Exhibit 10.7

 

 

 

 

Manufacturing and Distribution Rights Agreement

 

This Agreement (“Agreement”) is made as of January 07, 2016, by and between
Advice Electronics Ltd., an Israeli company (“Advice”), and Digital Power
Corporation, a California corporation (“DPC”). For purposes of this Agreement,
the “Parties” or “Party” shall mean Advice, on the one hand, and DPC, on the
other hand.

 

WHEREAS, DPC has signed a contract with an Israeli company Telkoor Telecom Ltd.
("Telkoor") granting DPC the right to directly order and purchase certain
products of Telkoor from a manufacturer in China: SHENZHEN WATT ELECTRONICS CO.
Ltd. ("Watt") and the right to market, sell and distribute such products in
agreed upon markets and territories, subject to the payment by DPC of royalties
to Telkoor; and

 

WHEREAS, on January 07, 2016 Advice has or intend to purchase the commercial
civil operation and all rights, including, but not only, Intellectual Property
and copyright rights, Production files and Know How regarding to products of
Telkoor, and including all the rights with regards to DPC with additional
warranty given by Telkoor that DPC will sign this agreement with Advice; and

 

WHEREAS, Telkoor has given its full irrevocable consent to this agreement; and

 

WHEREAS, in connection therewith the Parties wish to establish the commercial
relationship between them hereby enter into this Agreement pursuant to the terms
and conditions hereunder.

 

NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

 

1.

Subject to the terms and conditions of this Agreement, Advice hereby grants DPC
the non-exclusive right to directly place purchase orders for the purchase of
the products listed on Schedule A attached hereto, as may be amended from time
to time by mutual consent of the Parties (the “Products”) with the manufacturer
Watt (the “Manufacturer”), for the sole purpose of distributing the Products in
all territories except: in Israel, except: to Advice's clients and customers all
over the world and except: to the company "Harmonics" and affiliate companies
under it all over the world (the “Manufacturing Rights”). It is emphasized that
every right attributed to the Products is the property solely of Advice.

2.

The Manufacturing Rights are granted to DPC until 31 August 2017. It is agreed
that from 1 September 2017 DPC will have no rights to place orders directly to
Watt under this agreement, and all manufacturing orders and procedure as to the
Products will be via Advice. As to distribution of the Products after 31 August
2017, DPC will be allowed to distribute the Products under DPC branding until 31
December 2020, subject to Advice's consent. DPC will issue manufacturing order
to Advice for any Products listed in Schedule A after 31 August 2017, and
subject of issuing purchase orders only via Advice and payment of royalties as
specified in Schedule A.

3.

In consideration of the grant of the Manufacturing Rights and distributing the
Products, DPC shall pay Advice royalties in the amounts listed in Schedule A of
the price paid by DPC to Watt for each Product purchased from Watt (the
“Royalties”). DPC shall pay the Royalties to Advice within thirty (30) days of
receipt of invoice by Advice following Watt acknowledgement of products shipped
to DPC. DPC will notify Advice of each order within 3 days of placing every
purchase order of the Products with Watt.

4.

DPC shall pay for all costs and expenses associated with obtaining the necessary
regulatory certifications and approvals required for DPC to sell the Products in
all territories. At Advice's request, DPC shall provide services to facilitate
the receipt by Advice of the regulatory certifications and approvals required
for Advice to sell the Products at a reasonable price to Advice.

5.

In addition, DPC grants Advice the right to distribute the products of DPC
specified in Schedule B for the duration of this Agreement. In case DPC wishes
to distribute other products of Advice, subject to Advice's consent and approval
the parties will negotiate another distribution Agreement between them. In case
Advice wishes to distribute other products of DPC, subject to DPC's consent and
approval, the parties will negotiate another distribution Agreement between
them.

6.

For a period of this agreement, DPC shall not, directly or indirectly,
participate or engage, or assist any other person in engaging or preparing to
engage the customers of Advice and their affiliates worldwide in connection with
the sale or distribution of any of the Products. Similarly, DPC is hereby
committed and obliged not to sell the Products in Israel and/or to any Israeli
company or its affiliates worldwide, and additionally not to sell the Products
to the company "Harmonics" and its affiliates worldwide, without Advice's prior
written approval. For a period of this agreement, Advice shall not, directly or
indirectly, participate or engage, or assist any other person in engaging or
preparing to engage the customers of DPC, in connection with the sale or
distribution of any of the Products.

7.

This Agreement shall commence on the date hereof and shall remain in full force
and effect until 31 August 2017 (the “Term”). Notwithstanding the aforesaid or
any applicable law, either Party may terminate this Agreement with a prior
notice of 30 days ahead, with no cause required. If such termination occurs DPC
will immediately refrain from placing Purchase orders to Watt of the Products,
and refrain from distributing it anywhere.

8.

DPC shall provide Advice or its legal successor with (i) any purchase order
submitted by DPC to Watt (“Purchase Orders”), within 3 days after such Purchase
Order has been submitted by DPC, and (ii) accurate monthly reports, detailing
the actual number of Products which were purchased during each calendar month,
the price paid for such Products and any other material information, terms and
conditions with respect thereto (each, a “Usage Report”). Usage Reports must be
delivered to Advice or its legal successor no later than thirty (30) days after
the last day of each calendar quarter. Within thirty (30) business days of a
written request from Advice or its legal successor, but no more than once every
calendar year, Advice or its legal successor shall have the right to audit or
have audited said Usage Reports, and DPC shall have the obligation to make
available any requested Usage Reports and relevant books and records, during
normal business hours and at the principal offices of it, to confirm the
undertakings under this Agreement. The quantities in each Usage Report are
binding upon DPC, and if required by Advice will be authenticated by the
accountant of DPC.

9.

In no event shall Advice be liable for any liabilities, losses, claims, demands,
obligations, judgments, causes of action, assessments, fines, damages, costs and
expenses of DPC of any kind or nature that arise out of or in connection with
this Agreement. Notwithstanding the aforesaid, during the Term, Advice shall be
responsible for providing ECNs and ECOs Product design updates as a result of
materials/components obsolesces or Product manufacturability. Advice shall also
be responsible, and correct or repair, only defect in design in the Products,
but shall not be responsible for, or be obligated to correct or repair, any
defect in the manufacture of the Products.

 

 
 

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10.

DPC will compensate Advice for any claim or damage which will be suffered by
Advice due to DPC breach of this Agreement or any negligence conducted with the
Products.

11.

Either Party of acknowledges and agrees that “Confidential Information” means
any materials, data, and/or information of any type whatsoever, in whatever form
or media, whether or not marked as “confidential” and/or “proprietary,” that is
disclosed to or becomes known by either Party, and which is not generally known
to the public, or which could reasonably be expected to be valuable to Advice or
its affiliates or a competitor of Advice or its affiliates are created,
accessed, viewed, learned, obtained, disclosed to or become known by either
Party pursuant to this Agreement. Either Party shall: (a) hold such Confidential
Information in strict confidence; (b) not disclose such Confidential Information
to any third party except as expressly permitted by this Agreement. DPC will use
Confidential Information only as necessary for DPC’s performance of its
obligations under this Agreement.

12.

DPC will have no right of any kind and no copyright or intellectual property
rights in the Products or the Production Files of the Products or any rights
attributed to the Products, except as specified in this Agreement.

13.

DPC may not assign or delegate this Agreement, or any part thereof, to a third
party by operation of law or otherwise without the prior written consent of
Advice.

14.

No failure or delay on the part of either Party in the exercise of any power or
right under the Agreement shall operate as a waiver thereof. No single or
partial exercise of any right or power under the Agreement shall operate as a
waiver of such right or of any other right or power. The waiver by either Party
of a breach of any provision of the Agreement shall not operate or be construed
as a waiver of any other or subsequent breach under the Agreement. No amendment
or modification of or supplement to the terms of this Agreement or the schedules
attached hereto shall be binding on either Party unless reduced to writing and
signed by both Parties. This Agreement sets forth the entire final agreement
between the parties as to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, between the parties.

15.

This Agreement shall be construed, interpreted and the rights of the Parties
determined in accordance with the laws of the State of Israel (without reference
to the choice of law provisions of Israeli law that would require the
application of law of any other jurisdiction), except with respect to matters of
law concerning the internal corporate affairs of any corporate entity which is a
Party, and as to those matters the law of the jurisdiction under which the
respective entity derives its powers shall govern. In any action between the
Parties, each of the Parties irrevocably consents to the jurisdiction and venue
of the Tel Aviv-Yafo courts located in the State of Israel.

 

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
on its behalf by their respective officers thereunto duly authorized all as of
the date first written above.

 

 

 

Advice Electronics Ltd.

 

By: /s/ Eli Nahum

 

Name: Eli Nachum

 

Title: President

 

 

 

DIGITAL POWER CORPORATION

 

By: /s/ Amos Kohn

 

Name: Amos Kohn

 

Title: President & CEO

 

 
 

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Schedule A

Manufacturing Rights - Product List and Royalty

 

Family

Telkoor P/N

P/N

Royalty

Rate %

       

CPCI-AC-3U-200

900-3002-xx

CPCI 200W

10

CPCI-DC-3U-200/48

900-3003-xx

CPCI 200W

10

CPCI-DC-3U-200/24

900-3011-xx

CPCI 200WDC

10

CPCI-AC-3U-300/48

900-4002-xx

CPCI 300W

10

CPCI-DC-3U-300/48

900-4003-xx

CPCI 300W

10

CPCI-DC-3U-300/24

900-4011-xx

CPCI 300WDC

10

CPCI-AC-6U-400

900-6002-xx

CPCI 400W

10

CPCI-DC-6U-400

900-6003-xx

CPCI 400WDC

10

CPCI-AC-6U-500

900-7002-xx

CPCI 500W

10

CPCI-AC-6U-500-38

900-6212-xx

CPCI 500W

10

CPCI-AC-6U-500-38

900-7038-xx

CPCI 500W

10

eF175-131

900-0431-0000

EF200W

10

eF175-215

900-0215-0000

EF200W

10

eF175-215

900-0215-00

EF200W

10

eF200-225

900-0225-0000

EF200W

10

eFA175-112

900-1436-20

EF200W

10

eFA175-112

900-1437-0000

EF200W

10

DPO306-112

900-3436-0000

EF350W

10

DPO306-124

900-3456-0000

EF350W

10

DPOS306-112

900-3463-0000

EF350W

10

eF306-154

900-3054-0000

EF350W

10

eFO306-105

900-3151-0000

EF350W

10

eFO306-128

900-3028-0000

EF350W

10

eFO306-148

900-3046-0000

EF350W

10

eFOA306-148

900-3146-0000

EF350W

10

eFO306-148-54

900-3046-54

EF350W

10

eFO306-248

900-3248-0000

EF350W

10

eFO306-112

900-3036-0000

EF350W

10

eFO306-148

900-3056-0000

EF350W

10

ePO306-112

900-3036-0000

EF350W

10

eFO306-148

900-3356-0000

EF350W

10

eFOS306-112

900-4236-0000

EF300W

10

eF400-112

900-4036-0000

EF400W

10

eF400-124

900-4056-0000

EF400W

10

eF400-148

900-4046-0000

EF400W

10

eFO400-112

900-4136-0000

EF400W

10

eFO500-124

900-5124-0000

EF500W

10

1500W

900-1548-0000

Front-End

10

1600W

900-1648-0000

Front-End

10

800W

900-2180-0000

Front-End

10

Chassis 1500-1600W

900-1200-0000

Front-End

10

Chassis 800-800W

900-1200-0000

Front-End

10