ADVANCED POWER TECHNOLOGY, INC.
NORTH AMERICA DISTRIBUTOR AGREEMENT
This Agreement is made this 1st day of APRIL, 1997, by and between
Advanced Power Technology, Inc., a Delaware Corporation with its principal place
of business at 000 X. X. Xxxxxxxx Xxxxxx, Xxxx, Xxxxxx 00000, X.X.X.
(hereinafter referred to as "Company"), and Xxxxxxxxxx Electronics. Ltd. , a
company organized and existing under the laws of Delaware with its principal
place of business at 00X000 Xxxxxxxxx Xxxx, XxXxx., Xxxxxxxx 00000 (hereinafter
referred to as "Distributor").
RECITALS
A. Company is engaged in the business of manufacturing and selling
power transistors.
B. Company wishes to supplement its own sales efforts through the
appointment of a non-exclusive and independent distributor.
C. Distributor wishes to act as a distributor of Company's products.
NOW, THEREFORE, in consideration of the mutual promises, terms,
provisions and conditions contained herein, the parties hereto agree as follows:
SECTION 1. APPOINTMENT OF DISTRIBUTOR.
Company hereby appoints Distributor, and Distributor hereby accepts
such appointment as a non-exclusive and authorized distributor of Company during
the term of this Agreement for the sale of Company's Products, as defined in
Section 2.1, from listed locations.
SECTION 2. PRODUCTS.
2.1 The products covered by this Agreement shall be those identified on
Exhibit "B," attached hereto (the "Products").
2.2 Company may add Products to, or delete Products from, Exhibit "B"
upon written notice to the Distributor.
2.3 Notwithstanding anything to the contrary contained herein,, Company
reserves the right, in its sole discretion and without notice, to modify
specifications and characteristics of its Products, to discontinue the
distribution and sale of such Products, and to cancel, modify or condition any
right of the Distributor to prevent a violation of law.
PAGE 1 NORTH AMERICA DISTRIBUTOR AGREEMENT
[ * ] = CONFIDENTIAL TREATMENT REQUESTED
SECTION 3. OBLIGATIONS OF DISTRIBUTOR.
During the term of this Agreement, Distributor shall at all times use
best efforts and commensurate with distributor's overall business to enhance the
image and reputation of Company and the Products which are the subject matter
hereof, and agrees:
3.1 Distributor shall not disclose information of Company considered by
Company to be confidential or proprietary including, but not limited to,
customer and price lists and data regarding the design or methods of manufacture
of the Products and will not use any such information except as contemplated by
this Agreement. Such information will be appropriately marked or identified by
Company and the obligation of Distributor not to disclose or improperly use such
information will survive the termination of this Agreement. Upon the termination
of this Agreement or the earlier request of Company, all such information will
be promptly returned to Company. The restrictions of this Section 3.1 are in
addition to any other agreement between the parties with respect to the
protection and use of information. ALL CONFIDENTIAL INFORMATION SUPPLIED TO
COMPANY (INCLUDING, WITHOUT LIMIT, CUSTOMER NAMES AND DATA) BY DISTRIBUTOR SHALL
REMAIN DISTRIBUTOR'S PROPERTY AND SHALL NOT BE DISCLOSED BY COMPANY OR USED TO
DISTRIBUTOR'S DETRIMENT.
3.2 Distributor agrees that they will comply with all applicable
federal, state, and local laws or regulations in performing any act arising out
of or in connection with this Agreement. Distributor agrees to maintain such
records as are required by all applicable laws and regulations and this
Agreement and to promptly provide such records or written assurances as may be
required by Company in connection therewith.
The parties agree that each will use its best efforts to
secure any licenses or permits as may now or hereafter be required in connection
with the performance of its obligations under this Agreement, but this Agreement
shall not be deemed to require any performance on the part of either party which
cannot lawfully be done pursuant to the laws and regulations referred to above.
3.3 Distributor shall sell only Company's Products that bear Company's
markings or trademarks and will not alter, modify or in any way change the
Products, marking or trademarks thereon without prior written approval of
Company.
3.4 Distributor shall offer and sell Products only in accordance with
specifications and warranty schedules provided by Company.
3.5 Distributor shall provide Company by the 15th day of each month a
report detailing the total sales and inventory levels of the Products for the
prior month.
3.6 Distributor shall use its best efforts to actively promote the sale
of the Products to customers in its territory commensurate with its overall
business. Such efforts shall include, but not be limited to, promptly servicing
all customer accounts, soliciting new customer accounts, and cooperating and
participating in Company's advertising and sales promotional programs.
PAGE 2 NORTH AMERICA DISTRIBUTOR AGREEMENT
3.7 Distributor shall provide and maintain, without expense to Company,
a suitable place of business with adequate facilities and sufficient personnel
for the sale and distribution of the Products and to fulfill all other
additional objectives agreed to in writing by Company and Distributor.
3.8 Distributor shall pay all fees, taxes and duties which may be
imposed on the Products purchased by Distributor. To the extent that Company
must pay any fees, taxes or duties on Products sold to Distributor, Distributor
shall promptly reimburse Company.
3.9 Distributor shall refrain from any activities which are illegal,
unethical, or which might damage Company's reputation.
3.10 Distributor shall fully comply with all agreements with Company,
including without limitation, the obligations to pay amounts due when due.
3.11 Distributor shall use its best efforts to consolidate purchase
orders to promote efficiency and reduce supporting documentation.
SECTION 4. OBLIGATIONS OF COMPANY.
4.1 Company, in its sole discretion, shall maintain the necessary
personnel needed to fulfill the agreed upon sales objectives of Company and
Distributor.
4.2 Company shall use its best efforts to manufacture sufficient
quantities of Products to meet the requirements of Distributor. Company shall
consult with Distributor regarding inventory levels, and shall advise
Distributor of promotional efforts to increase the sale of Products.
4.3 Company shall subject all Products delivered to Distributor to its
usual standards of quality control and inspection and all Products sold or
delivered under this Agreement shall be subject to the limited warranty set
forth in paragraph 17 below.
SECTION 5. DELIVERIES
5.1 All deliveries of Products by Company pursuant to this Agreement
will be made F.O.B. Bend, Oregon. Products will be consigned to carriers for
shipment to Distributor, however, upon the written approval of Company and
Distributor, Company will consign Products to carriers for shipment directly to
Distributor's customers.
5.2 Minimum order quantities: The minimum order quantities for all
products shall be the standard minimum order quantities in effect at the time of
acceptance by Company from the Distributor.
SECTION 6. TITLE AND RISK OF LOSS.
Title to and risk of loss of Products sold hereunder shall pass to the
Distributor upon delivery to the carrier at the F.O.B. point.
PAGE 3 NORTH AMERICA DISTRIBUTOR AGREEMENT
SECTION 7. PRICE.
Company agrees to sell the Products to Distributor at the prices set
forth in the published Distributor Cost and Price Schedule. All prices are
subject to change by Company at any time upon written notice to Distributor.
7.1 If the price for any Product is increased prior to full shipment of
any Order, the price charged to Distributor will be that in effect at the time
of Company's acceptance of Distributor's Order. If the price for any Product is
decreased, all Products shipped on or after the effective date of any price
decrease will be shipped and invoiced at the price in effect at the time of
shipment.
7.2 In order to assist Distributor in competitive markets, Company
will, under certain limited circumstances, adjust the effective price of the
Products to Distributor. The unit price of any Product(s) as set forth in
Exhibit "B" shall be ultimately adjusted pursuant to the following procedure:
Distributor must contact Company, or Company's local representative, and provide
to the same the customer's name, Company part number, quantity, delivery
schedule, price per unit requested by Distributor, resale price per unit to
customer and competitive products available in the market. Upon acceptance by
Company of the information and approval of Distributor's request for a price
reduction, Company or Company's local representative shall provide Distributor
with the Company's authorized "ship and debit" price per unit for the particular
order and the Company's authorization number. Within 30 days from the invoice
date to Distributor's customer, Distributor shall provide Company with a copy of
the invoice, or a substitute deemed acceptable by Company, and a debit
memorandum with Company's authorization number to obtain a credit. Upon
Company's request, Distributor shall produce for inspection the original
invoice. Upon satisfaction of the conditions set forth above, Company shall
issue to Distributor, within 30 days of receipt of the supporting documentation
set forth above, a credit. A credit will only be issued for those amounts
authorized.
SECTION 8. PAYMENTS.
Payment for Products delivered to Distributor shall be in United States
dollars and is within [ * ] days of invoice date.
SECTION 9. CANCELLATION OF ORDER.
9.1 In the event Distributor cancels an Order for any customized
Product which has been accepted by Company, Distributor shall pay Company for
all direct and indirect costs incurred by Company as a result of such
cancellation.
9.2 Distributor may reschedule delivery dates of production order by
written request to Company; provided, however, that no such changes shall be
allowed within thirty (30) days of first factory promise date.
9.3 Distributor may cancel standard product by written notice to
Company; provided, however, that no orders may be canceled within thirty (30)
days of first factory promise date.
PAGE 4 NORTH AMERICA DISTRIBUTOR AGREEMENT
[ * ] = CONFIDENTIAL TREATMENT REQUESTED
SECTION 10. EXCUSABLE DELAYS AND FAILURES (Force Majeure)
Company shall be excused for delays in performing and failures to
perform pursuant to this Agreement and to any Order issued hereunder to the
extent that any such delay or failure results from any cause beyond its control,
including, solely by way of example and without limitation, delays caused by
Distributor or a third party, acts of God, strikes, and other labor disputes,
government regulations, public disorders, international disputes, inability to
obtain or shortage of any material used in the manufacture or shipping and
delivery of the Products, transportation or trade embargoes, customs
restrictions, and catastrophes of nature, fire and explosion, whether any such
cause affects Company, any supplier or provider of service to Company. Company
agrees to exert reasonable effort to prevent such occurrences from affecting its
performance hereunder. Company shall not be liable for damages, general,
specific or otherwise resulting from such excusable delays and failures.
SECTION 11. INVENTORY.
11.1 Distributor shall maintain a minimum level of inventory of
Products. The level of inventory shall be established by Company and adjusted
from time to time as market conditions warrant. Company retains the right to
inspect Distributor's inventory at any time.
11.2 In the event of a decrease in the price of any of Company's
Products, Distributor shall be entitled, within thirty (30) days following such
decrease, to apply for a credit in an amount equal to the difference in the
price of the Product(s) excluding transportation charges, duties and taxes)
before and after such decrease on the unsold Products) in Distributor's
inventory and/or the affected Product(s) in transit to Distributor. This credit
shall be calculated upon receipt of an itemized inventory from Distributor and
shall be applied against future Orders from Distributor. Company will have the
right to inspect the inventory subject to the credit and all records relating
thereto.
SECTION 12. RETURNS.
12.1 Company will accept returned Products only if such return is made
in accordance with Company's current procedures which are set forth in this
Section 12. Company reserves the right to unilaterally change these procedures,
such changes will become effective upon reasonable notice to Distributor.
12.2 Distributor may return any and all Products within 6 months of the
delivery of the Initial Stocking Package recommended by Company after obtaining
Company's prior written authorization and the return material authorization
number given with such prior written authorization, and a dollar for dollar
off-setting order is received. Upon receipt of such Products in a condition
acceptable to Company, a credit, less shipping and handling costs, will be
issued to Distributor. After the Initial Stocking Package period has expired,
Products may be returned in accordance with Company's current return policy.
12.3 Company shall give Distributor written notice of the
discontinuance of any Product. Within 30 days of receipt of such notice,
Distributor shall notify Company in writing of its intention to return
discontinued Products for credit. On receipt of such Product in a condition
PAGE 5 NORTH AMERICA DISTRIBUTOR AGREEMENT
acceptable to Company, freight prepaid by Distributor, Company shall issue a
credit to Distributor.
12.4 Distributor is authorized to return slow-moving items for
exchange in only the months of January and July. All such returns shall
require Company's prior written authorization and the return material
authorization number given with such prior written authorization, and a
dollar for dollar offsetting order is received, and shall be limited to [ * ]
of the U.S. dollar amount (excluding costs associated with shipping,
handling, duties and taxes) of standard purchases of Product over the prior
six months. All returned material must be returned in a condition acceptable
to Company.
SECTION 13. ADVERTISING.
13.1 Company and Distributor shall jointly agree from time to time
on advertising programs and other forms of promotion of the Products in the
Territory. Company shall share such expenses equally with Distributor;
provided, however, Company's share of such expenses shall not exceed [ * ] of
Company's prior 12 month's sales to Distributor.
13.2 Company shall provide Distributor reasonable quantities of its
Product catalogs, data sheets and other promotional material free of charge.
Additional quantities of any such material requested by Distributor shall also
be supplied free of charge, F.O.B. point of origin.
13.3 Distributor may conduct advertising programs other than those
programs undertaken with Company provided Distributor obtains Company's approval
of all aspects of the advertising program. Distributor shall refrain from making
any representations or claims concerning the Products which are inconsistent or
exceed Company's written representations.
SECTION 14. DURATION AND TERMINATION.
14.1 Unless terminated as provided for herein, this Agreement shall
continue in force for one year from the date first above mentioned. This
agreement shall continue thereafter unless either party gives written notice to
the other party of its intention to terminate the agreement, giving at least
thirty (30) days written notice.
14.2 If either party commits a material breach of this Agreement or
becomes insolvent or bankrupt, or admits in writing its inability to pay its
debts as they mature, or makes an assignment for the benefit of creditors, or
ceases to function as a going concern or to conduct its operations in the normal
course of business, the other party shall have the right to cancel this
Agreement by giving immediate written notice of its election to do so.
14.3 Upon expiration or termination of this Agreement by Distributor,
Distributor will return to Company at such place as Company may designate, all
promotional materials which had originally been furnished by Company to
Distributor. Distributor shall be responsible for all return charges. Upon
expiration or termination of this Agreement by Company, Company shall be
responsible for all return charges.
14.4 Company and Distributor agree that upon the expiration or
termination of this Agreement, neither party shall be liable to the other for
any damages, expenditures, loss, of
PAGE 6 NORTH AMERICA DISTRIBUTOR AGREEMENT
[ * ] = CONFIDENTIAL TREATMENT REQUESTED
profits or prospective profits of any kind or nature sustained or arising out
of, or alleged to have been sustained or to have arisen out of, such
termination. The expiration or termination of this Agreement shall not, however,
release either party from making payments which may be owing to either party
under the terms of this Agreement.
14.5 Upon termination or expiration of this Agreement by Company,
Company will accept, within 30 days after effective date of termination or
expiration, the Distributor's stock inventory valued at the effective
Distributor cost as of the date of termination or expiration or at Distributor's
acquisition price, whichever is lower. Upon termination or expiration of this
agreement by Distributor, Company will have the option. of accepting the
Distributor stock inventory valued at the effective Distributor cost as of the
date of termination or at Distributor acquisition price, whichever is lower.
Stock inventory not returned within the 30-day period will not be accepted by
Company. This reacquisition formula applies only to the Products shipped by
Company to Distributor within one year of the date of termination or expiration
of the Agreement. For Products which are custom Products, Company may repurchase
such items at prices within its sole discretion. Products specially prepared by
Company to Distributor's specifications will not be repurchased.
14.6 In event of termination of this Agreement for any reason, APT
shall not be liable to the Distributor or any employee or agent of the
Distributor for compensation, reimbursement or damages on account of the loss of
prospective profits or anticipated sales or on account of expenditures,
investments, leases or commitments in connection with the business or goodwill
of the Distributor or for any reason arising out of such termination. The
Distributor hereby waives any and all rights it might have to compensation upon
termination of this agreement pursuant to the local and national laws of any
country within the territory and hereby agrees to indemnify APT and hold
harmless from any and all claims of its employees or subcontractors for similar
compensation or for severance, liability or other pay.
SECTION 15. RELATIONSHIP BETWEEN PARTIES.
15.1 This Agreement does not create an employer-employee relationship
between Company and Distributor, or a joint venture or partnership. The
relationship between Company and Distributor shall be that of seller and buyer
and in such relationship Distributor shall be an independent contractor and
shall have no authority to act for or to bind Company in any matter. Distributor
agrees to hold Company harmless from all claims, actions or judgments arising
from acts or omissions of Distributor, its agents or employees.
15.2 Company shall indemnify, protect and save harmless Distributor
from and against all claims, demands and proceedings, actions, liabilities and
costs resulting from any actual or alleged infringement of any patent,
industrial and commercial property rights of third parties related to the
Products.
SECTION 16. EXPORT CONTROLS.
Distributor -acknowledges that exportation of the Products may be
subject to compliance with `various United States Export Administration Acts and
the rules and regulations promulgated from time to time thereunder, which
restrict the export and re-export of certain
PAGE 7 NORTH AMERICA DISTRIBUTOR AGREEMENT
products, technical data and direct products of technical data. Distributor
agrees to comply with such United States export control laws, rules and
regulations and all other applicable laws and governmental regulations,
domestic, foreign and local.
SECTION 17. WARRANTY
17.1 Products sold pursuant hereto are covered by APT's standard
warranty in effect as set forth in the APT sales contract under which the
Products are sold provided that APT's obligations under such warranty are
limited to, and shall not run beyond, two years from the date of APT's shipment
of the Products, except where specific customer or user requirements are agreed
to by APT in writing. APT shall have no liability to Representative or to the
customer or user with respect to any alleged defective Products sold by APT
except as specifically set forth in APT's warranty, if any, included as part of
the terms and conditions of the sale made by APT. Representative shall have no
authority to and shall not make any warranty representation with respect to the
Products contrary to or inconsistent with APT's warranty.
17.2 The products are not authorized for use as critical components of
life support systems. A critical component is any component of a life support
device or system whose failure to perform may be expected to cause the failure
of the life support device or to affect its safety or effectiveness.
SECTION 18. MISCELLANEOUS.
18.1 This Agreement does not convey, nor shall Distributor claim any
title or property interest in Company's trademarks, trade names, copyrights,
patents or other such property so marked by Company. Distributor acknowledges
ownership by Company of trademarks, names, copyrights, patents and other such
property so marked by Company, so identified or so identifiable.
18.2 Distributor shall not delegate any duties or assign any rights
under this Agreement or any interest herein without Company's prior written
consent.
18.3 The validity, meaning enforceability and effect of this Agreement,
and the rights and liabilities of the parties, shall be determined in accordance
with the laws of the State of Oregon.
18.4 Except as specifically provided in a written waiver signed by a
duly authorized officer of the party or the party seeking enforcement, the
failure to enforce or the waiver of any term of this Agreement shall not
constitute the waiver of such term at any time or in any circumstance and shall
not give rise to any restriction on or condition to the prompt, full and strict
enforcement of the terms of this Agreement.
18.5 All notices in connection with this Agreement shall be in writing
and shall be effective upon dispatch if by telex, telegram or similar means,
upon delivery if by hand delivery, and 3 days after deposit if deposited in the
channels of the United States mails, postage prepaid, in registered form, return
receipt requested. In all cases notices shall be delivered to the other party at
the address set forth above or such other address such party may have provided
by written notice.
PAGE 8 NORTH AMERICA DISTRIBUTOR AGREEMENT
18.6 This Agreement, including any exhibits, schedules and tables
attached hereto which either have been specifically referred to herein or have
been initialed by the parties, constitute the entire agreement between the
parties with respect to the subject matter. This Agreement supersedes all prior
discussions, understandings and agreements with respect to the subject matter.
18.7 This Agreement may be amended or supplemented only in a writing
designated as such an amendment or supplement and signed by a duly authorized
officer of the party or the party against whom enforcement is sought.
18.8 This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same Agreement
18.9 If any provisions of this Agreement shall be held by a court of
competent jurisdiction to be invalid, the remaining provisions of this Agreement
shall remain in full force and effect.
SECTION 19. COMPLIANCE WITH LAW.
19.1 Distributor agrees that it will not violate any applicable law or
regulation of any country or political subdivision thereof in performing or
purporting to perform any act arising out of or in connection with this
Agreement. Pursuant thereto, Distributor agrees to maintain such records as are
required by all applicable laws and regulations and to provide such written
assurances as are required by APT in connection therewith.
19.2 This Agreement is subject to all applicable laws, regulations and
other statutory and administrative acts, now or hereafter in effect of the
United States and the Territory. The Distributor agrees that it will use its
best efforts to secure any licenses or permits as may now or hereafter be
required in connection with the performance of its obligations under this
Agreement, but this Agreement shall not be deemed to require any performance on
the part of either party which cannot lawfully be done pursuant to the laws,
regulations and statutory and administrative acts referred to above.
PAGE 9 NORTH AMERICA DISTRIBUTOR AGREEMENT
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Agreement in duplicate as of the day and year first above written.
COMPANY: DISTRIBUTOR:
ADVANCED POWER TECHNOLOGY, XXXXXXXXXX ELECTRONICS,
INC., a Delaware corporation LTD.
By S/S By S/S
-------------------------- ------------------------
Its: President Its:
------------------------ -----------------------
Date Date
------------------------ -----------------------
PAGE 00 XXXXX XXXXXXX DISTRIBUTOR AGREEMENT
EXHIBIT A
AUTHORIZED LOCATIONS
- North America & Hawaii - China (including Hong Kong)
- Central America - Japan
- South America - Southeast Asia
- Africa - France
- Australia & New Zealand - Spain
- India - Portugal
- Korea - Italy
COMPANY: DISTRIBUTOR:
ADVANCED POWER TECHNOLOGY, XXXXXXXXXX ELECTRONICS
INC., a Delaware corporation LTD.
By S/S By S/S
-------------------------- ------------------------
Its: President Its:
------------------------ -----------------------
Date Date
------------------------ -----------------------
PAGE 00 XXXXX XXXXXXX DISTRIBUTOR AGREEMENT
EXHIBIT B
PRODUCTS
ALL APT PRODUCTS
PAGE 00 XXXXX XXXXXXX DISTRIBUTOR AGREEMENT
Page 11. NORTH AMERICA DISTRIBUTOR AGREEMENT 5/96
PAGE 00 XXXXX XXXXXXX DISTRIBUTOR AGREEMENT
PAGE 00 XXXXX XXXXXXX DISTRIBUTOR AGREEMENT
