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EXHIBIT 10.41
NON-EXCLUSIVE DISTRIBUTION AGREEMENT
BETWEEN
D.S.P.C. TECHNOLOGIES, LTD.
AND
TOMEN ELECTRONICS CORP.
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THIS NON-EXCLUSIVE DISTRIBUTION AGREEMENT (this "Agreement") is made and entered
into as of the 29th day of September, 1999, between D.S.P.C. TECHNOLOGIES, LTD.
("DSPC") with its place of business at ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, and TOMEN ELECTRONICS CORP. ("Distributor") with its place of business
at ▇-▇▇, ▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇-▇▇▇▇ ▇▇▇▇▇, which collectively
are referred to hereinafter as "the parties".
NOW, THEREFORE, the parties hereto hereby agree as follows effective April 1,
1999:
1. DISTRIBUTOR SALES
Distributor shall have the non-exclusive right to purchase Products (as
hereinafter defined, the "Product") from DSPC for resale through its
distribution network in the country of JAPAN. Sales of such Product in the
country of JAPAN to other than Distributor directly by DSPC's representatives,
agents, or other authorized distributors are not the subject of this Agreement.
The purchase price for the products shall be [************************]of the
suggested OEM resale price as set forth in Exhibit A (attached hereto and
subject to change by DSPC as otherwise set forth herein) except as otherwise set
forth in Exhibit A or as agreed to in writing by DSPC and Distributor.
Distributor agrees not to sell other products which are competitive with the
Product while this Agreement is in effect to any entity to which Distributor has
sold, is selling, or proposes to sell Product from DSPC. Distributor agrees not
to otherwise sell other products which are competitive with Product while this
Agreement is in effect without ninety (90) days advance notice in writing to
DSPC.
2. PERFORMANCE
(a) Performance under this Agreement shall be in accordance with the terms and
conditions set forth herein and in Exhibit A (DSPC's current published
Distributor Price List as may be amended by DSPC from time to time on advance
notice to Distributor), Exhibit B (DSPC's Terms of Sale, as may be amended by
DSPC from time to time on advance notice to Distributor) and Exhibit C
(Definitions).
Exhibits are hereby incorporated fully into and made a part of this Agreement.
In the event that any part of any Exhibit has been modified by, or is in
conflict with the body of this Agreement, the language in the body of this
Agreement shall prevail.
(b) The relationship of DSPC and Distributor established by this Agreement is
that of independent contractors, and nothing contained in this Agreement shall
be construed to (i) give either party the power to direct and control the
day-to-day activities of the other, (ii) constitute the parties as partners,
joint ventures, co-owners or otherwise as participants in a joint or common
undertaking, or (iii) allow Distributor to create or assume any obligation on
behalf of DSPC for any purpose whatsoever. All financial obligations associated
with Distributor's business are the sole responsibility of Distributor. All
sales and other agreements between Distributor and its customers are
Distributor's exclusive responsibility and shall have no effect on Distributor's
obligation under this Agreement. DSPC shall not create or assume any obligation
on behalf of Distributor for any purpose whatsoever.
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3. TERM OF AGREEMENT
This Agreement shall become effective on the date first written above and shall
remain in effect until terminated pursuant to Section 15 below.
4. PRODUCT
(a) Products covered by this Agreement are as set forth in DSPC's Distributor
Price List attached as Exhibit A, as modified from time to time by DSPC upon
prior written notice to Distributor not less than thirty (30) days before.
(b) Additional Product may be added to this Agreement through mutual agreement
on the conditions applicable to each additional Product.
(c) In the event that DSPC shall agree to supply Distributor with any Product
not listed in Exhibit A, or under conditions not covered in DSPC's Distributor
Price List attached as Exhibit A under this Agreement, certain provisions of
this Agreement may not apply to sales of such Products, if both parties so agree
in writing. Absent such a written agreement, all of the terms of this Agreement
shall apply except for the description of the Product being sold and the price
of such Product. The provisions that may not apply must be determined prior to
acceptance by DSPC of Distributor's purchase order for such Product.
5. PRICING
(a) DSPC shall sell to Distributor, and Distributor shall buy from DSPC Product
at the prices shown in Exhibit A hereto, with payment therefore to be made in
U.S. Dollars. Should this Agreement be terminated by either party, for any
reason, prior to payment of amounts due hereunder or pursuant hereto, such
amount shall be paid as and when due in accordance with the terms hereof. DSPC
will provide Distributor with "suggested OEM resale pricing" for the Product as
guidelines only. Distributor shall have the unilateral right to establish the
prices at which it will sell Product to its customers.
In the event that the price of a certain Product is not listed on Exhibit A, the
price of such Product shall be determined by the parties' mutual written
agreement from time to time.
(b) The pricing shown in Exhibit A does not include any sales or excise taxes
that may be applicable to the Product, and is subject to change at any time by
DSPC. DSPC shall provide Distributor with notice of any such change, and the
effective date thereof, by furnishing written notice to Distributor at least
thirty (30) days prior to such effective date.
(c) In the event that DSPC decreases the published Distributor price in any
Product shown in Exhibit A, DSPC will furnish Distributor with a listing of
Products affected, showing the old price and the new price. Distributor shall be
entitled to receive a credit equal to the difference between the price paid by
the Distributor, less any prior credits granted by DSPC and the new decreased
price for the Product, multiplied by the quantity of such Product in
Distributor's inventory on the effective date of the price reduction that are
not subject to purchase orders previously received. Issuance of such credit by
DSPC may be contingent upon DSPC's
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verification of Distributor's inventory report. All such credits will
forthwith be applied to Distributor's account for subsequent purchase of
Product, and shall not otherwise entitle Distributor to any rebate. All
Product shipped after the effective date of a price decrease will be invoiced
at the new/lower price.
(d) In the event DSPC increases the published price of any Product shown in
Exhibit A, such Product shipped on or after the effective date of such price
increase shall be invoiced at the price in effect at the time Distributor's
purchase order is accepted by DSPC.
(e) The price for each Product on every purchase order issued by Distributor
shall be based on the quantity ordered at the time of purchase order placement
and on DSPC's published price list in Exhibit A, as amended from time to time by
DSPC.
6. DELIVERY, TITLE AND RISK
(a) Shipment of all Product shall be FCA DSPC's point of shipment, freight
collect. Title to, and risk of loss or damage to, Product shall pass to
Distributor, upon delivery to carrier at the shipping point. In the event of
carrier's miss-delivery, DSPC shall aid the Distributor in dealing with the
carrier in tracing the shipment and obtaining delivery. Shipment made more than
five (5) days ahead of schedule or shipments made against orders properly
cancelled pursuant to the terms hereof are made at DSPC's risk and Distributor
shall not be responsible or liable for the Product, but Distributor will aid
DSPC in tracing the shipment and obtaining delivery.
(b) DSPC shall not be liable for delays in delivery or failure to manufacture
due to causes beyond its reasonable control, such as but not limited to: acts of
God, acts or omissions of Distributor, priorities, fire, strikes, floods,
epidemics, quarantine restrictions, riots, war, manufacturing delays caused by
its outside fabrication and manufacturing suppliers, transportation embargoes,
or failure or delays in transportation, inability to secure raw materials or
machinery for the manufacture of its devices ("Force Majeure"). In the event of
any such delay, the date of delivery shall be extended for a period equal to the
time lost by reason of the delay plus ten (10) days. If such event of Force
Majeure continues for a period of more than ninety (90) days, Distributor hereby
shall have the right to forthwith terminate to the extent of the obligation
affected by the event of Force Majeure in writing without prejudice any other
rights and remedies obtained before such termination respectively.
7. EXPORT CONTROL
(a) Distributor agrees and warrants to DSPC that unless prior authorization is
obtained from the United States Department of Commerce, neither Distributor nor
its subsidiaries shall knowingly, after due inquiry and review:
(1) export or re-export, directly or indirectly, any technical data (as
defined in Part 779 of the U.S. Export Administration Regulations), including
software, received from DSPC, or
(2) disclose such technical data or,
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(3) export re-export, directly or indirectly, any direct product of such
technical data, to any destination or country to which the export or release
of such technical data or products is restricted or prohibited by U.S. law.
(b) The foregoing assurance is furnished by Distributor to satisfy the general
license GTDR written assurance requirements under Part 779 of the U.S. Export
Administration Regulations.
(c) Distributor further agrees to obtain any necessary export license or other
documentation prior to export or re-export of any Product or technical data,
including software, acquired from DSPC or any product of such technical data.
(d) Further, Distributor shall give notice of the need to comply with such law
to any person, firm, or entity which it has reason to believe is obtaining any
such technical data or Product from DSPC with intention to export.
(e) Each party shall secure, at its sole expense, such licenses and export and
import documents as are necessary for it to fulfil its obligations under this
Agreement.
(f) This Article shall survive the cancellation or termination of this
Agreement.
(g) DSPC shall attempt to give prior written notice of any contingent tax which
might be imposed by the U.S. Government, including any federal, state, or local
taxes.
(h) To the extent that the Products contain any software to implement the TIA
Common Cryptographic Algorithms (the "Restricted Parts") and as such are subject
to export control restrictions, the parties shall i) have executed the required
agreement with the TIA to obtain the Common Cryptographic Algorithms; ii) have
obtained the controlled subject documents from the TIA; and iii) agree to
control the Software in compliance with the requirements of the TIA Agreement
and U.S., Canadian, and other export restrictions. The Restricted Parts will not
be included in the Products provided to Distributor, until the receiving party
can demonstrate compliance with the required export regulations.
8. ORDERING
(a) All purchases of Products pursuant to this Agreement shall be effected by
the issuance of Purchase Orders by Distributor with the terms and conditions of
this Agreement as set forth in Exhibit B, attached hereto and incorporated
herein by this reference. Such Purchase Orders shall state unit quantities, unit
descriptions, applicable prices, and requested delivery dates, and shall refer
to the forecasts described in Section 8(b) below. Distributor shall endeavor to
provide firm quantity and requested delivery dates consistent with DSPC's lead
time for subject Products
(b) Beginning on September 1, 1999, and on the first day of each month
thereafter, Distributor shall provide DSPC with a one year, nonbinding, rolling
forecast. Within seven (7) business days after receipt of the rolling forecast,
DSPC shall inform Distributor as to the feasibility of such rolling forecast.
DSPC shall use its reasonable efforts to fill Distributor's PO's which are based
on the approved rolling forecast.
(c) All Purchase Orders issued by Distributor are subject to written acceptance
by DSPC.
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9. RESCHEDULING/CANCELLATION
(a) For the purposes of this Article the following definitions shall apply:
i) "Standard Product" is defined as any Product which can be sold to
any customer free from any other customer's proprietary restrictions; and
ii) "Custom Product" is defined as any Product which has been
developed for specific customer and which is not free from that customer's
proprietary restrictions regarding its use or sale.
(b) Distributor may reschedule, only once per purchase order, certain
deliveries on existing orders for Standard Product upon written notice to
DSPC only according to the following schedule:
Number of Days in Advance of
DSPC's committed Delivery Date Permitted Rescheduling
------------------------------ ----------------------
[****************] [***********]
[**************** [********************
**********************] ********************************]
[********************] [********************************
*******************]
(c) Distributor may reschedule certain deliveries on existing orders for Custom
Products upon written notice to DSPC according to the following schedule:
Number of Days in Advance of
DSPC's committed Delivery Date Permitted Rescheduling
------------------------------ ----------------------
[****************] [***********]
[**************** [********************
*********************] *********************
*********]
[********************] [********************************
********************]
(d) Distributor may cancel deliveries on existing orders for Standard or Custom
Products upon written notice to DSPC subject to the following: The parties agree
that in litigation or in arbitration resulting from the damages caused by
cancellation by Distributor, the exact amount of loss would be extremely
difficult or impracticable to prove. Accordingly, the parties wish to make a
commercially reasonable estimate of the damages they would incur in the event of
cancellation by Distributor, and to establish that estimate as liquidated
damages. The parties agree that the liquidated damages provided in this Section
constitute that reasonable estimate. The cancellation charge amounts are as set
forth below:
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Cancellation Charge as a Percentage of Cancelled
Order Value
Number of Days in Advance of
DSPC's committed Delivery Date Standard Product Custom Product
------------------------------ ---------------- --------------
[****************] [***] [***]
[**************** [**] [**]
*********************]
[******************] [*********** [************
*************] *************]
(e) Notwithstanding the cancellation charges in paragraph (d) above,
Distributor may, within [********************] from the placement of any
order with DSPC, cancel that order without penalty as long as DSPC has not
shipped the order.
10. TERMS OF DISTRIBUTION.
(a) Distributor shall only distribute the Products to those customers that are
approved in writing by DSPC prior to any sale by Distributor. With respect to
any Product using CDMA technology, DSPC shall only approve sales by Distributor
to customers that have been approved as customers under DSPC's agreement with
Qualcomm, Inc., as that agreement shall be amended from time to time.
Additionally, Distributor and Distributor's customers must acknowledge in form
satisfactory to DSPC that the sale of CDMA ASICs or Products containing such to
Distributor's customers does not convey to Distributor's customers any
intellectual property rights of Qualcomm, Inc. in such CDMA ASICs, including,
but not limited to, any rights under any patent, trademark, copyright, or trade
secret and that Distributor's customers may not use or sell any CDMA ASIC, alone
or in combination with other components, without a separate license from
Qualcomm under all applicable patents. Distributor's customers' use and sale of
any CDMA ASIC shall be solely in accordance with the terms and conditions of
such license. This Agreement shall not modify or abrogate Distributor's
customers' obligations under any existing license agreement between
Distributor's customers and Qualcomm, Inc., including, but not limited to,
Distributor's customers' obligation to pay all royalties specified thereunder,
and shall not expand or alter Distributor's rights hereunder.
(b) All agreements of sale by Distributor of any Product shall contain a
provision that Distributor's customers agree to purchase Product from
Distributor under the Terms and Conditions contained in Exhibit D, attached
hereto and incorporated herein by this reference, or such other terms and
conditions as may be approved in writing by DSPC. All Purchase Orders received
by the Distributor shall state unit quantities, unit descriptions, applicable
prices, requested delivery dates, F.C.A. point of shipment, payment terms and
shipping instructions. Distributor shall not agree to provide its customers with
Products in lead time shorter than for which it has received confirmation from
DSPC.
(c) The terms set forth on Exhibit D, are the only ones upon which DSPC will
accept orders and Distributor agrees that such terms shall supersede the terms
contained on any purchase order that Distributor provides to DSPC. As an
additional matter, these terms supersede all prior written understandings,
assurances and offers. Any deviation from the terms set forth on Exhibit
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D, shall be deemed to be rejected unless expressly approved by DSPC in
writing. The terms contained in the attached exhibit shall become binding on
both parties with regard to a Purchase Order and DSPC's acceptance of such
Purchase Order.
(d) All agreements of sale by Distributor shall provide that Distributor's
customers shall provide Distributor with a one year rolling nonbinding forecast
prior to the first day of each month, and that within ten (10) business days
from the first day of each month Distributor shall inform Distributor's customer
as to the feasibility of such rolling forecast. Distributor shall promise its
customers no more than its reasonable efforts to fill PO's based on the approved
rolling forecast.
(e) If a customer of Distributor who purchases Products declines to abide by
the terms and conditions of this Article 10 and Exhibit D, Distributor must
get DSPC's written approval of any deviance. Absent such approval,
Distributor shall indemnify and hold DSPC harmless from any claims by
customers or other third parties that arise as a result of, or proximately
from, Distributor's failure to abide by the terms of this Article 10 and
Exhibit D.
11. REPORTS
Distributor shall send to DSPC within five (5) working days after the end of
each month, a written report containing the following information by location:
(a) A detailed inventory of all Products, at the end of said month, with
quantities and prices paid.
(b) A detailed Point of Sale (P.O.S.) activity report including the names of
customers with programs, Products, quantities purchased and the amounts invoiced
to said customers.
(c) Sales projections and bookings targets for the next six (6) months.
(d) "Design in" or custom design status activity.
12. ADVERTISING AND PROMOTION
(a) DSPC agrees to supply Distributor with DSPC's usual sales promotion and
advertising material, in quantities to be mutually agreed upon, without cost to
Distributor and to support the efforts of Distributor with DSPC's usual
advertising and other sales promotion efforts. All such material that
Distributor has not discarded with DSPC's permission shall be returned to DSPC
in good condition, except for reasonable wear, immediately upon demand by DSPC.
(b) Distributor agrees to promote the sale of DSPC's Product, at its own
expense, through various media advertising and other sales promotional efforts
as approved in writing by DSPC. Special advertising or promotion programs may be
agreed upon from time to time in which the parties will agree to some sharing of
the costs.
(c) A cooperative advertising program will be defined with a budget established
which is equivalent to two tenths of one percent (0.2%) of annual sales.
13. WARRANTY
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(a) DSPC shall provide Distributor with the warranty provided in Exhibit B
hereto, except that DSPC agrees to extend the [***********] limited warranty to
Distributor as stated in Exhibit B to a period of [******************] from date
of shipment by DSPC to Distributor, or [**********] from date of shipment from
Distributor to Distributor's customer, whichever is shorter.
(b) THE WARRANTY IN EXHIBIT B AS EXTENDED ABOVE IS PERSONAL TO DISTRIBUTOR, AND
IS EXPRESSED IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, AND IN LIEU OF ALL OTHER OBLIGATIONS OR LIABILITIES ON THE PART OF
DSPC.
14. RETURNS AND REPURCHASES
Distributor may not return any Product purchased from DSPC except for claims
under warranty.
15. TERMINATION
(a) Either party may at any time terminate this Agreement with or without cause
upon one hundred and eighty (180) days written notice after having a review
meeting with the other party to discuss the termination. It is expressly
understood and agreed that the rights of termination set forth above are
absolute and that both parties hereto have considered the making of expenditures
in preparing for performance under this Agreement and possible losses incident
and resulting to them in the event of its termination. Therefore, in agreeing to
said terms of termination, it is with full knowledge of such possibilities and
either party hereto shall not be responsible to the other for damage, or
otherwise, by reason of the fact of termination of the Agreement.
Notwithstanding the foregoing, should this Agreement be terminated by DSPC, or
its successor, within twelve (12) months after a change in control of DSPC,
Distributor shall be entitled to a cancellation fee equal to fifty percent (50%)
of the cumulative discount received by Distributor under this Agreement for the
twelve (12) month period prior to such cancellation. For purposes of this
Section, a "change in control in DSPC" means a change in ownership of more than
fifty percent (50%) of the voting stock of DSPC, or a change in the composition
of its Board of Directors of more than fifty percent (50%).
(b) Distributor warrants that all identifying signs, literature, logos and
other evidence provided by DSPC will be returned to DSPC upon termination of
this Agreement. Distributor will cease production of any such materials
referring to the Products upon termination, and shall cease advertising that
there is any business relationship between the parties.
(c) Should this Agreement be terminated by either party prior to payment of
amounts due hereunder or pursuant hereto, such amount shall be paid as and when
due in accordance with the terms hereof.
(d) In event of termination of this Agreement without cause by DSPC, all orders
received and accepted by DSPC as of the date of such termination notice shall be
unaffected by such notice. DSPC will accept orders from Distributor to the
extent Distributor is contractually obligated to furnish Products to its
customers and does not have such Product in its inventory;
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provided that Distributor notifies DSPC of any and all such transactions in
writing within fifteen (15) days after the notice of termination is given by
DSPC.
(e) If this Agreement is terminated by DSPC with cause, by Distributor without
cause, DSPC shall repurchase at DSPC's option, any of all Products remaining in
Distributor's inventory, subject to the following:
(1) The price to be paid for the repurchase of said inventory shall be
the net amount of Distributor' s cost at time of purchase less any
subsequent price credits issued.
(2) All Product must be new, unused, undamaged, and in good
merchantable condition after inspection and testing by DSPC.
(3) All Product will be shipped FCA Distributor's designated facility,
freight collect.
16. ACCOUNTING
(a) The Terms of Payment are as defined in Exhibit B, Terms and Conditions of
Sale.
(b) DSPC and Distributor shall be jointly responsible for reconciling their
accounts in a timely manner, Distributor adjustments, debit memos, and billbacks
must be forwarded to DSPC within [***************] of the transaction date. DSPC
must reply to any such adjustment, debit memo, and billback-in writing within
[***************] of the date of notification. Any other entries will be
considered valid and closed to further negotiations. The only exception to this
policy will be for formal DSPC audit findings which may be conducted by DSPC
within fifteen (15) months after the date of any transaction.
(c) DSPC may request audits of physical inventory and books of record
pertaining to DSPC Product on an annual basis. No audit shall be retroactive
more than fifteen (15) months. Audit findings will be submitted to the
Distributor in writing within ninety (90) days from the day the audit stated.
Therefore, when the audit findings are received by the Distributor, no
Product will be more than eighteen (18) months old. The terms of this
subsection shall not apply to audits pursuant to subsection 16 (d) below.
(d) Distributor shall keep accurate and complete books and records concerning
any CDMA ASICs it may sell under this Agreement. As applicable, such books and
records shall include the date of transaction involving sales of CDMA ASICs,
including the number of Products sold. Distributor shall furnish DSPC within
thirty (30) days after the end of each calendar quarter a certificate, in the
form as requested by DSPC, signed by a responsible official of Distributor
showing the transactions and corresponding amounts during said calendar quarter
and any other information as may be reasonably requested by DSPC. DSPC may on
reasonable notice, no more than once each calendar year, have an audit conducted
by a major independent international accounting firm, which has not served as
DSPC's or Distributor's auditors during the preceding year, of Distributor's
applicable books and records to confirm the sales information of CDMA ASICs
provided by DSPC. Such independent accounting firm shall (a) maintain the
confidentiality of all information of the Distributor obtained in the course of
such audit except that such noncustomer-specific information as is necessary to
determine the accuracy of the sales
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information on CDMA ASICs provided by DSPC, and (b) execute a nondisclosure
agreement reasonably acceptable to the Distributor to reflect the above. The
cost of such audit shall be borne by DSPC, unless such audit determines that
the Distributor has underreported the sales of CDMA ASICs by the lesser of
(a) more than five percent (5%) or (b) twenty-five thousand dollars
($25,000); in which case, the Distributor shall, in addition to paying the
deficiency plus late payment charges, pay the cost of such audit. The
Distributor shall preserve and maintain all such books and records required
for audit for a period of five (5) years after the calendar quarter for which
the books and records apply.
17. GENERAL
(a) This Agreement, including any Exhibits hereto attached or incorporated by
reference, constitutes the sole and entire Agreement between DSPC and
Distributor concerning the subject matter hereof, supersedes all prior
communications or agreements written, or oral, including without limitation the
Distribution Agreement that existed between the parties or affiliated entities,
and is intended as a complete and exclusive statement of the terms of the
Agreement between the parties. Except as explicitly permitted herein, this
Agreement may be modified only in writing, signed by authorized representatives
of both parties.
(b) Both parties represent and warrant to each other that each has the right
and power to enter into this Agreement, and that there are no outstanding
assignments, grants, licenses, encumbrances, obligations or agreements,
either written, oral or implied, inconsistent with this Agreement.
(c) The transfer, delegation or assignment by either party of this Agreement,
or any of its duties, obligations, or rights hereunder, without the prior
written consent of the other party shall be void, except that DSPC may
transfer this Agreement to any present or future affiliated entities.
(d) THIS PROVISION LIMITS THE POTENTIAL LIABILITY OF DSPC ARISING OUT OF THIS
AGREEMENT AND/OR SALE OF PRODUCTS HEREUNDER. NEITHER PARTY SHALL BE LIABLE TO
THE OTHER FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL (INCLUDING LOSS OF
GOODWILL), PUNITIVE, OR SPECIAL DAMAGES RESULTING FROM PERFORMANCE OR USE OF ANY
GOODS OR SERVICES SOLD PURSUANT TO THIS AGREEMENT, WHETHER SUCH DAMAGES ARE DUE
TO A BREACH OF CONTRACT, BREACH OF WARRANTY, OR NEGLIGENCE. NEITHER PARTY SHALL
BE LIABLE TO THE OTHER FOR DAMAGES FOR INFRINGEMENT OF INTELLECTUAL PROPERTY OF
ANY THIRD PARTY, EXCEPT THAT DISTRIBUTOR SHALL BE LIABLE TO DSPC FOR ANY DAMAGES
CAUSED BY DISTRIBUTOR'S FAILURE TO COMPLY WITH SECTION 10 (a) OF THIS AGREEMENT,
OR DISTRIBUTOR'S MISUSE OF DSPC'S INTELLECTUAL PROPERTY. DSPC SHALL NOT BE
LIABLE TO DISTRIBUTOR FOR ANY AMOUNT IN EXCESS OF THE LESSER OF (i) AN AMOUNT
EQUAL TO THE TOTAL VALUE OF THE PRODUCTS PURCHASED BY DISTRIBUTOR FROM DSPC IN
THE YEAR PRIOR TO ANY CLAIM; OR (ii) $US 1,000,000 FOR EACH CUSTOMER OF
DISTRIBUTOR FOR EACH GENERATION OF CHIPSET PRODUCT.
(e) Without derogating from the above, DSPC shall not be responsible for any
failure to perform or late delivery arising from causes beyond its control.
These causes shall include, not be restricted to, fire, storm, flood,
earthquake, explosion, accident, acts of the public enemy, war,
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rebellion, insurrection, epidemic, quarantine restrictions, labor disputes,
labor shortages, manufacturing delays caused by its outside fabrication and
manufacturing suppliers, transportation embargoes, or failure or delays in
transportation, inability to secure raw materials or machinery for the
manufacture of its devices, acts of God, acts of any government or any agency
thereof, or any judicial action. In the event of any such delay, the date of
delivery shall, at the request of DSPC, be deferred for a period equal to the
time lost by reason of the delay, plus ten (10) days.
In the event of any delay by Distributor, DSPC may decline to make further
shipments without in any way affecting its rights under such order. If, despite
any fault by Distributor, DSPC elects to continue to make shipments, its action
shall not constitute a waiver of any default by Distributor or in any way affect
DSPC's legal remedies of any such default. Right of possession of the Products
sold hereunder shall remain with DSPC, and such Products shall remain personal
property until all payments hereunder (including deferred payments whether
evidenced by notes or otherwise) shall have been made in full in each, and
Distributor agrees to do all acts necessary to perfect and maintain such right
and title in DSPC.
(f) Distributor agrees that DSPC, or its affiliates, owns all right, title, and
interest necessary to enter into this Agreement in the Products now or hereafter
subject to this Agreement, and owns all right, title, and interest in, or is
licensed under, all intellectual property rights including but not limited to
patents, trade marks, trade names, inventions, copyrights, know-how and trade
secrets relating to the design, manufacture, and sale of the Products. The use
by Distributor of any of these property rights is authorized only for the
purposes herein set forth, and upon termination of this Agreement for any reason
such authorization shall cease. Distributor shall take no action to register any
of such property rights under its own or another's name, nor shall it take any
other action contrary to DSPC's or DSPC's licensor's ownership of such property
rights. Nothing in this Agreement gives Distributor the right to modify the
Products in any way, and Distributor shall have no right translate, decompile,
reverse engineer, or adapt the Products or any part thereof.
(g) Distributor acknowledges that by reason of its relationship to DSPC
hereunder, it may have access to certain information and materials concerning
DSPC business, plans, customers, technology, and products (the "confidential
information"). Distributor agrees that it will not use in any way for its own
account or the account of any third party, nor disclose to any third party, any
such confidential information revealed to it by DSPC, and shall use such
confidential information only for the purposes of this Agreement. Distributor
shall hold such confidential information in strictest confidence, and shall take
all measures necessary to protect against the disclosure or misuse of such
information. Distributor shall disclose such confidential information only to
those of its employees with a need to know for the purposes of this Agreement,
who are subject to no less than reasonable terms of confidentiality covering
such confidential information. Distributor shall not publish any technical
description of the Products beyond the description published by DSPC. In the
event of termination of Agreement, there shall be no use or disclosure by
Distributor of any confidential information of DSPC. Distributor shall not
manufacture or have manufactured any devices, components or assemblers utilizing
any of DSPC's confidential information.
(h) All notices required to be given hereunder shall be given in writing by
personal delivery or by a certified letter to the respective address as may be
designated in writing by either party and delivered to the other party. Notice
given by certified mail shall be deemed given five (5)
11
business days after mailing date to the current address of the party. The
current addresses of the parties are as follows:
DSPC: D.S.P.C. TECHNOLOGIES, LTD.
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Distributor: TOMEN ELECTRONICS CORP.
▇-▇▇, ▇▇▇▇▇▇ ▇ ▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇-▇▇▇▇
▇▇▇▇▇
(i) This Agreement and all acts and transactions pursuant hereto and the rights
and obligations of the parties hereto shall be governed, construed, and
interpreted in accordance with the laws of the State of California, U.S.A.
(j) Any dispute between the parties arising out of this Agreement shall be
submitted to final and binding arbitration of Santa Clara, California, U.S.A.,
under the then current Arbitration Rules and supervision of the American
Arbitration Association, upon written notification and demand by either party
hereto. The American Arbitration Association shall be requested to submit a list
of prospective arbitrators experienced in commercial contracts involving the
semiconductor industry, and the parties shall select a single arbitrator from
such list to conduct the arbitration. The arbitrator may not award punitive or
exemplary damages, and the decision and award of the arbitrator shall be final
and binding and may be entered by any court of competent jurisdiction. The
parties hereto agree to pay their own attorneys' fees associated with the
arbitration, and to pay the other costs and expenses of the arbitration as the
rules of the American Arbitration Association provided. The provisions of
California Code of Civil Procedure Section 1283.05 permitting the taking of
depositions and obtaining discovery shall be applicable to any arbitration.
Nothing herein shall prevent the parties from seeking interim relief in any
court with competent jurisdiction.
(k) The following sections shall survive termination of this Agreement: 7, 13,
16, 17 and sections 7, 8, and 9 of Exhibit B.
(l) The terms and conditions herein contained together with the Exhibits
attached hereto and incorporated by reference constitute the entire and final
Agreement between the parties with respect to the subject matter hereof,
supersede all previous communications, representations, understanding or
agreements, either oral or written, between the parties with respect to such
subject matter, and shall take precedence over any additional or conflicting
terms which may be contained in either party's Quotations, Purchase Orders,
Acknowledgements or invoices.
(m) No agreement or understanding varying or extending any of the terms or
provisions hereof shall be binding on either party unless in writing and signed
by duly authorized representative of both parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first written above.
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D.S.P.C. TECHNOLOGIES,LTD. TOMEN ELECTRONICS CORP.
By: /s/ G. Hilevitz By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------ ---------------------------
/s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------
Printed Name: G. Hilevitz Printed Name: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------- ----------------------
▇. ▇▇▇▇
--------------------
Title: President Title: President
-------------------------- ------------------------
Date: October 5, 1999 Date: September 30, 1999
--------------------------- ------------------------
13
EXHIBIT A
D.S.P.C. TECHNOLOGIES, LTD. DISTRIBUTOR PRICE LIST
TO BE PROVIDED
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[****] Confidential Treatment
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EXHIBIT B
D.S.P.C. TECHNOLOGIES, LTD. ("SELLER") AND
TOMEN ELECTRONICS CORP. ("BUYER")
TERMS AND CONDITIONS OF SALE
1. GENERAL: The terms and conditions of sale contained herein apply to all
quotations made and purchase orders entered into by the Seller. The said terms
and conditions may in some instances conflict with some of the terms and
conditions affixed to the form order blank and/or specified by the Buyer.
Therefore, acceptance of the Buyer's order is made only on the express
understanding and condition that insofar as the terms and conditions of this
acceptance conflict with any terms and conditions of the Buyer's order, the
terms and conditions of this acceptance shall govern, irrespective of whether
the Buyer accepts these conditions by written acknowledgment, by implication, or
acceptance and payment of goods ordered thereunder. Seller's failure to object
to provisions contained in any communication from Buyer shall not be deemed a
waiver of the provisions contained herein. Any amendment or deviation from terms
and conditions of this Exhibit B must specifically be agreed to in writing by
the general manager of the Seller before becoming binding on either the Seller
or the Buyer.
All orders or contracts must be approved and accepted by the Seller at its home
office.
The said terms and conditions of sale shall be applicable whether or not they
are attached to each order sheet or enclosed with the Product to be sold or sold
hereunder.
2. PRICES: Irrespective of any prices quoted by Seller or listed on Buyer's
order, an order is accepted only at the prices shown on Seller's acknowledgment.
3. TAXES: All prices are quoted, all orders accepted, and all ▇▇▇▇▇▇▇▇
rendered exclusive of all excise, sales, use and similar taxes, and all
shipping, freight and insurance expenses. Consequently, in addition to the
prices specified herein, the amount of any present or future excise, sales,
use or similar tax applicable to the sale of the Product hereunder shall be
paid by Buyer; or, in lieu thereof Buyer shall provide Seller with a tax
exemption certificate, to the taxing authorities.
4. TERMS AND METHOD OF PAYMENT: Where Seller has extended credit to Buyer,
terms of payment shall be net [**************] from date of invoice covering
the Product. No discounts are authorized. The amount of credit may be changed
or credit withdrawn by Seller at any time. On any order on which credit is
not extended by Seller, shipment or delivery shall be made, at Seller's
election, Cash With Order (in whole or part), C.O.D. or Sight Draft attached
to ▇▇▇▇ of Lading or other shipping documents, with all costs of collection
for the account of Buyer.
If, in the judgment of the Seller, the financial condition of the Buyer at any
time does not justify continuation of production or shipment on the terms of
payment originally specified, the Seller may require full or partial payment in
advance and, in the event of the bankruptcy or insolvency of the Buyer or in the
event any proceeding is brought, Seller shall be entitled to cancel any order
1
then outstanding and shall receive reimbursement for its cancellation charges or
require full or partial payment in advance.
Each shipment shall be considered a separate independent transaction, and
payment therefore shall be made accordingly.
5. TITLE AND DELIVERY: All sales are made FCA point of shipment. Seller's
title passes to Buyer and Seller's liability as to delivery ceases upon
making delivery of material purchased hereunder to Buyer's designated carrier
at shipping point in good condition. All claims for damages must be filed
with the carrier. All shipments will normally be made by Air Freight. Unless
specific instructions from Buyer specify which designated carrier is to be
used, the Seller will exercise his own discretion.
Products shall be shipped on the date specified in the accepted purchase order.
Such shipment date shall be determined in accordance with the lead-time agreed
upon in writing by the parties prior to placement of the purchase order by Buyer
to Seller. In the event that Seller anticipates not meeting an agreed upon
delivery date, Seller will notify Buyer with a revised date, provided that
Seller has given notice at least twenty (20) days before the scheduled delivery
date.
Without derogating from the above, Seller shall not be responsible for any
failure to perform or late delivery arising from causes beyond its control.
These causes shall include, but not be restricted to, fire, storm, flood,
earthquake, explosion, accident, acts of the public enemy, war, rebellion,
insurrection, epidemic, quarantine restrictions, labor disputes, labor
shortages, manufacturing delays caused by its outside fabrication and
manufacturing suppliers, transportation embargoes, or failure or delays in
transportation, inability to secure raw materials or machinery for the
manufacture of its devices, acts of God, acts of the Federal Government or any
agency thereof, or any judicial action. In the event of any such delay, the date
of delivery shall, at the request of the Seller, be deferred for a period equal
to the time lost by reason of the delay plus ten (10) days.
In the event of any delay by Buyer, Seller may decline to make further shipments
without in any way affecting its rights under such order. If, despite any
default by Buyer, Seller elects to continue to make shipments, its action shall
not constitute a waiver of any default by Buyer or in any way affect Seller's
legal remedies of any such default. Right of possession of the Products sold
hereunder shall remain with Seller and such Products shall remain personal
property until all payments hereunder (including deferred payments whether
evidenced by notes or otherwise) shall have been made in full in each, and Buyer
agrees to do all acts necessary to perfect and maintain such right and title in
Seller.
6. ASSIGNMENTS: The Buyer shall not assign his order or any interest therein
or any rights thereunder without the prior written consent of Seller.
7. PATENTS:
(a) Buyer shall indemnify, defend and hold Seller harmless against any
expenses, damages, costs and attorneys fees resulting from any claim, suit or
proceeding brought for direct or indirect infringement of patents, trademarks
copyrights, trade secrets or other intellectual property right or unfair
competition arising from: (i) compliance with Buyer's, or third party's as
directed by Buyer, designs or specifications or instructions; (ii) compliance
with any third
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party or independent group's telecommunications' standard; (iii) use,
combination, integration of any product purchased hereunder with software or
hardware not provided by Seller; or (iv) a claim that a manufacturing or
other process utilizing any product or any part thereof furnished hereunder,
directly or indirectly infringes any patent or other intellectual property
right of any third party under the laws of the United States or any other
country.
(b) Except in such cases as specified in Paragraph 7(a) hereof, Seller shall
defend any suit or proceeding brought against Buyer so far as it is based on a
claim that any Product, or any part thereof by itself, furnished hereunder
directly or indirectly infringes any patent of the United States or any other
country, if notified promptly of such claim in writing and given authority,
information and assistance (at Seller's expenses) for the defense of same, and
Seller shall pay all damages, costs, and attorneys' fees awarded therein against
Buyer, subject to any dollar limitation set forth in Paragraph 9 below. In case
any Product or any part thereof is in such suit held to directly or indirectly
infringe, and the sale, offer for sale, or importation of any Product is
enjoined, Seller shall, in its sole discretion and at its own expense, either
procure for Buyer the right to continue selling, offering for sale, and
importing the Product or part, or replace same with a non-infringing product (or
modify the Product so that it does not infringe), or accept the return of the
Product or part and refund the purchase price and the transportation costs
thereof. The foregoing states the entire liability of the Seller for patent
infringement by the Product or any part thereof and refers solely to products
held in inventory by Buyer, or Buyer's customers, and shall not cover damages of
any type whatsoever in connection with any Product or part already sold.
Sale of any Product or any parts thereof, hereunder confers on the Buyer no
license under any patent or other intellectual property rights of Seller or of
Qualcomm, Inc. governing or relating to (a) the structure of any devices to
which the Products or parts may be applied, or (b) a process or machine in
connection with which they may be used.
8. WARRANTIES AND ADJUSTMENTS:
(a) Products of Seller are warranted to be free from defects in materials and
workmanship and to meet the applicable specifications when tested to published
specifications for a period of [***********] from date of shipment. THE
FOREGOING IS IN LIEU OF ANY OTHER WARRANTY, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, ALL OF WHICH OTHER WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. The
liability of Seller under this warranty is limited solely in replacing, or
repairing, or issuing credit (at the discretion of Seller) for such Products
that become defective or fail to meet the specifications during such [******]
period, provided that, Seller will not be liable under this warranty unless (i)
Buyer promptly notifies Seller in writing within a reasonable time period upon
discovery of defects or failure to meet specifications, (ii) Buyer returns the
defective unit to Seller, transportation charges paid by Seller, (iii) Seller
receives the defective unit for adjustment no later than [************]
following the last day of the warranty periods, and provided further that Seller
will not be liable under this warranty if such defects or failure have been
caused by misuse, neglect, improper installation, repair, alteration or
accident. Any authorization for repairs or alteration must be in writing or
prevent voiding warranty. IN NO EVENT SHALL SELLER BE LIABLE TO BUYER FOR LOSS
OF PROFITS, OR LOSS OF USE BASED UPON A CLAIM FOR BREACH OF WARRANTY. Any
Product which has
3
either been replaced or repaired under the provisions of this warranty
provision shall have warranty coverage for the remaining period of time of
the originally shipped Product.
(b) Seller's warranties as hereinabove set forth shall not be enlarged,
diminished or affected by, and no obligation or liability shall arise or grow
out of, Seller's rendering of technical advice or service in connection with
Buyer's order or the products furnished hereunder.
9. SELLER SHALL NOT BE LIABLE TO BUYER FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL (INCLUDING LOSS OF GOODWILL), PUNITIVE, OR SPECIAL DAMAGES
RESULTING FROM PERFORMANCE OR USE OF ANY GOODS OR SERVICES SOLD PURSUANT TO
THIS AGREEMENT, WHETHER SUCH DAMAGES ARE DUE TO A BREACH OF CONTRACT, BREACH
OF WARRANTY, OR NEGLIGENCE. SELLER SHALL NOT BE LIABLE TO BUYER FOR ANY
AMOUNT IN EXCESS OF THE LESSER OF (i) AN AMOUNT EQUAL TO THE TOTAL VALUE OF
THE PRODUCTS PURCHASED BY BUYER FROM SELLER IN THE YEAR PRIOR TO ANY CLAIM;
OR (ii) $US 750,000 FOR EACH CUSTOMER OF BUYER FOR EACH GENERATION OF PRODUCT.
4
EXHIBIT C
DEFINITIONS
A. TERMINATION FOR CAUSE
Any of the following events or occurrences are defined as a breach of the
Agreement, giving the injured party the right to terminate the Agreement for
cause, such termination exercisable by the injured party at its option. The
waiver of any instance of breach under the Agreement shall not constitute
waiving of the right to terminate the Agreement for any subsequent or like
breach.
(1) Any proceeding in bankruptcy or insolvency filed by or against either
party, or appointment of a Receiver or Trustee for such party or of a
substantial assignment for the benefit of the creditors of either party.
(2) Failure by either party to substantially perform any material covenant,
obligation or warranty set forth in the Agreement; or violation by either party
of any material covenant, obligation, agreement or warranty set forth in the
Agreement.
(3) Any significant change in ownership of either party that adversely affects
the relationship of the parties except for a change of control of DSPC.
B. TERMINATION WITHOUT CAUSE
Termination without cause is the termination of the Agreement, by either party,
upon the unilateral action of the terminating party for its primary convenience
and interest, for reasons other than those defined as breach.
C. DISCONTINUANCE
Product will be considered discontinued by manufacturer if it is removed from
DSPC's Distributor Price List upon one hundred twenty (120) days advance written
notice to Distributor.
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EXHIBIT D
TOMEN ELECTRONICS CORP. ("SELLER") AND
____________________________ ("BUYER")
TERMS AND CONDITIONS OF SALE
1. TERMS OF SALE AND PURCHASE.
These terms and conditions of sale govern the relationship between Seller
and Buyer with respect to the sale and purchase of the products (the "Products")
originally supplied to Seller by D.S.P.C. TECHNOLOGIES, LTD. ("DSPC"). These
terms are the only ones upon which Seller will accept orders, and Buyer agrees
that such terms shall supersede the terms contained on any purchase order that
Buyer provides to Seller. As an additional matter, these terms supersede all
prior written understandings, assurances and offers between the parties. Buyer
and Seller agree that any attempt to vary the terms specified herein, or that
propose additional terms to be included in any purchase order that Buyer may
issue, shall not be effective. Any such proposal shall be deemed to be rejected,
unless expressly approved by Seller in writing. Seller's failure to object to
provisions contained in any communication from Buyer shall not be deemed a
waiver of the provisions contained herein. Any amendment of, or deviation from,
these Terms and Conditions of Sale must specifically be agreed to in writing by
the general manager of the Seller before becoming binding on either the Seller
or the Buyer. All purchase orders or contracts must be approved and accepted by
the Seller in writing.
The said Terms and Conditions of Sale shall be applicable whether or not
they are attached to each order sheet or enclosed with the Product sold
hereunder.
2. PRICES, SHIPMENTS AND PAYMENT.
2.1 PRICES; TAXES. Irrespective of any prices quoted by Seller or
listed on Buyer's order, an order is accepted only at the prices shown on
Seller's acknowledgment. All prices are quoted, all orders accepted and all
▇▇▇▇▇▇▇▇ rendered exclusive of all excise, use and similar taxes. Consequently,
in addition to the prices specified, the amount of any such tax applicable to
the sale of the Product sold hereunder, shall be paid by Buyer, or, in lieu
thereof, Buyer shall provide Seller with a tax exempt certificate for the taxing
authorities.
2.2 TERMS AND METHOD OF PAYMENT. Where Seller has extended credit to
Buyer, terms of payment shall be [*************] days from date of invoice
covering the Product. No discounts are authorized. The amount of credit may be
changed or credit withdrawn by Seller at any time. For any order on which credit
is not extended by Seller, shipment or delivery shall be made, at Seller's
election, Cash With Order (in whole or part), C.O.D. or Sight Draft attached to
▇▇▇▇ of Lading or other shipping documents, with all costs of collection for the
account of Buyer.
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If, in the judgment of the Seller, the financial condition of the
Buyer at any time does not justify continuation of production or shipment on the
terms of payment originally specified, the Seller may require full or partial
payment in advance and, in the event of the bankruptcy or insolvency of the
Buyer or in the event any proceeding is brought, Seller shall be entitled to
cancel any order then outstanding, and shall receive reimbursement for its
cancellation charges or require full or partial payment in advance.
Each shipment shall be considered a separate independent transaction,
and payment therefore shall be made accordingly.
2.3 ORDERS. All purchases of Products pursuant to this Agreement
shall be effected by the issuance of purchase orders by Buyer. Such purchase
orders shall state unit quantities, unit descriptions, applicable prices, and
requested delivery dates, and shall refer to the forecasts described in
Section 2.4 below. Buyer shall endeavor to provide firm quantity and
requested delivery dates consistent with Seller's lead time for subject
products. All purchase orders issued by Buyer are subject to written
acceptance by Seller.
2.4 FORECASTS. Beginning on the first date of the calendar month
after the date that this Agreement is executed, and on the first day of each
month thereafter, Buyer shall provide Seller with a one (1) year, nonbinding,
rolling forecast. Within seven (7) business days after receipt of the rolling
forecast, Seller shall inform Buyer as to the feasibility of such rolling
forecast. Seller shall use its reasonable efforts to fill Buyer's purchase
orders which are based on the approved rolling forecast.
2.5 CANCELLATION OF PURCHASE ORDER AND RETURN OF PRODUCTS.
(a) For the purposes of this Article the following definitions shall apply:
"Standard Product" is defined as any Product which can be sold to any customer
free from any other customer's proprietary restrictions; and "Custom Product" is
defined as any Product which has been developed for specific customer and which
is not free from that customer's proprietary restrictions regarding its use or
sale.
(b) Buyer may reschedule, only once per purchase order, certain deliveries on
existing orders for Standard Product upon written notice to Seller only
according to the following schedule:
Number of Days in Advance of
committed Delivery Date Permitted Rescheduling
---------------------------- ----------------------
[*****************] [**********]
[**************** [********************
*********************] ********************************]
[*******************] [********************************
*******************]
(c) Buyer may reschedule certain deliveries on existing orders for Custom
Products upon written notice to Seller according to the following schedule:
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Number of Days in Advance of
committed Delivery Date Permitted Rescheduling
---------------------------- ----------------------
[****************] [**********]
[**************** [********************
*********************] ***********************
*********]
[*******************] [********************************
*******************]
(d) Buyer may cancel deliveries on existing orders for Standard or Custom
Products upon written notice to Seller subject to the following: The parties
agree that in litigation or in arbitration resulting from the damages caused by
cancellation by Buyer, the exact amount of loss would be extremely difficult or
impracticable to prove. Accordingly, the parties wish to make a commercially
reasonable estimate of the damages they would incur in the event of cancellation
by Buyer, and to establish that estimate as liquidated damages. The parties
agree that the liquidated damages provided in this Section constitute that
reasonable estimate. The cancellation charge amounts are as set forth below:
Cancellation Charge as a Percentage of Cancelled
Order Value
Number of Days in Advance of
committed Delivery Date Standard Product Custom Product
----------------------- ------------------------------------------------
[****************] [***] [***]
[**************** [**] [***]
*********************]
[*******************] [************ [************
*************] *************]
2.6 TITLE, DELIVERY AND DELAY. All sales are made FCA point of
shipment. Seller's title passes to Buyer, and Seller's liability as to delivery
ceases upon making delivery of material purchased hereunder to carrier at
shipping point. All claims for damages must be filed with the carrier. All
shipments will normally be made by Air Freight. Unless specific instructions
from Buyer specify which of the foregoing methods of shipment is to be used
and/or which carrier is to be used, the Seller will exercise his own discretion.
Products shall be shipped on the date specified in the accepted
purchase order. Such shipment date shall be determined in accordance with the
lead-time agreed between the parties. In the event that Seller anticipates not
meeting an agreed upon delivery date, Seller will notify Buyer with a revised
date, provided that Seller has given notice at least twenty (20) days before the
scheduled delivery date.
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Without derogating from the above, Seller shall not be responsible for
any failure to perform or delayed deliveries arising from causes beyond its
control. These causes shall include but not be restricted to fire, storm, flood,
earthquake, explosion, accident, acts of the public enemy, war, rebellion,
insurrection, epidemic, quarantine restrictions, labor disputes, labor
shortages, inability or poor performance by the fabrication or manufacturing
facilities, transportation embargoes, or failure or delays in transportation,
inability to secure raw materials or machinery for the manufacture of its
devices, acts of God, acts of the Federal Government or any agency thereof,
judicial action and failure of its Supplier to make timely supply of the
Products.
In the event of any such delay, the date of delivery shall, at the
request of the Seller, be deferred for a period equal to the time lost by reason
of the delay plus twenty (20) days.
In the event of any delay by Buyer, Seller may decline to make further
shipments without in any way affecting its rights under such order. If despite
any default by Buyer, Seller elects to continue to make shipments, its action
shall not constitute a waiver of any default by Buyer or in any way affect
Seller's legal remedies of any such default. Right of possession of the Products
sold hereunder shall remain with Seller and such Products shall remain personal
property until all payments hereunder (including deferred payments whether
evidence by notes or otherwise) shall have been made in full in each, and Buyer
agrees to do all acts necessary to perfect and maintain such right and title in
Seller.
3. WARRANTY.
3.1 WARRANTY. Seller warrants that all Products to be
purchased hereunder shall be free from defects in materials and workmanship
for a period of [*****] year from the date of shipment of the Products to
Buyer. The Warranty does not cover any default or damage resulting from: (i)
any breakage or wear and tear; (ii) misuse, improper installation,
maintenance, repair, alteration, operation or care; (iii) accident, fire,
war, flood, force majeure, sabotage, or any uncontrolled circumstances that
Seller, as a reasonable producer, cannot control. The liability of Seller
under this warranty is limited solely to replacing, or repairing, or issuing
credit (at the discretion of Seller) for such Products that become defective
during such [**********] period, provided that, Seller will not be liable
under this warranty unless (i) Seller is promptly notified in writing by
Buyer within reasonable time period upon discovery of defects or failure to
meet specifications, (ii) the defective unit is returned to Seller,
transportation charges paid by Seller. Any authorization for repairs or
alteration must be in writing or prevent voiding warranty. IN NO EVENT SHALL
SELLER BE LIABLE TO BUYER FOR LOSS OF PROFITS, OR LOSS OF USE BASED UPON A
CLAIM FOR BREACH OF WARRANTY. Any Product which has either been replaced or
repaired under the provisions of this warranty provision shall have warranty
coverage for the remaining period of time of the originally shipped Product.
3.2 LIMITATION ON WARRANTY. THE ABOVE WARRANTY IS EXCLUSIVE TO
THE BUYER AND IS EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED.
SELLER SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE AND MAKES NO REPRESENTATIONS REGARDING SUITABILITY FOR
USE OR PERFORMANCE. SELLER'S WARRANTIES AS HEREINABOVE SET FORTH, SHALL NOT BE
ENLARGED OR AFFECTED BY, AND NO OBLIGATION OR LIABILITY SHALL
4
ARISE OR GROW OUT OF, SELLER'S RENDERING OF TECHNICAL ADVICE OR SERVICE IN
CONNECTION WITH BUYER'S ORDER OR THE PRODUCTS FURNISHED HEREUNDER.
4. CONFIDENTIAL INFORMATION. Buyer shall use all reasonable efforts to
protect and preserve the confidentiality of any information, in any medium,
which is received from Seller in connection with these Terms and Conditions or
any other agreement between Buyer and Seller, whether such information
originates from Seller or a third party ("Confidential Information"), and to
prevent any misuse of such Confidential Information. Without the written consent
of Seller, Buyer further agrees not to disclose any Confidential Information nor
to use any Confidential Information, except to the extent required for Buyer's
internal use of the Products according to their specifications.
5. INTELLECTUAL PROPERTY RIGHTS. Buyer acknowledges that D.S.P.C.
Technologies Ltd. or its affiliates ("DSPC") or certain licensor's of DSPC have
certain right intellectual property rights including but not limited to patents,
trade marks, trade names, inventions, copyrights, know-how and trade secrets
relating to the design, manufacture, or operation of the Products. Buyer shall
take no action to register any of such property rights under its own or
another's name, nor shall it take any other action contrary to DSPC's, or its
licensor's, ownership of such property rights. Nothing in this Agreement gives
Buyer the right to modify the Products in any way, and Buyer shall have no right
to translate, decompile, reverse engineer, or adapt the Products or any part
thereof.
6. REMEDIES AND DEFAULT. In the event that Buyer shall default in a
performance of any its obligations under these Terms and Conditions ("default")
and fails to cure, remedy or correct such default within thirty (30) days of
receipt of written notice from Seller, then Seller may at any time thereafter
terminate these Terms and Conditions upon written notice effective immediately.
Any required notice periods set forth herein shall run concurrently. For the
purposes of this Section, and in addition to any other act of default hereunder
(i) the entering into or filing by a party of a petition, arrangement or
proceeding seeking an order for relief under the bankruptcy laws of the United
States or similar laws of any other jurisdiction, a receivership for any of its
assets, a composition with or assignment for the benefit of its creditors, a
readjustment of debt, or its dissolution or liquidation, and (ii) the failure to
provide to Seller, upon request, reasonable assurances of future performance,
shall be considered an event of default hereunder. Except as is expressly stated
herein to the contrary, any termination of these Terms and Conditions or other
exercise of rights and remedies upon a default as may be herein, shall be in
addition to any rights or remedies provided by law, at equity or under these
Terms and Conditions; provided, however, that in no event shall either party
have any liability for indirect or consequential damages resulting from a
default of its obligations under these Terms and Conditions.
7. INDEMNITY.
7.1 BUYER'S INDEMNITY. Buyer shall indemnify, defend and hold Seller
harmless against any expenses, damages, costs and attorneys' fees resulting from
any claim, suit or proceeding brought for infringement of patents, trademarks,
copyrights, trade secrets, other intellectual property rights, or unfair
competition arising from: (i) compliance with Buyer's (or a third party as
directed by Buyer) designs or specifications or instructions; (ii) compliance
with
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[****] Confidential Treatment
Requested
any third party or independent group's telecommunications standard; (iii)
use, combination, or integration of any Product purchased hereunder with any
non-DSPC software or hardware; or (iv) a claim that a manufacturing or other
process utilizing any Product or any part thereof furnished hereunder,
constitutes either direct or contributory infringement of any patent or other
intellectual property right of any third party under the laws of the United
States or any other country. .
7.2 SELLER'S INDEMNITY Except in such cases as specified in Paragraph
7.1 above, Seller shall defend any suit or proceeding brought against Buyer so
far as it is based on a claim that any Products, or any part thereof by itself,
furnished hereunder directly but not indirectly infringes any patent issued in
the United States, or any other country, if notified promptly of such claim in
writing and given authority, information and assistance (at Seller's expense)
for the defense of same, and Seller shall pay all damages, costs, and attorneys'
fees awarded therein against Buyer, subject to the dollar limitation set forth
in Paragraph 8.1 below. In case any Product or any part thereof is in such suit
held to directly (but not indirectly) infringe, and the sale, offer for sale,
use, or importation of any Product or part is enjoined, Seller shall, in its
sole discretion and at its own expense, either procure for Buyer the right to
continue selling, offering for sale, using and importing the Product or part, or
replace same with a non-infringing product, or accept the return of the Product
or part and refund the purchase price thereof. The foregoing states the entire
liability of the Seller for patent infringement by the Product or any part
thereof.
7.3 NO LICENSE. Sale of Products or any parts thereof,
hereunder confers on the Buyer no license under any patent or other right of
DSPC or its licensors governing or relating to (a) the structure of any devices
to which the Products or parts may be applied, or (b) a process or machine in
connection with which they may be used.
8. MISCELLANEOUS
8.1 LIMITATION OF LIABILITY AND REMEDIES. NEITHER SELLER NOR ITS
SUPPLIER, DSPC, SHALL BE LIABLE TO BUYER FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL (INCLUDING LOSS OF GOODWILL), PUNITIVE, OR SPECIAL DAMAGES
RESULTING FROM PERFORMANCE OR USE OF ANY GOODS OR SERVICES SOLD PURSUANT TO THIS
AGREEMENT, WHETHER SUCH DAMAGES ARE DUE TO A BREACH OF CONTRACT, BREACH OF
WARRANTY, OR NEGLIGENCE. NEITHER PARTY, NOR DSPC, SHALL BE LIABLE TO THE OTHER
FOR DAMAGES FOR INFRINGEMENT OF INTELLECTUAL PROPERTY OF ANY THIRD PARTY, EXCEPT
THAT BUYER SHALL BE LIABLE TO SELLER AND TO DSPC FOR ANY DAMAGES CAUSED BY
BUYER'S FAILURE TO COMPLY WITH SECTION 8.6 OF THIS AGREEMENT, OR BUYER'S MISUSE
OF DSPC'S INTELLECTUAL PROPERTY. NEITHER SELLER NOR ITS SUPPLIER DSPC SHALL BE
LIABLE TO BUYER FOR ANY AMOUNT IN EXCESS OF THE LESSER OF (i) AN AMOUNT EQUAL TO
THE TOTAL VALUE OF THE PRODUCTS PURCHASED BY BUYER FROM SELLER IN THE YEAR PRIOR
TO ANY CLAIM; OR (ii) $US 750,000 for each generation of a chipset. Any action
against Seller hereunder must be commenced within [**********] after the cause
of action has accrued.
8.2 GOVERNING LAW AND JURISDICTION. These Terms and Conditions and its
performance shall be governed by, be subject to and be construed in accordance
with the laws
6
of Japan. Judgment upon the award rendered and/or the enforcement
of injunctive relief herein provided may be entered in any court having
competent jurisdiction. The parties agree to submit to the jurisdiction of the
appropriate courts located in Tokyo, for the purpose of any suit, action or
other proceeding for the enforcement of arbitration and/or injunctive relief
herein provided and each party expressly waives any and all objections as to
jurisdiction or venue in any of such courts. Nothing herein shall prevent either
party from seeking interim relief in any court with competent jurisdiction.
8.3 INVALIDITY. In the event that (i) any part of these Terms and
Conditions is declared invalid or unenforceable by a final, non-appealable
judgment or decree of a court of competent jurisdiction, or (ii) any
governmental authority or subdivision thereof adopts or interprets any measure,
regulation or law, which in either event, has or may have the effect of
nullifying or impairing any material object of these Terms and Conditions; then
upon the happening of either such event, the party adversely affected by such
event, upon written notice to the other, may propose negotiations for an
appropriate modification of these Terms and Conditions. If the parties cannot
agree to such a modification within thirty (30) days following such notice,
these Terms and Conditions may thereafter be terminated without any further
liability by the party adversely affected by such event, at any time during the
continuance of such event beyond said thirty (30) day period, effective
immediately upon prior written notice to the other party.
8.4 EXPORT CONTROL. To the extent that the Products contain any
software to implement the TIA Common Cryptographic Algorithms (the "Restricted
Parts"), and as such as subject to export control restrictions, the parties
shall i) have executed the required agreement with the TIA to obtain the Common
Cryptographic Algorithms; ii) have obtained the controlled subject documents
from the TIA; and iii) agree to control the Software in compliance with the
requirements of the TIA Agreement and U.S., Canadian, and other export
restrictions. The Restricted Parts will not be included in the Products provided
to Buyer, until the Buyer can demonstrate compliance with the required export
regulations.
8.5 NOTICES. Any notice or communication required or permitted
hereunder, shall be in writing and shall be sent by telex or fax and confirmed
by registered mail, postage prepaid, or personal delivery to the other party.
8.6 CDMA ASICS LICENSEES. With respect to any Product using CDMA
technology, Buyer may only purchase such Products if Buyer has been licensed to
make such purchase by Qualcomm, Inc. Additionally, Buyer hereby acknowledges
that the sale of CDMA ASICs does not convey any intellectual property rights of
Qualcomm, Inc. in such CDMA ASICs, including, but not limited to, any rights
under any patent, trademark, copyright, or trade secret. Buyer may not use or
sell any CDMA ASICs, alone or in combination with other components, without a
separate license from Qualcomm, Inc. under all applicable patents. Buyer's use
and sale of any CDMA ASICs shall be solely in accordance with the terms and
conditions of such license. This Agreement shall not modify or abrogate Buyer's
obligations under any existing license agreement between Buyer and Qualcomm,
Inc., including, but not limited to, Buyer's obligation to pay all royalties
specified thereunder.
8.7 ENTIRE AGREEMENT, MODIFICATIONS, WAIVERS. Except as otherwise
specified herein, these Terms and Conditions incorporates by reference such
Schedules and
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Exhibits as are identified by Buyer on the face hereof, which together set
forth the entire understanding and agreement between the parties hereto and
supersedes all prior verbal or written negotiations and understandings in
connection herewith. No waiver of or modification of or amendment of these
Terms and Conditions or any provision thereof shall be binding unless
executed in writing by the parties. No terms and conditions contained in any
other document which are contrary to the provisions of these Terms and
Conditions shall be binding unless executed in writing by the parties. No
waiver of any provision of these Terms and Conditions shall be deemed or
construed a waiver of any other provisions hereof (whether or not similar),
nor shall such waiver be construed a continuing waiver unless expressly so
stated.
SELLER: BUYER:
TOMEN ELECTRONICS CORPORATION _____________________________
By: _________________________ By: _________________________
Name: _______________________ Name: _______________________
Title: ______________________ Title: ______________________
Date: _______________________ Date: _______________________
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