Exhibit 10.2
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August Technology Corporation
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INTERNATIONAL DISTRIBUTOR
AGREEMENT
This Agreement is made as of the 14th day of June , 1999, between AUGUST
TECHNOLOGY CORPORATION, a Minnesota (USA) corporation with a principal place of
business at 0000 Xxxxx Xxxxxxxxxx Xxxx., Xxxxx, Xxxxxxxxx 00000, XXX, (hereafter
referred to as "August Technology") and MARUBENI SOLUTIONS CORPORATION, an
entity organized and existing under the laws of Japan, having its principal
place of business 0-00-00, Xxxxxxx, Xxxxxxx-xx, Xxxxx 000-0000 Xxxxx (hereafter
referred to as "Distributor").
In consideration of the mutual covenants and agreements hereinafter set forth,
the parties agree as follows:
The following are the terms and conditions under which August Technology sells
and licenses its image inspection technology, vision system controlled
manufacturing tools, licensed software programs, and related spare parts
specified in Exhibit-A (hereinafter jointly referred to as "Product" or "
Products"). Distributor wishes to purchase all or selected Products for resale
and commits to actively provide its customers the necessary service and support
to successfully market and maintain the Products in the assigned territory.
1. DEFINITIONS
The terms listed below will have the following meaning, unless the
context clearly indicates otherwise:
1.1 "AGREEMENT" will mean this International Distributor Agreement
and all Exhibits.
1.2 "COMPETITIVE PRODUCTS" will mean image inspection technology,
vision system controlled manufacturing tools, licensed
software programs, and related spare parts, of substantially
the same functionality Products..
1.3 "PRICE LIST" will mean the published prices that August
Technology shall issue from time to time.
1.4 "TERRITORY" will mean the countries specified in Exhibit-C.
1.5 "MIE" will mean Marubeni Solutions Corporation's subsidiary in
the USA. Specifically, Marubeni International Electronics
Corporation with a principal place of business at 000 Xxxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxxx, 00000.
2. APPOINTMENT AS DISTRIBUTOR
August Technology hereby appoints Distributor as an authorized,
independent, exclusive Distributor for the Products, for the purpose of
reselling and servicing the Products directly to its customers in the
Territory. Distributor agrees that it will re-sell Products directly,
without the use of any dealers, sub-agents, and the like except with
August Technology's express written consent.
3. TERM OF AGREEMENT
This Agreement will remain in effect during one (1) year period after
the signed date on this agreement by both parties, and then shall be
automatically renewed thereafter on a year-to-year basis unless
otherwise terminated hereunder. Termination may be made at any time by
either party by providing written notice at least 6 months prior to the
intended termination date.
4. TERRITORY
Distributor will have the exclusive right to actively market, sell, and
promote the Products in the Territory (see Exhibit-C).
5. RESTRICTIONS
5.1 Distributor agrees not to make any sale, transfer, exchange,
or other conveyance of any Products whatsoever to any person
that Distributor knows, or has reason to know, is purchasing
such Products for the purpose of resale without first
notifying August Technology for written approval.
5.2 Distributor will have no rights to the Products, any software
included in the Products, or any improvements in the Products.
Distributor agrees not to copy, manufacture, re-manufacture,
or otherwise modify any Products without the written consent
from August Technology (signed by an officer of the company).
If Distributor is permitted to modify Products to conform to
customer requests or specifications, such modifications must
not degrade the original August Technology operating
specifications or impede the reliability of the Products. Any
modifications performed in violation of this Section 5.2 will
void all warranties.
5.3 Distributor agrees not to promote, market, or sell any
Competitive Products or services, directly or indirectly,
within the Territory with the exception of Products that
Distributor has a Tight to distribute in the Territory on the
date of this Agreement. If any equipment supplier to
Distributor develops or promotes a Competitive product to
August Technology's products, Distributor agrees to
immediately notify August Technology in writing of this
conflict (including a proposed resolution to the conflict).
Distributor agrees not to establish a branch office or other
entity or association with plans to distribute Products
outside the
Territory, or to appoint any sub-Distributor outside the
Territory except with express written consent by August
Technology.
6. PRICE, PAYMENT, TAXES, DUTY & COMMISSION
6.1 Prices for the Products purchased under this Agreement will be
as specified in Exhibit-B. August Technology will have the
right at any time to change its prices and must provide
Distributor with a Sixty (60) day advance written notice of
any pricing changes. Price changes will not apply to unfilled
purchase orders that have been accepted by August Technology
prior to the effective date of the price change.
6.2 Payment by Distributor will be made by bank check in U.S.
Dollars issued by Distributor's subsidiary Marubeni
International Electronics Corp. ("MIE") to August Technology
under the payment terms agreed to as part of this Agreement
(see Exhibit-B). All bank checks will be forwarded to August
Technology via over night "Express Mail Service". Tracking
number will be advised by Marubeni International Electronics
Corp upon delivery.
6.3 Product prices are to be stated in U.S. Dollars and are
Ex-works (as defined by Incoterms 1990) exclusive of all
sales, use, and like taxes. Distributor agrees to pay all
freight, storage fees, bank transfer fees, and all taxes and
duties associated with the sale of Products purchased under
this Agreement.
6.4 All risk of loss to Products will pass to Distributor upon
surrender by August Technology to the carrier at the point of
shipment (Edina, Minnesota, USA.) MIE agrees to make all
arrangements for export, select the carrier, and insure
Products against loss, damage, theft, or destruction upon
surrender to the carrier at August Technology's facility.
6.5 Both Distributor and August Technology agrees that a customer
order has three primary components: (1) project/equipment
specification, (2) purchasing/negotiations, and (3)
In-Warranty service support. The Distributor's purchasing
discount from the August Technology published list price will
be effected by these primary components (see Table-1 and
Exhibit-D).
TABLE-1: Equipment Discount Schedule
----------------- ----------------------- --------------------- ---------------------- --------------------
ORDER LOCATION WHERE LOCATION WHERE LOCATION WHERE % OF STANDARD
POSSIBILITY PROJECT SPECIFIED P.O. ISSUED EQUIP. INSTALLED EQUIP. DISCOUNT
----------------- ----------------------- --------------------- ---------------------- --------------------
0 Xxxxxxxxx Xxxxxxxxx Xxxxxxxxx 100%
----------------- ----------------------- --------------------- ---------------------- --------------------
0 Xxxxxxxxx Xxxxxxxxx Not In Territory 66 2/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
3 Not In Territory Territory Territory 66 2/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
4 Territory Not In Territory Territory 66 2/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
5 Territory Not In Territory Not In Territory 33 1/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
6 Not In Territory Territory Not In Territory 33 1/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
7 Not In Territory Not In Territory Territory 33 1/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
8 Not In Territory Not In Territory Not In Territory 0%
----------------- ----------------------- --------------------- ---------------------- --------------------
7. PURCHASE ORDERS, SHIPMENTS, CANCELLATIONS & CHANGES
7.1 In order to receive Products, Distributor agrees to deliver to
August Technology a hard copy purchase order through MIE. All
Distributor purchase orders are subject to acceptance at
August Technology. All purchase orders issued by Distributor
will include the following information:
(a) Final customer's name (end-user), and location, and
customer's official purchase order (P.O.) number (If
and when customer's PO number is available).
(b) Distributor purchase order number
(c) "Ship To" location (generally Marubeni International
Electronics Corporation address)
(d) "Xxxx To" location (generally Marubeni International
Electronics Corporation address) and accounts payable
contact person
(e) Method of shipment, including contact person and
telephone number
(f) Quantity and description of each item being purchased
(g) Details of any options purchased
(h) Pricing
(i) Requested ship date(s)
(j) Power requirements
(k) Environmental requirements - if any (such as
cleanroom specifications)
(l) Any other special requirements, such as customer part
or device drawings and samples. Distributor will
submit a completed "order sheet" indicating in detail
the power, environmental and any other special
requirements such as customer part or device
drawings.
August Technology reserves the right to reject any order that
does not conform to the provisions of this Agreement. All
orders accepted for delivery will be governed exclusively by
the terms and conditions of this Agreement and its
incorporated Exhibits. Unless August Technology expressly
agrees in writing, no additional or different terms and
conditions appearing on the face or reverse side of any order
issued by Distributor will become part of such order.
7.2 No purchase order will be binding on August Technology until
accepted by August Technology in writing. August Technology
agrees to use its reasonable best efforts to accept or reject
a purchase order, and will notify Distributor within three (3)
working days from receipt of order.
7.3 In no event will August Technology accept purchase orders from
any Person other than Distributor. All purchase orders must
originate from Distributor.
7.4 Cancellation.
7.4.1 Distributor may cancel a shipment at no charge up to
sixty (60) days prior to shipment.
7.4.2 Cancellations within sixty (60) days prior to
shipment are treated as follows:
7.4.2.1 Cancellation #1: August Technology assumes
"risk" of cancellation. Distributor will
not be responsible for any penalties for
this cancellation.
7.4.2.2 Cancellation #2: Distributor assumes
"risk" of the next cancellation (following
Cancellation #1). Distributor will be
responsible for accepting original
shipment schedule and fulfillment of
payment obligations to August Technology.
7.4.2.2.1: If an alternate buyer is
found, outside of
Territory, August
Technology agrees to
re-purchase the Product
from Distributor, at
original export pricing,
for resale to alternate
buyer. Distributor agrees
to pay for shipping costs
to alternate buyer if
required (system must be in
"as new" condition and not
used except for
demonstrations in
Distributor's clean room).
7.4.2.3 Cancellation #3: August Technology assumes
"risk" of the next cancellation (following
cancellation #2). Distributor will not be
responsible for any penalties for this
cancellation.
7.4.2.4 Cancellation #4, and after: Distributor
and August Technology will alternate
"risk" of cancellation under same terms as
above repeating the cycle of cancellation
"risk" responsibility.
At any time following any cancellation, both Distributor and
August Technology agree to make best effort to find an
alternate buyer, worldwide.
All cancellation notices must been submitted in writing to
August Technology within three (3) business days following
notification by customer to Distributor.
7.5 August Technology agrees to use its best efforts to meet
scheduled shipment dates. However, August Technology will not
be liable for delay in meeting a scheduled shipment date. If
Products are in short supply, August Technology will allocate
them equitably, at August Technology's discretion, among
Distributor and all other resale channels. August Technology
will only ship an entire order unless otherwise agreed to in
writing by Distributor.
7.6 Rescheduling (Later Delivery). All rescheduling change must be
made at least fifteen (15) days prior to the original shipment
date on the purchase order. In no case will the delay be
greater than sixty (60) days from original shipment date.
Rescheduling will be allowable one time per purchase order,
without cost or liability. Distributor agrees to immediately
provide August Technology with a written notice of any
rescheduling.
7.7 Rescheduling (Earlier Delivery). Distributor may request early
delivery at any time without cost, and August Technology
agrees to use its best efforts to comply with this request.
7.8 August Technology may refuse to ship, or delay the shipment,
of any Products on order, if Distributor becomes delinquent in
performance of its obligations or fails to meet other credit
or financial requirements established by August Technology. No
such cancellation, refusal, or delay will be deemed a
termination of this Agreement by August Technology, unless
August Technology advises Distributor.
7.9 All Products will be considered delivered to Distributor
Ex-works (in accordance with Incoterms 1990) upon transfer to
a common carrier by August Technology at the point of shipment
(Edina, Minnesota, USA).
7.10 In the event of any discrepancy between the provisions of this
Agreement and any Purchase Order, the provisions of such
Purchase Order shall prevail.
8. RELATIONSHIP
8.1 Distributor's relationship to August Technology will be that
of an independent contractor engaged in purchasing and
licensing Products for resale to Distributor customers.
Nothing in this Agreement will be understood to give either
party any power to direct or control the day-to-day activities
of the other. All financial obligations associated with
Distributor's business are the sole responsibility of
Distributor. Distributor will be solely responsible for and
agrees to indemnify and hold August Technology harmless from
any claims, damages or lawsuits arising out of act of gross
negligence or willful misconduct of Distributor, its
employees, and agents. Distributor, its employees and agents,
are not agents or legal representatives of August Technology
for any purpose, and have no authority to act for, bind, or
commit August Technology. Distributor and August Technology
agree that this Agreement does not establish a franchise,
joint venture, or partnership.
8.2 Any commitment made by Distributor to its customers with
respect to quality, delivery, modifications, interfacing,
capability, suitability of software, or suitability in
specific applications, will be Distributor's sole
responsibility, unless
prior written approval is obtained from August Technology.
Distributor has no authority to modify the Products warranty.
8.3 Distributor has the right to determine its own resale prices,
and no August Technology representative will require that any
particular price be charged by Distributor.
8.4 Distributor agrees that August Technology may market and sell
Products, other than those listed in Exhibit-A, without making
them available to Distributor.
8.5 August Technology assigns each Distributor based on their
expertise and comprehensive knowledge of the Territory,
including regional customs, culture, and specific customer
business practices. Distributor agrees that the standard
Distributor equipment discount is provided by August
Technology in order that August Technology can fully rely on
the Distributor for all sales, marketing, training, service,
and financial responsibilities (in order to satisfy the agreed
upon payment terms in this Agreement).
9. PRODUCT ACCEPTANCE PROCESS
9.1 August Technology Site Source Inspection: This August
Technology Site Source Inspection takes place at August
Technology and is performed by August Technology service
engineering. In order to complete this source inspection,
August Technology will require approved customer samples be
received 2 weeks in advance of the scheduled source inspection
(For defect inspection Products, these samples should be
representative of the types of devices and defects that the
customer intends to find in production environments). This
August Technology Site Source Inspection to ensure the system
quality and configuration prior to shipment.
9.2 Product Configuration Acceptance: August Technology will
forward a completed August Site Source Inspection document to
Distributor. This Product Configuration Acceptance is intended
to ensure that Distributor accepts the exact configuration of
the system being shipped and that this agrees with the
customer's order.
9.3 Distributor Site Source Inspection: This Distributor Site
Source should occur within fifteen (15) days of receipt of
equipment in Japan. Distributor will perform a source
inspection and complete the "source inspection check list" and
return a copy of the completed form to August Technology.
Should any Product fail to meet Distributor expectations,
August Technology will fully support Distributor in this
process and will make best effort to ensure that equipment is
accepted by Distributor.
9.4 Final Acceptance Test at Customer Site: This Final Acceptance
Test at Customer Site will completed by Distributor. Should
any Product fail to meet Customer
expectations, August Technology will fully support Distributor
in this process and will make best effort to ensure that
equipment is accepted by Customer.
10. OBLIGATIONS
During the term of this Agreement August Technology agrees to perform
the following:
10.1 August Technology agrees to offer for sale to Distributor
Products required by Distributor to perform its duties as
described in this Agreement.
10.2 August Technology agrees to keep Distributor informed of its
progress in the conduct of its marketing, sales, and service
activities in the USA, as well as international markets
(including new applications discovered, major customers,
competitor activities, and other trends). August Technology
agrees to identify Distributor as its active, exclusive
Distributor in the Territory for Products in appropriate
advertising and other promotions.
10.3 August Technology agrees to provide training for Distributor
personnel for Products. Training will be available (at a
minimum) as follows:
(a) August Technology will provide factory training at a
minimum of one (1) time per year. August Technology
will pay for all training material, personnel, local
transportation, and meals. All other expenses,
including air travel and hotel accommodations, will
be paid for by Distributor.
(b) In addition to factory training, August Technology
may provide training at Distributor's facility on a
mutually agreed upon bases (for example, during a
trade show in Distributor's Territory). This
additional training is in no way intended to be a
substitute for factory training.
10.4. August Technology agrees to provide reasonable technical
advice to Distributor.
10.5 August Technology agrees to provide a reasonable amount of
technical literature that may be necessary to promote Products
(such as brochures, video tapes, technical reports, and other
data subject to the confidentiality provisions of this
Agreement). All technical material and promotional material
will be provided in English.
10.6 August Technology agrees to actively support the marketing,
sales, and service efforts of Products by Distributor, give
priority responses to Distributor's requests, and keep
Distributor informed of lead times and any related changes to
Products.
During the term of this Agreement Distributor agrees to perform the
following:
10.7 Distributor agrees to use its best efforts in good faith to
promote, demonstrate, and sell Products on a face-to-face
basis and in an end-user environment within the Territory.
Distributor agrees to ensure the highest quality of pre-sale
and post-sale support to the customers, and to promote the
goodwill, name and interest of August Technology and its
Products. Specifically, August Technology expects the
Distributor to provide the following basic marketing
activities, as necessary, in the Territory - industry trade
shows, print advertising, direct mail campaigns, marketing
literature and data sheets as required to reach each potential
customer. Additionally, August Technology expects the
Distributor to provide these materials in the local language
if necessary.
10.8 Distributor agrees to purchase an NSX demonstration system,
within five (5) days of this Agreement, to be used to actively
promote, demonstrate, and sell Products to the customers. For
this demo system, August Technology will offer a 32.5%
discount with payment terms of 100% due on shipment (net 30).
This demonstration discount is available one-time per year,
beginning from the date of first demonstration equipment
purchase. Distributor has the right to re-sell the
demonstration equipment at any time, provided that it is
immediately replaced (physically) with another similar or
functionally enhanced unit (replacement of the demonstration
equipment will be at the standard Distributor Products
discount price if the replacement occurs before the one-time
per year special discount period expires).
10.9 Distributor will ensure that its employees complete
appropriate training courses, as necessary, (upon release of
new product models and software versions) for each of the
following subjects: - a) Maintenance training will take place
at August Technology's facility in the US. b) Applications
training may take place either in Japan or at August
Technology's facility in the US. c) Sales training may take
place as various locations. August will make it's best efforts
to minimize training costs for distributor by holding training
classes in Japan when feasible. August Technology will pay for
all training material, personnel, local transportation, and
meals. All other expenses, including air travel and hotel
accommodations, will be paid for by Distributor.
10.10 Distributor agrees to promptly handle customer complaints,
inquiries and orders, and will provide and support Territory
based services such as applications assistance, operation and
maintenance training, Factory Source Inspection, final on-site
acceptance testing, warranty labor services, post-warranty
spares and service support, systems retrofits, up-grade kit
installation, and the like. Distributor agrees to stock
adequate spare parts for Products to meet the requirements of
this Agreement as defined Exhibit-A.
10.11 Distributor agrees to handle all warranty claims of customers
and comply with August Technology policy for in-warranty
repairs and post-warranty support of Products.
** For the 3 existing in-warranty CV systems in the Territory
(CX002, CV089, CV095) August Technology agrees to repair or
replace any spare parts required during the warranty period.**
10.12 Distributor agrees to conduct its marketing, sales, and
service activities in compliance with local customs,
traditions, laws, regulations, and customer expectations at
the high quality level consistent with that established by
August Technology in the USA. Distributor agrees to clearly
identify August Technology as the original source of the
Products and as the beneficial owner of all Products rights in
all advertising, literature, marketing, or labeling, including
the use of August Technology's official trademarks and logo.
10.13 Distributor agrees to bear all of its operating expenses
during the term of this Agreement. Distributor will maintain
sufficient net worth and Working capital, and devote
sufficient financial resources to allow Distributor to perform
its obligation as outlined in this Agreement.
10.14 If, during the term of this Agreement, Distributor receives
any inquiry or order regarding Products from any person or
business entity outside the Territory, Distributor agrees to
immediately refer the inquiry or order to August Technology.
For a case in which Distributor's sales efforts specifically
related to a Product Specification made to a specific company
and made within the Territory results in sales of Products to
the same company or affiliates outside the Territory, August
Technology will pay to Distributor a commission in accordance
with the rate described in Section 6.5. The payment of such
commission shall be made by wire transfer within 30 days after
August Technology receives a payment from such transaction.
Reference Exhibit-D for a complete description of August
Technology's World Wide Service & Support Plan.
10.15 Distributor agrees to, at its expense, arrange for the
translation of any documentation for the use and operation of
the Products in the Territory (as required or determined to be
necessary by Distributor). Distributor will make every
reasonable effort to make any translation accurate so that
they completely represent August Technology's English version.
11. WARRANTY
11.1 Hardware Products - August Technology warrants that it will
repair or replace, at its option, hardware Products which are
found to be defective in material or workmanship. August
Technology must receive written notification of any defect
within fourteen (14) months from date of shipment. All
transportation charges associated with hardware Products
warranty will be arranged and paid for by August Technology.
11.2 Software Products - August Technology warrants that it will
repair or replace, at its option, software Products which fail
in a manner which significantly and
adversely affects operating performance as specified in August
Technology's published Products description. August Technology
must receive written notification of any failure to conform
within fourteen (14) months from date of shipment. August
Technology does not warrant that the software Products are
free from errors. All transportation charges associated with
software Products warranty will be arranged and paid for by
August Technology.
11.3 The foregoing warranties will not apply to any deficiency or
defect resulting from:
(a) Normal wear and tear, or items subject to
deterioration, breakage, or burnout through use.
(b) Installation or maintenance by customer or any third
party (other than Distributor).
(c) Modifications or alterations made by customer or any
third party without August Technology's written
consent.
(d) Misuse or abuse.
(e) Failure of customer to maintain the equipment, site,
and environmental conditions as required for the
normal operation of the Products.
(f) Causes beyond August Technology's reasonable control.
August Technology makes no other warranty, either expressed or
implied, including, but not limited to, any implied warranty
of merchantability or fitness for a particular purpose, or
arising from course of dealing or usage of trade. The
foregoing constitutes August Technology's sole obligation and
the exclusive remedies of the customer for any breach by
August Technology of the warranties contained in this
Agreement. August Technology's total liability under this
Section 11 will be limited to the repair or replacement of
Products, and will in no case exceed the value of the purchase
order.
12. POST-WARRANTY SPARE PARTS SUPPORT
Due to the rapid pace of the technologies included in the Products,
August Technology agrees to use its best efforts to maintain the
ability to provide spare parts and documentation for any Products
shipped to the Territory for as long as technologically and
economically feasible. If a direct replacement spare part can not be
maintained to exact specifications, August Technology will make every
effort to supply an equal or superior substitute spare part. For a
period of five (5) years following Product purchase, under no
circumstances will the customer be forced to abandon the use of their
Product (or accept inferior performance) due to unavailable
post-warranty service or spare parts.
13. WARRANTY PROCEDURES
Distributor agrees to request approval from August Technology before
returning any defective Products. Once approval is granted, August
Technology will provide Distributor with a Return Material
Authorization (RMA) number to be displayed on the shipping container of
the defective Products. Once August Technology approves the return of
any defective Product, Distributor agrees to ship the Products to
August Technology's factory using an August Technology approved
shipping method on FOB Edina basis. Specific parts to be returned to
August Technology will be advised in the RMA. Distributor agree to ship
back such defective parts to August Technology at F.O.B. Edina, MN
basis. (Shipment cost for non-commercial Products are to be borne by
Shipper side.)
To expedite warranty service, Distributor and August Technology agree
to make every effort to supply the customer with immediate replacement
Product (or parts) while the defective Product (or part) is being
tested and repaired at August Technology's factory. After repair or
replacement is completed, August Technology will determine if warranty
applies and will invoice Distributor for Product (or parts) if warranty
does not apply (see Section 11.3 for list of non-warranty conditions).
14. LIMITATION OF LIABILITY
14.1 Except as stated in this Agreement, August Technology will not
be liable for any loss or damages claimed to have resulted
from the use, operation, or performance of the Products.
14.2 August Technology will in no way be liable to Distributor for
any special, indirect, incidental, or consequential damages,
or for any damages from loss of use or profits.
15. TRADEMARKS
From time to time, August Technology may designate one or more August
Technology trademarks or trade names as available for Distributor's
use, and will provide standards for that use in August Technology
material. August Technology authorizes Distributor to use these
designated trademarks only as follows:
(a) Distributor agrees to use the designated trademarks and trade
names in accordance with August Technology's standards solely
in advertising and promoting Products, in good taste, and in a
manner that preserves their value and August Technology's
rights in them.
(b) Distributor agrees not to use any August Technology trademark
or trade name on its letterhead or in a way that implies
Distributor is an agency or branch of August Technology.
Distributor will immediately change or discontinue any
trademark or trade name use when requested in writing by
August Technology.
16. PROPRIETARY RIGHTS INDEMNITY
16.1 August Technology will, except as otherwise provided below,
defend or settle any claim made, or suit, or proceeding
brought against Distributor so far as it is based on a claim
that the use or sale of Products sold under this Agreement
infringes an intellectual property right, including but not
limited to, patent, copyright and trademark. August Technology
must be immediately notified in writing and given information,
assistance, and sole authority to defend or settle claims, at
August Technology's expense. Also, August Technology will pay
all damages and costs including reasonable attorneys' fees.
finally awarded against Distributor. If any such Product is
determined to infringe, and its use is enjoined, or in case of
a settlement, August Technology will have the option, at
August Technology's expense, to replace Products with a
non-infringing Product, or modify Products so it becomes
non-infringing, or repurchase Products from Distributor at the
original purchase price. August Technology will have no
liability to Distributor for any infringement, or claim
thereof, based upon use of any Products in combination with
any equipment, device, software, or data not supplied by
August Technology, if such infringement is caused by such
combination.
16.2 This Section states August Technology's entire liability for
proprietary rights infringement by Products furnished under
this Agreement.
17. TERMINATION
17.1 Either Distributor or August Technology may terminate this
Agreement, to be effective upon receipt of written notice,
based on the occurrence of any of the following events:
(a) If the other party commits a breach of any obligation
in this Agreement.
(b) The commencement by either party of a voluntary
action under the federal bankruptcy laws, or any
other applicable federal, state, or foreign
bankruptcy, insolvency, or other similar laws.
(c) The consent of either party to the appointment of a
receiver, assignee, or trustee (or other similar
official).
(d) The admission by either party of its inability to pay
its debts as they become due.
(e) If Distributor is acquired, or its ownership changes
substantially.
(f) The nationalization of either party's assets or
business.
(g) The passage of any legislation by a country, or
subdivision of a country, granting Distributor extra
contractual compensation upon termination or
non-renewal of this Agreement.
(h) By mutual consent at any time and with a written
notice of termination signed by both parties.
17.2 Each party acknowledges that the other has made no commitments
regarding the term or renewal of this Agreement. Neither
August Technology or Distributor will be liable to the other
for damages of any kind, including incidental or consequential
damages, or for any losses or claims whatsoever on account of
or arising out of the termination of this Agreement.
Distributor waives any and all benefit of any law or
regulation providing compensation arising from the termination
or non-renewal of this Agreement.
17.3 Upon termination of this Agreement for any reason, Distributor
agrees to immediately cease to be an authorized August
Technology Distributor and will immediately stop representing
itself as an August Technology Distributor, and from using any
August Technology trademark or trade name. Distributor also
agrees to return any and all sales and marketing material (and
equipment) at the written request of August Technology,
shipment pre-paid.
17.4 Upon termination of this Agreement for any reason, Distributor
agrees to continue to provide service support to only Products
that are under warranty period in the Territory in return for
the compensation already received by Distributor for this
service (compensation in the form of discounted Products
pricing).
17.5 Outstanding Service Liability: Distributor will be compensated
for outstanding service liability on installed base of "in
warranty" CV systems in Japan according to the following
schedule:
OUTSTANDING SERVICE LIABILITY SCHEDULE:
MONTHS TOTAL 1YR
WARRANTY REMAINING SERVICE PRORATED
REF SYSTEM LOCATION SHIP EXPIRE ON COMMISSION OUTSTANDING
# DESCRIPTION INSTALLED SERIAL # DATE DATE WARRANTY LIST PRICE (5.8%) LIABILITY
1 Dainichi Japan CX002 11/20/98 1/31/00 8 $119,500 $6,931 $4,621
2 Mitsubishi Mat Japan CV089 7/22/98 8/22/99 3 $97,250 $5,641 $1,410
3 Epson Seiko Japan CV095 4/30/99 5/30/00 12 $107,097 $6,212 $6,212
TOTAL OUTSTANDING SERVICE LIABILITY PAYABLE TO MARUBENI: $12,242
Note: The amount of $12,242 will be credit against the first customer based NSX
system (not the demo system)
18. POST TERMINATION COOPERATION
Both Distributor and August Technology agree to fully cooperate to
carry out an orderly transition in the marketing, sales, and service of
Products in the Territory. Upon receiving a written notice of
termination, as described in Sections 3 or 17, by either party, until
the effective date of the termination, both parties agree to fully
cooperate in supporting existing customers in the Territory (see
Section 17.4 for further agreement on service support following
termination).
18.1 Demonstration equipment buy back :If August Technology
terminates this Agreement pursuant to the provisions hereof
August Technology shall buy back Distributor's demo equipment.
Buy-back price will be the distributor's original discounted
purchase price if the equipment was shipped within 12 months
of the date of termination. For equipment shipped outside of
12 months from the date of termination, the buy-back price
will be negotiated on a depreciated price.
18.2 August Technology shall not be obligated to buy back
demonstration equipment if Distributor terminates this
Agreement pursuant to the provision hereof.
18.3 Compensation: In accordance with Section 6.5 of this
Agreement, Distributor will be compensated at a rate of 1/3 of
the purchasing discount from the August Technology published
list price as compensation for providing the original "Project
Specification". This offer would extend for a period of six
(6) months from date of Termination and would only be
applicable to accounts that Distributor identifies at the time
of Termination and agreed to by August Technology.
18.4 Spare Parts Inventories buyback: If August Technology
terminates this Agreement pursuant to the provisions hereof,
August Technology shall buyback Distributor's spare parts
inventories. Buy-back price will be the distributor's original
discounted purchase price if the spare parts were shipped
within 12 months of the date of termination. For spare parts
shipped outside of 12 months from the date of termination, the
buy-back price will be negotiated on a depreciated price.
18.5 August Technology shall not be obligated to buy back spare
parts if Distributor terminates this Agreement pursuant to the
provision hereof.
19. CONFIDENTIALITY & PROPRIETARY RIGHTS
19.1 Distributor recognizes that certain information to be provided
by August Technology (during the term of this Agreement)
including, designs, specifications, drawings, engineering
details, software, and information concerning August
Technology's customers, business, procedures, methods, and
Products, are proprietary to August Technology. Distributor
agrees not to attempt to reverse compile or engineer the
Products or software associated with them.
19.2 Distributor agrees to keep confidential, and to utilize its
best efforts to prevent and protect from unauthorized use or
disclosure, any information provided to Distributor by August
Technology during the term of this Agreement (which is
designated by August Technology as confidential or
proprietary).
19.3 Distributor agrees that unauthorized disclosure or use of any
proprietary information is a material breach of this
Agreement.
19.4 Distributor agrees not to make, or have made, additional
copies of documents containing confidential or proprietary
information unless they are necessary for Distributor to
perform its obligations of this Agreement. Distributor agrees
to include on any copies of confidential or proprietary
information a "Confidential Notice" the same manner as the
original August Technology documents.
19.5 Upon termination of this Agreement, Distributor will return to
August Technology, or will destroy and certify in writing to
August Technology that it has destroyed, all copies of
documentation and other forms of confidential or proprietary
information.
19.6 Distributor's obligations under this Section will continue
within 3 years following termination of this Agreement.
20. DISTRIBUTOR'S REPRESENTATIONS
Distributor represents and warrants that in performing under this
Agreement it will in no way compromise any rights or trust
relationships between any other party and itself, or create a conflict
of interest for Distributor or August Technology. Distributor agrees to
conduct business in a manner that will enhance the image and reputation
of August Technology and the Products. Distributor hereby represents
and warrants that it will comply with all applicable laws and
regulations, and avoid deceptive, misleading, unethical, and illegal
practices.
Distributor acknowledges that it may be necessary for August Technology
to disclose the fact of Distributor's appointment, the duties performed
by Distributor, and the compensation paid, should there be a proper
inquiry from an authorized U.S. government agency.
21. FORCE MAJEURE
Neither party will be liable, or deemed to be in breach of this
Agreement, by reason of any act, delay or omission caused by strikes,
lockouts, or other labor disputes, regulations, ordinances, or order of
a court of competent jurisdiction, act of government, act of God, war,
riot, epidemic, flood, earthquake or like natural disaster, embargo or
quarantine, or any other cause beyond the reasonable control of the
party claiming force majeure. The party whose performance will have
been prevented or delayed must
provide immediate written notice to the other party explaining the
nature of the act, delay or omission, and the date such condition
commenced. The party also agrees to provide further written notice
when the condition has ended.
22. MODIFICATIONS & IMPROVEMENTS OF PRODUCTS
If any modifications or improvements to the Products are developed by
Distributor or August Technology, such modifications or improvements
will be the exclusive property of August Technology, which will have
the full right to patent or copyright such modifications or
improvements at its sole cost and expense.
23. GOVERNMENT EXPORT RESTRICTIONS
Distributor agrees that the Products purchased will not be exported
directly or indirectly, separately or as part of a system, without
complete and full compliance with the export and re-export restrictions
imposed by U.S. export laws and regulations. Distributor also agrees to
take reasonable action to assure that no customer contravenes the U.S.
laws and regulations.
24. NOTICES
Unless otherwise agreed to by both parties, all notices required under
this Agreement will be made by fax, and all notices will be addressed
to the attention of the party executing the Agreement, or his or her
successor.
25. GENERAL PROVISIONS
25.1 Neither party may assign or transfer this Agreement. Any
attempted assignment or transfer will be void. Both parties
agree to advise each other of any change in ownership,
control, or operating arrangements.
25.2 Either party's failure to enforce any provisions of this
Agreement will not be deemed a waiver of that provision or of
the right to enforce it in the future.
25.3 This Agreement, including the attached Exhibits, contains the
entire and only understanding between the parties, and
supersedes all prior agreements either written or oral
relating to the subject matter of this Agreement. No
modifications of this Agreement will be binding on either
party, unless made in writing and signed by persons authorized
to sign agreements on behalf of Distributor and August
Technology.
25.4 If any provision of this Agreement will be determined by any
court of competent jurisdiction to be illegal, invalid, or
unenforceable, that provision will be understood and enforced
as if it had been more narrowly drawn so as not to be illegal,
invalid or unenforceable. Any determination will have no
effect upon the enforceability of any other provision of this
Agreement.
25.5 If during the term of this Agreement, or at any time after its
termination, either August Technology or Distributor commences
a suit, action, or other legal proceedings against the other
arising out of or in connection with this Agreement, such
action will be brought in the state or federal courts located
in the State of Minnesota, USA.
25.6 This Agreement will be governed by the laws of the State of
Minnesota, USA and specifically excludes the United States
Convention on Contracts of International Sales of Goods. Any
disputes or claims arising out of this Agreement or its
interpretation, creation, termination, or performance will be
settled by binding arbitration in Minnesota, under the Rules
of Arbitration of the International Chamber of Commerce.
25.7 This Agreement will be effective only upon its execution by
August Technology at its Corporate Headquarters. This
Agreement will be binding upon, and will inure the benefit of
the parties, and their respective heirs, executors,
representatives, and successors in interest.
25.8 The prevailing party in any arbitration, or other legal action
brought by one party against the other arising out of this
Agreement, will be entitled, in addition to any other rights
and remedies it may have, to reimbursement for its expenses,
including court costs and attorneys' fees.
26. AUTHORITY
If Distributor is a partner or corporation, the person executing this
Agreement represents that he or she is either a general partner or a
duly authorized corporate officer, and that he or she has full
authority to enter into this Agreement on behalf of Distributor.
DISTRIBUTOR: ACCEPTED BY:
Marubeni Solutions Corporation August Technology Corporation
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Authorized Signature Authorized Signature
Title: President Title: President & CEO
