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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 23, 1998
ALIGN-RITE INTERNATIONAL, INC.
(exact name of Registrant as Specified in Charter)
California 0-26240 95-4528353
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
2428 Ontario St.
Burbank, CA 91504
(Address of Principal Executive Offices and Zip Code)
(Registrant's telephone number, including area code: (818) 843-7220
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Item 5. Other Events
Align-Rite International, Inc. a California corporation, entered into that
certain Systems Purchase Agreement, dated as of May 22, 1998, with Etec
Systems, Inc. a Nevada corporation. This agreement is filed as Exhibit 10.1 and
is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
*10.1 Systems Purchase Agreement, dated as of May 22, 1998, by and
between Etec Systems, Inc. a Nevada corporation and Align-Rite
International, Inc., a California corporation.
</TABLE>
* Certain information in this exhibit has been omitted and filed
separately with the Commission. Redacted portions of the exhibit are
indicated by an asterisk within brackets ([*]), and a legend appears on
the appropriate pages. Confidential Treatment has been requested with
respect to the omitted portions.
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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.
ALIGN-RITE INTERNATIONAL, INC.
Date: July 23, 1998 By: /s/ PETAR KATURICH
-----------------------------------
Petar Katurich
Chief Financial Officer & Secretary
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
*10.1 Systems Purchase Agreement, dated as of May 22, 1998, by and
between Etec Systems, Inc. a Nevada corporation and Align-Rite
International, Inc., a California corporation.
</TABLE>
* Certain information in this exhibit has been omitted and filed
separately with the Commission. Redacted portions of the exhibit are
indicated by an asterisk within brackets ([*]), and a legend appears on
the appropriate pages. Confidential Treatment has been requested with
respect to the omitted portions.
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[LOGO] EXHIBIT 10.1
Etec Systems, Inc.
Agreement No. 1224 26460 Corporate Avenue
Hayward, CA 94545
SYSTEM PURCHASE AGREEMENT
This Agreement is entered into between Etec Systems, Inc. ("Etec"), 26460
Corporate Avenue, Hayward, California 94545 and Align-Rite International
("Customer"), 2428 Ontario Street, Burbank, California 91504-3195.
1.0 CONTRACT DOCUMENTS
1.1 System Purchase Agreement No. 1224.
1.2 Exhibit A
o Exhibit A-1: ALTA 3500 Acceptance Test Procedure No. 7040-0015,
Rev. B.
o Exhibit A-2: MEBES IV Acceptance Test Procedure No. 0920-2553,
Rev. B.
1.3 Exhibit B
o Exhibit B-1: ALTA 3500 Technical Description No. 7060-0012, Rev.
A.
o Exhibit B-2: MEBES III to MEBES IV-TFE Retrofit (Product
Performance Specification) No. 0999-0225, Rev. A.
1.4 Exhibit C
o Exhibit C-1: ALTA 3500 Facility Planning Manual No. 7380-0004,
Rev. A.
o Exhibit C-2: ALTA 3500 Electrical Installation Guide No.
7460-0011, Rev. A.
o Exhibit C-3: MEBES IV Facility Planning Manual No. 0900-2496,
Rev. B.
1.6 Exhibit D
o Exhibit D-1: ALTA 3500 End User Software License Agreement No.
93531.
o Exhibit D-2: ALTA 3500 End User Software License Agreement No.
93532.
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1.7 Exhibit E - MEBES Software Configuration Sheets
o Exhibit E-1: Software Configuration Sheet for MEBES system Serial
No. 37.
o Exhibit E-2: Software Configuration Sheet for MEBES system Serial
No. 40.
o Exhibit E-3: Software Configuration Sheet for MEBES system Serial
No. 71.
o Exhibit E-4: Software Configuration Sheet for MEBES system Serial
No. 90.
o Exhibit E-5: Software Configuration Sheet for MEBES system Serial
No. 94.
o Exhibit E-6: Software Configuration Sheet for MEBES system Serial
No. 109.
o Exhibit E-7: Software Configuration Sheet for MEBES system Serial
No. 132.
1.8 Exhibit F - (Blank) National Financing Statement (Form UCC1)
2.0 ORDER OF PRECEDENCE
The terms of this Agreement are to be considered together. The order of
precedence listed in Section 1.0 shall apply to resolve any conflict.
3.0 SYSTEM PURCHASE
3.1 Customer shall purchase the following from Etec:
3.1.1 One (1) ALTA 3500 System, for installation at Customer's
facility in Bridgend, UK ("System #1").
3.1.2 One (1) ALTA 3500 System, for installation at Customer's
facility in Burbank, California, USA ("System #2").
3.1.3 Upgrade for a MEBES III system currently owned by Customer and
installed at Customer's facility in Burbank, California, USA
("Upgrade"). Customer will notify Etec in writing of the serial
number of this system on or before September 30, 1998.
3.2 System #1 and System #2 are sometimes collectively referred to in this
Agreement as "Systems."
3.3 The Upgrade will be to a MEBES IV TFE configuration and will include
the modules, software and other features as described in the "MEBES
III to MEBES IV-TFE Retrofit (Product Performance Specification) No.
0999-0225, Rev. A," attached hereto as Exhibit B-2. The Upgrade will
also include a spare TFE gun. The Upgrade must be installed on a MEBES
III with a High Throughput Memory (HTM) System (80 MHz). Following
Customer's notification of the serial number of the MEBES III system
to be upgraded, Etec will conduct an on-site audit of said MEBES III
system and its performance prior to installation of the Upgrade. All
software licenses currently in effect with respect to the existing
MEBES III system shall also apply to the Upgrade.
3.4 OPTION. In consideration of Customer's order pursuant to this
Agreement, Etec grants Customer an option to upgrade two (2)
additional MEBES III systems (with Customer-supplied HTM) to the MEBES
IV-TFE configuration. A spare TFE gun for each upgrade will be
included. [*].
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[*] Confidential Treatment has been requested with respect to the omitted
portions.
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[*]Shipment of the upgrades will be at Etec's then current
availability, presently estimated to be eight (8) months following
receipt of notification of Customer's election to exercise the option.
Following receipt of Customer's purchase order, Etec will provide an
acknowledgment with a scheduled delivery date. Each upgrade will be
completed within four (4) months of delivery of parts to Customer's
system meeting the requirements specified in the "MEBES III to MEBES
IV-TFE Retrofit (Product Performance Specification) No. 0999-0225,
Rev. A," attached hereto as Exhibit B-2, or then current revision
thereof. [*]
3.5 OPTION. In consideration of Customer's order pursuant to this
Agreement, Etec grants Customer an option to purchase two (2) used
High Throughput Memory (HTM) systems [*]. At the present time, Etec
does not own said used HTM systems, and as such, this offer is subject
to availability, currently estimated at June 1998 and January 1999,
respectively. [*]
3.6 Upon receipt, acknowledgment and acceptance of Customer's purchase
order pursuant to this Agreement, Etec will install one (1) MEBESNET
option, Part Number 0751-0700-040, on MEBES system serial number 37,
and one (1) MEBESNET option, Part Number 0751-0700-040, on MEBES
system serial number 94, which systems are currently installed at
Customer's Bridgend, UK and Burbank, California facilities
respectively. [*]. Estimated delivery of these options will be
fourteen (14) weeks after receipt and acknowledgment of Customer's
purchase order. Etec will use reasonable efforts to expedite the
delivery of each of the MEBESNET units with delivery of the first
MEBESNET to MEBES system serial number 37 in Bridgend, UK.
3.7 Upon receipt, acknowledgment and acceptance of Customer's purchase
order pursuant to this Agreement, Etec will install one (1)
Write-From-Link software option, Part Number 0735-0038-000, at
Customer's facility in Bridgend, UK, and one (1) Write-From-Link
software option, Part Number 0735-0038-000, at Customer's facility in
Burbank, California USA. Customer will advise Etec in writing of the
serial numbers of the specific systems which are to receive these
options. [*]. Estimated delivery of these options will be two (2)
week after Etec's receipt of notification from Customer of the serial
numbers of the specific systems which are to receive these options.
3.8 In consideration of Customer's order pursuant to this Agreement, and
upon receipt, acknowledgment and acceptance of Customer's purchase
order in connection therewith, Etec agrees to:
3.8.1 [*]
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[*] Confidential Treatment has been requested with respect to the omitted
portions.
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3.8.2 [*] Such software options currently enabled and specified on the
Configuration Sheets attached collectively to this Agreement as
Exhibit E and will be provided by Customer to Etec no later than
June 1, 1998.
3.8.3 provide Customer with a right of first refusal on the next three
used CORE lithography systems received in trade by Etec, at
Etec's then current resale price. Etec will provide Customer
with quotations for each such system. A purchase order from
Customer, consistent with the terms and conditions of Etec's
quotation(s), will be required within thirty (30) days of
Customer's receipt of such quotation(s). The failure of Customer
to submit such a purchase order within the specified time will
relieve Etec of all obligations with respect to any such quoted
system.
3.9 Etec's approval of Customer's purchase order pursuant to this
Agreement is also conditioned upon the occurrence of either of the
following events:
3.9.1 issuance of a replacement purchase order by a reputable leasing
company approved by Etec, no later than thirty (30) days prior
to the shipment of System #1; or
3.9.2 a commitment letter from Customer's bank stating that it has
agreed to finance this transaction through its completion, said
letter to be received by Etec no later than thirty (30) days
prior to the shipment of System #1.
3.10 Etec shall acknowledge Customer's purchase order(s) in writing within
fifteen (15) days. Upon Etec's written agreement that all the terms of
Customer's order (including quantity, configuration, price, payment
terms and delivery schedule) are acceptable to Etec, Customer's order
shall be deemed to have been accepted under the terms and conditions
of this Agreement. This Agreement shall supersede all printed terms
and conditions contained in Customer's order(s) and Etec's
acknowledgment(s).
4.0 INSPECTION AND PLANT VISITS
Customer's authorized representatives may visit the facilities where the
Systems are being manufactured or tested during Etec's normal business
hours. Visits shall be approved by Etec and conducted to minimize any
impact on schedule or cost. Customer shall not be permitted to operate, use
or test Systems prior to final acceptance at Customer's site except as
otherwise provided in Exhibit A.
5.0 CHANGES
At any time prior to shipment of Systems, Customer may, by written order
and with Etec's approval:
5.1 order additional work or issue additional instructions within
the general scope of this Agreement; or
5.2 make changes within the general scope of this Agreement in any
one or more of the following areas:
5.2.1 drawings, designs or specifications;
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[*] Confidential Treatment has been requested with respect to the omitted
portions.
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5.2.2 method of shipment or packing; or
5.2.3 place of delivery.
If any Customer change causes an increase in the cost of or time
required for performance of this Agreement, an equitable adjustment
shall be made in the Purchase Price, delivery schedule, or other
affected terms. The adjustment shall be by mutually agreed written
amendment to this Agreement. In addition, if any change affects the
performance of Systems, Exhibits A and B shall be amended accordingly.
6.0 CUSTOMER FACILITIES
6.1 Performance of the Systems and Upgrade to specifications is based upon
their installation in a facility which meets or exceeds the
requirements of Exhibit C and which has demonstrated electron beam or
optical resist processing capability as specified in Exhibit C, as
appropriate. Accordingly, Customer agrees to provide Etec with a
report which details the status of the facility design, construction
and materials in relation to schedule milestones. Customer will be
responsible for system failure due to facilities deficiencies.
6.2 Customer shall make its facility available for Etec's inspection at
least 14 days before the start of Factory Acceptance for the Systems,
and at least 30 days prior to shipment of the Upgrade. At that time
Etec will verify that the facility and process meets or exceeds
specifications. If the facility fails to meet specifications, Etec may
recommend modifications that Customer may choose to accept or reject.
If Customer chooses to reject Etec's recommendations, then Customer
must waive that portion of the specifications or acceptance criteria
that may be affected by the lack of proper facilities as designated by
Etec.
6.2.1 The determination that Customer's facility is deficient will be
a joint decision made by Etec and Customer. Any re-audit of
Customer's facility by Etec will be at Customer's expense.
6.2.2 If Customer's facility is determined to be deficient, then the
final progress payment shall be due at Etec's scheduled shipment
date for the Systems. If Customer requests installation of the
Systems and Upgrade without re-audit of the facility, Customer
shall be responsible for Etec's reasonable direct expenses
explicitly associated with failure of the facility to meet
specifications. In addition, in the event that the shipment is
delayed due to facility deficiencies, Etec, at its option, may
store the Systems and Upgrade at its plant or at Customer's
site, at Customer's expense. Selection of the actual storage
location shall be determined by mutual agreement between
Customer and Etec. If a mutually agreeable site is not
determined, Etec will determine the storage location at
Customer's expense.
6.3 (Applicable to ALTA 3500 Systems only)
Two (2) weeks prior to the Etec-scheduled System acceptance at
Customer's site ("Final Acceptance"), an assessment will be made of
Customer's anisotropic process. If at this time Customer's anisotropic
process does not meet or exceed the specifications in Table 6.3 below,
all Final Acceptance plates will be developed/processed using Etec
process facilities. Upon development, processing and metrology, said
Final Acceptance plates and measurement data will be sent to Customer.
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PROCESS PERFORMANCE SPECIFICATIONS
TABLE 6.3
<TABLE>
<CAPTION>
DATA ITEM PERFORMANCE CRITERIA
- --------- --------------------
<S> <C>
CD sensitivity to dose for 2.0 um clear lines <= 4 nm/%
as exposed by the 3500
CD error contribution from the mask blank < +/-10 nm
Nominal CD shall be achieved at the isofocal dose
Chrome etch undercut < 10 nm/edge
Latent image instability < 10 nm over 6 hours
</TABLE>
7.0 IMPORT/EXPORT APPROVALS
7.1 The parties hereby covenant that no commodities or technical data
(including computer software) agreed to be sold under this Agreement
will be sold, leased, delivered, transferred or conveyed to any person
in any country in contravention of any export or import laws,
regulations, executive orders or decrees of the United States
Government or any agencies thereof.
7.2 Customer shall assist Etec in obtaining all required export and import
licenses, permits, approvals, certificates and verifications before
shipment of the Systems and Upgrade.
8.0 SHIPPING AND DELIVERY
System #1 is shipped CIP Bridgend, UK. System #2 is shipped FCA Beaverton,
Oregon. The Upgrade is shipped FCA Hayward, California.
Etec's current scheduled shipment date of System #1 [*]. Etec's current
scheduled shipment date of System #2 [*]. Etec's current scheduled shipment
date of the Upgrade [*].
Etec shall prepay and Customer shall be billed for all freight costs,
including return of packing containers. Customer shall supply all labor and
equipment needed for unloading the Systems and Upgrade from the carrier.
Customer shall not unload or unpack any product except in the presence of
qualified Etec personnel, or if authorized in writing by Etec to do so.
9.0 ACCEPTANCE
9.1 Customer acceptance of the Systems will occur twice; once at Beaverton
("Factory Acceptance") and after installation at the delivery point
(Final Acceptance or "CFA"). The specification for Systems for butting
will be less than or equal 18nm mean plus (range divided 2). This
specification and acceptance test criteria supercede that described in
Exhibit A and B. Etec will provide Customer with revised Exhibits A
and B no later June 30, 1998. Customer acceptance of the Upgrade will
occur once, following installation at the delivery point (Final
Acceptance or CFA). Acceptance tests will be performed in accordance
with Exhibit A as applicable. Upon successful completion of tests,
Customer's representative shall execute the appropriate "Acceptance
Form" and shipment of the System and Upgrade from Etec's facility
constitute an irrevocable commitment to purchase. Any unauthorized use
of the Systems or Upgrade by Customer prior to completion of Final
Acceptance shall be deemed to be a waiver of the Final Acceptance test
and the balance of the Purchase Price shall then become due and
payable and the Warranty Period shall begin.
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[*] Confidential Treatment has been requested with respect to the omitted
portions.
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9.2 Etec will notify Customer at least two (2) weeks prior to the
start of Factory Acceptance for the Systems, and at least two
(2) weeks prior to the estimated shipment date of the Upgrade.
If Customer unreasonably delays the start of Factory Acceptance,
customer understands that Etec may proceed with Factory
Acceptance tests and agrees to pay Etec the associated milestone
payment upon Etec's presentation of satisfactory Factory
Acceptance test results.
9.3 Customer agrees that it will not unreasonably prevent the start
of Final Acceptance nor unreasonably delay the completion of
Final Acceptance. If there are delays, other than Force Majeure,
that prevent the start or completion of Final Acceptance after
ninety days from shipment of the Systems or Upgrade, Customer
agrees to waive the Final Acceptance test, the balance of the
Purchase Price shall become due and payable and the Warranty
Period shall begin.
9.4 Etec will undertake an engineering program for the purposes of
improving butting to the original 15 nm performance. Any result
that produces a deliverable engineering change order (ECO) or
procedure will be made available to Customer immediately [*].
10.0 TRAINING
Etec will provide [*] technical training sessions in use and operation of
the Systems and the initial Upgrade for up to three (3) of Customer's
personnel at each training session at the Customer's facility following
Final Acceptance of the Systems, consistent with Etec's then-offered system
training. Customer will bear all expenses for its personnel, including but
not limited to transportation, meals, and lodging.
11.0 PAYMENT TERMS
The total price for the Systems and Upgrade listed in Customer's order as
accepted by Etec (the "Purchase Price") is payable in United States
currency to Etec Systems, Inc., in the following ways:
1) By Wire: Sanwa Bank of California, Los Angeles, CA
(Preferred) Account Name: Etec Systems, Inc.
ABA #122-003-516
Account #1132-56384
or
2) By Mail to: Etec Systems, Inc.
P.O. Box 45911
San Francisco, California 94145 USA
The purchase price for each system is payable as follows:
SYSTEMS:
11.1 First Payment - [*] is due net thirty (30) days from invoice date upon
receipt, acceptance and acknowledgment of Customer's Purchase Order.
11.2 Second Payment - [*] is due net thirty (30) days from invoice date
upon completion of Factory Acceptance Tests ("FAC").
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[*] Confidential Treatment has been requested with respect to the omitted
portions.
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11.3 Third Payment - [*] is due net thirty (30) days from invoice date upon
the earliest completion of either of the following two events: 1)
Final Acceptance Tests ("CFA") conducted at Customer's site following
installation; or 2) Ninety (90) days after Factory Acceptance, if
failure to complete CFA is not caused by Etec.
11.4 [*]
UPGRADE:
11.5 First Payment - [*], upon receipt, acceptance and acknowledgment of
Customer's Purchase Order.
11.6 Second Payment - [*] is due net thirty (30) days from invoice date
upon shipment.
11.7 Third Payment - [*], is due net thirty (30) days from invoice date
upon the earliest completion of either of the following two events: 1)
CFA conducted at Customer's site following installation; or 2) One
hundred twenty (120) days after shipment, if failure to complete CFA
is not caused by Etec.
12.0 TAXES
The Purchase Price excludes all applicable Federal, State or local sales,
use, excise or similar taxes. Customer shall reimburse Etec for all
applicable foreign import duties, taxes or other similar charges.
13.0 TITLE
13.1 Title shall transfer to Customer for System#1 upon delivery to
Customer's destination in Bridgend, UK and for System#2 and Upgrade
upon shipment from Etec's manufacturing facilities. Etec shall retain
and Customer grants a security interest in the Systems and Upgrade for
the unpaid portion of the Purchase Price and any other unpaid amounts
due until such monies have been received. Customer shall execute all
necessary documents, including, if required, National Financing
Statement(s) or similar document to perfect Etec's security interest
(a sample blank National Financing Statement is attached hereto as
Exhibit F) and shall assist Etec in the filing thereof. Further, Etec
shall retain title to all System and Upgrade spare parts supplied by
Etec and stored at Customer's site for use in connection with warranty
replacement or maintenance requirements.
13.2 [*] title to material, both software and hardware, removed from
equipment by Etec as a consequence of an installation of accessory
equipment or upgrade purchased or provided to Customer, including
Field Change Notices, shall automatically revert back to Etec. Etec
reserves the right to remove such material from Customer's equipment
and from Customer's site at such time or after installation of
accessory or upgrade with no further obligations or liabilities to
Customer concerning such material.
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[*] Confidential Treatment has been requested with respect to the omitted
portions.
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14.0 RISK OF LOSS
Etec bears the risk of loss or damage to System#1 until delivered to
Customer's Bridgend UK facility, System#2 and Upgrade risk of loss or
damage is transferred to Customer upon delivery to the carrier at
Beaverton, Oregon or Hayward, California. Thereafter, Customer bears the
risk of loss or damage. If the Systems or Upgrade are damaged or destroyed
while Customer bears the risk of loss and Customer chooses not to repair or
replace the Systems or Upgrade or initiate any action within four weeks
after the loss or damage, Etec shall be relieved of all further obligations
under this Agreement and the balance of the Purchase Price shall become
immediately due and payable less the value of the warranty. Customer bears
the risk of loss for spare parts while they are stored at Customer's site.
15.0 INSURANCE
Etec shall maintain insurance coverage for System #1 until it arrives at
Customer's site. Prior to shipment of System #2 and the Upgrade, Customer
shall provide a certificate evidencing all-risk insurance coverage and
Customer shall be responsible for such insurance.
16.0 WARRANTY
16.1 [*] if the delay in completing the CFA is due solely to Customer, the
Warranty Period will begin for Systems ninety (90) days after shipment
to Customer, or, for the Upgrade, one hundred twenty (120) days after
shipment to Customer, whichever occurs first ("Warranty").
16.2 Customer shall be entitled to purchase an extended warranty on the
Upgrade[*] for a period not to exceed two (2) years following
completion of the initial 90-day warranty period.
16.3 Etec warrants that software, if operated in accordance with Etec's
instructions, will substantially achieve the functionality described
in the applicable Etec software manual. Etec does not warrant,
however, that Customer's use of software will be uninterrupted or that
its operation will be error-free. Customer waives all rights under
this Warranty if it fails to provide Etec with notice of any claimed
defect or claimed failure to meet specifications within the Warranty
Period.
16.4 During the Warranty Period, Etec shall repair or replace the defective
part(s), including lasers or TFE sources, or repair or replace
software, or make such adjustments as are necessary for the Systems to
meet the specifications in Exhibit B (including one (1) optics
cleaning for each System), if Etec is satisfied of all of the
following:
16.4.1 that the Systems or any part thereof, or any software, is
defective or fails to meet specifications,
16.4.2 that the defect or failure is covered by this Warranty, and
16.4.3 that the terms of this Warranty have been complied with.
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[*] Confidential Treatment has been requested with respect to the omitted
portions.
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[*]
Replacement parts may be new or reconditioned (functionally equivalent
to new).
16.5 Parts and materials normally recognized as consumables which
are required for Systems maintenance and repair during the
Warranty Period will be billable to Customer at Etec's then
current price.
16.6 Warranty includes software updates released during the Warranty
Period. During the Warranty Period, preventive maintenance and
remedial repairs will be provided by an Etec (ALTA 3500
trained) Customer Support Representative [*] on an on-call
basis, forty (40) hours per week during the hours of 8:00 a.m.
to 5:00 p.m., or as local customs prevail, Monday through
Friday, with a response time to arrive at Customer's site
within two (2) hours, except during Etec's published Holiday
periods, when no coverage will be provided. Maintenance and
repairs at all other times will be provided on a priority basis
as available and will be billable at the prevailing service
rates. Maintenance and repairs after the expiration of the
Warranty Period will be provided at Etec's then-current
billable rates or per a separate service contract.
16.7 Applications support for the Systems during the Warranty Period
shall include the availability of an Etec applications
specialist for telephone consultations during this period and
for one week process training following CFA at Customer's
facility [*].
16.8 This Warranty does not apply to any System not operated, used
or maintained in accordance with Etec's operating and
maintenance instructions, nor shall it apply to any System
which has been modified, altered or repaired by anyone other
than Etec or Etec's authorized representative. Further, this
Warranty shall not apply if any defect or failure to meet
specifications results from or is caused by accident,
negligence, misapplication, attachment of incompatible devices,
Customer's failure to maintain its facility in accordance with
the specifications in Exhibit C, Customer's use of operating
supplies or expendable components which do not meet or exceed
the quality level specified by Etec, or equipment added or
installed by Customer.
16.9 This Warranty does not cover furniture or expendable operating
supplies, including (but not limited to) masks, wafers, filters
or magnetic tape.
16.10 This Warranty shall extend to Customer or its legal successors
only, and is not assignable without the prior written consent
of Etec. This Warranty shall apply only to the country in which
Systems were first installed by Etec.
16.11 THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND AGAINST INFRINGEMENT.
17.0 TERMINATION
The parties may terminate this Agreement for the reasons listed below.
Except as
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[*] Confidential Treatment has been requested with respect to the omitted
portions.
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otherwise expressly provided in this Agreement, the right of termination
is the sole and exclusive remedy available to either party.
17.1 This Agreement may be terminated by Etec upon the occurrence of
any of the following:
17.1.1 Customer's default or breach of any material term or
condition of this Agreement, including but not limited
to failure to make payments as scheduled, and failure of
Customer to cure the default or breach within ninety
days after receipt of notice from Etec;
17.1.2 insolvency or institution by Customer of any voluntary
proceedings under any insolvency or bankruptcy law, the
adjudication of Customer as bankrupt or insolvent, the
appointment of a receiver for Customer's property, or
assignment by Customer for the benefit of creditors.
17.2 This Agreement may be terminated prior to Factory Acceptance by
Customer upon the occurrence of any of the following:
17.2.1 Etec's default or breach of any material term or
condition of this Agreement and failure of Etec to cure
the default or breach within ninety days after receipt
of notice from Customer specifying the default or
breach;
17.2.2 insolvency or institution by Etec of any voluntary
proceedings under any insolvency or bankruptcy law, the
adjudication of Etec as bankrupt or insolvent, the
appointment of a receiver for Etec's property or any
assignment by Etec for the benefit of creditors; or
17.2.3 the destruction or damage beyond repair of the System
when risk of loss or damage rests upon Etec, provided
that Customer notifies Etec in writing of its election
to terminate this Agreement within two weeks after
notice that the System has been destroyed or damaged
beyond repair.
17.3 If Etec terminates this Agreement pursuant to this Section, Etec
shall recover payment from Customer for any amount that has
accrued or become payable at or prior to the date of
termination. Thereafter each party shall be relieved and
discharged from all obligations under this Agreement.
17.4 If Customer terminates this Agreement pursuant to this Section,
Etec shall promptly return all payments made to Etec for that
System and each party shall be relieved and discharged from all
obligations under this Agreement.
18.0 TERMINATION FOR CONVENIENCE
Customer may terminate this Agreement for its convenience upon payment
of: 1) the Termination Charges listed below, and 2) any and all license
fees waived pursuant to Section 3.8 of this Agreement. In addition, upon
such termination for convenience, Etec will revoke Customer's options to
purchase additional MEBES upgrades, HTMs and used CORE systems pursuant
to Sections 3.4, 3.5 and 3.8 of this Agreement.
For termination under this Section to be effective, Etec must have
received both written notice of termination and payment as specified
above. The Termination Charge shall be
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<PAGE> 12
computed as a percentage of the Purchase Price in accordance with the
following schedule:
18.1 For Systems:
18.1.1 termination following receipt of purchase order but no
18.1.3 later than the 181st day before estimated shipment: 20%
of Customer's purchase order amount [*];
18.1.4 termination effective on or after the 180th day but no
later than the 91st day before estimated shipment: 30%
of Customer's purchase order amount [*]; and
18.1.5 termination effective on or after the 90th day but no
later than the 31st day before estimated shipment: 50%
of Customer's purchase order amount [*].
18.2 For Upgrade:
The Termination Charge will [*].
18.3 Customer shall not have the right to terminate this Agreement
for convenience within 30 days prior to estimated shipment of
Systems or Upgrade. Customer agrees that the Termination Charges
shall be Etec's liquidated damages in the event of breach and
that they are reasonable in amount in light of the anticipated
harm and the difficulties of proof of loss. Termination charges
are non-refundable and may not be applied to any other purchase
by or on the behalf of Customer nor may they be used as a setoff
of outstanding accounts.
19.0 FORCE MAJEURE
Etec shall not be responsible for failure to perform due to unforeseen
circumstances or causes beyond its reasonable control. Examples of such
causes are natural disaster, war, riot, embargo, fire, flood, accident,
strike, injunction, shortage of transportation, power, material, acts of
any Government or agency thereof, or any act or condition beyond the
reasonable control of Etec.
20.0 INFRINGEMENT INDEMNITY
Etec, at its own expense, will defend any action brought against
Customer to the extent that such action is based on a claim that any
Licensed Program (as defined in Exhibit D hereto) used within the scope
of the license hereunder infringes a United States patent or copyright,
provided Customer notifies Etec promptly in writing of the action (and
all prior claims relating to such action), and Etec has sole control of
the defense and all negotiations for its settlement or compromise. In
the event any Licensed Program becomes, or in Etec's opinion is likely
to become, the subject of a claim of infringement of a patent or
copyright, Etec alternatively may, at its option, either secure the
Customer's right to continue using the Licensed Program, or replace or
modify it to make it non-infringing, provided such modifications meet
the specifications as described in Exhibit B. Etec shall have no
liability for any claim of copyright or patent infringement based on (a)
use of other than a current unaltered release of the Licensed Program
available from Etec; or (b) use or combination of the Licensed Program
with programs or data not supplied by Etec; or (c) compliance with
Customer's specifications, designs or instructions; or (d) a
modification of the Licensed
- ----------
[*] Confidential Treatment has been requested with respect to the omitted
portions.
12
<PAGE> 13
Programs, other than by Etec, to the extent such modification causes the
infringement. THE FOREGOING STATES THE ENTIRE LIABILITY OF ETEC WITH
RESPECT TO INFRINGEMENT OF ANY COPYRIGHTS OR PATENTS BY THE LICENSED
PROGRAMS OR ANY PARTS THEREOF.
21.0 LIMITATION OF LIABILITY
21.1 IN NO EVENT SHALL ETEC BE LIABLE FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF
ANTICIPATED PROFIT, WHETHER CUSTOMER'S CLAIM IS BASED ON
CONTRACT, NEGLIGENCE, OR OTHERWISE.
21.2 This limitation of liability shall survive termination or
expiration of the Agreement. Any action against Etec must be
commenced within one year from the date the cause of action
accrues.
22.0 PROPRIETARY INFORMATION: TITLE TO DOCUMENTS AND DRAWINGS
22.1 Customer shall obtain the written consent of Etec before any
specifications, records, drawings, data or other technical
information related to this Agreement is released to anyone
other than Customer's directors, officers, employees,
accountants or attorneys.
22.2 Customer shall not reverse-assemble, reverse-compile or
otherwise reverse-engineer any Licensed Program described in
Exhibit D in whole or in part.
22.3 If Customer attempts to reverse-engineer, use, copy, transfer
or disclose any Licensed Program described in Exhibit D or
documentation in a manner contrary to the provisions of this
Agreement or in derogation of Etec's proprietary rights, Etec
shall have, in addition to any other remedies available to it,
the right to injunctive relief enjoining such action.
22.4 Unless specifically agreed otherwise by Etec, or provided for
in Exhibits B or D, Etec shall at all times have title to all
documents, materials, designs, manufacturing processes and
other essential elements furnished by Etec to Customer.
Customer shall exercise reasonable care to prevent disclosure
of such information to any third party and will not use the
information for its own benefit or for the benefit of others
except as may be authorized in writing by Etec, unless and to
the extent the information becomes publicly known through no
fault of Customer. Upon Etec's request, Customer shall promptly
return all such information to Etec. The obligation under this
Section 22.0 shall survive termination of this Agreement.
23.0 ASSIGNMENT
Neither party shall assign any right or obligation arising from this
Agreement without the prior written consent of the other. Any purported
assignment without such consent shall be void.
24.0 PUBLICITY
This Agreement and its Exhibits are confidential. Neither party will
engage in any type of publicity, including the publication of technical
papers, relating to this Agreement without first reviewing the proposed
public statements with the other party and obtaining the other's written
approval. Consent will not be unreasonably withheld by either party.
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<PAGE> 14
25.0 DISPUTE RESOLUTION
25.1 Mediation. The parties to this Agreement believe in prompt and
peaceful resolution of differences. Prior to the initiation of
any legal proceedings under this Agreement, the parties shall
first attempt to resolve their differences directly. If unable
to do so, the disagreement shall be submitted to mediation with
a mediator that is mutually agreeable to the parties. All
parties agree to conduct mediation in good faith and to share
the costs.
25.2 Attorneys' Fees. If suit or action is filed by any party to
enforce the provision of this Agreement, or for the breach
thereof, or if legal proceedings are otherwise commenced with
respect to the subject matter of this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees
as fixed by the trial court, and if any appeal is taken from
the trial court, reasonable attorneys' fees as fixed by the
appellate court.
26.0 CE MARK CERTIFICATION (applicable to initial European Union
installations only)
26.1 Etec will provide CE Mark certification for those systems
destined for initial installation within the European Union. CE
Mark certification requires Customer to provide certain
documentation to Etec and prepare the System installation site
to the requirements defined in Exhibits B and C. Etec will
provide Customer with sufficient information for Customer to
design and construct facilities in compliance with the CE Mark.
All costs for the design and construction of the facility will
be borne by Customer. Customer and Etec will work together to
ensure that the installed system meets the CE Mark regulations
valid at the time of delivery.
26.2 Customer agrees to provide to Etec all documentation specified
in Exhibit B, ALTA 3500 Technical Description, a minimum of two
(2) months prior to the estimated start of Factory Acceptance.
26.3 Once the CE Mark certification is completed for the System,
Customer agrees to consult with Etec prior to performing 1) any
configuration changes to the system/facility or 2) physical
movement of the System. Etec will review any proposed
changes/movement with the appropriate European Union Competent
Body to maintain CE Mark compliance. Any costs associated with
maintaining CE Mark compliance will be borne by Customer.
26.4 Customer agrees to consult with Etec prior to physical movement
of the System from outside the European Union into a member
country within the European Union. Etec will review any
proposed physical movements with the appropriate European Union
Competent Body to determine the requirements necessary for CE
Mark compliance. Customer will bear all expenses necessary for
bringing Customer site and the System into CE Mark compliance.
27.0 YEAR 2000 (Y2K) READINESS
Systems and Upgrade when accepted by Customer may or may not be Y2K
ready. An Etec product is designated as being Y2K ready when it will
correctly process, calculate, compare and sequence date data from, into
and between the twentieth and the twenty-first centuries, including leap
year calculations, when used in accordance with the associated Etec
product documentation and provided that all hardware, firmware and
software used in combination with Etec products properly exchange
accurate date data with Etec products. Prior to the
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<PAGE> 15
completion of the Warranty Period, Etec will evaluate Customer's system,
and if Etec solely determines that it is required, provide Customer with
upgrades necessary to achieve Y2K readiness as defined above.
28.0 NOTICES
Any notice required to be given under this Agreement shall be deemed to
have been given for all purposes: 1) when such notice is delivered in
person; or 2) when such notice is delivered by Federal Express or other
reliable 24-hour delivery service; or 3) five (5) business days after
being deposited in the United States mail, by registered or certified
mail, return receipt requested, postage prepaid, addressed to the other
party at its address stated above. For purposes of this paragraph, any
party may substitute another address for its address stated above (or
its address which has been substituted by a previous notice) by giving
fifteen (15) days notice of the new address to the other party in the
manner provided in this paragraph.
29.0 SEVERABILITY
The invalidity in whole or in part of any provision of this Agreement
shall not affect the validity of any other provision.
30.0 HEADINGS
All headings of this Agreement are inserted for convenience only and
shall not affect any construction or interpretations of this Agreement.
31.0 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of California, without giving effect to its conflicts of laws
principles.
32.0 ENTIRE AGREEMENT
This Agreement sets forth the entire agreement between Etec and Customer
with respect to its subject matter. No other terms, conditions,
modifications, changes or amendments shall be effective or recognized
without the prior written approval of authorized representatives of Etec
and Customer. The lack of objection by either party to any modifying
provisions shall not be construed as an acceptance of the modifying
provision. This Agreement shall not be modified, supplemented, qualified
or interpreted by any trade usage or prior course of dealing.
ALIGN-RITE INTERNATIONAL
(CUSTOMER) ETEC SYSTEMS, INC.
By: /s/ JAMES MAC DONALD By: /s/ STEVEN DUNBRACK
------------------------------------ ----------------------------------
(Authorized Signature) (Authorized Signature)
Name: James Mac Donald Name: Steven Dunbrack
---------------------------------- ---------------------------------
Title: Chairman and CEO Title: Director of Marketing Services
--------------------------------- -------------------------------
Date: May 22, 1998 Date: May 22, 1998
--------------------------------- -------------------------------
15
<PAGE> 16
Exhibit D-1
ALTA 3500 END USER SOFTWARE LICENSE AGREEMENT
Etec Systems, Inc., 26460 Corporate Avenue, Hayward, California 94545 U.S.A.
("Etec"), grants Align-Rite International, 2428 Ontario Street, Burbank,
California 91504-3195 ("Licensee"), a non-exclusive license to use the Licensed
Program(s) on the following terms and conditions:
1.0 DEFINITIONS
(a) "Licensed Program" shall mean each computer software program in
machine readable, object, printed or interpreted form furnished
by Etec or its distributor to Licensee, including related
supporting materials, in machine readable or printed form and any
related updated program or program portion, for use with or
regarding the Designated Equipment.
(b) "Designated Equipment" shall mean Etec equipment ALTA-3500 s/n
_______ (to be specified at the time of Factory Acceptance) and
delivered to Licensee and with which, or for which, the Licensed
Program is supplied or specified third party software licenses
are issued. Associated third party software will be listed prior
to shipment (Attachment A).
(c) "Use" means copying any portion of any Licensed Program from
storage units or media into the Designated Equipment or using any
Licensed Program in the course of the operation of any Designated
Equipment or in support of the use of any Designated Equipment or
program.
2.0 LICENSE
This license authorizes Licensee on a non-exclusive basis to Use each
Licensed Program on each particular Designated Equipment.
3.0 NON-ASSIGNMENT
This Software License is non-transferable by Licensee and may not be
assigned or sublicensed and any attempt to do so shall be invalid.
4.0 COPIES/MODIFICATIONS
Licensee may make no more than one back-up copy of each Licensed Program
for Licensee's Use on any Designated Equipment on which a Licensed
Program is licensed. Licensee agrees to include the copyright notice and
proprietary rights legend in and on every copy of a Licensed Program in
any form. Licensee may not modify or enhance the Licensed Program.
5.0 TITLE
The original and any copy of the Licensed Programs, in whole or in part,
which are made by Licensee, shall be the property of Etec.
6.0 PROTECTION OF LICENSED PROGRAM
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<PAGE> 17
Licensee shall not provide or otherwise make available any Licensed
Program in any form to any person other than Licensee's and Etec's
employees. Licensee shall take appropriate action by instruction,
agreement or otherwise with Licensee's employees to satisfy its
obligations under this Software License Agreement. Licensee agrees that
the Licensed Program is the confidential trade secret of Etec and
Licensee will use at least the same degree of care to protect the
confidentiality of the Licensed Program as Licensee's own confidential
property. Licensee shall not attempt to reverse engineer or disassemble
the Licensed Program.
7.0 TERM AND TERMINATION
This Software License Agreement and any license granted hereunder may be
terminated by Etec if Licensee fails to comply with any of the terms and
conditions of this Software License Agreement. The license granted
herein shall remain in force until Licensee discontinues the use of that
Licensed Program on the Designated Equipment or until Etec terminates
this Software License Agreement due to the default by Licensee. Within
thirty (30) days after Licensee has discontinued use of any Licensed
Program or within ten (10) days after Etec has so terminated any license
because of Licensee's default, Licensee will destroy or return to Etec
the original and all copies, in whole or in part, of the Licensed
Program(s) and certify in writing to Etec that to the best of its
knowledge, the original and all copies of the discontinued or terminated
Licensed Program(s) have been destroyed, except that, upon prior written
authorization from Etec, Licensee may retain a copy for archive purposes
only.
8.0 PATENT AND COPYRIGHT INDEMNIFICATION
Etec at its own expense will defend any action brought against Licensee
to the extent that it is based on a claim that any Licensed Program used
within the scope of the license hereunder infringes a United States
patent or copyright provided Licensee notifies Etec promptly in writing
of the action (and all prior claims relating to such action) and Etec
has sole control of the defense and all negotiations for its settlement
or compromise. In the event any Licensed Program becomes or, in Etec's
opinion is likely to become, the subject of a claim of infringement of a
patent or copyright, Etec alternatively may at its option either secure
the Licensee's right to continue using the Licensed Program, or replace
or modify it to make it non-infringing providing such modifications meet
the specification as described in 9 below. Etec shall have no liability
for any claim of copyright or patent infringement based on (a) use of
other than a current unaltered release of the Licensed Program available
from Etec or (b) use or combination of the Licensed Program with
programs or data not supplied by Etec. THE FOREGOING STATES THE ENTIRE
LIABILITY OF ETEC WITH RESPECT TO INFRINGEMENT OF ANY COPYRIGHTS OR
PATENTS BY THE LICENSED PROGRAMS OR ANY PARTS THEREOF.
9.0 WARRANTY
Each Licensed Program when delivered with this Designated Equipment will
provide the functions necessary to cause the Designated Equipment to
substantially conform to Etec's current published product
specifications; however, Licensee acknowledges that the Licensed
Programs are of such complexity that they may have inherent defects and
agrees that as Etec's sole liability and as sole remedy, Etec will
provide programming services to attempt to correct documented program
errors that Etec's diagnosis indicates are caused by a defect in an
unaltered version of the delivered Licensed Program. Etec does not
guarantee the results of any such services or represent or
17
<PAGE> 18
warrant that any or all errors will be corrected, but Etec will make
reasonable good faith efforts to correct such errors so that the
Designated Equipment substantially achieves the performance levels
specified.
10.0 DISCLAIMER OF WARRANTY
EXCEPT FOR THE EXPRESS WARRANTY STATED ABOVE, ETEC GRANTS NO WARRANTIES,
EITHER EXPRESS OR IMPLIED, WITH REGARD TO ANY LICENSED PROGRAM INCLUDING
ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
11.0 LIMITATION OF DAMAGES
Etec's liability for damages, whether arising from contract, warranty,
tort (including negligence) or strict liability, with the exception of
liability for patent and copyright infringement, shall not exceed ten
percent of the price paid by Licensee for the Designated Equipment. IN
NO EVENT, WHETHER ARISING FROM CONTRACT, WARRANTY, TORT OR STRICT
LIABILITY, WILL ETEC BE LIABLE FOR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS AND LOSS OF USE) OR INCIDENTAL DAMAGES EVEN IF ETEC HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
12.0 GENERAL
This Software License Agreement supersedes all prior agreements and
understandings between the parties related to the subject matter and is
intended by the parties as the complete and exclusive statement of the
terms of the Software License Agreement. If any of the provisions of
this Software License Agreement are invalid under any applicable statute
or rule of law, they are to that extent deemed omitted. This Software
License Agreement shall be governed by the laws of the State of
California, USA.
13.0 ENFORCEMENT OF LICENSE BY OTHER
The Licensed Program may include computer software that Etec has
licensed from other parties including Sun Microsystems, Inc. ("Sun"),
Compaq Computer Corporation, Quarterdeck Systems, Inc. and IBM. Those
parties shall be considered third-party beneficiaries of this Software
License Agreement and shall be entitled to enforce its terms as if it
were Etec with respect to protecting software owned by them. Any back-up
copies of the Licensed Program shall include the following:
(a) the copyright notice for such software for each third party,
(b) any proprietary notices for each third party,
(c) if the Licensed Program includes Sun software as specified in
Attachment A, a notice stating that Sun operating system software
is based upon or derived from software made available under
license from the American Telephone & Telegraph Co., the Regents
of the University of California and the Electrical Engineering
and Computer Science Departments of the University of California
at Berkeley,
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<PAGE> 19
(d) that this Software License Agreement inures to the benefit of any
third party holding any right, title, or interest in the software
products licensed by such third party or any software from which
such third party software was derived, and
(e) such third party may directly enforce the terms of this Software
License Agreement with respect to protecting software owned by
such third party.
Licensee agrees to keep the original packaged copies of all supplied
third party software including the program diskettes, associated
manuals, and accompanying third party Program License Agreement
statements with the Designated Equipment. In the event that the
Designated Equipment is resold and the Licensed Program is licensed, the
original copies of the third party software must be transferred to the
end user by the Licensee. In accepting transfer of the program and
license, the receiving party agrees to accept the terms and conditions
of the third party Program License Agreement.
ALIGN-RITE INTERNATIONAL ETEC SYSTEMS, INC.
(CUSTOMER)
By: /s/ JAMES MAC DONALD By: /s/ STEVEN DUNBRACK
------------------------------------ ----------------------------------
(Authorized Signature) (Authorized Signature)
Name: James Mac Donald Name: Steven Dunbrack
---------------------------------- ---------------------------------
Title: Chairman and CEO Title: Director of Marketing Services
--------------------------------- -------------------------------
Date: May 22, 1998 Date: May 22, 1998
--------------------------------- -------------------------------
19
<PAGE> 20
EXHIBIT A
LICENSED PROGRAMS
ALTA-3500 SYSTEM SYSTEM SERIAL NO.____
(to be specified at the
time of Factory Acceptance)
<TABLE>
<S> <C> <C>
o ALTA System Executive Software 9500-6110 version 5.00
o ALTA Datapath Processor Software 9500-6010 version 5.00
o SUN Microsystems Solaris O/S 2050-0018 version 1.1.2
o SUN Microsystems Online DiskSuite 2050-0017 version 1.00
</TABLE>
The undersigned agrees that the above described Licensed Programs are licensed
to Licensee pursuant to all of the terms and conditions of Etec's ALTA End User
Software License Agreement in effect as of this date. A copy of such License
Agreement has been received and reviewed by Licensee.
20
<PAGE> 21
Exhibit D-2
ALTA 3500 END USER SOFTWARE LICENSE AGREEMENT
Etec Systems, Inc., 26460 Corporate Avenue, Hayward, California 94545 U.S.A.
("Etec"), grants Align-Rite International, 2428 Ontario Street, Burbank,
California 91504-3195 ("Licensee"), a non-exclusive license to use the Licensed
Program(s) on the following terms and conditions:
1.0 DEFINITIONS
(a) "Licensed Program" shall mean each computer software program in
machine readable, object, printed or interpreted form furnished
by Etec or its distributor to Licensee, including related
supporting materials, in machine readable or printed form and any
related updated program or program portion, for use with or
regarding the Designated Equipment.
(b) "Designated Equipment" shall mean Etec equipment ALTA-3500 s/n
_______ (to be specified at the time of Factory Acceptance) and
delivered to Licensee and with which, or for which, the Licensed
Program is supplied or specified third party software licenses
are issued. Associated third party software will be listed prior
to shipment (Attachment A).
(c) "Use" means copying any portion of any Licensed Program from
storage units or media into the Designated Equipment or using any
Licensed Program in the course of the operation of any Designated
Equipment or in support of the use of any Designated Equipment or
program.
2.0 LICENSE
This license authorizes Licensee on a non-exclusive basis to Use each
Licensed Program on each particular Designated Equipment.
3.0 NON-ASSIGNMENT
This Software License is non-transferable by Licensee and may not be
assigned or sublicensed and any attempt to do so shall be invalid.
4.0 COPIES/MODIFICATIONS
Licensee may make no more than one back-up copy of each Licensed Program
for Licensee's Use on any Designated Equipment on which a Licensed
Program is licensed. Licensee agrees to include the copyright notice and
proprietary rights legend in and on every copy of a Licensed Program in
any form. Licensee may not modify or enhance the Licensed Program.
5.0 TITLE
The original and any copy of the Licensed Programs, in whole or in part,
which are made by Licensee, shall be the property of Etec.
6.0 PROTECTION OF LICENSED PROGRAM
21
<PAGE> 22
Licensee shall not provide or otherwise make available any Licensed
Program in any form to any person other than Licensee's and Etec's
employees. Licensee shall take appropriate action by instruction,
agreement or otherwise with Licensee's employees to satisfy its
obligations under this Software License Agreement. Licensee agrees that
the Licensed Program is the confidential trade secret of Etec and
Licensee will use at least the same degree of care to protect the
confidentiality of the Licensed Program as Licensee's own confidential
property. Licensee shall not attempt to reverse engineer or disassemble
the Licensed Program.
7.0 TERM AND TERMINATION
This Software License Agreement and any license granted hereunder may be
terminated by Etec if Licensee fails to comply with any of the terms and
conditions of this Software License Agreement. The license granted
herein shall remain in force until Licensee discontinues the use of that
Licensed Program on the Designated Equipment or until Etec terminates
this Software License Agreement due to the default by Licensee. Within
thirty (30) days after Licensee has discontinued use of any Licensed
Program or within ten (10) days after Etec has so terminated any license
because of Licensee's default, Licensee will destroy or return to Etec
the original and all copies, in whole or in part, of the Licensed
Program(s) and certify in writing to Etec that to the best of its
knowledge, the original and all copies of the discontinued or terminated
Licensed Program(s) have been destroyed, except that, upon prior written
authorization from Etec, Licensee may retain a copy for archive purposes
only.
8.0 PATENT AND COPYRIGHT INDEMNIFICATION
Etec at its own expense will defend any action brought against Licensee
to the extent that it is based on a claim that any Licensed Program used
within the scope of the license hereunder infringes a United States
patent or copyright provided Licensee notifies Etec promptly in writing
of the action (and all prior claims relating to such action) and Etec
has sole control of the defense and all negotiations for its settlement
or compromise. In the event any Licensed Program becomes or, in Etec's
opinion is likely to become, the subject of a claim of infringement of a
patent or copyright, Etec alternatively may at its option either secure
the Licensee's right to continue using the Licensed Program, or replace
or modify it to make it non-infringing providing such modifications meet
the specification as described in 9 below. Etec shall have no liability
for any claim of copyright or patent infringement based on (a) use of
other than a current unaltered release of the Licensed Program available
from Etec or (b) use or combination of the Licensed Program with
programs or data not supplied by Etec. THE FOREGOING STATES THE ENTIRE
LIABILITY OF ETEC WITH RESPECT TO INFRINGEMENT OF ANY COPYRIGHTS OR
PATENTS BY THE LICENSED PROGRAMS OR ANY PARTS THEREOF.
9.0 WARRANTY
Each Licensed Program when delivered with this Designated Equipment will
provide the functions necessary to cause the Designated Equipment to
substantially conform to Etec's current published product
specifications; however, Licensee acknowledges that the Licensed
Programs are of such complexity that they may have inherent defects and
agrees that as Etec's sole liability and as sole remedy, Etec will
provide programming services to attempt to correct documented program
errors that Etec's diagnosis indicates are caused by a defect in an
unaltered version of the delivered Licensed Program. Etec does not
guarantee the results of any such services or represent or
22
<PAGE> 23
warrant that any or all errors will be corrected, but Etec will make
reasonable good faith efforts to correct such errors so that the
Designated Equipment substantially achieves the performance levels
specified.
10.0 DISCLAIMER OF WARRANTY
EXCEPT FOR THE EXPRESS WARRANTY STATED ABOVE, ETEC GRANTS NO WARRANTIES,
EITHER EXPRESS OR IMPLIED, WITH REGARD TO ANY LICENSED PROGRAM INCLUDING
ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
11.0 LIMITATION OF DAMAGES
Etec's liability for damages, whether arising from contract, warranty,
tort (including negligence) or strict liability, with the exception of
liability for patent and copyright infringement, shall not exceed ten
percent of the price paid by Licensee for the Designated Equipment. IN
NO EVENT, WHETHER ARISING FROM CONTRACT, WARRANTY, TORT OR STRICT
LIABILITY, WILL ETEC BE LIABLE FOR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS AND LOSS OF USE) OR INCIDENTAL DAMAGES EVEN IF ETEC HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
12.0 GENERAL
This Software License Agreement supersedes all prior agreements and
understandings between the parties related to the subject matter and is
intended by the parties as the complete and exclusive statement of the
terms of the Software License Agreement. If any of the provisions of
this Software License Agreement are invalid under any applicable statute
or rule of law, they are to that extent deemed omitted. This Software
License Agreement shall be governed by the laws of the State of
California, USA.
13.0 ENFORCEMENT OF LICENSE BY OTHER
The Licensed Program may include computer software that Etec has
licensed from other parties including Sun Microsystems, Inc. ("Sun"),
Compaq Computer Corporation, Quarterdeck Systems, Inc. and IBM. Those
parties shall be considered third-party beneficiaries of this Software
License Agreement and shall be entitled to enforce its terms as if it
were Etec with respect to protecting software owned by them. Any back-up
copies of the Licensed Program shall include the following:
(a) the copyright notice for such software for each third party,
(b) any proprietary notices for each third party,
(c) if the Licensed Program includes Sun software as specified in
Attachment A, a notice stating that Sun operating system software
is based upon or derived from software made available under
license from the American Telephone & Telegraph Co., the Regents
of the University of California and the Electrical Engineering
and Computer Science Departments of the University of California
at Berkeley,
(d) that this Software License Agreement inures to the benefit of any
third party holding any right, title, or interest in the software
products licensed by such
23
<PAGE> 24
third party or any software from which such third party software
was derived, and
(e) such third party may directly enforce the terms of this Software
License Agreement with respect to protecting software owned by
such third party.
Licensee agrees to keep the original packaged copies of all supplied
third party software including the program diskettes, associated
manuals, and accompanying third party Program License Agreement
statements with the Designated Equipment. In the event that the
Designated Equipment is resold and the Licensed Program is licensed, the
original copies of the third party software must be transferred to the
end user by the Licensee. In accepting transfer of the program and
license, the receiving party agrees to accept the terms and conditions
of the third party Program License Agreement.
ALIGN-RITE INTERNATIONAL ETEC SYSTEMS, INC.
(CUSTOMER)
By: /s/ JAMES MAC DONALD By: /s/ STEVEN DUNBRACK
------------------------------------ ----------------------------------
(Authorized Signature) (Authorized Signature)
Name: James Mac Donald Name: Steven Dunbrack
---------------------------------- ---------------------------------
Title: Chairman and CEO Title: Director of Marketing Services
--------------------------------- -------------------------------
Date: May 22, 1998 Date: May 22, 1998
--------------------------------- -------------------------------
24
<PAGE> 25
EXHIBIT A
LICENSED PROGRAMS
ALTA-3500 SYSTEM SYSTEM SERIAL NO.____
(to be specified at the time of
Factory Acceptance)
<TABLE>
<S> <C> <C>
o ALTA System Executive Software 9500-6110 version 5.00
o ALTA Datapath Processor Software 9500-6010 version 5.00
o SUN Microsystems Solaris O/S 2050-0018 version 1.1.2
o SUN Microsystems Online DiskSuite 2050-0017 version 1.00
</TABLE>
The undersigned agrees that the above described Licensed Programs are licensed
to Licensee pursuant to all of the terms and conditions of Etec's ALTA End User
Software License Agreement in effect as of this date. A copy of such License
Agreement has been received and reviewed by Licensee.
25
