Terms and Conditions of Sale

1. Definitions. “Customer” means the customer submitting the Order to Key. “Customer’s Terms and Conditions” means Customer’s terms and conditions included with an Order or incorporated by reference in an Order, but excluding any Master Terms Agreement. “Documentation” means all written material (whether intangible, electronic or any other form) Key provides with or for the Products, including all Product safety notices, warnings, instructions and training materials, manuals, video recording, or similar materials, and all updates, upgrades, and improvements thereto. “Key” means Key Technology, Inc., its subsidiaries, and its business units. “Key Intellectual Property” means all patentable and unpatentable know-how, inventions, discoveries and improvements, all Software, all designs, drawings, Documentation, other original works of authorship, all technical information, data and all other intellectual property rights associated with the Product. “Master Terms Agreement” means an enforceable agreement, other than the Order and these Terms, between Key and Customer establishing the general provisions that apply to their relationship. “Order” means a purchase order Customer submits to Key for Products and/or Services, including any attached Product specifications and drawings. “Product” means the goods (including Software) described in an Order. “Services” means the services described in an Order. “Software” means all software related to the Product, whether downloaded over the internet, provided on a disk or embedded in a tangible Product including all updates, upgrades, and improvements thereto. “Terms” means these Terms and Conditions of Sale.

2. Orders; Entire Agreement. All Orders are subject to and expressly conditioned upon Key’s acceptance in writing of the Order.

If there is a Master Terms Agreement, then the Order, the Master Terms Agreement, and these Terms constitute the entire agreement between Key and Customer regarding the Products and Services to which the Order applies, with all prior discussions, proposals, understandings, agreements, express, implied, written or oral, regarding the Products and Services having been superseded. To the extent there are conflicts between the Master Terms Agreement, the Order, or the Terms, the Master Terms Agreement shall supersede and govern.

If there is no Master Terms Agreement, then the Order and these Terms constitute the entire agreement between Key and Customer regarding the Products and Services to which the Order applies, with all prior discussions, proposals, understandings, agreements, express, implied, written or oral, regarding the Products and Services having been superseded. To the extent there are conflicts between the Order, provided such is acknowledged by Key) and the Terms, the Order, excluding Customer’s pre-printed terms, shall supersede and govern.

No variation of the Terms will be binding upon Key unless agreed to in writing and signed by an officer or authorized representative of Key.

3. Prices; Taxes. Prices and payment terms are provided in the Order; however we constantly monitor our supply chain and input costs to ensure that we are able to offer our customers best-in-class solutions at a market competitive price. Should the price of raw materials or other input costs move significantly between the date of this contract and the date of manufacture, the offered price for this solution shall be equitably adjusted. Key Technology will provide market-based support to justify any price adjustment prior to that adjustment being applied. All prices are Ex Works–Key loading dock, and are exclusive of shipping and transportation charges, special packaging charges, insurance, tariffs, duties and sales, use, privilege, excise, value added and all other taxes, and other similar charges. Customer agrees to pay and otherwise be fully responsible for such taxes (except for tax based on the net income of Key).

4. Payment Terms. Terms of sale are net 30 days of date of the invoice, unless otherwise stated, except where open account credit is established and maintained to the satisfaction of Key. Credit and terms of payment may be changed or credit withdrawn by Key at any time. Key’s invoices shall be deemed accepted and conclusively binding upon Customer as an account stated, and will not be subject to any audit claim, unless Customer notifies Key in writing within 10 days after receipt of that invoice. Failure to pay an invoice within 30 days of the date of the invoice was received will result in an additional service charge equal to the lesser of one and one-half percent per month or the maximum rate permitted by law.

If Customer’s financial responsibility or condition reasonable appears to call for such action, Key may, without notice to Customer, delay or postpone the delivery of the Product or the performance of the Services. In the event of default by Customer in the payment of the purchase price or otherwise, concerning this Order or any other Order, Key, at its option, without prejudice to any other of Key’s lawful remedies, may defer delivery, cancel the Order, or sell any undelivered Products on hand for the account of Customer and apply such proceeds as a credit, without set-off or deduction of any kind, against the Order purchase price, and Customer agrees to pay the balance then due to Key on demand.

5. Delivery; Risk of Loss. Unless Key expressly agrees otherwise, all Products consisting of tangible goods are shipped Ex Works-Key’s loading dock. Customer will select the carrier. Title and risk of loss to Products shall pass to Customer upon delivery to the carrier and Customer will submit all claims for damage or shortages to the carrier. Shipping dates, if any, set forth in the Order are approximate only and merely represent Key’s best estimate of the time required to make shipment. Key shall not be liable for any loss or expense (consequential or otherwise) incurred by Customer because of any delay in delivery for any reason other than arbitrary refusal of Key to perform. If any shipment of Products is delayed at Customer’s request, Key may invoice Customer for such Products on the date Key is prepared to make shipment.

6. Inspection; Shortage. Immediately upon Customer’s receipt of any Order shipped by Key, Customer shall inspect the same and notify Key in writing of any claims for shortages. Any written notification of shortage provided to Key must be accompanied by the original freight bill, with notation on its face by the authorized agent of the carrier as to the items and quantities claimed to be short. Customer shall hold the Products for Key’s written instructions concerning disposition. Failure by Customer to provide written notification of any claims for shortages within 10 days after delivery of the Order to the shipping destination shall be deemed irrevocable acceptance of such Products.

7. Safety. Customer will (a) cause each person who receives or uses a Product to read and comply with all safety instructions in the Documentation for the Product; (b) instruct the user in the proper use of the Product; and (c) implement and enforce the safety provisions of all Product safety notices, warnings, instructions or similar Documentation. Customer will not remove any shields, guards, or other safety devices from the Product.

8. Ownership of Intellectual Property and Software License.

• Ownership of Intellectual Property. Key, and not Customer, owns and will own all patents, patent applications, trade secrets, proprietary information, know-how, inventions, discoveries and improvements, technical information, drawings, data, performance data,  ideas, samples, media, techniques, sketches, designs, formulae, processes, procedures, works of authorship, models, algorithms, software programs, software source documents, information concerning research, experimental work, development, design details, design specifications and engineering, financial information, procurement requirements, and all other intellectual property rights invented, discovered, created or developed by Key (collectively, the “Key Intellectual Property”).

• Software License. Key grants to the original purchaser, for the useful life of the related Product, a nonassignable, nonexclusive license to use the Software in the manner and subject to the restrictions set forth in the Documentation provided with the Product. The Software is Key’s proprietary property and is licensed, not sold, to Customer. Key retains all right, title and interest in and to the Software provided to Customer in connection with the Product. Customer will not use the Software except on or in conjunction with the Product. Customer will not (a) copy, alter, modify, adapt, translate, create derivative works, reverse engineer, disassemble, or decompile all or any portion of the Software; (b) disclose, sell, sublicense or otherwise transfer or make available all or any portion of the Software to any third party, without the express written consent of Key; or (c) remove any copyright, trademark or other proprietary notice from the Software. In addition to any other remedy Key may have, Key reserves the right to terminate Customer’s license if Customer fails to comply with these Terms. The Software is “commercial computer software” and the related Documentation is “commercial computer software documentation” under 48 CFR 12.212 and is provided to US Government licensees with restricted rights. Use, duplication, reproduction or transfer of the Software is restricted under FAR 12.212 and DFARS 227.7202 and these Terms.

9. Proprietary Documents. Documentation that Key may furnish shall be in Customer’s possession pursuant only to a restrictive, nontransferable, nonexclusive license under which Customer may use such Documentation solely to operate, service and repair the Product and for no other purpose. Customer agrees to maintain the confidentiality of all Documentation and to instruct and obligate its employees and agents to do the same. Without limiting the generality of the foregoing, without the prior express written consent of Key, Customer may not reproduce or copy any Documentation or transfer, assign, sublicense, loan, disclose or otherwise make available all or any portion of such Documentation to any other person or entity. Title to and ownership of the Documentation shall at all times remain in Key. Besides any other remedy Key may have, Key reserves the right to terminate Customer’s license if Customer fails to comply with these Terms.

10. Protections and Restrictions. Customer shall not (a) use the Software, Documentation, Product or Key Intellectual Property except as expressly provided in these Terms and in the Documentation; or (b) disclose or make available the Software and/or Documentation to any third party without the prior written consent of Key. To protect the Key Intellectual Property and to ensure Key knows to whom and where to send product safety notices and other product updates, Customer will not transfer any Product containing Key Intellectual Property to anyone other than to one of Customer’s affiliates unless Customer first: (a) gives Key written notice at least 30 days before the removal of the Product from Customer’s workplace, including (i) the identity of the proposed transferee; (ii) if applicable, the location where the proposed transferee will install and use the Product; and (iii) the financial and other terms of the transfer; (b) gives Key the opportunity to inspect the Product before it is removed from Customer’s workplace; and (c) receives Key’s prior written consent to the transfer. If the proposed transferee intends to use the Product in commercial production in the ordinary course of its business, any consent by Key will include commercially reasonable terms under which Key will permit the proposed transferee to use the Key Intellectual Property. In no event will Key consent to a transfer to a person in the business of manufacturing or distributing optical inspection, material handling or processing equipment unless Key is first permitted to disable and/or remove Key’s Intellectual Property from the Product. Customer will fully indemnify Key for all damages, costs and expenses, including attorney fees, resulting from any person gaining access to Key’s Intellectual Property due to any transfer of a Product by Customer in violation of this provision. All data, job files, description files, written material (whether in tangible, electronic or any other form) Customer provides Key is and will remain Customer’s property.

11. Warranty Against Patent Or Trademark Infringement. Key warrants to the original purchaser that Key is the exclusive owner of the Key Intellectual Property and the Product shall be delivered free of the rightful claim of any person by way of patent or trademark infringement or the like. Key reserves all rights regarding the Intellectual Property except those expressly granted to Customer in these Terms and the Documentation.

12. Laws, Codes, and Regulations. Key warrants to the original purchaser that, at the time of shipment, each item of Product will comply with all laws, ordinances and regulations which apply at the place where each item of Product is manufactured. After shipment of the Product, compliance with applicable laws, ordinances and regulations relating to environmental, public and user safety, training, Product use, maintenance and transportation become the sole responsibility of Customer. Key does not undertake or assume any responsibility or obligations of Customer for the safety of the workplace where the Product is used, whether that responsibility or those obligations are imposed by code, regulation, or judicial decision, and Key makes no warranty or representations with respect thereto.

13. Warranty of Title. Key warrants to the original purchaser that Key has absolute title to and full right to dispose of the Products, free and clear of any liens, claims, or encumbrances of any kind.

14. Limited Warranty. Key warrants to the original purchaser that each item of Product, including replacement parts and Service, will conform in all material respects to Key’s written specifications for the item and Service and to the descriptions on the Order, and will be free from defects in materials and workmanship subject to the tolerances and variations consistent with usual and customary trade practices. The period of this limited warranty is 12 months from the shipment of each item of Product. The period of this limited warranty for service is 90 days from the performance of such service. The period of this limited warranty for replacement parts is the longer of 90 days or the unexpired portion of the original limited warranty 12 month period.

Customer shall promptly notify Key in writing of any alleged defects in the Product or Service and specifically describe the problem. Key shall have no obligations under this warranty regarding any defect unless it receives notice and a description of such defect no later than 10 days following the expiration of the warranty period. Upon receipt of such notice, Key shall either advise Customer that warranty service shall be at the location of the Product or shall instruct Customer as to the part or parts of the Product that Customer shall ship back to a Key repair facility for repair or replacement. Key will pay the costs of transporting repaired or replaced Products back to Customer, and Key will pay the costs of transporting any Product to Key, which Key determines to have been defective; otherwise, Customer shall pay all costs of transportation in both directions.  In all circumstances where Key is responsible for shipping costs, the shipping arrangements must be made by Key or authorized by a Key representative.

The foregoing warranty shall not apply to any Product which have been (a) used or operated in a manner inconsistent with the use intended by Key; (b) modified or repaired by anyone other than Key personnel or Key’s authorized service representatives; or (c) damaged because of accident, neglect, misuse, excessive deterioration, erosion, abuse, improper installation, failure or surge of electrical power, air conditioning, or humidity control, transportation, other causes other than ordinary use, or any use in violation of or contrary to Key’s instructions..

THE FOREGOING WARRANTY APPLIES ONLY TO THE ORIGINAL PURCHASER AND IS IN LIEU OF ALL OTHER WARRANTIES, WHETHER STATUTORY, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, NON INFRINGEMENT, AND WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE. THIS LIMITED WARRANTY MAY NOT BE MODIFIED OR EXPANDED EXCEPT IN A WRITING SIGNED BY ONE OF KEY’S EXECUTIVE OFFICERS.

15. Limited Remedy. If any Product or Service fails to conform to the limited warranty in Section 14 and if: (a) Customer gives Key prompt written notice specifying in detail the nonconformity; (b) Customer, if requested by Key, returns any defective Product to a Key repair facility at Key’s expense; (c) the inspectors at the Key repair facility or at the Customer site, as applicable, determine the item is nonconforming or defective; and (d) Customer has paid for the Products and Services; then Key will, at its option, either repair, replace or re-perform the defective Product or Service or refund the purchase price for that Product or Service. THE PRECEDING REMEDY IS CUSTOMER’S SOLE AND EXCLUSIVE REMEDY FOR BREACH OF THE TERMS OR ANY LOSS OR DAMAGE ARISING OUT OF THE PRODUCTS OR THE SERVICES OR ANY ORDER, WHETHER IN CONTRACT, TORT OR OTHERWISE.

16. Confidentiality. If either party receives Confidential Information (in that case the receiving party will be referred as “Recipient”) from or about the other party (“Disclosing Party”), either before or after the date of the Order, whether received in written form, orally, by observation or otherwise, Recipient will not use that Confidential Information or disclose it to anyone other than to Recipient’s employees with a need to know and who are bound to comply with the restrictions in this Section), without the prior written consent of Disclosing Party. The term “Confidential Information” means all information that Recipient knows or reasonably should know is valuable confidential information of Disclosing Party, its suppliers, customers or others, except that the term “Confidential Information” includes no information that (A) is or becomes publicly available without Recipient’s breach of this Section); (B) Recipient can prove from its written records that it rightfully received from third parties without restriction on disclosure; or (C) Recipient can prove from its written records that it independently developed without use of Confidential Information. Recipient is responsible for a breach of the obligations in this Section by its employees, agents and contractors. Recipient will take all necessary precautions to protect Confidential Information from disclosure to or use by unauthorized persons, including if requested by Disclosing Party, arranging for others to execute and deliver to Disclosing Party a suitable confidentiality agreement before disclosing Confidential Information to them. In taking these precautions, Recipient will use a standard of care at least as high as that normally adopted by prudent owners of confidential information where their commercial success depends upon keeping that information from being disclosed to or used by others. Recipient’s breach of this Section would cause Disclosing Party to suffer losses which could not be adequately compensated in damages so, besides any other available remedies; Disclosing Party will be entitled to seek an injunction to restrain that breach and any further breach.

17. Insurance. Key shall carry and maintain at Key’s cost the following insurance coverage: (a)workers’ compensation insurance complying with all statutory benefits to the statutory limits; (b) commercial general liability with a combined single limit per occurrence of $1 million and aggregate limit for all occurrences of $2 million; and (c) automobile liability insurance with a combined single limit per occurrence of $1 million. Key will furnish Customer with certificates of insurance certifying the required insurance coverage is in effect upon request.

18. Indemnity.

(a) Customer shall indemnify, defend and hold Key and Key’s successors and assigns harmless from and against all damages paid or payable to any third party other person, including attorney fees incurred prior to, at trial and on appeal, arising from or related to any of the following (each, a “Claim”): (i) if Customer designed or furnished the specifications for that Product or any marking or branding applied at the request of Customer, any product liability claim (except product liability claims caused solely by defects in the materials Key supplied or solely by Key’s negligence) or any claim that the Product infringes any other person’s intellectual property rights or defective; (ii) that Customer breached the Terms; (iii) any improper alteration, installation, repair or maintenance including removal of guards or defeating of interlocks or other safety devices; (iv) any use contrary to the Documentation or applicable law, other than the purpose for which the Product was designed or any other misuse; or (v) any failure to provide, implement or enforce any Product notices.

(b) Key will indemnify, defend and hold Customer harmless from and against any Claim: (i) that the Product as Key designed it and when used as set forth in the Documentation infringes any other person’s intellectual property rights; or (ii) that Key breached the Terms.

(c) The obligation of each party (“Indemnitor”) to indemnify the other party is conditioned upon that other party (1) giving the Indemnitor prompt written notice of the Claim (except that any delay in giving notice will not limit the Indemnitor’s obligations unless it has been prejudiced by the delay and then only to the extent of the prejudice); (2) tendering defense and settlement of the Claim to the Indemnitor; and (3) cooperating with the Indemnitor in the defense of that Claim.

TO THE EXTENT NECESSARY TO INDEMNIFY AND HOLD KEY HARMLESS FROM ANY CLAIMS BY ANY OF CUSTOMER’S EMPLOYEES AND TO THE EXTENT PERMITTED BY LAW, CUSTOMER EXPRESSLY WAIVES ANY IMMUNITY OR EXEMPTION FROM LIABILITY FOR THE PERSONAL INJURY OR DEATH OF CUSTOMER’S EMPLOYEES THAT MAY EXIST UNDER, OR ANY RIGHT TO RECEIVE CONTRIBUTION FROM KEY, CREATED BY, THE WORKERS’ COMPENSATION LAWS OF THE STATE WHERE THE INJURY OCCURS OR THE EMPLOYEE IS LOCATED.

19. LIMITATION OF LIABILITY. EXCEPT FOR DAMAGES ARISING FROM THIRD PARTY INDEMNIFICATION OBLIGATIONS UNDER SECTION 18, IN NO EVENT WILL (a) EITHER PARTY HAVE ANY OBLIGATION OR BE LIABLE FOR ANY LOSS OF USE, REVENUE, INCOME, OR ANTICIPATED PROFITS; LOSS OF PRODUCT, MATERIALS, OR PROPERTY HANDLED OR PROCESSED WITH THE USE OF THE PRODUCTS; AND DAMAGE TO, LOSS OR DESTRUCTION OF PROPERTY USE, OR ANY INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES, OR (b) EITHER PARTY’S LIABILITY EXCEED THE PRICE OF THE PRODUCT OR SERVICE GIVING RISE TO THE CLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE.

20. Changes and Cancellations. A request to cancel or change an Order received by Key must be made in writing at least 30 days before the requested shipment date and is subject to Key’s approval. Customer acknowledges that a change, if accepted by Key, may affect the price and the delivery of the Product and performance of the Service. In the event of a cancellation, Customer shall, as a condition of such cancellation or termination, be obligated to pay Key’s reasonable costs and expenses incurred or committed to prior to the date of such termination or cancellation in respect of the Product and Services performed by Key under the Order, plus a reasonable allowance in respect of Key’s anticipated profit. Customer agrees to pay such costs and expenses promptly following receipt of Key’s invoice therefore, which shall be submitted to Customer as soon as practicable after such termination or cancellation.

21. Force Majeure. Neither Key nor Customer shall be liable for any delays or performance failures, other than Customer’s payment obligations, when due to an act of God, war, mobilization, insurrection, rebellion, civil commotion, riot, act of an extremist or public enemy, sabotage, labor dispute, custom’s delay, lockout, strike, explosion, fire, flood, storm, accident, drought, epidemic, power failure, inability to obtain suitable and sufficient energy, labor or material, delay of carriers, embargo, any existing or future law, ordinance, rule or regulation, whether valid or invalid, of the federal or of any state or foreign government effecting the conduct of business, including priority, requisition, allocation or price control; or due to any other cause beyond a party’s reasonable control, whether affecting procurement, production, transportation or any other phase related to an Order.

22. Security Interest. To secure payment and performance of all of Customer’s current and future obligations to Key, Customer grants to Key a security interest in all Products (and replacements) that Customer has purchased or may at any time in the future purchase from Key and in all proceeds of the Products (collectively, the “Collateral”). Customer agrees, without further consideration, at any time to do or cause to be done, executed and delivered, all such further acts and instruments as Key may reasonably request in order to perfect and protect Key’s security interest in the Products, including, without limitation, a financing statement appropriate for filing. If Customer defaults in any of its obligations to Key, Customer will, at Customer’s cost and expense, assemble the Collateral and deliver that Collateral to Key at any location in the United States reasonably requested by Key. If Customer fails to make any payment when due or defaults on any other obligation to Key, or if Key discovers that Customer is insolvent, Key may, at Key’s discretion, cancel any Order or any other agreement with Customer, cease manufacturing Products described in any Order, refuse to ship Products, stop delivery of Products in transit, reclaim any Products for which payment has not been made, and exercise all of Key’s other rights and remedies. Key may at any time in its sole discretion immediately terminate Customer’s ability, if any, to purchase Products on credit or otherwise.

23. Storage Fees. If a delay in shipment is caused by customer  and is more than ten (10) calendar days past the original ship date, then Key may charge a storage fee for the Equipment.  The rate shall be negotiated by Key and the Customer based on applicable local storage rates.

24. Attorney Fees; Governing Law; Venue. Customer shall pay all costs, collection agency commissions, expenses and reasonable attorney fees (prior to, at trial and on appeal) incurred by Key in collecting the price for any Product or Services. The laws of Oregon, USA will govern, excluding (a) its choice of law rules; and (b) if Customer is a citizen of a country other than the United States, the Convention on the International Sale of Goods. All disputes relating to the Order, the Terms, the Products, or the Services will be tried in Oregon, and Customer will not initiate suit against Key in any other place.

25. Assignment. These Terms may not be assigned, in whole or in part, by either party except with the prior written consent of the other party, except that: (a) Key may assign any of its right to receive any payment or payments from Customer hereunder; and (b) Key may subcontract the performance of any of its obligations under these Terms; provided that Key shall remain primarily responsible for the performance of obligations which it subcontracted hereunder.

26. Notices. All notices, requests, consents and other communications required or permitted under the Terms shall be in writing and shall be sent by registered or certified mail, postage prepaid to Key and Customer at their respective addresses set forth on the signature page hereto. Either party may change its address by written notice to the other.

27. Disclosure. Customer agrees to allow Key to disclose the sale of the Products and Services to Customer as required by law.

28. Export Laws and Regulations. Neither Customer nor Key will export any Product except in compliance with applicable law, including the United States Export Administration Act of 1969, as amended, and the related regulations issued by the United States Department of Commerce.

29. Severability. If any provision of an Order is found to be invalid or unenforceable by a court of competent jurisdiction, that provision will be severed from the remainder of that Order, which will remain in full force and effect.

30. No Waiver; Modification. None of the Terms may be waived or modified (including by course of performance, course of dealing or usage of trade) unless that waiver or modification is in writing and is signed by the party to be bound. So long as it does not add to or conflict with the Terms, Key will be entitled to rely on any written or telephonic request or notice that appears to be from an employee or authorized agent of Customer.

31. Interpretation. Except as otherwise expressly provided or unless the context otherwise requires (i) defined terms include the plural and the singular; (ii) the words “herein,” “hereof,” “hereto,” “hereunder,” and words of similar import refer to the Terms as a whole and not to any particular section or provision; and (iii) the terms “include,” “includes,” and “including” are not limiting and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”

32. Authority. Each person executing the Order represents and warrants he or she has the authority to do so for himself or herself or the party he or she represents.