**Exhibit 10.29**

 

**ADVANCED POWER TECHNOLOGY, INC.**

**WORLDWIDE DISTRIBUTOR AGREEMENT**

 

This Agreementis made this 30th day of October, 2003, by and between Advanced PowerTechnology, Inc., a Delaware Corporation with its principal place of businessat 405 S. W. Columbia Street, Bend, Oregon 97702, U.S.A. and all its whollyowned subsidiaries (hereinafter referred to as “Company”), and FutureElectronics, a company organized and existing under the laws of New Brunswickwith its principal place of business at 237 Hymus Blvd, Pointe Claire, QuebecH9R 5C7 (hereinafter referred to as “Distributor”).

 

RECITALS

 

A.                                 Companyis engaged in the business of manufacturing and selling power transistors.

 

B.                                   Companywishes to supplement its own sales efforts through the appointment of anon-exclusive and independent distributor.

 

C.                                     Distributorwishes to act as a distributor of Company’s products.

 

NOW,THEREFORE, in consideration of the mutual promises, terms, provisions andconditions contained herein, the parties hereto agree as follows:

 

Section 1.  Appointment of Distributor.

 

Company herebyappoints Distributor, and Distributor hereby accepts such appointment as anon-exclusive and authorized distributor of Company during the term of thisAgreement for the sale of Company’s Products, as defined in Section 2.1, fromlisted locations.

 

Section 2.  Products.

 

2.1.                           Theproducts covered by this Agreement shall be those identified on Exhibit “B,”attached hereto (the “Products”).

 

2.2.                           Companymay add Products to, or delete Products from, Exhibit “B” upon written noticeto the Distributor.

 

2.3.                           Notwithstandinganything to the contrary contained herein” Company reserves the right, in itssole discretion and without notice, to modify specifications andcharacteristics of its Products, to discontinue the distribution and sale ofsuch Products, and to cancel, modify or condition any right of the Distributorto prevent a violation of law.

 

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NORTH AMERICA DISTRIBUTORAGREEMENT

 

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Section 3.  Obligations of Distributor.

 

During theterm of this Agreement, Distributor shall at all times use best efforts toenhance the image and reputation of Company and the Products which are thesubject matter hereof, and agrees:

 

3.1.                           Distributorshall not disclose information of Company considered by Company to beconfidential or proprietary including, but not limited to, customer and pricelists and data regarding the design or methods of manufacture of the Productsand will not use any such information except as contemplated by this Agreement.Such information will be appropriately marked or identified by Company and theobligation of Distributor not to disclose or improperly use such informationwill survive the termination of this Agreement. Upon the termination of thisAgreement or the earlier request of Company, all such information will bepromptly returned to Company. The restrictions of this Section 3.1 are inaddition to any other agreement between the parties with respect to theprotection and use of information.

 

3.2.                           Distributoragrees that they will comply with all applicable federal, state, and local lawsor regulations in performing any act arising out of or in connection with thisAgreement. Distributor agrees to maintain such records as are required by allapplicable laws and regulations and this Agreement and to promptly provide suchrecords or written assurances as may be required by Company in connectiontherewith.

 

The partiesagree that each will use its best efforts to secure any licenses or permits asmay now or hereafter be required in connection with the performance of itsobligations under this Agreement, but this Agreement shall not be deemed torequire any performance on the part of either party which cannot lawfully bedone pursuant to the laws and regulations referred to above.

 

3.3.                           Distributorshall sell only Company’s Products that bear Company’s markings or trademarksand will not alter, modify or in any way change the Products, marking ortrademarks thereon without prior written approval of Company.

 

3.4.                           Distributorshall offer and sell Products only in accordance with specifications andwarranty schedules provided by Company.

 

3.5.                           Distributorshall provide Company by the 15th working day of each month a report detailingthe total sales and inventory levels of the Products for the prior month.

 

3.6.                           Distributorshall use its best efforts to actively promote the sale of the Products tocustomers in its territory. Such efforts shall include, but not be limited to,promptly servicing all customer accounts, soliciting new customer accounts, andcooperating and participating in Company’s advertising and sales promotionalprograms.

 

3.7.                           Distributorshall provide and maintain, without expense to Company, a suitable place ofbusiness with adequate facilities and sufficient personnel for the sale anddistribution of the Products and to fulfill all other additional objectivesagreed to in writing by Company and Distributor.

 

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3.8.                           Distributorshall pay all fees, taxes and duties which may be imposed on the Productspurchased by Distributor. To the extent that Company must pay any fees, taxesor duties on Products sold to Distributor, Distributor shall promptly reimburseCompany.

 

3.9.                           Distributorshall refrain from any activities which are illegal, unethical, or which mightdamage Company’s reputation.

 

3.10.                     Distributorshall fully comply with all agreements with Company, including withoutlimitation, the obligations to pay amounts due when due.

 

3.11.                     Distributorshall use its best efforts to consolidate purchase orders to promote efficiencyand reduce supporting documentation.

 

Section 4.  Obligations of Company.

 

4.1                               Companyshall not disclose information of Distributor considered by Distributor to beconfidential or proprietary including, but not limited to, customer and pricelists and will not use any such information except as contemplated by thisAgreement. Such information will be appropriately marked or identified byDistributor and the obligation of Company not to disclose or improperly usesuch information will survive the termination of this Agreement. Upon thetermination of this Agreement or the earlier request of Distributor, all suchinformation will be promptly returned to Distributor. The restrictions of thisSection 4.1 are in addition to any other agreement between the parties withrespect to the protection and use of information.

 

4.2.                           Company,in its sole discretion, shall maintain the necessary personnel needed tofulfill the agreed upon sales objectives of Company and Distributor.

 

4.3.                              Companyshall use its best efforts to manufacture sufficient quantities of Products tomeet the requirements of Distributor. Company shall consult with Distributorregarding inventory levels, and shall advise Distributor of promotional effortsto increase the sale of Products.

 

4.4.                           Companyshall subject all Products delivered to Distributor to its usual standards ofquality control and inspection and all Products sold or delivered under thisAgreement shall be subject to the limited warranty set forth in paragraph 17below.

 

Section 5.                                            Deliveries

 

5.1.                           Alldeliveries of Products by Company pursuant to this Agreement will be made EXWCompany facilities and designated subcontractors. Products will be consigned tocarriers for shipment to Distributor, however, upon the written approval ofCompany and Distributor, Company will consign Products to carriers for shipmentdirectly to Distributor’s customers.

 

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5.2.                             Minimumorder quantities: The minimum order quantities for all products shall be the standardminimum order quantities in effect at the time of acceptance by Company fromthe Distributor.

 

Section 6.                                            Titleand Risk of Loss.

 

Title to andrisk of loss of Products sold hereunder shall pass to the Distributor upondelivery to the carrier at the F.O.B. point.

 

Section 7.                                            Price.

 

Company agreesto sell the Products to Distributor at negotiated market prices or at theprices set forth in the published Distributor Cost and Price Schedule. Allprices are subject to change by Company at any time upon written notice toDistributor.

 

7.l.                              Ifthe price for any Product is increased prior to full shipment of any Order, theprice charged to Distributor will be that in effect at the time of Company’sacceptance 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 willbe shipped and invoiced at the price in effect at the time of shipment.

 

7.2.                           Inorder to assist Distributor in competitive markets, Company will, under certainlimited circumstances, adjust the effective price of the Products toDistributor. The unit price of any Product(s) as set forth in Exhibit “B” shallbe ultimately adjusted pursuant to the following procedure: Distributor mustcontact Company, or Company’s local representative, and provide to the same thecustomer’s name, Company part number, quantity, delivery schedule, price perunit requested by Distributor, resale price per unit to customer andcompetitive products available in the market. Upon acceptance by Company of theinformation and approval of Distributor’s request for a price reduction,Company or Company’s local representative shall provide Distributor with theCompany’s authorized “ship and debit” price per unit for the particular orderand the Company’s authorization number. Within 30 days from the invoice date toDistributor’s customer, Distributor shall provide Company with a copy of theinvoice, or a substitute deemed acceptable by Company, and a debit memorandumwith Company’s authorization number to obtain a credit. Upon Company’s request,Distributor shall produce for inspection the original invoice. Uponsatisfaction of the conditions set forth above, Company shall issue toDistributor, within 30 days of receipt of the supporting documentation setforth above, a credit. A credit will only be issued for those amountsauthorized.

 

Section 8.                                            Payments.

 

Payment forProducts delivered to Distributor shall be in United States dollars and iswithin [ * ] days of invoice date.

 

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Section 9.                                            Cancellationof Order.

 

9.1.                           In the event Distributor cancels anOrder for any customized Product which has been accepted by Company,Distributor shall pay Company for all direct and indirect costs incurred byCompany as a result of such cancellation.

 

9.2.                           Distributormay reschedule delivery dates of product on order by written request toCompany; provided, however, that no such changes shall be allowed within thirty(30) days of first factory promise date.

 

9.3.                           Distributormay cancel standard product by written notice to Company; provided, however,that no orders may be canceled within thirty (30) days of first factory promisedate.

 

Section 10.                                      ExcusableDelays and Failures (Force Majeure)

 

Company shallbe excused for delays in performing and failures to perform pursuant to thisAgreement and to any Order issued hereunder to the extent that any such delayor failure results from any cause beyond its control, including, solely by wayof example and without limitation, delays caused by Distributor or a thirdparty, acts of God, strikes, and other labor disputes, government regulations,public disorders, international disputes, inability to obtain or shortage of anymaterial used in the manufacture or shipping and delivery of the Products,transportation or trade embargoes, customs restrictions, and catastrophes ofnature, fire and explosion, whether any such cause affects Company, anysupplier or provider of service to Company. Company agrees to exert reasonableeffort to prevent such occurrences from affecting its performance hereunder.Company shall not be liable for damages, general, specific or otherwiseresulting from such excusable delays and failures.

 

Section 11.                                      Inventory.

 

11.1.                     Distributorshall maintain a minimum level of inventory of Products. The level of inventoryshall be established by Company and adjusted from time to time as marketconditions warrant. Company retains the right to inspect Distributor’sinventory at any time.

 

11.2.                     In the eventof a decrease in the price of any of Company’s Products, Distributor shall beentitled, within thirty (30) days following such decrease, to apply for acredit in an amount equal to the difference in the price of the Product(s)excluding transportation charges, duties and taxes) before and after suchdecrease on the unsold Product(s) in Distributor’s inventory and/or theaffected Product(s) in transit to Distributor. This credit shall be calculatedupon receipt of an itemized inventory from Distributor and shall be appliedagainst future Orders from Distributor. Company will have the right to inspectthe inventory subject to the credit and all records relating thereto.

 

Section 12.                                      Returns.

 

12.1.                     Company willaccept returned Products only if such return is made in accordance with Company’scurrent procedures which are set forth in this Section 12.

 

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12.2.                     [ * ]

 

12.3.                     Company shallgive Distributor written notice of the discontinuance of any Product. Within 30days of receipt of such notice, Distributor shall notify Company in writing ofits intention to return discontinued Products for credit. On receipt of suchProduct in a condition acceptable to Company, freight prepaid by Distributor,Company shall issue a credit to Distributor.

 

12.4.                     Distributoris authorized to return slow-moving items for exchange in only the months ofJanuary and July. All such returns shall require Company’s prior writtenauthorization and the return material authorization number given with suchprior written authorization, and a dollar for dollar offsetting order isreceived, and shall be limited to five percent (5%) of the U.S. dollar amount(excluding costs associated with shipping, handling, duties and taxes) ofstandard purchases of Product over the prior six months. All returned materialmust be returned in a condition acceptable to Company.

 

Section 13.                                      Advertising.

 

13.1.                     Company andDistributor shall jointly agree from time to time on advertising programs andother forms of promotion of the Products in the Territory. Company shall sharesuch expenses equally with Distributor; provided, however, Company’s share ofsuch expenses shall not exceed [ * ]) of Company’s prior 12 month’s sales toDistributor.

 

13.2.                     Company shallprovide Distributor reasonable quantities of its Product catalogs, data sheetsand other promotional material free of charge. Additional quantities of anysuch material requested by Distributor shall also be supplied free of charge,F.O.B. point of origin.

 

13.3.                     Distributormay conduct advertising programs other than those programs undertaken withCompany provided Distributor obtains Company’s approval of all aspects of theadvertising program. Distributor shall refrain from making any representationsor claims concerning the Products which are inconsistent or exceed Company’swritten representations.

 

Section 14.                                      Durationand Termination.

 

14.1.                        Unlessterminated as provided for herein, this Agreement shall continue in force forone year from the date first above mentioned. This agreement shall continue

 

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thereafterunless either party gives written notice to the other party of its intention toterminate the agreement, giving at least thirty (30) days written notice.

 

14.2.                     If eitherparty commits a material breach of this Agreement or becomes insolvent orbankrupt, 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 agoing concern or to conduct its operations in the normal course of business,the other party shall have the right to cancel this Agreement by givingimmediate written notice of its election to do so.

 

14.3.                     Uponexpiration or termination of this Agreement by Distributor, Distributor willreturn to Company at such place as Company may designate, all promotionalmaterials which had originally been furnished by Company to Distributor.Distributor shall be responsible for all return charges. Upon expiration ortermination of this Agreement by Company, Company shall be responsible for allreturn charges.

 

14.4.                     Company andDistributor agree that upon the expiration or termination of this Agreement,neither party shall be liable to the other for any damages, expenditures, lossof profits or prospective profits of any kind or nature sustained or arisingout of, or alleged to have been sustained or to have arisen out of, suchtermination. The expiration or termination of this Agreement shall not,however, release either party from making payments which may be owing to eitherparty under the terms of this Agreement.

 

14.5.                     Upontermination or expiration of this Agreement by Company, Company will accept,within 30 days after receipt of RMA number, the Distributor’s stock inventoryvalued at the effective Distributor cost as of the date of termination orexpiration or at Distributor’s acquisition price, whichever is lower. Upontermination or expiration of this agreement by Distributor, Company shallaccept the Distributor stock inventory valued at the effective Distributor costas of the date of termination or at Distributor acquisition price, whichever islower. Stock inventory not returned within the 30-day period will not beaccepted by Company. For Products which are custom Products, Company mayrepurchase such items at prices within its sole discretion. Payment toDistributor shall be made within twelve (12) months of receipt of Distributor’sinvoice.  Products specially prepared byCompany to Distributor’s specifications will not be repurchased.

 

14.6.                     In event oftermination of this Agreement for any reason, Company shall not be liable tothe Distributor or any employee or agent of the Distributor for compensation,reimbursement or damages on account of the loss of prospective profits oranticipated sales or on account of expenditures, investments, leases orcommitments in connection with the business or goodwill of the Distributor orfor any reason arising out of such termination. The Distributor hereby waivesany and all rights it might have to compensation upon termination of thisagreement pursuant to the local and national laws of any country within theterritory and hereby agrees to indemnify Company and hold harmless from any andall claims of its employees or subcontractors for similar compensation or forseverance, liability or other pay.

 

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Section 15.                                      RelationshipBetween Parties.

 

15.1.                     ThisAgreement does not create an employer-employee relationship between Company andDistributor, or a joint venture or partnership. The relationship betweenCompany and Distributor shall be that of seller and buyer and in such relationship Distributor shall be anindependent contractor and shall have no authority to act for or to bindCompany in any matter. Distributor agrees to hold Company harmless from allclaims, actions or judgments arising from acts or omissions of Distributor, itsagents or employees.

 

15.2.                     Company shallindemnify, protect and save harmless Distributor from and against all claims,demands and proceedings, actions, liabilities and costs resulting from anyactual or alleged infringement of any patent, industrial and commercialproperty rights of third parties related to the Products.

 

Section 16.                                      ExportControls.

 

Distributoracknowledges that exportation of the Products may be subject to compliance withvarious United States Export Administration Acts and the rules and regulationspromulgated from time to time thereunder, which restrict the export andre-export of certain products, technical data and direct products of technicaldata. Distributor agrees to comply with such United States export control laws,rules and regulations and all other applicable laws and governmentalregulations, domestic, foreign and local.

 

Section 17.                                      Warranty

 

17.1                        Productssold pursuant hereto are covered by Company’s standard warranty in effect asset forth in the Company sales contract under which the Products are soldprovided, however, that the warranty coverage shall be no less than thefollowing:

(i)            [* ];

(ii)           Companyshall extend such warranty directly to the customer as if such customer hadpurchased the Products directly from Company;

(iii)          Companyshall warrant the Products against defects in material and workmanship undernormal use and service, repair or replace at Company’s cost any defectiveProduct (or issue a credit or refund, as the case may be, based on the purchaseprice paid therefor); and

(iv)          Companyshall pay (or refund the amount of) all freight and shipping charges for anydefective Products returned under this paragraph.

Distributorshall have no authority to and shall not make any warranty representation withrespect to the Products contrary to or inconsistent with Company’s warranty.

 

Section 18.                                      Miscellaneous.

 

18.1.                     ThisAgreement does not convey, nor shall Distributor claim any title or propertyinterest in Company’s trademarks, trade names, copyrights, patents or othersuch property so marked by Company. Distributor acknowledges ownership byCompany of

 

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trademarks,names, copyrights, patents and other such property so marked by Company, soidentified or so identifiable.

 

18.2.                     Distributorshall not delegate any duties or assign any rights under this Agreement or anyinterest herein without Company’s prior written consent.

 

18.3.                     The validity,meaning enforceability and effect of this Agreement, and the rights andliabilities of the parties, shall be determined in accordance with the laws ofthe State of Oregon.

 

18.4.                     Except asspecifically provided in a written waiver signed by a duly authorized officerof the party or the party seeking enforcement, the failure to enforce or thewaiver of any term of this Agreement shall not constitute the waiver of suchterm at any time or in any circumstance and shall not give rise to anyrestriction on or condition to the prompt, full and strict enforcement of theterms of this Agreement.

 

18.5.                     All noticesin connection with this Agreement shall be in writing and shall be effectiveupon dispatch if by telex, telegram or similar means, upon delivery if by handdelivery, and 3 days after deposit if deposited in the channels of the UnitedStates mails, postage prepaid, in registered form, return receipt requested. Inall cases notices shall be delivered to the other party at the address setforth above or such other address such party may have provided by writtennotice.

 

18.6.                     ThisAgreement, including any exhibits, schedules and tables attached hereto whicheither have been specifically referred to herein or have been initialed by theparties, constitute the entire agreement between the parties with respect tothe subject matter. This Agreement supersedes all prior discussions,understandings and agreements with respect to the subject matter.

 

18.7.                     ThisAgreement may be amended or supplemented only in a writing designated as suchan amendment or supplement and signed by a duly authorized officer of the partyor the party against whom enforcement is sought.

 

18.8.                     ThisAgreement may be executed in two or more counterparts, each of which shall bedeemed an original and all of which together shall constitute one and the sameAgreement.

 

18.9.                     If anyprovisions of this Agreement shall be held by a court of competent jurisdictionto be invalid, the remaining provisions of this Agreement shall remain in fullforce and effect.

 

Section 19.                                   Comp1iancewith Law.

 

19.1                        Distributoragrees that it will not violate any applicable law or regulation of any countryor political subdivision thereof in performing or purporting to perform any actarising out of or in connection with this Agreement. Pursuant thereto,Distributor agrees to maintain

 

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such recordsas are required by all applicable laws and regulations and to provide suchwritten assurances as are required by APT in connection therewith.

 

19.2                        ThisAgreement is subject to all applicable laws, regulations and other statutoryand administrative acts, now or hereafter in effect of the United States andthe Territory. The Distributor agrees that it will use its best efforts tosecure any licenses or permits as may now or hereafter be required inconnection with the performance of its obligations under this Agreement, butthis Agreement shall not be deemed to require any performance on the part ofeither party which cannot lawfully be done pursuant to the laws, regulationsand statutory and administrative acts referred to above.

 

IN WITNESSWHEREOF, the undersigned, being duly authorized, have executed this Agreementin duplicate as of the day and year first above written.

 
|      | Company:                        |   |                      | Distributor: |   |
|-----------|---------------------------------|--------|---------------------------|--------------|--------|
|      |                            |   |                      |
|      | Advanced  Power Technology Inc. |   | Future  Electronics       |
|      |                            |   |
|      |                            |   |
| Signature |                            |   |                      |         |   |
|      |                            |   |
| Name      | Greg M. Haugen                  |   | Sam Abrams                |
|      |                            |   |
| Title     | Chief  Financial Officer        |   | Executive  Vice President |
|      |                            |   |
| Date      |                            |   | October 30,  2003         |
|           |                                 |        |                           |              |        |  |  |

 

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**EXHIBIT A**

**AUTHORIZED LOCATIONS**

 

 

**All Locations Worldwide**

 

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**EXHIBIT B**

 

 

Products

 

 

**All APT Products**

 

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