Exhibit 10.1
ORIGINAL EQUIPMENT MANUFACTURER'S PURCHASE AGREEMENT
THIS AGREEMENT, effective as of the 1st day of April, 1997, is made and
entered into between TOTAL CONTROL PRODUCTS, INC., a corporation organized and
existing under the laws of the State of Illinois USA, having its principal
office at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx Xxxx, Xxxxxxxx, 00000 (hereinafter
called "Buyer"), and DIGITAL ELECTRONICS CORPORATION, a corporation organized
and existing under the laws of Japan having its registered principal office at
0/0/00 Xxxxx Xxxxxxx, Xxxxxxx-xx, Xxxxx, Xxxxx (hereinafter called "Seller"), in
the presence of MORITANI AMERICA INC., a corporation organized and existing
under the laws of the State of Illinois having its principal office at 000 Xxxx
Xxxxxxxxx, Xxxxxx, Xxxxxxxx, 00000 XXX (hereinafter called "MORITANI"), and INDE
ELECTRONICS INC., a corporation organized and existing under the laws of Canada
and wholly-owned subsidiary of Seller, having its principal office at 000-0000
Xxxxxxx Xxx, Xxxxxxx, XX, Xxxxxx, X0X0X0 (hereinafter called "INDE"). Buyer and
Seller are hereinafter together called "the parties";
WITNESSETH:
WHEREAS, Buyer wishes to purchase from Seller, on an OEM basis, Product
which is set forth in Attachment A hereto; and
WHEREAS, Seller wishes to sell said Product to Buyer under the terms and
conditions hereinafter set forth;
WHEREAS, Buyer and Seller have entered into Original Equipment
Manufacturer's Purchase Agreement dated 1st day of January, 1991 ("Original
Agreement") by and between Digital Electronics Corporation, as "Seller", Total
Control Products Inc., as "Buyer", Inde Electronics, Inc., as "Inde", and
Moritani America, Inc., as "Moritani" for the purchase of certain display
products manufactured by Seller;
WHEREAS, by an amendment dated the 8th day of July, 1993 (First
Amendment:), the Original Agreement was amended to modify and supplement terms
of said Original Agreement;
WHEREAS, by an amendment dated the 8th day of July, 1994 ("Second
Amendment"), the Original Agreement was amended to modify and supplement the
terms of said Original Agreement;
WHEREAS, the parties desire to further modify and supplement the provisions
of the Original Agreement with the terms indicated in this Agreement
("Agreement");
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
1. DEFINITION
"Product(s)", as used in this Agreement, shall mean the products described
in Attachment A hereto and other products which, by mutual consent of the
parities hereto may be included from time to time.
"European Joint Venture Company" shall mean Pro-face HMZ B.V.
The listing contained in Attachment A may be amended from time to time by
mutual agreement.
2. SALES RIGHTS AND OBLIGATION OF SALE AND PURCHASE
A. Buyer intends to sell the Product to the customers in the territory of
North America and South America. Seller and Buyer agree that European Joint
Venture Company shall intend to sell the Products to the customers in the
territory of Europe. Seller will allow Buyer to sell the product to be exported
out of North America and South America as a part of their customer's machine.
In the event Buyer desires to sell the Product in other countries, Buyer will
notify Seller of such plans and mutually agree with Seller upon appropriate
changes in this Agreement and any changes required in the Product
specifications.
B. Buyer shall, from time to time, issue its purchase orders for Products
for use and sale only in North America and South America in accordance with the
terms and conditions contained herein or otherwise agreed by parties in writing.
Seller shall send a confirmation of orders as an acknowledgment of the Buyer's
order. After the issuance of the confirmation of order, individual sales
contract shall be deemed as executed. After the individual sales contract is
deemed as executed, Buyer shall not terminate the individual sales contract.
Buyer is responsible for any damages incurred to Seller on account of any
Buyer's cancellation of the individual sales contract.
C. Buyer shall purchase on an OEM basis and Seller shall sell Product and
any spare parts upon Seller's acceptance of individual purchase orders issued by
Buyer pursuant to the terms and conditions set forth in this Agreement.
D. Buyer shall have the exclusive right to market and sell the Product
within North America and South America under its own name, trademark and brand.
E. Buyer and Seller agree to cooperate and trust each other in order to
collaborate for a long-term business.
F. Seller and Buyer agree to exchange application notes of the Product in
Japan and North America.
G. Buyer shall be responsible for any claim, any problem of similar
nature from their customer(s) for the products liability. Product liability
insurance and similar protection covering all Products sold by Buyer hereunder
shall be procured and maintained by Buyer at its sole cost and expense.
H. Seller knows, to the best of its knowledge, of no infringement by
Product of any issued patent in North America and South America. Any claim
asserted against Buyer by reason of an alleged infringement of any North
American or South American patent by Product shall be taken care of by Buyer.
I. Buyer shall provide to Seller relevant market information such as the
sales amount, major distributors, competitors and market trends every three (3)
months.
3. TESTING AND ACCEPTANCE
A. All Product shipped hereunder shall conform to the specifications
which are issued by Seller from time to time. The parties may conduct mutually
agreed upon final tests on Product prior to shipment and following receipt of
the Products, to determine Products' compliance with specifications and
necessary approval agency requirement (VL/CE). Either party shall have the
right to witness such tests at its own expense and within the convenience of
the other party.
4. COMMERCIAL ARRANGEMENTS: PURCHASE ORDERS, PRICES, AND TERMS OF PAYMENT
A. Seller has appointed or may appoint MORITANI its agent for sale of
some of Products to Buyer ("Agent's Products") and Buyer hereby agrees to
deliver for Seller's acceptance all relevant purchase orders for Agent's
Products to MORITANI, after Buyer is informed of Agent's Products.
B. Seller may designate some of Products as Agent's Products or cancel
some or any of Agent's Product with 3 months prior notice to MORITANI, with
mutual consent of the parties.
C. The Price to Buyer for Products shall be in Japanese Yen. Such prices
shall be FOB Osaka, Japan for all the Products in Attachment A, as amended. All
Products and spare parts shall be paid by letters of credit or company checks or
mutually agreed method acceptable to Seller, in its sole discretion, within
sixty (60) days after the date of Xxxx of Lading. In the event that Buyer shall
not pay invoice amount on due date and any payment shall not be executed after
ten (10) working days beyond due date, Buyer agrees to pay interest to Seller
monthly until such payment shall be completed. The applicable percentage as the
penalty interest shall be mutually agreed upon by Buyer and Seller from time to
time.
D. Shipment shall be effected by ocean vessel and Buyer agrees to bear
additional transportation charges if air shipment is requested. However, if
Seller cannot meet a promised date of shipment, Seller shall be responsible for
paying all additional charges associated with an air shipment.
E. It is contemplated that from time to time purchase orders on forms
prepared by Buyer may be used in order the Products and that there may be
included in such forms certain stipulations, conditions or agreements not
otherwise contained herein. It is expressly understood and agreed that the
provisions of this Agreement shall be deemed a part of each purchase order
accepted by Seller (in terms of Agent's Product, Seller shall give its
acceptance through MORITANI) and any provision in any purchase order which shall
be inconsistent with or contrary to the provisions of this Agreement shall be
deemed amended or deleted as the case may be.
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F. Seller or MORITANI shall have no liability to Buyer hereunder, or
under any order from Buyer, on account of delay in delivery of or inability to
manufacture or deliver any Product for any reason whatsoever, including, but not
limited to, strikes, lockouts, accidents, fire, delays in manufacture,
transportation or delivery of materials, acts of God, embargoes or governmental
actions and any other cause beyond the reasonable control of Seller or MORITANI,
whether the same or different from the matters and things hereinabove
specifically enumerated.
G. Any amount of debts or obligations of Buyer shall not exceed the
amount of one fourth (1/4) of yearly minimum sales quantity, defined hereinafter
in Section 12A.
5. ENGINEERING CHANGES AND MODIFICATIONS
A. Seller shall advise Buyer in advance when they wish to make any
changes in product which affect appearance, form, software, including protocol
and driver, developed by Buyer, physical serviceability, or functional
interchangeability or operation.
B. Seller may freely make any engineering changes in Product to the
extent that such engineering changes do not affect appearance, form, software,
including protocol and driver, developed by Buyer, physical service ability, or
functional interchangeability or operation, provided, however, that Seller shall
notify Buyer of the implementation of such engineering changes and provide all
necessary documentation immediately.
C. Buyer and Seller will jointly determine, from time to time, what
engineering changes are reasonably necessary for the Product. In this case,
Buyer and Seller will, in good faith, decide by mutual consultation how and when
to install such mandatory engineering changes, as well as the party who is to
bear expenses incurred thereby.
D. In the event that certain engineering changes are determined by Buyer
to be desirable to market Product, Buyer shall submit in writing, to Seller, a
statement specifying the changes requested and the reasons for such changes.
Seller shall evaluate such statement and if the change is technically feasible,
will furnish Buyer a price quotation, as well as its delivery lead-time for such
changes. The price quotation and delivery lead-time shall be valid for thirty
(30) days from Buyer's receipt thereof.
6. TECHNICAL SUPPORT
INDE shall, during its normal working hours, have available to Buyer,
designated personnel to respond to fax or telephone requests from Buyer's
designated corporate personnel for assistance in resolving technical, design and
field installation and maintenance problems encountered by Buyer.
7. WARRANTY AND LIMITATIONS
A. Seller warrants that the Products, sold hereunder will conform with
the
specifications attached hereof, and will be free from defects in material
and workmanship for a period of fifteen (15) months from the date upon which
Seller delivers to Buyer in accordance with the delivery terms.
B. SELLER'S WARRANTY HEREIN IS IN LIEU OF AND EXCLUDES ALL OTHER
WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, OR OTHERWISE CREATED, INCLUDING, BUT
NOT LIMITED TO, THE WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR
A PARTICULAR PURPOSE. IN NO EVENT SHALL SELLER BE LIABLE FOR SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS, WHETHER OR NOT
CAUSED BY OR RESULTING FROM THE NEGLIGENCE OF SELLER, UNLESS SPECIFICALLY
PROVIDED HEREIN. IN ADDITION, THIS WARRANTY SHALL NOT APPLY TO ANY PRODUCT
WHICH HAS BEEN SUBJECTED TO ABUSE, MISUSE, IMPROPER INSTALLATION, MAINTENANCE OR
OPERATION, ELECTRICAL FAILURE OR ABNORMAL CONDITIONS, AND TO PRODUCT WHICH HAS
BEEN TAMPERED WITH, ALTERED, MODIFIED, REPAIRED OR REWORKED BY ANYONE NOT
APPROVED BY SELLER. SELLER'S SOLE AND EXCLUSIVE LIABILITY UNDER THIS WARRANTY
SHALL BE TO REPLACE OR REPAIR, AT ITS DISCRETION, ANY DEFECTIVE PRODUCT OR PART
THEREOF.
8. TERM, RENEWAL AND TERMINATION
A. This Agreement shall have been effective on January 1, 1991, and
unless terminated earlier in accordance with the provisions herein, shall
continue in full force and effect until January 31, 2005. The Parties hereto
shall consult and discuss about the possibility of renewal two years before the
expiration.
B. The provision of Paragraph 8A to the contrary notwithstanding, this
Agreement may be terminated as follows:
1. By Seller immediately upon giving written notice, in the event
that
i. there are instituted proceedings by or against Buyer in
bankruptcy or under insolvency laws which are not vacated
within thirty (30) days from the date of filing;
ii. Buyer makes an assignment of all or part of its assets for
the benefits of creditors;
iii. Buyer shall admit insolvency;
iv. Buyer, if a corporation, ceases to exist;
v. Buyer is a corporation and disagreements arise between the
members of the stockholders, officers, or managers of the
corporation which cause Seller to deem that its interests
may be imperiled;
vi. a misrepresentation is made to Seller as to the ownership of
Buyer;
vii. sales, transfer or relinquishment of any substantial
interest in
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the ownership or active management of Buyer, or attempted
assignment of this Agreement, shall occur without prior
written approval of Seller;
viii. Buyer shall fail to cause Seller to be informed in writing
immediately on the happening of any event specified in this
section; or
ix. any non-payment of bank drafts delivered by Buyer to Seller
in payment for Products or non-payment of any check issued
by Buyer shall occur, or if Buyer becomes more than thirty
(30) days in arrears in payment of its account with Seller;
2. By either party at any time by sixty (60) days prior notice
delivered to the other party if a material breach shall occur and
said breach is not cured within said sixty (60) day period;
3. By Buyer immediately in the event that a receiver is appointed
for or applied for by Seller, or a petition in bankruptcy,
voluntary or involuntary, or equivalent adjudication is filed by
or against Seller;
4. By Seller upon sixty (60) days prior written notice delivered to
Buyer, in the event that Buyer fails to exert is best efforts to
vigorously promote the sale of the Products; and
C. In the event that this Agreement is terminated in its entirety,
Seller shall have the right, but not the obligation, to repurchase from Buyer
all or any portion of any new undamaged, and unused Products, which are of
current manufacture in their original containers, theretofore sold by Seller to
Buyer and being currently in Buyer's inventory, at the lower of the prevailing
or original purchase prices exclusive of any transportation charges originally
paid by Seller. If Seller desires to exercise its rights hereunder, Seller
shall serve written notice thereof on Buyer within thirty (30) days following
the effective date of termination, specifying the Products (or portion thereof)
to be repurchased by Seller, such products to be then shipped by Buyer to
Seller or its designee, within thirty (30) days following the date of such
notice.
9. CONFIDENTIALITY
A. In the course of their communications, each party may disclose
Confidential Information to the other. For purposes of this Agreement,
"Confidential Information" shall mean:
1. the Specifications, the Products and any trade secrets related to
any of the foregoing, including, but not limited to, any
information relating to either party's product plans, designs,
costs, prices and names, finances, marketing plans, business
opportunities, personnel, research, development or know-how;
2. any information designated by the disclosing party as
confidential in writing or, if disclosed orally, reduced to
writing within thirty (30) days; and
3. the terms, conditions and existence of this Agreement.
The party disclosing any Confidential Information must conspicuously
designate such information as "Confidential" in writing, if communicated in
writing, or orally with a prompt written confirmation describing the
Confidential Information, if communicated orally.
B. The party receiving Confidential Information shall maintain the
confidence of such Confidential Information and use all reasonable efforts to
prevent its unauthorized dissemination and use; provided, however, that this
Agreement shall impose no obligation with respect to maintaining the confidence
of Confidential Information that:
1. is not designated "Confidential" as set forth in Section 9A;
2. is generally known or available by publication, commercial use
or otherwise through no fault of the receiving party;
3. is known by the receiving party at the time of disclosure and is
not subject to restriction;
4. is independently developed or learned by the receiving party;
5. is lawfully obtained from a third party who has the right to
make such disclosure; or
6. is released for publication or use by the disclosing party in
writing.
C. The parties agree not to use each other's Confidential Information for
purposes other than those necessary to directly further the purposes of this
Agreement.
10. GOVERNING LAWS: SETTLEMENT OF DISPUTES
This Agreement shall be construed, interpreted and enforced in accordance
with the laws of Japan and, if applicable, all trade terms shall be given the
meaning contained in the latest International Commercial terms (INCOTERMS). All
disputes, controversies or differences which may arise between the parties, out
of, or in relation to, or in connection with this Agreement, or for any breach
thereof, shall be settled amicably and promptly by mutual consent of both
parties. If such dispute, controversy or difference cannot be settled between
the parties, they shall finally be settled by arbitration. The place of
arbitration shall be in Osaka, Japan, if Buyer files for arbitration and in
Chicago, Illinois, if Seller files for arbitration.
11. NEW PRODUCTS
A. If the Seller develops a more efficient and/or less expensive Product
enhancement of the same performance class, which makes Products sold hereunder
less desirable in the marketplace (New Products), Seller agrees to give Buyer
the option of purchasing the New Products; such New Products to be sold to Buyer
in accordance with mutually agreeable terms and conditions.
12. MINIMUM SALES AMOUNT
A. Buyer shall make best effort to purchase, and take delivery from
Seller of, at least the following quantities of Products annually as shown in
Attachment B.
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B. The parties agree to review the above minimum sales amount in January
immediately following any year where market conditions substantially
deteriorate, making impracticable the minimum sales amount referenced above. In
such event, a mutually agreeable adjustment in the targets shall be negotiated.
For purposes of this paragraph, the aggressive marketing practices by new or
existing competitors of Buyer shall not be sufficient to require a review of the
minimum sales amount referenced above.
13. GENERAL PROVISIONS
A. LIMITATION OF MORITANI'S RESPONSIBILITY - The parties hereto
acknowledge and agree that except as specifically provided in Xxxxxxxxx 0X,
XXXXXXXX shall have no responsibility or liability under this Agreement and
hereby release and waive any claims arising out of this Agreement or the various
transactions incident to this Agreement, except to the extent it arises out of
MORITANI'S breach of facts and obligations under Xxxxxxxxx 0X.
B. ASSIGNMENT. Buyer understands and agrees that its rights under
this Agreement are not transferable, and therefore cannot be considered an asset
of its business, and that this Agreement may not be assigned by Buyer to any
other individual or business entity without the prior written approval of
Seller, such approval to be at the sole discretion of Seller.
C. NOTICE. All notices permitted or required hereunder shall be in
writing, shall be executed by an officer of Seller or by any executive officer,
partner or principal of Buyer, and shall be effective as of the date on which
deposited in the United States mails in a properly stamped and addressed
envelope, except that any such notice actually or personally delivered to an
officer of Seller, or to any executive officer, partner, or principal of Buyer,
shall be effective as of the date of such delivery. All such notices shall be
sent to the respective parties at the address set forth on the first page hereof
or to such other address as may be designated by either party from time to time.
D. ENTIRE AGREEMENT. This Agreement, together with all attachments hereto
and all purchase orders issued hereunder, constitutes the entire agreement
between the parties and supersedes any and all previous agreements, memoranda or
other understandings of the parties. This Agreement may be amended only in
writing.
E. SEPARABILITY OF PROVISIONS. A judicial or administrative declaration
in any jurisdiction of the invalidity of any one or more of the provisions
hereof shall not invalidate the remaining provisions of this Agreement in any
jurisdiction, nor shall such declarations have nay effect on the validity or
interpretation of this Agreement outside of that jurisdiction.
F. WAIVER OF COMPLIANCE. Any failure by any party hereto to enforce at any
time any term or condition under this Agreement shall not be construed as a
waiver of that party's right thereafter to enforce each and every term and
condition of this Agreement.
G. FORCE MAJEURE. Any party hereto shall be excused from non-performance
or delay in case of force majeure, labor disputes, wars, revolutions, civil
strikes, riots, disturbances and acts
of enemies, accidents, unavailability of raw materials, typhoons, hurricanes,
floods, fires, earthquakes, other like causes beyond the control of either
party hereto.
H. BINDING UPON SUCCESSORS. This Agreement shall be binding upon the
successors and legal representatives of the parties hereto.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date and year set forth below.
TOTAL CONTROL PRODUCTS, INC.
By: /S/Nic X. Xxxx Date: August 13, 1997
---------------------------- --------------------------------------
DIGITAL ELECTRONICS CORPORATION
By: /s/Xxxxx Xxxx Date: September 12, 1997
---------------------------- --------------------------------------
Xxxxx Xxxx, President
The foregoing contractual provisions, including all rights and obligations of
MORITANI and INDE set out herein are accepted and agreed to by MORITANI and
INDE.
MORITANI AMERICA, INC.
By: /s/Xxxxxxx Xxxxxxxxx
-----------------------------------------
Date: August 25, 1997
INDE ELECTRONICS, INC.
By: /s/Xxxx Fuji
-----------------------------------------
Date: August 19, 1997
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June 19, 1997
(Attachment A)
LIST OF PRODUCTS TO SELL TO TCP
Type Part Numbers Minimum Lot
1. GP870VM (GP870-PV11)(*) 10
2. GP675T (GP675-TC11)(*) 50
3. GP570VM (GP570-TV11)(*) 10
4. GP570T (GP570-TC11) 50
5. GP570S (GP570-SC11) 100
6. GP470E (GP470-EG11) 1,000
7. GP370S (GP370-SC31-24VP) XX/XXX 000
0. GP370L (GP370-LG31-24VP) XX/XXX 000
0. GP570T (GP570-TC21-24VP) CE Marking 30/50
10. GP570S (GP570-SC31-24VP) CE Marking 30/50
11. GP470E (GP470-EG21-24VP) CE Marking 30/50
12. GP270S (GP270-SC21-24VP) CE Marking 30/50
13. GP270L (GP270-LG21-24VP) CE Marking 30/50
14. GP370S (GP370-SC21-24VP) CE Marking 30/50
15. GP370L (GP370-LG21-24VP) CE Marking 30/50
16. GP570L (GP570-LG21-24V) CE Marking 1,000
17. GP570T (GP570-TC31-24V) XX/XXX 00
00. GP570S (GP570-SC31-24V) XX/XXX 000
00. GP470E (GP470-EG31-24V) XX/XXX 000
00. GP270S (GP270-SC31-24V) XX/XXX 000
00. GP270L (GP270-LG31-24V) XX/XXX 000
00. GPH70S (GPH70-SC11-24V) (*) 100
23. GPH70L (GPH70-LG11-24V) (*) 100
Note: 1. Marked (*) item above shall be directly sold to the Buyer from the
Seller.
2. Other products not listed above shall be subject to negotiation with
the Seller.
/s/ Xxxxxxxxx Xxxxx
-------------------------------------------------
Digital Electronics Corporation
May 9, 1997
(Attachment B)
MINIMUM SALES QUANTITY FROM DIGITAL TO TCP
(Period) (Minimum Sales Quantity, Yen)
April 1, 1997 to March 31, 1998 1,550,000,000.00
April 1, 1998 to March 31, 1999 1,775,000,000.00 (Preliminary)
April 1, 1999 to March 31, 2000 1,935,000,000.00 (Preliminary)
April 1, 2000 to March 31, 2001 2,050,000,000.00 (Preliminary)
Note: Numbers next to the "Preliminary" shall be discussed again between the
Seller and the Buyer in every January of the Japanese fiscal year (from April
through March of the next year).
/s/ Xxxxxxxxx Xxxxx
---------------------------------------
Digital Electronics Corporation
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