DIGITAL POWER CORPORATION
DESIGN ACQUISITION
THIS INITIAL AGREEMENT is made and entered into in San Xxxx, Santa
Xxxxx County, California, this 10th day of November, 1987, by and between
DIGITAL POWER, INC., (hereinafter referred to as "DIGI-POWER") whose
principal place of business is 000 X. Xxxx Xxxx, Xxx Xxxx, Xxxxxxxxxx
00000, and Mr. Ki Xxxx Xxxx of KDK ELECTRONICS, (hereinafter referred to as
Xx. Xxxx) whose principal place of business is 00000 Xxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000.
For the design rights and transfer of technical know-how, Digital
Power will compensate Ki Xxxx Xxxx of KDK Electronics as follows:
1) $10,000 upon signing of an agreement and $10,000 on the 1st of
each of the following nine months.
2) Royalties are as follows:
5% on First $ 20,000,000 sales.
4% on Next $ 25,000,000 sales.
3% on Next $ 33,333,333 sales.
2% on Next $ 50,000,000 sales.
1% on Next $100,000,000 sales.
At this point royalties cease.
3) Stock option:
Option on 135,000 shares of Digital Power Stock at 3.50 per
share. Optionable when the 1st $20,000,000 in sales has been reached.
Digital Power will pay in the $472,500.00 to cover the purchase of
shares for Xx. Xxxx.
In return for the above compensation Digital Power owns all
rights to the following products developed by Xx. Xxxx.
See: Appendix "A"
Xx. Xxxx will give the necessary assistance to get technology and
know-how on these products into Digital Power manufacturing. On an
ongoing basis Digital Power will have access to 20 hours per month of
Xx. Xxxx'x assistance, as long as the Royalty Agreement is in effect.
Digital Power reserves the first right of refusal on any new products
Xx. Xxxx develops in the future.
Xx. Xxxx promises not to sell or divulge to any other company any
of the technology purchased by Digital Power. Digital Power will
compensate Xx. Xxxx on any new projects which require Xx. Xxxx'x
assistance. The compensation will be determined on a job by job basis
mutually agreed upon by both parties.
APPENDIX "A"
Products:
STANDARD PACKAGE (L or U Bracket)
1. 80-1OOW Family AC-DC 1.5 inch high 4 output
2. 150-200W Family AC-DC 1.5 inch high 4 output
3. 80-1OOW Family DC-DC 1.5 inch high
A. 12V input 4 outputs
B. 24V input 4 outputs
C. 48V input 4 outputs
4. 150-200W Family DC-DC 1.5 inch high
A. 12V input 4 outputs
B. 24V input 4 outputs
C. 48V input 4 outputs
5. Up to 500W Family-Natural progression
SLIM LINE
1. lOOW 4 output 0.8 inch high AC-DC
2. lOOW 4 output 0.8 inch high 12V input DC-DC Converter
3. 100W 4 output 0.8 inch high 24V input DC-DC Converter
SPECIAL
1) AC input module integrated P.S.
lOOW
2) 200W
/S/ KI XXXX XXXX
__________________________
/S/ XXXXXX XXXXXX
__________________________
SUPPLEMENTARY AGREEMENT
This is to clarify and supplement our agreement entered on November
10, 1987.
KDK Electronics Inc. has no obligation to Digital Power
Corp. for the two products group listed below.
1) New products developed after the agreement date,
November 10, 1987.
2) Products already developed by KDK but not implemented
to production line of Digital Power Corporation as of May 23,
1988.
May 23,1988 /S/ KI XXXX XXXX
__________________________
May 23,1988 /S/ XXXXXX XXXXXX
__________________________
AGREEMENT
1. 5% royalty on net sales of XX000, XX000 and KD200 power supplies
and any derivatives employing this base design.
2. 100,000 shares stock option when net sales of Item #1 reach
$20,000,000 (subject to terms and conditions of original agreement).
3. All past and future royalty payments paid out at 4% of total DPC
net sales on a monthly basis (3% for the first 12 payments), the first
payment due upon signing a new agreement.
4. This agreement applies only to designs incorporated by DPC as of
June 22, 1990. It is our understanding that KDK has in development various
features, enhancements or other products, the purchase of which would be
the subject of a new agreement.
5. KDK agrees not to sell or license these products to a competing
power supply manufacturer. However, KDK is free to manufacture these
products for sale to end customers, or to license the manufacture of these
products to an end customer who would employ them, not for resale, but as a
part of their product. If DPC does not achieve $3.5 million in net sales
from July, 1990 through June, 1991, then KDK is free to sell or license
these products to a competing power supply company.
6. DPC is developing new designs and KDK would inspect these designs
prior to this agreement to assure that they are not KDK designs.
7. There will be a 1% per month penalty charge on any payments
delayed over 10 days, plus an additional 1% per month interest charge for
balances owing beyond 30 days.
8. DPC will provide two monthly reports to KDK as follows:
NEW ORDERS SHIPMENTS
KDK Designs $ KDK Designs $
Old DPC Designs $ Old DPC Designs $
New DPC Designs $ New DPC Designs $
9. If Digital Power Corporation is sold or merged, by the time of
such events, unpaid royalty is due and prorated stock option may be
exercised based on total accrued royalty.
10. Mutually dismiss all litigations.
Date 6/29/90 /S/ KI XXXX XXXX KDK ELECTRONICS, INC.
Ki Xxxx Xxxx, President
Date 6/29/90 /S/ XXXXXX X. XXXXX DIGITAL POWER CORPORATION
Xxxxxx X. Xxxxx, CEO
