Exhibit 10.1





Exhibit 10.1




CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE SECURITIES

AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL

TREATMENT. BRACKETED ASTERISK ([*]) DENOTES OMISSIONS.




BRIDGE AMENDMENT TO THE

APPLIED MATERIALS — ADVANCED ENERGY GSA




THIS AMENDMENT is made as of the 26th day of January, 2011 (the “Amendment Date”), with
respect to that certain Global Supply Agreement dated August 29, 2005 (the “GSA”) between Applied
Materials, Inc. and Advanced Energy Industries, Inc. (as defined in the GSA, “Supplier”).




	1.	 	Continuation and Extension of GSA.







	 	a.	 	Capitalized terms used in this Amendment shall (unless separately defined in this
Amendment) have the same meaning as in the GSA. Except to the limited extent expressly
modified by this Amendment, the GSA shall remain unmodified and in full force and effect.







	 	b.	 	The parties agree that the Addendum to the GSA dated as of July 13, 2005, as later
amended as of January 23, 2007 (sometimes called the TFG Addendum) was terminated as of
August 29, 2008, and neither party has any further obligations thereunder.







	 	c.	 	The parties agree that the Applied part numbers, prices, and IP classifications listed
on the attached “Attachment 1” are all included on Attachment 1 to the GSA as of the
Amendment Date. (This is a non-exclusive listing of the Items that are on Attachment 1 as
of the Amendment Date, and does not remove any Item from Attachment 1 or waive any
commitment either Party may have otherwise made in writing to include or add an Item to
Attachment 1 at a future date.)







	2.	 	Continuation of Contracts and Amendments. The Parties expressly agree that all
amendments and addenda to the GSA and all separate contracts continue in effect without
modification by this Amendment. The amendments and contracts that remain in effect include,
by way of example and not limitation, the following: Amendment to the GSA regarding the [*],
Addendum to the GSA for the [*] Addendum, Shipping Amendment to the GSA, [*].







	3.	 	Replacement, Insertion, and Deletion of Certain GSA Sections. The following
provisions of the GSA are hereby replaced, deleted or inserted as set forth below.







	 	a.	 	Section 1(b) is replaced with the following:







“Applied” means Applied Materials, Inc., on behalf of itself and its subsidiaries existing
on or after the Effective Date, including without limitation Applied Materials South East
Asia Pte. Ltd. and Applied Materials Europe BV.




	 	b.	 	Section 1(l) is replaced with the following:







“Specifications” means such drawings, designs, instructions, technical or performance
requirements or other technical information relating to the design, development,
manufacture, installation, assembly, testing and/or use of one or more Items. The
Specifications for a particular unit of an Item are the Specifications in place for that
Item at the time that unit is ordered by Applied. Through Applied’s Engineering Change
Order (ECO) process, the Specifications for an Item can change. The revised Specifications
will apply to units of the Item ordered after the ECO is implemented by Supplier in
accordance with the ECO process; however, unless otherwise agreed by Applied and Supplier,
the ECO will not modify the Specifications that are applicable to any unit of that Item
ordered by Applied before the ECO was implemented.


 


 









 






	 	c.	 	Section 1(j) is replaced with the following:







“Sub-tier Supplier” means a member of Supplier’s direct or indirect sub-tier supply base
(including, without limitation, subcontractors and vendors of Supplier, and of Supplier’s
subcontractors and vendors) that provides goods and/or services in connection with an Item.




	 	d.	 	Section 2(b) is replaced with this following:







	4.	 	Term. The GSA shall, unless terminated as set forth in Section 21 (Termination),
continue in effect for at least thirty-six (36) months after January 28, 2011. Subject to the
minimum thirty-six (36) month term, this Agreement shall continue until either party provides nine
(9) months prior written notice to the other party of such party’s desire to allow this Agreement
to expire. The effective period of this Agreement is referenced as the “Term.”







	 	a.	 	Section 3(e) is replaced with the following:







Purchases by Authorized Third Party. Certain Items may be incorporated into
subassemblies or other products made for Applied by a third party. In such event, Applied
may designate the third party as authorized to purchase such Item(s) from Supplier and, upon
Supplier’s receipt of notice thereof, Supplier shall enter into an agreement with such third
party to sell such Item(s) to such third party on terms (including [*]) [*] the terms set
forth in this Agreement specifically for use on subassemblies or other products that such
third party will sell directly to Applied. Although Applied will have the right to require
such a contract between Supplier and a third party designated by Applied to be on terms[*]
the terms set forth in this Agreement, Applied will not be a party to the negotiations, nor
a party to the resulting contract, between Supplier and such a designated third party.




	 	b.	 	Section 4(c) is replaced with the following:







Transportation Costs. Pursuant to Section 6(b), below, Applied pays
transportation charges directly to certain common carriers designated by Applied. For those
Items where Applied pays such charges, pricing in a quotation or invoice or as set forth in
Attachment 1 shall not include any transportation costs. For all other Items, all costs for
shipping, import/export fees, customs, and other transportation expenses shall be separately
identified and itemized by Supplier in each quotation or invoice or on Attachment 1.




	 	c.	 	Section 4(d) is replaced with the following:







Price Adjustments.

Supplier shall implement all committed price [*] set
forth in this Agreement and on Attachment 1. All quantities of Items purchased
by Applied and its subsidiaries purchasing under this Agreement will be
aggregated for purposes of calculating applicable price adjustments. Any change
in circumstances (such as a change in Applied’s [*], or a change
in industry conditions), may result in a review of Agreement terms and/or
negotiated adjustment in the Contract Price. Subject to Sections 9(b),
11(g) and 11(h) of this Agreement regarding prohibited activities, [*],
and [*] any good which is [*], at a [*] price than the
Contract Price, then [*] agrees to notify [*] thereof and, if
[*] and to [*].










	 	d.	 	In Section 5(c), “[*]” in the last sentence is replaced with “[*]” In addition, the
following language is inserted at the end of Section 5(c):







If, pursuant to Section 5(c)(iii), Applied purchases products comparable to an Item in the
open market or from other suppliers and charges Supplier the cost differential, Applied will
have the right to continue implementing this cover remedy in accordance with Section
5(c)(iii) for a period of [*]. During this [*] period, Applied shall not be required, as a
condition of implementing this cover remedy, to continue to issue Authorized Demand Signals
to Supplier unless Supplier has without qualification committed in writing to accept
Applied’s Authorized Demand Signal at the Contract Price and to deliver the Items when and
as required by this Agreement. If the root cause(s) of the late delivery or failure to
deliver the Items on time is cured prior to the expiration of this [*] period, and if
Supplier without qualification commits to deliver those Items on time and in full compliance
with the GSA, then Applied’s right to cover those Items will end. Each Item (by Applied
part number) will have its own [*] cover period. In addition, if a [*] period commences as
to a particular Item, the root causes for that delay or failure to deliver on time are
cured, and then a new delay or failure to deliver on time arises, a new [*] cover period
will commence for that Item.


 


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	 	e.	 	The following provision is added as a new subsection (p) to Section 11 of the GSA:







(p) Audit. Supplier shall permit Applied, and cause its employees and agents to
permit Applied, after reasonable written notice to Supplier (and in any event not less than
[*] in advance), to take reasonable steps to audit and verify compliance with Sections 9 and
11. During this notice period, if requested by Supplier, Applied will discuss the scope and
purpose of the audit with Supplier, and will escalate that discussion as appropriate within
Applied’s Global Sourcing Organization (GSO) or its successor organization. In addition,
upon Applied’s request, Supplier shall provide to Applied a record of all Sub-tier Suppliers
and other persons to whom Confidential Information was disclosed by Supplier or by another
person, the Confidential Information that was disclosed to such person, and the date such
Confidential Information was retrieved from such person. The following additional provisions
will apply to any audit under this Section 11(p) to the extent that Supplier agrees to allow
Applied to access data or other information on or through Supplier’s computer systems in the
course of the audit: (i) The audit of Supplier’s data and its information systems will be
conducted using Encase software, or a similar program chosen by Applied and reasonably
acceptable to Supplier. (ii) Applied may engage a third-party service to assist in data
extraction, and Supplier IT personnel will assist in that effort. (iii) The third-party
inspector (if engaged) will perform analytical tasks on specified systems, and Supplier IT
personnel will ensure that the inspection does not disrupt Supplier’s business operations or
modify its data. (iv) Any external services contracted by Supplier or Applied regarding
data extraction/examination will agree in writing to keep all confidential information of
Supplier in confidence; not to use any such information for any purpose other than this
inspection; not to disclose any such information to any person other than Applied; and not
to disclose any such information to Applied until after working with Applied to narrow the
disclosure of such information to what is reasonably necessary to enable Applied to ensure
compliance with the GSA and to protect Confidential Information and Applied’s IP Rights. If
the inspector discloses any such information to Applied in accordance with the foregoing
sentence, Applied shall keep all of Supplier’s confidential information provided under this
Section 11(p) in confidence, except that disclosures required by law are permitted if
Applied takes reasonable measures, or affords Supplier a reasonable opportunity to pursue
measures, such as protective orders or requests for confidential treatment, to protect
Supplier’s intellectual property rights in such proceedings. After the inspection is
completed, the third-party inspector shall return to Supplier all confidential information
of Supplier, if any, in such inspector’s possession, custody or control.




	 	f.	 	The second and third sentences in Section 12(e), Remedies, are deleted and replaced
with the following:







Applied will be required to [*] above unless Supplier [*] within the time period required to
meet the volume manufacturing needs of Applied or the commercial needs of Applied’s
customer, provided that Supplier shall be given a minimum of [*], after return of an Item by
Applied, [*]. If Applied elects to [*] as set forth in subsection [*] above, then Applied
agrees that [*] for which the [*], including the [*] of the [*].




	 	g.	 	The last sentence in Section 12(e), Remedies, is deleted and replaced with the
following:







Applied may notify Supplier of defects and nonconformances and communicate its elected
remedy by delivery of notice in the form of a “Supplier Corrective Action Request” as set
forth in Attachment 8a on the Applied Web Site or in accordance with the Discrepant Material
Report (“DMR”) and closed-loop corrective action processes as set forth in Attachment 8b
located on the Applied Web Site.


 


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	 	h.	 	Section 15(b) is replaced with the following:







Design and Process Change Communication. After Applied has approved the First
Article, Supplier shall not make any change to the design (firmware, hardware or software)
of the Item that may alter the Specifications or the form, fit, function [*] of parts
without first submitting a “Supplier Problem Sheet (SPS)” as set forth in Attachment 12 on
the Applied Web Site. Supplier will not make changes to the manufacturing process of such
Items, including a transfer of any portion of the design, manufacturing, or assembly process
to a different facility, without first submitting a “Supplier Notification Form (SNF)” as
set forth in Attachment 13 on the Applied Web Site.




	 	i.	 	Section 15(c) is replaced with the following:







Other Changes and Equitable Adjustments. Applied may, upon notice to Supplier,
require Engineering Change Orders (“ECOs”) with respect to an Item to address (i) safety
problems related to an Item, (ii) an Item’s non-compliance with governmental regulations or
laws in place at the time of delivery of an Item to Applied, or (iii) performance problems
or concerns arising from the Item’s noncompliance with its written Specifications, and
Applied may request an ECO with respect to an Item for other reasons. Supplier’s
expectations and responsibilities associated with ECOs are set forth in Attachment 14, “ECO
Process Requirements” on the Applied Web Site. With respect to an ECO required by Applied,
or an ECO requested by Applied and approved by Supplier, Supplier shall meet such
requirements in a timely and cost effective manner. The price for any Item for which
Applied has issued an ECO will be adjusted up or down based on [*]. If the required change
causes the part number to change and thus become a “new Item”, the new Item will be added to
Attachment 1 and the price for the new Item will be the price of the original Item before
the change, adjusted up or down based on [*] for that Item. Either party may submit a
request for a price change based on an ECO. Supplier shall supply the original Item and/or
the new Item in accordance with Applied’s request. No claim by Supplier for adjustment
under this subsection shall be valid unless in writing and received by Applied within [*]
from the date of Supplier’s receipt of the notice of such change; provided, however, that
such period may be extended upon the written approval of Applied, and provided that so long
as Supplier asks Applied for additional time in writing within this [*] period, Applied will
not unreasonably withhold consent for an extension up to [*].




	 	j.	 	Section 15(e), Ozone Depleting Chemical, is replaced with the following:







Compliance with Minimum Environmental, Health & Safety Requirements. Supplier,
Supplier’s Subsidiary and Sub-tier Suppliers shall comply with, any applicable
environmental, health or safety law, rule, regulation, order, decree or ordinance, as well
as those environmental, health and safety requirements set forth in Attachment 3d entitled
“0250-27105, Minimum Product EHS Requirements for Items” located on the Applied Web Site.




	 	k.	 	Section 16, Management of Inventory, is replaced with the following:







(a) Designation of Inventory [*] Items. Applied may designate certain Items
as “Inventory [*] Items” by (i) reporting a [*] “Target Inventory” quantity for that Item in
an authorized inventory planning tool, or (ii) identifying an Item as an Inventory [*] Item
on Attachment 1, or otherwise providing Supplier with written or electronic notice of such
designation. Unless otherwise agreed, Applied will only designate an Item as an “Inventory
[*] Item” if Applied intends to order that Item from Supplier [*]. So that Applied can set
appropriate Target Inventory quantities, Supplier shall actively maintain accurate [*] for
all Items in such authorized inventory [*], using the definition of [*] designated by
Applied from time to time for this purpose. (Applied must have the right to designate a
definition of [*] with respect to putting data into Applied’s [*] inventory [*] will use the
data input by Supplier to [*] Target Inventory quantity, and if Supplier uses a different
understanding of the [*] than Applied intends, [*].) Supplier agrees to
manufacture and stock such Inventory [*] Items in accordance with this Section 16; and/or,
if requested by Applied, a separate written agreement between Applied and Supplier.


 


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(b) Forecasts. Applied may periodically issue to Supplier rolling forecasts setting
forth projected demand for Items, whether by specific divisions or otherwise (“Applied
Forecasts”). Applied Forecasts are intended for planning purposes only and shall not
constitute a binding purchase commitment of Applied. If Applied designates an Inventory
[*] Item under Section 16(a)(ii), and does not specify a “Target Inventory” quantity for it
in [*] inventory [*], then that Item’s Target Inventory quantity shall equal the [*]
forecasted demand for that Item in the most recent and most specific Applied’s Forecast for
that Item. (The Parties may modify this number of weeks for any particular Item in
Attachment 1.)




(c) Inventory Levels and Tracking Requirements. Unless otherwise designated in
Attachment 1 or a separate written agreement, Supplier will maintain the “Target Inventory”
quantity, if any, of each Inventory [*] Item as specified by Applied from time to time. All
Inventory [*] Items manufactured by Supplier to meet a then-current Target Inventory
quantity shall be considered [*] Inventory” under this Agreement. When Supplier is creating
inventory levels to satisfy required Target Inventory levels of [*] Inventory, any reduction
in quantity of Inventory [*] Items that were ordered pursuant to an Authorized Demand
Signal, or any quantity of Items ordered pursuant to an Authorized Demand Signal that is
later cancelled by Applied, shall be returned to Supplier’s inventory and Supplier will
increase its inventory levels accordingly. Supplier shall monitor and report its
work-in-process and Inventory [*] Item count to Applied for all [*] Inventory.




(d) Claim for [*] Items. If Applied has not taken delivery of any unit of a
particular Inventory [*] Item in [*] Inventory within [*] from the date of Applied’s last
receipt of that unit, Supplier may then submit a claim [*] Items (“[*] Items”) to Applied
within [*] from the end of such [*] period. (Each Applied part number that is an Inventory
[*] Item will be measured separately to determine when [*] has elapsed with no receipt by
Applied of any unit of that Applied part number.) Supplier’s failure to submit such a claim
within this [*] period shall constitute waiver of [*] Items and Applied shall be released
from all liability relating to such [*] Items.




(e) Claim for [*] Items. An Inventory [*] Item in [*] Inventory will be
considered an “[*] Item” when Applied provides notice to Supplier that such Inventory [*]
Item is an [*] Item.” If Supplier desires to submit a claim for [*] Items, then Supplier
shall submit a claim for such [*] Item(s) within [*] from the date on which Applied notifies
Supplier that the Inventory [*] Item(s) are [*] Items. Supplier’s failure to submit such a
claim within this [*] period shall constitute a waiver of any claim [*] Items and Applied
shall be released from all liability relating to such [*] Items.




(f) Scope of Claim. Applied will not be liable for [*] Inventory other than as
described in this Section 16. In addition, no claim for [*] payment for [*] Inventory shall
be made in the following situations: (i) any termination by Applied pursuant to Section
21(a) (Termination for Default); (ii) if Supplier has [*]; (iii) Supplier errors in
production; (iv) if Supplier has been paid for such Items previously or has made a claim for
[*] payment for such Items previously; (v) if such Items are “Commercial Off-the-Shelf
Items” meaning Items that are standard or stock items in the industry in contrast to Items
manufactured to build-to-print specifications of Applied or its customer, except to the
extent [*] Items [*]; (vi) if Supplier has failed to fulfill its obligations to meet with
Applied in accordance with Section 16(i), unless Supplier is unable to do so because of
actions of Applied; (vii) if such Items were not disclosed by Supplier to Applied on each
report required by Section 16(i) when each such report was due, provided that a failure to
disclose Items on one report will not cause this exception (vii) to apply if Supplier does
disclose those Items in writing to Applied within [*] after the Items should have been
disclosed; or (viii) if Supplier materially fails to participates in Applied’s ECO process
as reasonably requested by Applied, including
without limitation providing accurate information about such Items that will be affected by
a proposed ECO and that Supplier has in inventory or on order so that Applied can plan its
ECO implementation to minimize the quantity of on-hand and/or on-order Items that will be
made obsolete by the ECO.


 


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(g) Claim Process. Any claim made under this Section 16 will be addressed based on
[*]. Supplier is responsible for [*] Inventory [*] Items [*] Inventory [*] and otherwise
making all efforts to mitigate the cost to Applied in any such claim. Any claim shall be
supported by reasonable evidence including a detailed listing of the relevant Inventory [*]
Item [*], documentary evidence that the [*] Inventory required for that Inventory [*] Item
and was not subsequently purchased by Applied; and a detailed description of Supplier’s
efforts to mitigate the costs to Applied. Supplier’s claim will be based solely on costs
incurred as a result of Applied’s actions or obsolescence. No [*] shall be considered in
calculating such claims. Applied reserves the right to physically audit the inventory
levels identified in the claim. Such audit shall be conducted in accordance with Section
19(e) (Financial Statements and Right to Audit).




(h) Disposal of [*] and [*] Items. Supplier agrees to physically
dispose of all [*] Items as directed in writing by Applied. [*] Items that are to be
delivered [*] must be delivered in accordance with the requirements of this Agreement and/or
any supplemental instructions provided by Applied. In lieu of [*], Applied may require that
Supplier [*] Items [*], and Supplier shall comply with this requirement in accordance with
Applied’s instructions and provide Applied with [*] (as set forth in Attachment 17 entitled
“Certificate of Destruction” located on the Applied Web Site).




(i) Materials Liability Review Meetings. Designated representatives of each party
shall attend a meeting (each, an “Inventory Review Meeting”) at the beginning of each
Applied fiscal quarter at such dates and times as agreed to between the Parties. On the
business day immediately before each Inventory Review Meeting (or by the tenth day of the
first month of each Applied fiscal quarter, whichever comes first), Supplier shall provide a
report in Microsoft Excel format (or another mutually agreed-upon written or electronic
format) to Applied identifying Supplier’s [*] inventory levels [*] Inventory, listed by
Applied part number, and showing [*] Item [*], a description in reasonable detail of all
actions taken by Supplier [*]. At each Inventory Review Meeting, the Parties will share
information to coordinate their combined operations, and discuss the report provided by
Supplier. From time to time, the Parties may mutually agree upon the specific format for
Supplier’s report and Supplier shall thereafter provide such report in the agreed-upon
format; however, no failure to agree on a format shall relieve Supplier from providing this
report in a commercially reasonable format when and as required by this Section 16(i).




	 	l.	 	Section 17, Management of Sub-tier Suppliers, is replaced with the following:







(a) Sub-tier Suppliers. After Applied has approved of the First Article of an Item,
Supplier shall not subcontract with any new or different Sub-tier Supplier as to such Item
without the prior written approval of Applied. Supplier agrees to use best efforts to inform
Applied of any process or Sub-tier Supplier changes related to Items (including, for example,
obsolescence of components, any changes in the manufacturing process of a Sub-tier Supplier,
or a transfer of any portion of the design, manufacturing, or assembly process to a different
facility), not less than [*] days prior to the date the Supplier or Sub-tier Supplier is
contemplating the implementation of the change, and further agrees that any such notice will
not be less than [*] days prior the change, by following the notification processes set forth
in Attachment 13 entitled “Supplier Notification Form (SNF)” located on the Applied Web Site.




(b) Sub-tier Supplier’s Obligations.




(i) Supplier will communicate to all Sub-tier Suppliers each action that is required of
Sub-tier Suppliers by another provision of this Agreement (including but not limited to
Sections 15 and 17(a)), and their obligations to comply with all Specifications, quality,
manufacturing and other technical requirements that may be necessary in order for the
Sub-tier Supplier to timely deliver conforming Items, or any portion thereof, to the
Supplier for the benefit of Applied.


 


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(ii) Supplier will not provide any Confidential Information to any Sub-tier Supplier
(or other third party authorized by Applied to receive or obtain, directly or indirectly,
Confidential Information) unless that Sub-tier Supplier (or other third party) has entered
into a signed, written agreement requiring that Sub-tier Supplier (or other third party)
(collectively, “Recipients”) to hold all Confidential Information in confidence and not to
use the Confidential Information in any way, except on behalf of Supplier in performing
Supplier’s obligations hereunder for the benefit of Applied, and to protect the Confidential
Information, and not to engage in the activities prohibited by this Agreement, upon
substantially similar terms to those set forth in Section 9 above.




Upon Applied’s request, Supplier will actively enforce Supplier’s rights under such
agreements for the benefit of Applied, including but not limited to retrieving Confidential
Information from Recipients.




(c) Mandated Sub-tier Suppliers. “Special Process” means a process that is
specifically designated as such by Applied, which may include, but is not limited to,
causing a metallurgical change to the base material such as heat treating, forging or
hardening processes; joining materials by welding, brazing, or other bonding process; or
providing a coating or surface treatment such as cleaning, electropolishing, plating,
painting, or anodizing. As to any Item(s) which require a Special Process, Supplier must
use (and cause Sub-tier Suppliers to use) one or more of the suppliers and otherwise follow
the requirements identified in Attachment 18 entitled “Applied Materials Special Process
Supplier Approval List” located on the Applied Web Site.




	 	m.	 	Section 21, Termination, is replaced with the following:







(a) Termination for Default.




(i) Notice By Applied. Applied may give Supplier notice of default of this
Agreement or of any Authorized Demand Signal if (1) Supplier fails to deliver Items in
accordance with the delivery times, Specifications, and other requirements of this
Agreement, or otherwise materially breaches this Agreement; (2) Supplier anticipatorily
repudiates any material provision of this Agreement and fails to provide adequate assurance
to Applied of Supplier’s future performance; or (3) Supplier becomes insolvent, files a
petition for relief under any bankruptcy, insolvency or similar law, or makes an assignment
for the benefit of its creditors.




(ii) Notice By Supplier. Supplier may give Applied notice of default of this
Agreement, in whole but not in part, if (1) Applied materially breaches this Agreement (2)
Applied anticipatorily repudiates Section 8, 11, or 26(a) of this Agreement and fails to
provide adequate assurance to Supplier of Applied’s future performance; or (3) Applied
becomes insolvent, files a petition for relief under any bankruptcy, insolvency or similar
law, or makes an assignment for the benefit of its creditors.




(iii) Notices of Default and Cure Period. Any notice of default shall be in
writing, reference this Section 21(a), state whether the notice relates to a specified
Authorized Demand Signal (under i above) or to this Agreement (under i or ii above), and
specify the basis for such notice (the “Defaulting Condition”). No cure period shall be
available, and this Agreement shall terminate immediately after the notice of default, if
(1) the Defaulting Condition is a negligent, knowing or willful material breach of Section 9
or Section 11, or (2) the Defaulting Condition is anticipatory repudiation, or if it cannot
reasonably be cured. No cure period shall be available for termination of
an Authorized Demand Signal for default. For all other Defaulting Conditions, the
defaulting party shall have [*] days in which to cure the Defaulting Condition, and the
Agreement shall not terminate if the defaulting party cures the Defaulting Condition within
such cure period.


 


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(iv) After Termination for Default. Upon any termination by Applied pursuant
to this Section 21(a), Supplier shall:




(1) continue to supply any portion of the Items for which this Agreement is
not cancelled;




(2) be liable for [*] additional costs, if any, incurred by Applied for the
purchase of similar goods and services to cover such default, provided that




	 	(a)	 	if the termination for default is of an
Authorized Demand Signal, such additional costs shall be [*] (which
cost may include premium costs for expedited delivery and
administrative costs), provided that [*],







	 	(b)	 	if the termination for default is of this
Agreement, such additional costs shall be for (i) the [*] at the time
of such termination, plus (ii) [*] (which cost may include premium
costs for expedited delivery and administrative costs) for commercially
reasonable substitutes for those Items, provided that the cost
differential for each Item [*], and provided that the cost differential
will [*] where such purchases are made by Applied during the
Post-Termination Period as defined below; and







3) at Applied’s request, Applied and Supplier will discuss and potentially
negotiate transferring title and delivery to Applied: (a) any completed
Items, (b) any partially completed Items, and (c) all unique materials and
tooling subject or relating to the termination, at which time Applied will
be liable to Supplier for the fair market value of all such Items, material
and tooling so transferred (excluding such material or tooling provided to
Supplier by Applied). Termination of the Agreement under this Section 21(a)
shall constitute “cancellation” under the Uniform Commercial Code as adopted
in California.




The “Post-Termination Period” means [*]: (i) [*] after effective date of the termination of
this Agreement or (ii) [*].




(b) Termination of an Authorized Demand Signal for Convenience.




(i) In addition to either Party’s rights under Section 2(b) and under Section 21(a),
Applied may terminate any Authorized Demand Signal in whole or in part at any time for
Applied’s convenience by giving Supplier notice which shall state the extent of the
termination and the conduct required of Supplier in connection therewith. Such a
cancellation may be for any reason including a reduction in the quantity of an Item ordered
under an Authorized Demand Signal. Supplier will use commercially reasonable efforts to
mitigate any damages incurred in connection with such termination. Within [*] from the date
on which Supplier receives such notice, Supplier shall deliver to Applied [*], in the form
and containing such documentation as required by Applied. In no event, shall [*] include
any [*].




(ii) Failure by Supplier to deliver such [*] within this [*] period shall constitute a
waiver by Supplier of [*] and a release of all Applied’s liability arising out of such
termination.




(iii) If Applied does not agree with [*], Applied and Supplier will [*]. If Applied
and Supplier [*] after receipt by Applied of the [*] from Supplier, then the [*] will be
conclusively presumed to be the [*] (provided that [*]): (1) the [*] for all Items
delivered to Applied pursuant
to the Authorized Demand Signal prior to the date of Applied’s termination; (2) the [*]
for all Items [*] prior to the date of termination, provided such Items are promptly [*];
(3) the [*] relating to Items ordered pursuant to the Authorized Demand Signal, [*]
Commercial-Off-The-Shelf components either manufactured or procured by Supplier, and an
amount [*]; and (4) the [*] as a direct result of [*]. Applied’s [*] pursuant to clauses
(3) and (4) above shall be subject to Supplier’s obligation to use commercially reasonable
efforts to mitigate any such costs.


 


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(iv) This Section 21(b) sets forth Supplier’s sole remedies, and Applied’s entire
liability to Supplier, in the event of a termination of an Authorized Demand Signal by
Applied for convenience, other than Supplier’s remedy and Applied’s liability as set forth
in Section 16.




(c) Post Termination Consequences. On the date of termination or expiration of the
Agreement for any reason, Supplier shall (i) stop work being performed by Supplier pursuant
to the Agreement, (ii) cancel orders for parts and/or materials with Supplier’s Sub-tier
Suppliers and cease ordering any such parts and/or materials, (iii) cancel work being
performed by Supplier’s Sub-tier Suppliers, (iv) cancel any sublicense granted to Sub-tier
Suppliers in accordance with this Agreement, (v) fully cooperate with Applied to minimize
any adverse effect on Applied or its customers, and (vi) perform those other obligations set
forth in this Agreement upon the termination or expiration of this Agreement.




	 	n.	 	Section 22, Disclaimer and Limitation of Liability, is replaced with the
following:







(a) NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT, IN NO
EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR TO ANY OTHER PERSON OR
ENTITY WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT, UNDER ANY EQUITY,
COMMON LAW, TORT, CONTRACT, ESTOPPEL, NEGLIGENCE, STRICT LIABILITY OR OTHER
THEORY, FOR ANY (A) SPECIAL, CONSEQUENTIAL OR INDIRECT DAMAGES OR
(B) DAMAGES RESULTING FROM LOSS OF SALE, BUSINESS, PROFITS, DATA,
OPPORTUNITY OR GOODWILL, EVEN IF THE REMEDIES PROVIDED FOR IN THIS AGREEMENT
FAIL OF THEIR ESSENTIAL PURPOSE AND EVEN IF THE PARTIES HAS BEEN ADVISED OF THE
POSSIBILITY OF ANY OF THE FOREGOING DAMAGES. NOTWITHSTANDING THE FOREGOING,
THIS SECTION 22(a) SHALL NOT APPLY TO OR OTHERWISE LIMIT ANY DAMAGES THAT ARE
EXPRESSLY RECOVERABLE UNDER ANOTHER SECTION OF THIS AGREEMENT, OR ANY DAMAGES
ARISING OUT OF OR RELATED TO (i) SUPPLIER’S BREACH OF SECTION 9
(CONFIDENTIALITY AND PROHIBITED ACTIVITIES, (ii) A BREACH BY EITHER
APPLIED OR SUPPLIER OF SECTION 11 (INTELLECTUAL PROPERTY RIGHTS), OR EITHER
PARTY’S INFRINGEMENT OR MISAPPROPRIATION OF THE OTHER PARTY’S OR A
THIRD PARTY’S INTELLECTUAL PROPERTY OR PROPRIETARY RIGHTS, (iii) THE
FRAUD OR WILLFUL MISCONDUCT OF APPLIED OR SUPPLIER, (iv) SUPPLIER’S
OBLIGATIONS UNDER SECTION 23 (INDEMNITY) TO THE EXTENT THE INDEMNIFIED
LIABILITIES (AS DEFINED THEREIN) ARISE FROM OR RELATE TO A CLAIM, DEMAND, SUIT,
ACTION OR PROCEEDING BROUGHT OR THREATENED TO BE BROUGHT BY SUPPLIER OR A THIRD
PARTY, OR (v) PERSONAL INJURY OR PROPERTY DAMAGE.




(b) IN NO
EVENT SHALL SUPPLIER’S AGGREGATE LIABILITY TO APPLIED, UNDER ALL OF THE
FOLLOWING PROVISIONS OF THIS AGREEMENT TAKEN TOGETHER, THROUGHOUT THE ENTIRE
TERM OF THIS AGREEMENT, EXCEED [*]: SECTION 5(c)(iii),
SECTION 12(e)(iii), DAMAGE TO APPLIED’S PROPERTY RESULTING FROM A DEFECTIVE OR
NON-CONFORMING ITEM, SECTION 21(a)(iv)(2), AND SECTION 23(a)(i), (ii), (iii),
OR (iv). THIS SECTION 22(b) SHALL NOT APPLY TO OR OTHERWISE LIMIT ANY OTHER
LIABILITY OF SUPPLIER TO APPLIED, INCLUDING BUT NOT LIMITED TO ANY LIABILITY
ARISING UNDER SECTIONS 5(c)(i) AND (ii), SECTION 12(e)(i) AND (ii), OR
SECTION 23(a)(v), OR ANY LIABILITY ARISING OUT OF OR RELATING TO SUPPLIER’S
BREACH OF SECTION 9, SUPPLIER’S INFRINGEMENT OR MISAPPROPRIATION OF
APPLIED’S OR A THIRD PARTY’S INTELLECTUAL PROPERTY OR PROPRIETARY
RIGHTS, OR PERSONAL INJURY. On or within thirty (30) days after each
anniversary of the Effective Date of this Agreement, Supplier shall notify
Applied in writing if the liability limit under this Section 22(b) has been
reduced by any amount paid or incurred by Supplier since the previous
anniversary of the Effective Date, itemizing each such amount and describing it
in reasonable detail. The liability limit under this Section 22(b) shall be
conclusively deemed not to have been reduced by any amount paid or incurred by
Supplier since the previous anniversary of the Effective Date unless that
amount is reported to Applied when and as required by the preceding sentence.



 


Page 9 of 11









 






	 	o.	 	Section 24, Import and Export Requirements, is replaced with the following:







(a) General. Both parties shall comply with all applicable import and export
control laws or regulations (“Import and/or Export Laws”) promulgated and administered by
the laws of the United States or the government of any other country with jurisdiction over
the Parties or the transactions occurring under this Agreement including the obligation not
to export, re-export or otherwise disclose, directly or indirectly, Items or technical data
to any person or destination when such export, re-export or disclosure is in violation of
Import and/or Export Laws. Applied shall provide Supplier with any and all information
(“Trade Compliance Information”), to the extent the Item is Applied’s design, that may be
required to comply with Import and/or Export Laws, including applicable Export Control
Classification Numbers and Harmonized Tariff Schedule Numbers. Supplier shall provide
Applied with any and all Trade Compliance Information to the extent the Item is Supplier’s
or a Sub-tier Supplier’s design. Documentation substantiating U.S. and foreign regulatory
approvals for the Items, and information required by Customs officials to substantiate the
value of imported Items, including any adjustments in valuation attributable to
manufacturing assists as defined by the U.S. Customs Regulations shall be provided by
Supplier. In any case, Supplier shall refrain from transmitting any Specification, design,
Item, or other good or documentation (or otherwise take any action or omit to take any
action) in violation of the Import and/or Export Laws.




(b) Country of Manufacture. Foreign origin Items produced by Supplier shall have
its packing marked with the Country of Origin as required by Import and/or Export Laws.
Supplier shall complete a manufacturer’s affidavit in the form of Form F-88 (or its
successor form provided by Applied), which is available through the Applied Web Site, prior
to delivery of the first Item, and shall update that Form (i) as required by the Form F-88
process, or (ii) upon request by Applied. In addition, upon Applied’s request, Supplier
shall provide other documentation as may be required by U.S. Customs and Border Protection
or other governmental authorities with respect to Supplier’s products.




(c) Duty Drawback. Supplier will provide Applied or its agent with U.S. Customs
entry data and information that Applied determines is necessary for Applied to qualify for
duty drawback. Such data shall include information and receipts for duties paid, directly
or indirectly, on all Items which are either imported or contain imported parts or
components. Information related to serial numbers, unique part numbers, lot numbers and any
other data which will assist Applied in identifying imported Items sold to Applied shall
also be provided. At the time of delivery of the Items, but in no event later than thirty
(30) days after each calendar quarter, Supplier will provide said documents accompanied by a
completed Certificate of Delivery of Imported Merchandise or Certificate of Manufacture and
Delivery of Imported Merchandise (Customs Form 331) as promulgated pursuant to 19 CFR 191,
or successor regulations.




	 	p.	 	Section 26(d) is replaced with the following:







Survival of Obligations. Termination or expiration of this Agreement will not
relieve either Party of its obligations under Sections 8(a), 8(c), 9, 11(a) — (i), (m) —
(n), and (p), 12, 17(b), 19, 20(d) — (f), 21 — 24, 26(c) — (e), (g), (i) — (k), (n),
(o), (q), (r), and (s), nor will termination or expiration relieve the Parties from any
liability arising prior to the date of termination or expiration.




	 	q.	 	Section 26(f) is replaced with the following:







General Compliance with Laws and EEO Regulations. Each Party represents, warrants
and agrees that (i) such Party’s execution, delivery and performance of this Agreement will
not conflict with or violate any applicable law, rule, regulation, order, decree, or
ordinance; and (ii) such Party shall comply with the requirements of 41 CFR §§ 60-1.4(a)
—250.5(a), and —741.5(a), if applicable, relating to equal opportunity clauses pertaining
to government contracts.


 


Page 10 of 11









 






	 	r.	 	Section 26(k) is replaced with the following:







General Representations. Each Party represents and warrants as follows: (i) such
Party is duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its organization; and (ii) such Party’s execution and delivery of this
Agreement and performance of its obligations hereunder will not (1) violate any provision of
the charter, bylaws or other governing document of such Party, or (2) conflict with, result
in a breach of, or constitute a default under, any other agreement or arrangement by which
such Party is bound.




	 	s.	 	Section 26(i), Applicable Law, Jurisdiction, Venue, is replaced with the
following:







Governing Law, Exclusive Forum. The Agreement and any dispute arising out of or in
connection with the Agreement or the Parties’ relationship shall be interpreted, enforced
and governed by the laws of the State of California, excluding its choice of law rules. The
exclusive forum for any dispute related in any way to this Agreement or the Parties’
relationship shall lie in the courts, state or federal, of California, and venue shall lie
in the courts of Santa Clara County. Items shall be deemed and shall qualify as goods under
the Uniform Commercial Code as adopted in California. Each Party consents to personal
jurisdiction in the above courts. Notwithstanding the foregoing, Applied shall have the
right to seek injunctive relief, including preliminary and permanent injunctive relief, in
any court of competent jurisdiction, including, without limitation, to enforce Applied’s
rights under Sections 9 and 11, or to otherwise enforce any judgment made hereunder.




	 	t.	 	The following provisions are added as new subsections to Section 26 of the GSA:







(t) Electronics Industry Code of Conduct. Supplier acknowledges that Applied has
adopted and supports the Electronics Industry Code of Conduct, which is set forth on
Applied’s Web Site as Attachment 21. Supplier acknowledges it has reviewed, complied with,
and will implement this code and will use commercially reasonable efforts to encourage its
Sub-tier Suppliers to implement this code.




(u) Notifications to Applied. Supplier shall promptly notify Applied in writing as
soon as possible before, and in any event prior to the occurrence of, (i) Supplier’s
acquisition of a majority of the capital stock of, or substantially all of the assets of, a
third party or business division of a third party that directly or indirectly provides goods
or services to Applied; (ii) a significant change in leadership roles at Supplier, a
business division of Supplier, or factory or physical plant of Supplier, which is involved
in Supplier’s performance of this Agreement; (iii) any problem or other issue that a
reasonable person in the position of Supplier would believe could negatively impact
Supplier’s ability to perform its obligations under this Agreement (including making on-time
deliveries); or (iv) any material change to Supplier’s information, inventory management, or
financial management systems or processes. 



IN WITNESS WHEREOF, each party has caused this Amendment to be executed by its duly authorized
representative.



	 	 	 	 	 	 	 	 	 	 	 
	APPLIED MATERIALS, INC.	 	 	 	ADVANCED ENERGY INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ George Alasajan
 

Name: George Alasajan
	 	 	 	By:
	 	/s/ Hans Betz
 

Name: Hans Betz
	 	 
	 

	 	Title: Not provided
	 	 	 	 	 	Title: CEO	 	 








	 	 	 
	Note:	 	This Amendment was not signed by Advanced Energy Industries until January 28, 2011






 


Page 11 of 11











 





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Lead	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Time	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	(business	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	days	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	including	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	transit	 	Lead	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	time	 	Time	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	estimate	 	(business	 	 	 	Refurb	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	using	 	days	 	 	 	Cycle	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	AMAT	 	excluding	 	 	 	Time	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	freight	 	in-transit	 	Section 12	 	(Typical	 	 	 	Item	 	Royalty	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	routing	 	time;	 	Warranty	 	business	 	 	 	Category	 	(% of	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Item	 	guide;	 	item	 	(Months	 	days	 	Contract	 	Unrestricted	 	item	 	 	 	 	 	 
	 	 	AMAT	 	 	 	AE	 	AE	 	Contract	 	item on	 	NOT on	 	from AE	 	required	 	Type	 	Royalty	 	Contract	 	 	 	 	 	AE
	AMAT	 	Rev	 	AE Part	 	Rev	 	Platform /	 	Price per	 	CSP	 	CSP	 	invoice	 	by refurb	 	1 = Direct	 	Restricted	 	Price per	 	 	 	AMAT	 	Product
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