,
disability, and the like.
When work is done on IBM's premises, Supplier agrees that the provisions of
Section entitled "REQUIREMENTS FOR SUPPLIER PERSONNEL WHILE ON IBM PREMISES"
shall apply and Supplier shall at all times provide supervisory personnel to
carry out the responsibility for supervision and direction of Supplier's
employees. Supplier will inform IBM Purchasing Coordinator of the name of the
supervisor who will be responsible for the work. The supervisor shall have the
authority to act as agent for Supplier.
IBM may, at its sole discretion, request that Supplier remove any specified
employee(s) of Supplier from IBM premises, and that they not be reassigned to
any IBM premises under this Agreement. No reason is required of IBM for such
request. Supplier hereby agrees to take action immediately to remove such
specified employee(s), and to see that the reassignment does not occur. IBM will
provide an explanation to Supplier for informational purposes only.
Supplier shall have an appropriate written agreement with its employees
sufficient to enable Supplier to comply with all provisions of this Agreement.
18.7 - SECURITY INTEREST/TITLE TO WORK IN PROCESS
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Supplier agrees that IBM shall have title to all components, deliverables or
work paid for by IBM under this Agreement, notwithstanding the state of
completion or physical location of such components, deliverables or work. In
addition, Supplier agrees that IBM shall have a security interest in all such
components, deliverables and work performed, and paid for by IBM,
notwithstanding the state of completion or physical location of such components,
deliverables or work. Supplier agrees to assist IBM as required to perfect such
security interest.
19.0 WARRANTY
Supplier warrants Equipment purchased hereunder to be free from defects in
material and workmanship and to operate in accordance with the Procurement and
Equipment Specifications. Said warranty shall meet the coverage and requirements
as defined in Section 2.0 of the Procurement Specification. Items replaced by
Supplier during the warranty period shall become Supplier's property. Supplier
agrees to promptly remove all such items from IBM's premises at no cost to IBM.
In the event that Supplier fails to remove such items from IBM's premises, IBM
may dispose of the items without liability. Supplier agrees to reimburse IBM for
any costs associated with such disposal.
20.0 TERMINATION
20.1 - Either Supplier or IBM may terminate this Agreement, or any applicable
IBM Purchase Order issued under this Agreement if the other party engages in any
material breach or default hereof by providing the other party a written notice
specifying the breach(es) or default(s). The notified party shall be entitled to
cure any of the breaches or events of default identified in the notice within:
1)sixty (60) calendar days after the date upon which the notice was sent; or 2)
if applicable, within the time period specified in the relevant section of this
agreement, whichever occurs last.
If, at end of the cure period any of the identified breaches or defaults have
not been cured to the satisfaction of IBM, the applicable Purchase Order issued
hereunder shall terminate, effective as of the date of the written notice,
without additional notice, additional act, payment or other obligation. Supplier
agrees to reimburse IBM all monies paid by IBM through the effective date of
termination.
20.2 - IBM may terminate this agreement and IBM Purchase Orders issued hereunder
immediately upon notice and without further payment or other obligation if
Supplier:
20.2.1 - becomes insolvent, is dissolved or liquidated, has a petition of
bankruptcy, reorganization, dissolution or liquidation or similar action filed
by or against it, is adjudicated as bankrupt, or has a receiver appointed for
its business; or
20.2.2 - has all or a substantial portion of its capital stock or assets
expropriated or attached by any government entity; or
20.2.3 - makes an assignment for the benefit of creditors; or
20.2.4 - is subject to property attachment, court injunction, or court order
materially affecting its operations under this Agreement; or
20.2.5 - suffers a change of control, i.e. ownership (excluding mere ownership
changes due to public offerings or the exercise of warrants);
In the event of termination pursuant to this Subsection of Section entitled
"TERMINATION", the full extent of IBM's responsibility for payment to
Supplier shall be for work satisfactorily performed and for products
delivered and accepted by IBM through the effective date of termination minus
payments previously made by IBM.
20.3 - IBM may terminate this Agreement, or any applicable IBM Purchase Order
issued under this Agreement, in whole or in part, at any time, without cause,
upon delivery to Supplier of a written notice specifying the extent of the
termination and its effective date. Supplier agrees to stop work as specified in
the termination notice and settlement thereof shall be in accordance with the
following two (2) paragraphs as appropriate:
20.3.1 - Supplier shall submit a claim to IBM for reasonable and allowable costs
directly incurred by Supplier in the performance of this Agreement, or the
applicable IBM Purchase Order, as the case may be, including expenses which are
non-cancelable through the date of IBM's delivery of notice of termination to
Supplier. Supplier agrees to provide reasonable documentation to support
Supplier's claim.
20.3.2 - When available, cancellation matrices included in the Volume Purchase
Agreement shall be used to determine the appropriate adjustment to the total
amount due under the Purchase Order. If no cancellation matrix is available,
Supplier and IBM agree to faithfully negotiate an appropriate adjustment. When
settlement of such claim has been made, title to any items paid for by IBM shall
vest in IBM and Supplier shall dispose of such items in accordance with IBM's
instructions.
20.4 - The payment described herein shall be IBM's sole liability upon
termination of this Agreement before completion in accordance with this Section,
entitled "TERMINATION". NEITHER PARTY SHALL BE RESPONSIBLE FOR CONSEQUENTIAL,
INCIDENTAL, OR SPECIAL DAMAGES SUCH AS LOST PROFITS OR LOSS OF ANTICIPATED
BUSINESS AS A RESULT OF TERMINATION. Supplier acknowledges that neither it nor
IBM has any fixed commitments beyond this Agreement and agrees not to change its
operation in reliance on any anticipated business other than that actually
committed in this Agreement.
20.5 - RETURN OF WORK BY SUPPLIER
In the event of expiration or termination of this Agreement, title to all
completed work, all raw materials, all Supplier purchased parts, and work-in
process procured under this Agreement and reimbursed or paid for by IBM shall
vest in IBM. Supplier agrees to dispose of any items in its possession as
directed by IBM in writing at IBM's expense. The convenience payments made in
accordance with Subsection 20.3 of this Section above will be accepted for all
items described in this Subsection.
In the event of expiration or termination, Supplier or its successors(s) in
interest acknowledges IBM's right, title, and interest and agrees to cooperate
with IBM to facilitate IBM's access to and ability to secure and take possession
of any of IBM's assets including materials, tools, Equipment, data and the like.
Supplier agrees to collect these materials and make them available to IBM.
Further, Supplier grants to IBM or its agents its consent to enter Supplier's
premises at reasonable times during normal business hours to secure IBM's rights
or to protect IBM's assets and to recover these items described above.
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20.6 - LICENSE
In the event of termination as specified in subsection 20.1, 20.2, 20.6.1 or
20.6.2 of this Agreement, Supplier agrees to grant to the extent that it has the
right to do so a nonexclusive, worldwide, irrevocable, royalty free, fully
paid-up license to IBM with the right to sublicense its Subsidiaries or Alliance
Partners under Supplier's rights in any copyright or any claim in any patents
owned or licensable by Supplier at any time to: modify, make Derivative Works
of, repair, or reconstruct the Equipment or Derivative Works of the Equipment:
to exercise any right under copyright involved in the use of the Equipment; to
use such Equipment and to practice and have practiced any process, including
those involving computer software, involved in the use of the Equipment and
Derivative Works of the Equipment. Activities licensed hereunder may be carried
out by employees of IBM, its Subsidiaries or Alliance Partners or by contractors
engaged by IBM, its Subsidiaries or Alliance Partners but only for the purposes
which are necessary for the proper operation of the Equipment and in accordance
with the Equipment specifications. Such license shall include the right of IBM
to grant revocable or irrevocable sublicenses, of or within the scope of the
licenses granted to it herein, to its suppliers.
20.6.1 - BANKRUPTCY - The license granted in previous Subsection entitled
"License" of this Section shall take effect upon any assignment by Supplier of
its business for the benefit of its creditors or the voluntary filing of a
petition in bankruptcy by Supplier, any appointment of a receiver or trustee in
bankruptcy to take charge of all Supplier's property, or any adjudication of
Supplier as bankrupt, provided that such condition or conditions prevent
Supplier from meeting its obligations hereunder for at least sixty (60) days.
20.6.2 - FAILURE TO ACCEPT - As an alternative to default under this Agreement,
the license granted in this Agreement shall also take affect if the Equipment is
not successfully accepted by IBM prior to the completion date of the acceptance
test, provided that (i) the failure was not caused by IBM, and (ii) the failure
is not cured as per section 16.3 of this Agreement.
20.7 - KNOW-HOW TRANSFER
20.7.1 Within ten (10) days after the signing of the last signature necessary
for the formation of this Agreement, Supplier agrees to provide IBM escrow
materials in a sealed envelope(s) for the most current version of Supplier's
specifications for manufacturing Supplier's Equipment, including but not limited
to machine drawings, operating instructions (source code and operating code for
machine operations), assembly instructions, machine tolerances, bills of
material, know-how and documentation to permit the manufacture of the Equipment
(hereinafter "Equipment Specs"). The Equipment Specs shall be provided to IBM on
a diskette and hard copy. IBM agrees to store the escrow materials in a locked
cabinet at IBM's Burlington premises and agrees not to examine them, except as
expressly provided for herein.
20.7.2 Supplier agrees to provide IBM with any updates to the Equipment Specs
for Equipment ordered in the most recent Purchase Order or any generic
specifications necessary to build the Equipment specified in the Purchase Order.
Supplier shall provide such updates in the same form as specified in subsection
20.7.1, above, and IBM agrees to escrow the updates and treat them as escrow
materials. All updates provided by Supplier to IBM shall be deemed as being part
of the escrow materials.
20.7.3 In the event of termination by IBM due to:
(a) Supplier's failure to deliver Equipment that meets the specifications
contained in a Purchase Order within ninety (90) days after the delivery dates
specified therein;
(b) material breach of the Agreement or a Purchase Order by Supplier; or
(c) IBM's exercise of its rights in subsection 20.1, 20.2, 20.6.1 or 20.6.2,
above, Supplier hereby grants IBM the right to access to the escrow materials
and to use them in accordance with subsection 20.7.4, hereinbelow.
20.7.4 With respect to the escrow material, Supplier hereby grants to IBM, its
Subsidiaries and Alliance Partners, in the event IBM acquires right of access to
the escrow materials, a worldwide, irrevocable, royalty free, fully-paid up,
nonexclusive license to use the escrow materials to make, have made, use and
otherwise transfer the Equipment and any combination, whether or not such
combination includes apparatus manufactured by or for IBM, its Subsidiaries or
Alliance Partners, and to practice any process involved in the manufacture or
use thereof. This license shall include the right to have any third party use
such escrow materials in the manufacture and/or maintenance of the Equipment for
IBM, its Subsidiaries or Alliance Partners, or in the course of providing
development assistance to IBM, its Subsidiaries, or Alliance Partners.
20.7.5 Supplier agrees to grant IBM, its Subsidiaries, Alliance Partners and any
third party required by IBM to build the Equipment, immunity from suit from
infringement of any Supplier patents and violation of any of Supplier's
intellectual property rights where the infringement of any Supplier patents or
violation of any Supplier's intellectual property rights arise from IBM's, or
its Subsidiaries, Alliance Partners or a third party on behalf of IBM, use of
the escrow materials, provided that the immunity shall apply only to the extent
that the escrow materials are used to build the Equipment for use by IBM, its
Subsidiary or Alliance Partner.
20.7.6 In the event that IBM acquires access to the escrow materials, Supplier
agrees that it shall, upon request and at mutually agreed to times and places,
provide IBM with the services of appropriately qualified experienced personnel,
to the extent reasonable, available to accomplish the transfer of the escrow
materials being transferred pursuant to this Agreement, in tangible form and
such assistance shall be available full time for a period of one (1) month
following the transfer of the escrow materials to IBM, at no charge to IBM, and
thereafter, during the subsequent three (3) months shall be available for up to
ten (10) days per month. IBM agrees to pay $__________per day plus reasonable
and actual living and travel expenses for any additional services requested in
writing by IBM and furnished by Supplier hereunder. The $____________rate is for
1996, and IBM and Supplier agree that they will negotiate rates as required for
subsequent years based on the cost of living index as established for the
Fishkill, NY area. No charges shall be made hereunder for any services other
than those furnished in response to a specific written request from IBM.
Supplier shall invoice IBM monthly for charges incurred pursuant to this
Subsection and IBM shall pay such charges within thirty (30) days after receipt
of the invoice.
20.7.7 If IBM acquires the escrow material, then in the event that IBM wishes to
purchase parts or components thereof from any of the Supplier's vendors,
Supplier shall authorize said vendors to use (without additional charge to IBM)
any tooling or specs of Supplier in the possession of said vendors in the
manufacture of Supplier's parts and components for the use of IBM. In the event
of such acquisition, and on request by IBM, its Subsidiaries and Alliance
Partners, Supplier shall authorize said vendors to make available to IBM, at
IBM's expense, vendors' drawings, technical assistance, masks and mask sets, and
any other materials or specifications for said parts and
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components, owned or controlled by Supplier, in sufficient detail to permit IBM
to duplicate such parts and components. Supplier shall authorize said vendors to
make available to IBM, at IBM's expense, any masks and mask sets for said parts
and components only if said vendors cannot supply the parts for which those
masks and mask sets are used in quantities and under terms substantially the
same as those which were provided by the vendors to Supplier.
21.0 INDEPENDENCE OF ACTION
IBM shall be free to perform for itself work in any field in which Supplier
performs such work for IBM under this Agreement and Purchase Order issued
hereunder, and shall also be free to contract with third parties to perform the
same or similar work for it.
21.1 - Except as provided elsewhere in this Agreement, and subject to the patent
rights of each party, the ideas, concepts, know-how, or techniques developed in,
or originating out of, performance by either party pursuant to this Agreement,
or any related Purchase Order, can be used by either party in any way it may
deem appropriate.
21.2 - This Agreement will not preclude IBM from developing anything, including
equipment, materials, software, programming, documentation, or the like, which
is similar to, or competitive with, the Equipment provided by Supplier to IBM
under this Agreement or any related Purchase Order, or from entering into
similar agreements with other parties.
22.0 COMPLIANCE WITH LAWS
22.1 - Supplier agrees to comply, and do all things necessary for IBM to comply,
with all applicable Federal, State and local laws, regulations and ordinances,
including by way of illustration but not limitation, the regulations of the
United States Department of Commerce relating to the Export of Technical Data,
insofar as they relate to the Deliverables or services to be performed under
this Agreement. Supplier agrees to notify IBM immediately in the event Supplier
becomes subject to any order issued by any agency of the United States
Government revoking or denying, in whole or in part, the Supplier's United
States export privileges. Supplier agrees to obtain the required government
documents and approvals prior to export of any technical data disclosed to
Supplier of the direct product related thereto.
22.2 - Supplier agrees that neither Supplier nor any of its agents or employees
will export or re-export any information of IBM, or any process, product or
service that is produced as a result of the use of such information, to any
country specified in such Export Regulations as a prohibited destination,
without first obtaining U.S. Government approval, by application through IBM.
Upon request, IBM will advise Supplier of the countries then specified in such
regulations as prohibited destinations.
22.3 - Supplier agrees that for the purpose of compliance with the requirements
of the Occupational Safety and Health Act of 1970, services performed for IBM
shall be deemed entirely within the Supplier's responsibility. Supplier will
notify IBM promptly in writing, if a charge of non-compliance with the Act has
been filed against the Supplier in connection with services being performed
hereunder on IBM owned or leased premises.
22.4 - Supplier shall at all times comply with federal, state and local laws,
rules and regulations applicable to the environment. Supplier acknowledges that
these laws may require, among other things, that Supplier install and maintain
abatement and monitoring devices, segregate wastes, develop and maintain
emergency response plans, and make applications for, and comply with, conditions
of permits and RCRA and state regulations applicable to transportation of
hazardous materials. This list is not exhaustive and Supplier shall be
responsible for insuring compliance with all laws and regulations concerning the
environment which are applicable to Supplier. Copies of all required permits
from governmental agencies having jurisdiction over Supplier's operation shall
be delivered to IBM Purchasing Coordinator upon request.
22.5 - This Agreement shall be construed and the legal relations created herein
between the Supplier and IBM shall be determined in accordance with the laws of
the State of New York which pertain to agreements executed in, and fully
performed within, the State of New York. Any proceeding to enforce, or to
resolve disputes relating to, this Agreement shall be brought before a court of
competent jurisdiction in the State of New York. The Supplier and IBM hereby
expressly waive any right to a jury trial and agree that any action, proceeding
or counterclaim arising out of or from this Agreement shall be tried by a judge
without a jury.
22.6 - Each party agrees to pay the other party's attorneys' fees and cost of
litigation if the party, for any reason whatsoever, brings suit against the
other party and the other party is finally adjudicated not to have liability.
23.0 ASSIGNMENT, DELEGATION, AND SUBCONTRACT
No right or interest in this Agreement shall be assigned by Supplier without
express written permission of IBM and any such assignment or attempted
assignment shall be void. No delegation of the services or other obligation of
it by Supplier to IBM shall be made without IBM's prior express written
permission. Supplier shall not subcontract any part of its manufacturing
operation to be performed hereunder without the prior written consent of IBM.
Purchase of services or components normally purchased by Supplier shall not be
construed as an assignment or subcontract.
Any subcontractor retained by Supplier must be obliged by written agreement to
the same obligations as are set forth herein with respect to Supplier. Such
agreement shall require that all copyrightable works, including software and
documentation prepared by the subcontractor pursuant to the requirements of IBM
Purchase Order shall be written solely by employees of the subcontractor acting
within the scope of his or her employment. In the event that Supplier receives
approval to subcontract certain portions of the services, the term "employee" as
it refers to Supplier herein shall be deemed to include such subcontractor and
its employees.
Supplier is solely responsible for its work under this Agreement and written
approval by IBM for subcontracting of any part of the workscope (e.g., building
the Equipment) shall not relieve Supplier of the responsibility for any failure
of performance by a subcontractor. Supplier shall be fully responsible for the
work and IBM may hold Supplier solely responsible.
With Supplier's consent, which will not unreasonably be withheld, IBM shall have
the right to assign any or all of the rights under this Agreement.
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24.0 PASSTHROUGH AGREEMENTS
Supplier will have an appropriate agreement with each of its employees or other
whose services Supplier may require sufficient to enable it to comply with all
the terms of this Agreement or any related Purchase Order.
25.0 REQUIREMENTS FOR SUPPLIER PERSONNEL WHILE ON IBM PREMISES
25.1 - Supplier agrees to take appropriate preventive steps before the
assignment of any of its employees to perform work under this Agreement, that it
reasonably believes will ensure that its employees and its subcontractors'
employees at any level, will not engage in inappropriate conduct while on IBM
premises. Inappropriate conduct shall include, but not be limited to: being
under the influence of or affected by alcohol, illegal drugs or controlled
substances; the manufacture, use, distribution, sale or possession of alcohol,
illegal drugs or any other controlled substance, except for approved medical
purposes; the possession of a weapon of any sort and/or harassment, threats or
violent behavior. Supplier shall provide IBM with documentation of the
preventative steps taken by Supplier to prevent inappropriate conduct on IBM
premises upon request.
25.2 - Supplier shall comply with all requirements provided by IBM with respect
to work performed on IBM premises, including but not limited to the following:
25.2.1 - IBM's Facilities Protection Department shall issue IBM security key
badges (IBM Badges) to Supplier Personnel. IBM Badges must be returned by
Supplier Personnel at the end of each assignment or as specified in IBM Purchase
Order. IBM Badges must be visibly displayed at all times by Supplier Personnel
while on IBM premises. If any IBM Badge is lost or stolen the IBM Purchasing
Coordinator, the IBM Technical Coordinator or IBM Facilities Protection must be
notified immediately.
25.2.2 - Supplier Personnel shall only enter those buildings, departments, or
areas which are designated by IBM Technical Coordinator as required to provide
services described in this Agreement.
25.2.3 - Supplier Personnel shall comply with all log-in/log-out requirements
when entering or leaving IBM buildings and designated work areas.
25.2.4 - Supplier Personnel shall comply with all security and safety guidelines
which are posted on IBM premises, specified in IBM Purchase Order or are
otherwise specified by IBM.
25.2.5 - Areas designated for IBM authorized personnel only shall be entered
only with special permission of the IBM Technical Coordinator and under IBM
escort.
25.2.6 - IBM copying equipment or other IBM equipment shall not be used by
Supplier Personnel except with prior approval of the IBM Technical Coordinator.
25.2.7 - Supplier Personnel shall not disturb materials lying on IBM desks,
mounted on easels or displayed on chalkboards.
25.2.8 - Supplier Personnel shall not linger in buildings or department areas
after completing work assignments.
25.2.9 - Supplier supervisory personnel working with the IBM Technical
Coordinator shall ensure that Supplier Personnel accountability is maintained in
performing various job assignments.
25.2.10 - Supplier Personnel shall not leave IBM external doors propped open. No
IBM materials shall be removed from buildings without written IBM approval.
25.2.11 - Supplier shall provide to the IBM Technical Coordinator an inventory
of all Supplier equipment being brought onto IBM premises and shall use the
proper IBM documentation, as supplied by the IBM Technical Coordinator, for the
removal of such equipment from the IBM premises.
25.3 - Violation of the provisions of this Section may result in the termination
of this Agreement and any other remedy available to IBM in law or equity.
26.0 GIFTS AND GRATUITIES
26.1 - Supplier, its employees, and agents shall not give or offer to give any
gifts or gratuities of any kind whatsoever to any IBM employees or members of
their families.
26.2 - In the event Supplier is approached by anyone suggesting fraudulent or
unethical behavior with regard to Supplier's business activities with IBM, or if
any request is made to Supplier, its employees, or agents by any IBM employees
or members or their families for gifts or gratuities of any kind, Supplier
agrees to immediately notify IBM Procurement Management.
26.3 - Supplier certifies by execution of this Agreement, that it knows of no
gifts or gratuities, of any kind whatsoever, paid to IBM employees or members of
their families by Supplier, Supplier's employees, or agents during the past five
(5) years, except as otherwise set forth in writing to IBM Procurement
Management within 30 days of the execution of this Agreement.
26.4 - Supplier agrees to immediately notify IBM Purchasing Coordinator in
writing of any violations of this subsection.
27.0 SEVERABILITY
If any term or provision of this Agreement or the application thereof to any
party hereto or set of circumstances shall, in any jurisdiction and to any
extent, be finally held to by invalid or unenforceable, such term or provision
shall only be ineffective as to such jurisdiction, and only to the extent of
such invalidity or unenforceability, without invalidating or rendering
unenforceable any other terms or provision of this Agreement or under any other
circumstances, so long as the remainder of this Agreement still effectuates the
essential purposes of this Agreement. If such essential purposes cannot be
effectuated, this Agreement shall either be renegotiated or terminated without
cause by IBM in its sole discretion.
28.0 NO WAIVER
The failure of IBM to insist on strict performance of any convenant or condition
hereof, or to exercise any option herein contained, shall not be construed as a
waiver of IBM's right to enforce all the terms and conditions of this Agreement
in any other instance.
29.0 MISCELLANEOUS
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29.1 - Supplier agrees to provide prompt written notice to the IBM Purchasing
Coordinator of any event of default engaged in or suffered by Supplier. Supplier
further agrees to provide written notice to the IBM Purchasing Coordinator of
any occurrence either internal or external to Supplier's business that may
effect Supplier's ability to perform hereunder. Such occurrences subject to this
provision shall include but are not limited to labor actions, unresolved
material supply problems, transportation problems and significant changes in
Supplier's financial status.
29.2 - Nothing contained in this Agreement, or any related Purchase Order shall
be construed as granting Supplier any rights to use in advertising, publicity or
other marketing activities any name, trade name, trademark, or other designation
of IBM, including any contraction, abbreviation, or simulation of any of the
foregoing.
29.3 - For a period of five years from the effective date of this Agreement
first above written, Supplier shall not intentionally disclose the existence,
terms and conditions, or subject matter of this Agreement, or any related
Purchase Order, without the prior written consent of IBM unless, in good faith
of Supplier, such disclosure is:
29.3.1 - in response to a valid order of a court or other governmental body of
the United States of any political subdivision thereof; provided, however, that
Supplier shall first have made a good faith effort to obtain a protective order
requiring that the information or documents so disclosed be used only for the
purposes for which the order was issued; or
29.3.2 - as may be otherwise required by law; or
29.3.3 - as may be necessary to establish its rights under this Agreement or any
related Purchase Order; or
29.3.4 - as may be necessary for the performance of the professional services of
Supplier's accountants and/or legal counsel.
29.4 - In addition to the Supplier's obligations, as specified elsewhere in this
Agreement, in the event IBM needs to convey to Supplier, for purposes of
effectuating this Agreement or Purchase Order issued hereunder, any information
that IBM deems to be confidential information, such IBM Confidential Information
will be treated by Supplier in accordance with the Section entitled "IBM
CONFIDENTIAL INFORMATION".
30.0 SURVIVAL
To the extent a particular right or obligation herein does not have a
specifically identified survival period, all rights and obligations which by
their nature survive the expiration or termination of this Agreement will remain
in effect beyond any expiration or termination for the period reasonably
necessary to accomplish their purpose and shall bind and inure to the benefit of
Supplier and IBM, their legal representatives, successors and assigns.
31.0 CHANGES OR AMENDMENTS
This Agreement and all attachments hereto, including the applicable Purchase
Order, may not be changed or amended except by an amendment signed by the
Authorized Representatives of Supplier and IBM. All future communications,
representations and or understanding of either Supplier or IBM shall be
subordinate to this Agreement and all attachments hereto including the
applicable Purchase Order.
32.0 ORDER OF PRECEDENCE
In the event of conflict or inconsistency in the provisions of the contract
documents, the order of precedence shall be as follows:
This Agreement including its Attachments and Appendices; Applicable Maintenance
Agreement, Service Agreement; or Volume Purchase Agreement not already
incorporated into this Agreement as an attachment hereto.
The above order of precedence shall not prohibit Supplier and IBM from entering
into new agreements or amending existing agreements when necessary for the
mutual benefit of Supplier and IBM.
33.0 SOLE AGREEMENT
This Agreement, the Attachments and Appendices hereto, and the Purchase Order
issued hereunder, (but NOT including the terms and conditions stated on the
reverse side of the Purchase Order, which are henceforth null and void), embody
the entire understanding of the Supplier and IBM, with respect to the subject
matter contained herein and supersede all previous communications,
representations or understandings either written or oral between the Supplier
and IBM relating to the subject matter hereof. It is expressly understood that
there has been made to Supplier no other inducement to enter into this Agreement
other than the terms hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.
ACCEPTED AND AGREED TO:
IBIS TECHNOLOGY CORPORATION INTERNATIONAL BUSINESS
MACHINES CORPORATION
BY: /s/ G. Ryding BY: /s/ Robert J. Belish
----------------------------- --------------------------
G. Ryding Robert J. Belish
TITLE: President and CEO TITLE: Procurement MGR
DATE: 5/10/96 DATE: May 22, 1996
LIST OF ATTACHMENTS
Attachment C: Consignments
Attachment D: Procurement Specifications
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