EXHIBIT 10.19
CONFIDENTIAL TREATMENT
Non-exclusive Distributor Agreement
This Agreement made as of February 23, 2001 by and between OmniVision
Technologies, Inc., a Delaware corporation having its principal office at 930
Thompson Place, Sunnyvale, CA, 94085 USA ("OmniVision") and SEC Development
Co., Ltd., a Hong Kong corporation, having its principal place of business at
33/F. No. 133 Wanchai Road, Hong Kong ("Distributor").
The parties agree as follows:
1. Distributorship
OmniVision appoints Distributor as a non-exclusive distributor for the products
designed and manufactured by OmniVision (hereinafter referred to as "Products"
or "Product"), as listed on Exhibit A attached hereto. Exhibit A will be
updated and distributed to Distributor by OmniVision from time to time.
Distributor agrees not to carry any other products, which in OmniVision's sole
judgment are directly competitive to OmniVision's Products.
Distributor's appointment covers Distributor's marketing location ("Territory")
shown on Exhibit B attached hereto.
Distributor is appointed to make sales to potential customers ("the Customers)
in the designated territory, excluding those customers identified as customers
of another OmniVision distributor or identified as a house account customer of
OmniVision ("the Excluded Customers") as specified in Exhibit C as that Exhibit
may be modified from time to time. OmniVision reserves the right to appoint
additional Product sales distributors in the same geographical area.
Distributor shall maintain an adequate and aggressive sales organization at all
times during the term of this Agreement in order to assure maximum distribution
of Products.
2. Sales
Subject to the terms of this Agreement, OmniVision agrees to sell and
Distributor agrees to buy Products for resale. However, OmniVision shall not be
required to sell any Products to Distributor if the manufacturing or sale of
such Product has been discontinued by OmniVision, or if such Product is or
becomes unavailable, or if OmniVision should withdraw such Product from sale to
distributors.
Distributor is restricted from delivering any Product to its customer without
first collecting payment in full from such customer. In the event Distributor
is not successful in collecting payment in full from its customer, the Product
is to be returned to OmniVision for full credit.
3. Prices
The Price Schedule will include all Products available for purchase by
Distributor as well as the unit prices for each of the Products. The Price
Schedule normally will be updated once a quarter by OmniVision and released to
Distributor. If there is any delay of this update, the Distributor shall use
the latest received Price Schedule as the purchasing price for OmniVision
Products.
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OmniVision Distributor Agreement
CONFIDENTIAL TREATMENT
All prices are subject to change or withdrawal by OmniVision without prior
notice to Distributor, although OmniVision shall use its best efforts to give
prior notice to Distributor of any change in the prices. Except as otherwise
provided in this Agreement, all sales of Products to Distributor shall be at
OmniVision's price in effect when Distributor's order is accepted by
OmniVision.
Distributor is required to submit a copy of each customer purchase order to
OmniVision for approval of the resale price before Distributor accepts the
order from its customer. Copies of customer purchase orders are to be faxed to
OmniVision for approval within twenty-four hours after receipt by Distributor.
4. Taxes
The Distributor is responsible for paying any duties, taxes, fees or any other
charges which may be levied by governmental authorities in the Country where
shipments are made.
5. Reports
Distributor shall provide OmniVision with a Monthly Resale Report, Monthly
Inventory Report, and Monthly Quote Report, defined below. These reports shall
be made available to OmniVision by Distributor each month. These reports shall
be received by OmniVision on the 26th of each month with the understanding that
Distributor will close its sales activity as of the 25th of each month.
a. The Monthly Resale Report will summarize the following information
provided to OmniVision by Distributor: OmniVision part number, quantity
shipped, unit sales price, total amount of sale, customer name, sales
location and postal code, invoice or credit number (if applicable),
shipment date, invoice date if different from shipment date, type of
sales (i.e., stock shipment, drop shipment, sample sale, billing
adjustment, customer return, sales to other re-sellers, etc.).
Distributor is required to provide OmniVision the sales information in
two parts, one for commissionable sales and the other for non-
commissionable sales (see 5 D listed below).
b. The Monthly Inventory Report shall list products, by OmniVision part
number, shipped to Distributor, and all transactions to and by
Distributor during the month. OmniVision may stop shipments of Products
to Distributor to facilitate verification of inventory levels.
c. The Monthly Quote Report summarizes the new Product Quotes, old Product
Quotes that have expired, and the status of all other OmniVision
Product quotes.
d. Each sales can be treated [***]. If customer's purchase order is [***],
Distributor has [***]. OmniVision will pay [***] whereas for [***],
Distributor is entitled to [***]. Only [***] are subject to [***].
For instance, if the selling price for [***] is USD$[***] and
[***] is USD$[***], the USD$[***] to OmniVision but OmniVision will pay
[***] and vice versa [***] and [***],
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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OmniVision Distributor Agreement
CONFIDENTIAL TREATMENT
OmniVision will pay [***] and OmniVision will reimburse the USD$[***].
And for [***], if the selling price is USD$[***] and the [***] is
USD$[***], [***] is entitled to the [***] of [***], however [***] will
not be paid to the [***].
6. Terms
All Products are sold to Distributor by OmniVision based on the following
shipment terms: F.O.B. OmniVision's warehouse. Terms of payment are: Net
payment due thirty (30) days from the date of invoice. Invoice shall be sent on
or soon after the date of shipment. Distributor shall not take any credit or
offset against accounts owing OmniVision without OmniVision's prior written
authorization. OmniVision may at any time, either generally or with respect to
any specific order by Distributor, change the amount or duration of credit to
be granted to Distributor, including requiring cash in advance of shipment to
Distributor (or COD term), if Distributor has failed to pay previous invoices
when due or if Distributor's creditworthiness, in OmniVision's judgment, makes
such action necessary. Distributor agrees to provide financial statements on a
monthly basis from the date of this Agreement.
Such financial statements are to be provided with a copy of the original
Chinese version and a copy translated into English. The financial statements
are to include a minimum of a Balance Sheet, a Statement of Operations, and a
Statement of Cash Flows. The financial statements are to be prepared as of
month end and year to date. The financial statements are to be received by
OmniVision on or before the 15th of the following month.
7. Acceptance of Orders
a. All orders sent by Distributor to OmniVision must be in writing,
including changes to existing orders. All orders must be accompanied by
copies of customer purchase orders which have been accepted by
Distributor and approved by OmniVision.
b. Distributor shall address all orders to OmniVision's Sales Department.
Inquires concerning availability, delivery or technical information
should be directed to OmniVision's Marketing Department. All orders are
subject to acceptance by OmniVision, and OmniVision reserves the right
to reject any order given by Distributor even if a price quotation has
been made previously.
c. OmniVision will package Products in a standard package or container,
but OmniVision may change such package or container at any time without
prior notice to Distributor, or use a standard bulk or quantity package
for any shipment. Distributor may specify a carrier, but if no carrier
is specified, OmniVision may select a suitable carrier without notice
thereof to Distributor.
d. Sales and shipments will be made on the terms and conditions set forth
herein and on OmniVision's order confirmation form in effect at the
time of order. If a term set forth in this Agreement is inconsistent
with OmniVision's order confirmation form, the former shall govern.
Unless otherwise in writing, OmniVision shall not in any event be bound
by the terms
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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CONFIDENTIAL TREATMENT
and conditions of Distributor's purchase order forms or any other forms
submitted by Distributor.
e. Delivery dates given by OmniVision for orders placed by Distributor
shall be considered OmniVision's best estimates only. To cancel a
purchase order or delay delivery, Distributor must first give
OmniVision written notice thereof and OmniVision shall have until the
end of five (5) full business or working days after such notice is
actually received by OmniVision in which to process, after (but not
before) which such order may be canceled if Distributor so requests.
8. Calculation of Price Difference
OmniVision will provide Distributor with a listing of standard prices for all
Products to be provided to Distributor for resale to its customers. OmniVision
will use these standard prices on invoices for Product shipped to Distributor
each month. Distributor will prepare a schedule each month showing the actual
price charged to its customer for the resale of Product compared to the
standard price charged by OmniVision for the sale of Product to Distributor. In
the event the price used for the sale to Distributor's customer is higher, an
additional invoice will be issued by OmniVision to charge Distributor for the
price difference. In the event the price used for the sale to Distributor's
customer is lower, a credit memo will be issued by OmniVision to reduce the
charge to Distributor for the price difference.
Distributor is not authorized, without the prior written approval of
OmniVision, to change the price to be charged to its customer to a value lower
than the price approved by OmniVision as indicated on the customer purchase
approved by OmniVision prior to the date of delivery of Product to Distributor.
9. Commission Sales
After receipt of the Monthly Resale Report and the Monthly Inventory Report,
and after receipt of payment in full for invoices due under the thirty day
credit terms of this Agreement, OmniVision will remit a Commission Payment to
Distributor as a percent of Distributor's monthly commissionable resale amounts
according to the following schedule:
Monthly Sales Volume Commission Percentage
-------------------- ---------------------
Up to $[***] [***]%
$[***] [***]%
$[***] [***]%
$[***] [***]%
Commission payments will be made by OmniVision within [***] days following the
end of each month.
10. Force Majeure
OmniVision assumes no obligation, and shall not be liable to Distributor, for
any delay or failure to deliver Products by reason of any contingencies beyond
OmniVision's control or beyond the
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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OmniVision Distributor Agreement
CONFIDENTIAL TREATMENT
control of OmniVision's suppliers including but not limited to force majeure;
strikes; labor disputes; lockouts or other labor trouble; fire; earthquake;
flood; civil commotion; war; riot; act of God; casualties; accidents; shortages
of transportation facilities; detention of goods by custom authorities; loss of
goods in public or private warehouses; quotas or actions of any government,
foreign or domestic, or any other agency or subdivision thereof; delays in the
delivery of raw or finished materials; parts or completed merchandise by the
suppliers thereof; or other casualty
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OmniVision Distributor Agreement
CONFIDENTIAL TREATMENT
contingency, or cause beyond the reasonable control of or occurring without the
fault of OmniVision or of OmniVision's suppliers, or otherwise unavoidable, or
because OmniVision's volume of orders at any time renders deliveries in the
ordinary course of business impractical. In such event, OmniVision shall have
the right, at its election and without liability to Distributor, to (i) cancel
all or any portion of this Agreement; or (ii) perform the Agreement as so
restricted or modified to the extent determined by OmniVision in its sole and
absolute discretion; or (iii) perform the Agreement within a reasonable time
after the causes for non-performance or delay have terminated.
11. Inventory
Distributor is not authorized to establish an inventory of Products. Products
will be ordered from OmniVision to supply firm customer commitments only. In
the event a customer decides not to complete a transaction after Product is
delivered to Distributor, such Product is to be returned to OmniVision for
credit.
12. Returns
a. Distributor shall obtain OmniVision's prior authorization for any
return of Products. Such authorization will not be unreasonably
withheld for return of Products which are obsolete, defective, or
shipped to but not ordered by Distributor. Distributor shall send all
authorized return of Products within thirty (30) days after receiving
OmniVision's authorization, or such returns will be refused. All
returns shall be shipped F.O.B. destination, freight prepaid, to
OmniVision specified location. Return of Products not expressly
authorized hereunder will be refused by OmniVision and returned to
Distributor at Distributor's expense.
b. Return of defective Products under OmniVision's product warranty policy
is governed by that policy.
c. OmniVision will be responsible only for the replacement of defective
Product.
d. Unless specially approved by OmniVision, OmniVision will not accept
return of Products which were purchased and shipped from OmniVision
more than six (6) months prior to the requested date of return.
13. Inventory Records and Inspection
Distributor shall keep current stock, cost and sale records of its inventory of
Products. Distributor's records shall accurately and sufficiently itemize and
describe the kind, type and quantity of such inventory and the cost thereof.
Distributor shall at any reasonable time allow OmniVision, or any of its
agents, to examine, audit or inspect such inventory wherever located and, for
such purposes, to enter Distributor's premises whenever any of such inventory
may be found; or, at OmniVision's option and expense, permit OmniVision to pick
up portions of Distributor's inventory for count by OmniVision and return,
provided Distributor's business is not unreasonably disrupted thereby.
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OmniVision Distributor Agreement
CONFIDENTIAL TREATMENT
14. Trademark
Distributor may so long as this Agreement is in force, and only for the purpose
of advertising and selling Products indicate to the public that it is an
authorized distributor of products manufactured by OmniVision Technologies,
Inc., and advertise such Products under the trademark "OmniVision". Distributor
shall not alter or remove any trademark or trade name applied to the Products
in the manufacture thereof. Permission to display the word "OmniVision" or any
other OmniVision proprietary word or symbol is only as started above and
nothing herein shall grant to Distributor any right, title or interest in the
word "OmniVision" (either alone or in association with other words or names),
or any part thereof or in any other trademark or trade name by OmniVision or
its related companies or in any copyright or good will of OmniVision or related
companies, nor is any permission or right given hereby to Distributor to use
any such trademark or trade name in connection with its corporate firm trade
name or trade style, nor shall Distributor permit a corresponding use of such
trade mark or trade name by a dealer.
15. Advertising and Advertising Assistance
OmniVision may advertise Products and list Distributor's name in its
advertising. Distributor may advertise and promote the sale of Products through
all appropriate media including trade show exhibits, catalogue and direct
mailing, space advertising, educational meetings and sales aids. OmniVision
agrees to allow Distributor to provide a complete listing in Distributor's
catalogue of all Products carried by Distributor.
16. Literature
OmniVision will supply Distributor with reasonable quantities of distributor
price lists and schedules which shall list Products available to be sold by
Distributor. OmniVision may suggest resale prices in its resale price
schedules, but Distributor, in its sole discretion, shall determine prices
charged by Distributor for Products. Distributor shall maintain an adequate
supply of printed sales, technical and product application information as
OmniVision may, from time to time, make available. Such printed material may
or may not be provided free of charge, subject to OmniVision's current
literature pricing policy. If OmniVision approves, at Distributor's request,
Distributor's customers may be added to OmniVision's mailing list.
17. Confidentiality
OmniVision may, from time to time, during the term of this Agreement, furnish
to Distributor confidential information and know-how relating to Products.
This information may be furnished orally or in written form, including
descriptive material, diagrams, specifications and other documents.
Distributor agrees that all such confidential information and know-how made
available to it by OmniVision shall be kept strictly confidential by it, and it
agrees not to divulge any such information or know-how to others without the
prior written consent of OmniVision. Distributor further agrees that it will
not use any confidential information or know-how in connection with the
manufacture by it or by others, on its behalf, of any Products or items similar
thereto. The obligations of Distributor to preserve the secrecy of the
technical information and know-how supplied to it by OmniVision shall survive
any termination of this Agreement.
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OmniVision Distributor Agreement
CONFIDENTIAL TREATMENT
18. Compliance with Laws
Neither party shall commit any act or request the other party to commit any act
which would violate either the letter or spirit of the export control laws,
rules or regulations, and neither party shall fail to take any action
reasonably within its capacity to assure compliance with such laws, rules or
regulations.
Distributor represents and warrants that it shall not, directly or indirectly,
export, re-export or transship Products and/or technical data ("the
Commodities") in violation of any applicable export control laws promulgated
and administered by the government of any country having jurisdiction over the
parties or the transaction(s) contemplated herein.
OmniVision shall have the right to refuse to accept distributor's orders for
Commodities, or to deliver Commodities to fulfill any previously accepted
Distributor order, if OmniVision determines, in good faith, that such proposed
sale or other disposition of the Commodities poses an unreasonable risk of a
violation of any applicable export control law or regulation.
In the event OmniVision refuses to deliver Commodities to fulfill previously
accepted Distributor orders as set forth in the paragraph immediately
preceding, or the necessary export or re-export authorizations are not obtained
within a reasonable period of time, OmniVision, at its option, may cancel the
order or contract, without penalty.
19. Term and Termination
a. The term of this Agreement shall be one (1) year commencing as of the
date first shown on the first page of this document, and this Agreement
shall automatically be renewed thereafter for additional one (1) year
periods at the anniversary dates hereof unless this Agreement is
otherwise terminated as elsewhere provided herein. Neither party is
under any obligation, express or implied, to renew this Agreement or to
otherwise continue their distributorship relationship after this
Agreement expires. After termination, this Agreement shall continue to
govern any transactions between OmniVision and Distributor that arose
prior to expiration. This Agreement may be terminated before expiration
of its term by either party upon written notice to the other party
thirty (30) days in advance, or for cause in accordance with sub-
paragraph (b) below. OmniVision shall have the right to terminate this
Agreement for cause with respect to any of Distributor's marketing
locations, while not terminating the Agreement with respect to the
balance of such locations.
b. OmniVision shall have the right to terminate this Agreement immediately
by written notice to Distributor, if Distributor fails to comply with
any of the terms and conditions set forth in this Agreement, or if
Distributor fails to perform to OmniVision's satisfaction. If either
party hereto shall become insolvent or admit in writing its inability
to pay its debts as they mature, or makes an assignment for the benefit
of its creditors, or to conduct its operations in the normal course of
business, or if either party hereto shall fail to perform any of the
obligations imposed upon it under the terms of this Agreement
irrespective of the nature of the obligations or the type of breach,
the other party shall have the right to immediately terminate this
Agreement by written notice.
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OmniVision Distributor Agreement
CONFIDENTIAL TREATMENT
c. If OmniVision terminates this agreement for cause, then Distributor
shall not be entitled to receive any commission payments otherwise
payable after OmniVision terminates this agreement.
If this agreement expires, or is terminated by OmniVision for its
convenience or by Distributor for cause, then Distributor shall receive
commissions for any sales made by Distributor prior to the date of
expiration or termination that result in shipment of products to an
Account in the Territory within one-hundred-twenty (120) days of the
expiration or termination.
d. Upon the termination or expiration of this Agreement, neither party
shall be liable to the other for any damages, expenditures, loss of
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 or expiration.
e. The termination or expiration of this Agreement shall not relieve or
release either party from making payments which may be owing to the
other party under the terms of this Agreement.
20. Injunction; Governing Law
a. All covenants herein may be enforced by way of injunction obtained from
any duly constituted court having jurisdiction, upon prima facie proof
that either party intends to engage in conduct which would violate the
terms of this Agreement. Such remedy shall be in addition to any other
remedies available to the parties for the breach or threatened breach
of this Agreement.
b. This Agreement and rights of the parties hereto shall be construed and
determined in accordance with the laws of the State of California, USA.
21. Miscellaneous
a. The relationship created between the parties hereto is that of seller
and purchaser, and neither party nor any of its employees, dealers,
customers or agents shall be deemed to be representatives, agents or
employees of the other party for any purchase whatsoever, nor shall
they or any of them have any authority or right to assume or create any
obligation of any kind or nature, express or implied, on behalf of the
other party, nor to accept service of any legal process of any kind
addressed to or intended for the other party.
b. Each party hereto warrants and represents to the other that it is
legally free to enter into this Agreement, that the execution hereof
has been duly authorized, and that the terms and conditions of this
Agreement, and each party's obligations hereunder, do not conflict with
or violate any terms or conditions of any other agreement or commitment
by which such party is bound.
c. This Agreement is intended to be the sole and complete statement of the
obligations of the parties relating to the subject matter hereof, and
supersedes all previous understandings, agreements, negotiations and
proposals as to this Agreement. Except as otherwise provided herein, no
provisions of this Agreement shall be deemed waived, amended or
modified by any party unless such waiver, amendment or modification
shall be in writing and dully signed by
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CONFIDENTIAL TREATMENT
the party against whom the waiver or modification is sought to be
enforced. The paragraph headings are for purposes of convenience only.
d. This Agreement may be executed in several counterparts, each of which
shall be deemed the original, but all of which shall constitute one and
the same instrument.
e. Neither party shall voluntarily or by operation of law, assign this
Agreement or any right accruing to it hereunder or delegate any duty
owed by it, without the prior written consent of the other party. This
Agreement shall inure to the benefit of and be binding upon the parties
hereto, their respective permitted successors in interest and permitted
assigns.
f. Notices hereunder shall be deemed properly given if in writing and
given by telegram, telex, facsimile, certified mail or personal
delivery, addressed to the parties at their addresses set forth above
or any substitute address established after notice, and shall be deemed
effective upon sending or personal delivery.
IN WITNESS WHEREOF, the parties hereto agree and have affixed their signatures
as of the date and year first written above.
For and on behalf of
OmniVision Distributor SEC DEVELOPMENT CO., LTD.
By /s/ RAYMOND WU By /s/ JAN KWOK (Mr.)
________________________________ ___________________________________
Print Name Raymond Wu Print Name Jan Kwok (Mr.)
_________________________ ___________________________
Title Executive V.P. Title Managing Director
______________________________ _________________________________
Date 11/7/2001 Date 10 July, 2001
_______________________________ _________________________________
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OmniVision Distributor Agreement
CONFIDENTIAL TREATMENT
Exhibit A
Exhibit A
---------
OmniVision Product List
Part Number Product Description
- ----------- ----------------------------------------------------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
For and on behalf of
OmniVision Distributor SEC DEVELOPMENT CO., LTD.
Signature /s/ RAYMOND WU Signature /s/ JAN KWOK (Mr.)
____________________________ ____________________________
Date 7/10/01 Date 10 July, 2001
_________________________ ____________________________
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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OmniVision Distributor Agreement
CONFIDENTIAL TREATMENT
Exhibit B
Exhibit B
---------
Distribution Territory
The following Territories are the business locations which are defined to be
the marketing locations for Distributor. Unless discussed and agreed by both
parties, the following Territories are the only appointed business territories
for Distributor:
Mainland China and Hong Kong
For and on behalf of
OmniVision Distributor SEC DEVELOPMENT CO., LTD.
Signature /s/ RAYMOND WU Signature /s/ JAN KWOK (Mr.)
____________________________ ____________________________
Date 7/10/01 Date 10 July, 2001
_________________________ ____________________________
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Exhibit C
Exhibit C
---------
Distributor Customers
Distributor is appointed to make sales to the following identified potential
Customers:
For and on behalf of
OmniVision Distributor SEC DEVELOPMENT CO., LTD.
Signature /s/ RAYMOND WU Signature /s/ JAN KWOK (Mr.)
____________________________ ____________________________
Date 7/10/01 Date 10 July, 2001
_________________________ ____________________________
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CONFIDENTIAL TREATMENT
Exhibit D
Exhibit D
---------
Commission
The commission rates for sales of the Products made on a commission basis as
described in Section 8 Commission Sales is as follows:
----------------
Type of Sale Commission Rate
------------ ---------------
1. Product delivered from OmniVision [***]% of net sales amount
For and on behalf of
OmniVision Distributor SEC DEVELOPMENT CO., LTD.
Signature /s/ RAYMOND WU Signature /s/ JAN KWOK (Mr.)
____________________________ ____________________________
Date 7/10/01 Date 10 July, 2001
_________________________ ____________________________
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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OmniVision Distributor Agreement