International Distributor

Exhibit 10.2


- --------------------------------------------------------------------------------
August Technology Corporation - --------------------------------------------------------------------------------


INTERNATIONAL DISTRIBUTOR


AGREEMENT


This Agreement is made as of the 14th day of June , 1999, between AUGUST TECHNOLOGY CORPORATION, a Minnesota (USA) corporation with a principal place of business at 5237 Edina Industrial Blvd., Edina, Minnesota 55439, USA, (hereafter referred to as "August Technology") and MARUBENI SOLUTIONS CORPORATION, an entity organized and existing under the laws of Japan, having its principal place of business 1-26-20, Higashi, Shibuya-ku, Tokyo 150-0011 Japan (hereafter referred to as "Distributor").


In consideration of the mutual covenants and agreements hereinafter set forth, the parties agree as follows:


The following are the terms and conditions under which August Technology sells and licenses its image inspection technology, vision system controlled manufacturing tools, licensed software programs, and related spare parts specified in Exhibit-A (hereinafter jointly referred to as "Product" or " Products"). Distributor wishes to purchase all or selected Products for resale and commits to actively provide its customers the necessary service and support to successfully market and maintain the Products in the assigned territory.


1. DEFINITIONS


The terms listed below will have the following meaning, unless the context clearly indicates otherwise:


1.1 "AGREEMENT" will mean this International Distributor Agreement
and all Exhibits.


1.2 "COMPETITIVE PRODUCTS" will mean image inspection technology,
vision system controlled manufacturing tools, licensed
software programs, and related spare parts, of substantially
the same functionality Products..


1.3 "PRICE LIST" will mean the published prices that August
Technology shall issue from time to time.


1.4 "TERRITORY" will mean the countries specified in Exhibit-C.


1.5 "MIE" will mean Marubeni Solutions Corporation's subsidiary in
the USA. Specifically, Marubeni International Electronics
Corporation with a principal place of business at 790 Lucerne
Drive, Sunnyvale, California, 94086.


2. APPOINTMENT AS DISTRIBUTOR


August Technology hereby appoints Distributor as an authorized,
independent, exclusive Distributor for the Products, for the purpose of
reselling and servicing the Products directly to its customers in the
Territory. Distributor agrees that it will re-sell Products directly,
without the use of any dealers, sub-agents, and the like except with
August Technology's express written consent.


3. TERM OF AGREEMENT


This Agreement will remain in effect during one (1) year period after
the signed date on this agreement by both parties, and then shall be
automatically renewed thereafter on a year-to-year basis unless
otherwise terminated hereunder. Termination may be made at any time by
either party by providing written notice at least 6 months prior to the
intended termination date.


4. TERRITORY


Distributor will have the exclusive right to actively market, sell, and
promote the Products in the Territory (see Exhibit-C).


5. RESTRICTIONS


5.1 Distributor agrees not to make any sale, transfer, exchange,
or other conveyance of any Products whatsoever to any person
that Distributor knows, or has reason to know, is purchasing
such Products for the purpose of resale without first
notifying August Technology for written approval.


5.2 Distributor will have no rights to the Products, any software
included in the Products, or any improvements in the Products.
Distributor agrees not to copy, manufacture, re-manufacture,
or otherwise modify any Products without the written consent
from August Technology (signed by an officer of the company).
If Distributor is permitted to modify Products to conform to
customer requests or specifications, such modifications must
not degrade the original August Technology operating
specifications or impede the reliability of the Products. Any
modifications performed in violation of this Section 5.2 will
void all warranties.


5.3 Distributor agrees not to promote, market, or sell any
Competitive Products or services, directly or indirectly,
within the Territory with the exception of Products that
Distributor has a Tight to distribute in the Territory on the
date of this Agreement. If any equipment supplier to
Distributor develops or promotes a Competitive product to
August Technology's products, Distributor agrees to
immediately notify August Technology in writing of this
conflict (including a proposed resolution to the conflict).
Distributor agrees not to establish a branch office or other
entity or association with plans to distribute Products
outside the


Territory, or to appoint any sub-Distributor outside the
Territory except with express written consent by August
Technology.


6. PRICE, PAYMENT, TAXES, DUTY & COMMISSION


6.1 Prices for the Products purchased under this Agreement will be
as specified in Exhibit-B. August Technology will have the
right at any time to change its prices and must provide
Distributor with a Sixty (60) day advance written notice of
any pricing changes. Price changes will not apply to unfilled
purchase orders that have been accepted by August Technology
prior to the effective date of the price change.


6.2 Payment by Distributor will be made by bank check in U.S.
Dollars issued by Distributor's subsidiary Marubeni
International Electronics Corp. ("MIE") to August Technology
under the payment terms agreed to as part of this Agreement
(see Exhibit-B). All bank checks will be forwarded to August
Technology via over night "Express Mail Service". Tracking
number will be advised by Marubeni International Electronics
Corp upon delivery.


6.3 Product prices are to be stated in U.S. Dollars and are
Ex-works (as defined by Incoterms 1990) exclusive of all
sales, use, and like taxes. Distributor agrees to pay all
freight, storage fees, bank transfer fees, and all taxes and
duties associated with the sale of Products purchased under
this Agreement.


6.4 All risk of loss to Products will pass to Distributor upon
surrender by August Technology to the carrier at the point of
shipment (Edina, Minnesota, USA.) MIE agrees to make all
arrangements for export, select the carrier, and insure
Products against loss, damage, theft, or destruction upon
surrender to the carrier at August Technology's facility.


6.5 Both Distributor and August Technology agrees that a customer
order has three primary components: (1) project/equipment
specification, (2) purchasing/negotiations, and (3)
In-Warranty service support. The Distributor's purchasing
discount from the August Technology published list price will
be effected by these primary components (see Table-1 and
Exhibit-D).


TABLE-1: Equipment Discount Schedule


----------------- ----------------------- --------------------- ---------------------- --------------------
ORDER LOCATION WHERE LOCATION WHERE LOCATION WHERE % OF STANDARD
POSSIBILITY PROJECT SPECIFIED P.O. ISSUED EQUIP. INSTALLED EQUIP. DISCOUNT
----------------- ----------------------- --------------------- ---------------------- --------------------

1 Territory Territory Territory 100%
----------------- ----------------------- --------------------- ---------------------- --------------------
2 Territory Territory Not In Territory 66 2/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
3 Not In Territory Territory Territory 66 2/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
4 Territory Not In Territory Territory 66 2/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
5 Territory Not In Territory Not In Territory 33 1/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
6 Not In Territory Territory Not In Territory 33 1/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
7 Not In Territory Not In Territory Territory 33 1/3%
----------------- ----------------------- --------------------- ---------------------- --------------------
8 Not In Territory Not In Territory Not In Territory 0%
----------------- ----------------------- --------------------- ---------------------- --------------------


7. PURCHASE ORDERS, SHIPMENTS, CANCELLATIONS & CHANGES


7.1 In order to receive Products, Distributor agrees to deliver to
August Technology a hard copy purchase order through MIE. All
Distributor purchase orders are subject to acceptance at
August Technology. All purchase orders issued by Distributor
will include the following information:


(a) Final customer's name (end-user), and location, and
customer's official purchase order (P.O.) number (If
and when customer's PO number is available).
(b) Distributor purchase order number
(c) "Ship To" location (generally Marubeni International
Electronics Corporation address)
(d) "Bill To" location (generally Marubeni International
Electronics Corporation address) and accounts payable
contact person
(e) Method of shipment, including contact person and
telephone number
(f) Quantity and description of each item being purchased
(g) Details of any options purchased
(h) Pricing
(i) Requested ship date(s)
(j) Power requirements
(k) Environmental requirements - if any (such as
cleanroom specifications)
(l) Any other special requirements, such as customer part
or device drawings and samples. Distributor will
submit a completed "order sheet" indicating in detail
the power, environmental and any other special
requirements such as customer part or device
drawings.


August Technology reserves the right to reject any order that
does not conform to the provisions of this Agreement. All
orders accepted for delivery will be governed exclusively by
the terms and conditions of this Agreement and its
incorporated Exhibits. Unless August Technology expressly
agrees in writing, no additional or different terms and
conditions appearing on the face or reverse side of any order
issued by Distributor will become part of such order.


7.2 No purchase order will be binding on August Technology until
accepted by August Technology in writing. August Technology
agrees to use its reasonable best efforts to accept or reject
a purchase order, and will notify Distributor within three (3)
working days from receipt of order.


7.3 In no event will August Technology accept purchase orders from
any Person other than Distributor. All purchase orders must
originate from Distributor.


7.4 Cancellation.


7.4.1 Distributor may cancel a shipment at no charge up to
sixty (60) days prior to shipment.


7.4.2 Cancellations within sixty (60) days prior to
shipment are treated as follows:


7.4.2.1 Cancellation #1: August Technology assumes
"risk" of cancellation. Distributor will
not be responsible for any penalties for
this cancellation.


7.4.2.2 Cancellation #2: Distributor assumes
"risk" of the next cancellation (following
Cancellation #1). Distributor will be
responsible for accepting original
shipment schedule and fulfillment of
payment obligations to August Technology.


7.4.2.2.1: If an alternate buyer is
found, outside of
Territory, August
Technology agrees to
re-purchase the Product
from Distributor, at
original export pricing,
for resale to alternate
buyer. Distributor agrees
to pay for shipping costs
to alternate buyer if
required (system must be in
"as new" condition and not
used except for
demonstrations in
Distributor's clean room).


7.4.2.3 Cancellation #3: August Technology assumes
"risk" of the next cancellation (following
cancellation #2). Distributor will not be
responsible for any penalties for this
cancellation.


7.4.2.4 Cancellation #4, and after: Distributor
and August Technology will alternate
"risk" of cancellation under same terms as
above repeating the cycle of cancellation
"risk" responsibility.


At any time following any cancellation, both Distributor and
August Technology agree to make best effort to find an
alternate buyer, worldwide.


All cancellation notices must been submitted in writing to
August Technology within three (3) business days following
notification by customer to Distributor.


7.5 August Technology agrees to use its best efforts to meet
scheduled shipment dates. However, August Technology will not
be liable for delay in meeting a scheduled shipment date. If
Products are in short supply, August Technology will allocate
them equitably, at August Technology's discretion, among
Distributor and all other resale channels. August Technology
will only ship an entire order unless otherwise agreed to in
writing by Distributor.


7.6 Rescheduling (Later Delivery). All rescheduling change must be
made at least fifteen (15) days prior to the original shipment
date on the purchase order. In no case will the delay be
greater than sixty (60) days from original shipment date.
Rescheduling will be allowable one time per purchase order,
without cost or liability. Distributor agrees to immediately
provide August Technology with a written notice of any
rescheduling.


7.7 Rescheduling (Earlier Delivery). Distributor may request early
delivery at any time without cost, and August Technology
agrees to use its best efforts to comply with this request.


7.8 August Technology may refuse to ship, or delay the shipment,
of any Products on order, if Distributor becomes delinquent in
performance of its obligations or fails to meet other credit
or financial requirements established by August Technology. No
such cancellation, refusal, or delay will be deemed a
termination of this Agreement by August Technology, unless
August Technology advises Distributor.


7.9 All Products will be considered delivered to Distributor
Ex-works (in accordance with Incoterms 1990) upon transfer to
a common carrier by August Technology at the point of shipment
(Edina, Minnesota, USA).


7.10 In the event of any discrepancy between the provisions of this
Agreement and any Purchase Order, the provisions of such
Purchase Order shall prevail.


8. RELATIONSHIP


8.1 Distributor's relationship to August Technology will be that
of an independent contractor engaged in purchasing and
licensing Products for resale to Distributor customers.
Nothing in this Agreement will be understood to give either
party any power to direct or control the day-to-day activities
of the other. All f ...