International Distributor Agreement

EXHIBIT 10.31



INTERNATIONAL DISTRIBUTOR AGREEMENT



This International Distributor Agreement (the "Agreement") is made and entered into this ___ day of November, 1999, by and between Avanex Corporation, a corporation duly organized and existing under the laws of California, having its principal place of business at 40919 Encyclopedia Circle, Fremont, California 94538 (hereinafter referred to as "Manufacturer") and Hakuto Co., Ltd., a corporation duly organized and existing under the laws of Japan, having its principal place of business at 1-13, Shinjuku 1-chome, Shinjuku-ku, Tokyo 160-8910, Japan (hereinafter referred to as "Hakuto" or "Distributor"),



WITNESSETH:



WHEREAS, Manufacturer is engaged in the business of the manufacture of various photonic processors including the Products hereinafter defined; and



WHEREAS, Hakuto is engaged in the business of the sale and marketing of merchandise throughout the world, including products similar or related to the Products of Manufacturer; and



WHEREAS, Hakuto is desirous of being appointed distributor of the Products in the Territory hereinafter defined.



NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, Manufacturer and Hakuto do hereby agree the terms and conditions set forth below:





1. Distributorship, Products and Territory



1.01 Distributorship. Manufacturer hereby grants to Hakuto during the term of this Agreement the non-exclusive right to sell the Products in the Territory all in accordance with the terms and conditions herein set forth. Distributor shall pursue aggressive sales policies and procedures to realize the maximum sales potential for the Products in the Territory. Manufacturer reserves the right to market its products directly to the House Accounts set forth on Exhibit A.



1.02 Products. The term Products as used herein shall refer to the equipment set forth on Exhibit B attached hereto and made a part hereof, as well as all accessories, attachments, spare parts and renewal parts therefor. Manufacturer shall have the right to modify, alter, improve, change or discontinue any or all of the Products covered by this Agreement but only upon [*] prior written notice to Hakuto. In the event Manufacturer manufactures any new or additional products similar to or related to the Products hereunder, said products, at the option of Hakuto, shall be added to the Products covered by this Agreement.



1.03 Territory. Territory shall have the meaning set forth in Exhibit C.



1.04 Conflict of Interest. Distributor warrants to Manufacturer that it does not currently represent or promote any lines or products that compete with the Products. During the term of this Agreement, Distributor shall not, without Manufacturer's prior written consent, represent, promote or otherwise try to sell within the Territory any lines or products that, in Manufacturer's judgment, compete with the Products covered by this Agreement.





2. Orders and Shipment



2.01 Order and Acceptance. Before accepting order from its customers, Hakuto shall place written order inquiry for the Products with Manufacturer on Hakuto's standard order inquiry form setting forth the quantity of Products, the specifications therefor, and the desired delivery date. Manufacturer shall use its reasonable best efforts to notify Distributor of the acceptance or rejection of an order inquiry and of the assigned delivery date for accepted orders within five (5) days after receipt of the order inquiry. Upon acceptance of the order inquiry by the Manufacturer, Hakuto shall place written orders for the Products with Manufacturer on Hakuto's standard purchase order form setting forth the quantity of Products, the specifications therefor, and the desired delivery date as agreed by Manufacturer. To facilitate Manufacturer's production scheduling, Distributor shall submit purchase orders to Manufacturer at least sixty (60) days prior to the first day of the requested month of delivery. No order shall be binding upon Manufacturer until accepted by Manufacturer in writing, and Manufacturer shall have no liability to Distributor with respect to purchase orders that are not accepted. No partial shipment of an order shall constitute the acceptance of the entire order, absent the written acceptance of such entire order. Manufacturer shall use its reasonable best efforts to deliver Products at the times specified





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either in its quotation or in its written acceptance of Distributor's purchase orders. The Products sold to Hakuto by Manufacturer shall be shipped F.O.B. (as defined in Section 2319 of the California Uniform Commercial Code) Manufacturer's factory at Fremont, CA to the destination in the Territory designated by Hakuto in the purchase order, unless otherwise agreed by the parties. Hakuto will supply a [*] rolling forecast throughout the agreement.





2.02 Reservation of Title. Title to and all risks of loss or damage of the Products shipped to Hakuto from Manufacturer shall be subject to full payment of the Purchase Price therefor. Until such full payment, the Product shall remain the property of Manufacturer. For all Products to which Manufacturer retains title, Distributor shall (i) carry full insurance on the Products throughout the time they are in Distributor's possession and (ii) segregate those Products from other products in Distributor's inventory.



2.03 Terms of Purchase Orders. Distributor's purchase orders submitted to Manufacturer from time to time with respect to Products to be purchased hereunder shall be governed by the terms of this Agreement, and nothing contained in any such purchase order shall in any way modify such terms of purchase or add any additional terms or conditions.



2.04 Import and Export Requirements. Distributor shall, at its own expense, pay all import and export licenses and permits, pay customs charges and duty fees, and take all other actions required to accomplish the export and import of the Products purchased by Distributor. Distributor understands that Manufacturer is subject to regulation by agencies of the U.S. government, including the U.S. Department of Commerce, which prohibit export or diversion of certain technical products to certain countries. Distributor warrants that it will comply in all respects with the export and re-export restrictions set forth in the export license for every Product shipped to Distributor.





3. Price and Terms of Payment



3.01 Prices. The difference between Distributor's purchase price and Distributor's selling price to its customers shall be Distributor's sole remuneration for sale of the Products. The initial prices for Manufacturer's Products shall be delivered by Manufacturer to Distributor within a reasonable time after the date of this Agreement. Said price shall be subject to change by Manufacturer from time to time by [*] days' prior written notice to Hakuto; provided, however, that no such price change shall affect purchase orders accepted by Manufacturer prior to notification of Hakuto of the price change by Manufacturer. Hakuto shall pay all freight, insurance, taxes, duty and customs, and any other charges associated with transportation after shipment and import of the Products.



3.02 Terms of Payment. Unless otherwise agreed by the parties, payment shall be made by Hakuto separately for each purchase order accepted by Manufacturer. Payment by Hakuto to Manufacturer for Products shall be made by cash remittance within thirty (30) days from the invoice date.



3.03 Currency. Currency for payments covered by this Agreement shall be in U.S. Dollars.



3.04 Taxes. Distributor's Purchase Price does not include any federal, state or local taxes that may be applicable to the Products. When Manufacturer has the legal obligation to collect such taxes, the appropriate amount shall be added to Distributor's invoice and paid by Distributor unless Distributor provides Manufacturer with a valid tax exemption certificate authorized by the appropriate taxing authority.





4. Marketing and Advertising



4.01 Hakuto's Undertaking. Hakuto shall exert best efforts to vigorously promote the sale of the Products in the Territory during the term of this Agreement and to develop a market demand for the same in the Territory. Hakuto shall advertise the Products throughout the Territory in appropriate advertising media and in a manner insuring proper and adequate publicity for the Products. Hakuto will ensure the translation into the Japanese language of the following: the leaflets, catalogues, technical literatures and maintenance manuals. Hakuto shall participate training program offered by Manufacturer. Hakuto shall maintain a sales organization which can be best utilized for the promotion of the sales of the Products and shall have the right, at its own discretion, to appoint a sub-dealer or sub-dealers to exploit the Products. The prices at which the Products are resold in the Territory shall be at the sole discretion of Hakuto. Hakuto shall provide a rolling [*] forecast at [*] basis.





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4.02 Manufacturer's Undertaking. Manufacturer shall, from time to time, make available to Hakuto free of charge advertising materials for the marketing of the Products, such as pamphlets, leaflets, calendars, catalogues, posters, and the like. Manufacturer shall also provide Hakuto free of charge service manuals, parts lists and any other servicing information as may be currently available to Manufacturer.



4.03 Fairs and Exhibitions. Hakuto agrees to participate in fairs and exhibitions to exploit the Products in the Territory. The cost of the fairs or exhibitions and displays and the responsibility therefor shall be discussed by the parties prior to the fair or exhibition.





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6. Warranty to Distributor's Cu ...