Exhibit 10.20
DISTRIBUTOR AGREEMENT
This Agreement (the "Agreement") is dated as of the 23rd day of October,
2002, (the "Effective Date") is by and between ZiLOG, INC., a Delaware
corporation and its wholly owned subsidiaries (hereinafter collectively
referred to as " ZiLOG ") and FUTURE ELECTRONICS, INC., a corporation
organized under the laws of New Brunswick, Canada (hereinafter referred to
as "Distributor"). ZiLOG and Distributor are sometimes hereby referred to
an a "Party" and collectively as the "Parties."
IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, THE ADEQUACY AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
(a) "Code X Products" means those Products that are not
recommended for distributor stock. These Products are listed under
the Code X category in the ZiLOG Price List as it may be revised
from time to time.
(b) "Customer Product Specifications," "CPS," or "Product
Specifications" means those ZiLOG documents that specify the
performance characteristics of particular ZiLOG Products.
(c) "Discontinued Products" means Products that ZiLOG no longer
intends to produce or which ZiLOG no longer produces.
(d) "Distributor Confidential Information" means all trade secrets
related to Distributor that is communicated by Distributor to
ZiLOG and marked or identified as confidential, including, without
limitation, Distributor's business plans, marketing plans,
customer lists, information contained in point-of-sale reports
supplied by Distributor to ZiLOG pursuant to the terms hereof,
pricing, contractual terms, sales plans, and inventory and
inventory strategies and programs; provided, however, that
Distributor Confidential Information does not include:
(i) any information that ZiLOG had in its possession
through lawful means prior to disclosure by Distributor,
(ii) any information that is or becomes publicly known
through no action or inaction of ZiLOG,
(iii) any information that is hereafter furnished to
ZiLOG by a third party, as a matter of right and without
restriction on disclosure, or
(iv) information that is independently developed by
ZiLOG without use of or reference to the Distributor
Confidential Information.
(e) "DSR" means a Distributor Stock Rotation authorization issued
by ZiLOG to Distributor.
(f) "Industrial Property Rights" means all patents, trademarks,
mask work rights, trade names, inventions, copyrights, know-how,
or trade secrets relating to the origin, design, manufacture,
programming, operation, or service of the Products, owned by ZiLOG
or to which ZiLOG has a legitimate right of use, as the same
exists as of the date of this Agreement or is developed or
acquired by ZiLOG during the term hereof.
(g) "Non-Standard Products" means a Product manufactured to either
a specific requirement of one or a limited number of customers, a
Product or a Product containing packaging or labeling which is
customized in any manner to meet the specific needs of one or a
limited number of customers, or a Product not included in the
Price List or identified by ZiLOG as not being approved for stock
rotation, return or price protection privileges. Non-Standard
Products include, but are not limited, to ROM coded Products, OTP
Products programmed by ZiLOG, Products with unusual or
non-standard packaging or markings, and Products with certain SL
XX numbers assigned.
(h) "Price" means those prices set forth from time to time in the
ZiLOG Price Book as Distributor cost.
(i) "Price Book" means the standard Price List maintained and
updated from time to time by ZiLOG.
(j) "Products" means the Standard Products, the Non-Standard
Products and Code X Products.
(k) "RMA" means a return material authorization issued by ZiLOG to
Distributor.
(l) "Standard Products" means those ZiLOG Products that are not
Non-Standard Products or Code X Products, and are purchased by
Distributor from ZiLOG at the distributor cost as shown in the
ZiLOG Distributor Price List.
(m) "Technical Data" means all information in written, graphic or
tangible form, or in any magnetic, electronic or machine-readable
form, relating to the design, manufacture, programming, operation,
fit, function or service of the Products including, without
limitation, Industrial Property Rights.
(n) "Territory" means the geographic area or areas described in
Exhibit A, attached to this Agreement and incorporated herein by
reference, as such Exhibit may hereafter be amended from time to
time by ZiLOG.
(o) "Trademarks" means those trademarks, service marks, trade
names, slogans, labels, logos and other trade-identifying symbols
as are or have been developed, used and owned by ZiLOG.
2. APPOINTMENT AND RELATIONSHIP
(a) Subject to the terms stated herein, ZiLOG appoints
Distributor, and Distributor hereby accepts such appointment, as
ZiLOG's authorized full-service distributor for the Products in
the Territory. To the extent the products contain any software
which is being licensed under the terms contained in the document
accompanying such software, ZiLOG hereby grants to Distributor a
license to sublicense such software, upon the terms and conditions
set forth in the documentation accompanying such software, to it
customers.
(b) During the initial eighteen (18) month period following the
Effective Date, Distributor shall be the exclusive full-service
distributor of Products within North America. Following the
completion of the initial eighteen (18) month period, Distributor
shall continue to be the exclusive distributor of Products within
North America unless such exclusivity is terminated by ZiLOG at
any time thereafter by giving Distributor at least thirty (30)
days notice of the termination of the exclusivity prior to the
effective date of such termination. Any such termination of
exclusivity shall be in ZiLOG's sole and absolute discretion, with
or without cause, and ZiLOG shall have no liability whatsoever on
account of ZiLOG's termination of the exclusivity pursuant hereto.
(c) Notwithstanding the provisions of subparagraph (b), above,
ZiLOG shall have the right to terminate Distributor's exclusivity
if Distributor defaults under any provision of this Agreement and
such default is not cured within any applicable cure periods
specified herein. Termination of Distributor's exclusivity
following a default is in addition to any other rights and
remedies ZiLOG may have either hereunder (including, without
limitation, termination of this Agreement) or at law or in equity.
Upon termination of Distributor's exclusivity without termination
of this Agreement, all rights and obligations of Distributor and
of ZiLOG hereunder shall continue with the exception that
Distributor will, from that point forward, be a non-exclusive
distributor of the Products in the Territory.
(d) Notwithstanding the provisions of paragraph (b), above, the
following shall constitute exceptions to the exclusivity granted
to Distributor pursuant to subparagraph (b), above:
(i) ZiLOG reserves the right, on behalf of itself and any
of its subsidiaries and affiliates, to sell Products
directly to customers within the Territory. In addition,
ZiLOG and its subsidiaries and affiliates may establish
house accounts within the Territory, which may be
exclusively serviced by ZiLOG.
(ii) ZiLOG may authorize so-called "catalog houses" who
are not full-service distributors to sell Products within
the Territory.
(iii) Distributor acknowledges that, as of October 23,
2002 (the "Distributor Termination Date"), ZiLOG will
have terminated its current exclusive relationships
within North America with other third party full service
distributors (other than catalogue distributors,
including Digi-Key, collectively, the "Distributor
Exceptions"). ZiLOG shall terminate these relationships
with other third party full service distributors in North
America on or before the Distributor Termination Date.
Should the period for ZiLOG to extricate itself from
relationships with other third party full service
distributors in North America go beyond the Distributor
Termination Date, the Parties will meet to make mutually
acceptable business arrangements under the circumstances
that exist at that time.
(iv) In the event ZiLOG is able to terminate one or more
of the agreements referenced in subparagraph (iii) above,
on commercially reasonable terms, then Distributor's
exclusivity shall not be applicable to any sales by any
such distributors made in the Territory in accordance
with the terms and conditions of the termination
agreement negotiated between ZiLOG and such distributors.
(v) The exclusivity granted to Distributor pursuant to
subparagraph (b), above, shall not be applicable to any
sales which are the subject of any of the exceptions set
forth in this subparagraph (d).
(e) The relationship of ZiLOG and Distributor, established by this
Agreement, is that of independent contractors, and nothing
contained in this Agreement shall be construed to: (1) give either
Party the power to direct and control the day-to-day activities of
the other, or (2) constitute the Parties as partners, joint
ventures, co-owners or as participants in a joint or common
undertaking. Distributor, its agents and employees, are not the
representatives of ZiLOG for any purpose except as expressly set
forth in this Agreement, and they do not have any power or
authority as agent, employee or in any other capacity to
represent, act for, bind, or otherwise create or assume any
obligation on behalf of ZiLOG 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 will have no effect on Distributor's
obligations under this Agreement. Distributor shall be solely
responsible for, and shall indemnify and hold ZiLOG free and
harmless from, any and all claims, liabilities, causes of action,
damages, lawsuits, costs or expenses (including, without
limitation, attorneys' fees, collectively, the "Indemnification
Events") arising out of or related to the acts of Distributor, its
employees, servants, agents, contractors, independent sales
personnel or representatives, or any of them except to the extent
that any such Indemnification Event arises from Distributor's
compliance with the terms and conditions of this Agreement.
(f) ZiLOG agrees that, subject to the exceptions granted pursuant
to subparagraph (d), above, ZiLOG shall not authorize any other
full service distributors, other than any Distributor Exceptions,
to sell Products within North America. In the event a distributor
other than Distributor does sell within North America without
ZiLOG's authorization, ZiLOG shall be required to initiate such
action as ZiLOG may determine is appropriate under the
circumstances. ZiLOG shall have no liability whatsoever to
Distributor as a result of any action or failure to act by ZiLOG
against any unauthorized distributor selling Products within North
America. In the event any such unauthorized distributor sells a
substantial quantity of the Products within North America which
substantially undermines the exclusive nature of Distributor's
relationship hereunder, and ZiLOG has not initiated some action
against such unauthorized distributor within forty-five (45) days
of receiving written notice from Distributor that Distributor
considers the unauthorized distributor as substantially
undermining its exclusivity hereunder, then Distributor shall have
the right to terminate this Agreement by written notice thereof to
ZiLOG. From and after the effective date of such notice,
Distributor, may, in its sole discretion, become a non-exclusive
distributor of ZiLOG hereunder, and ZiLOG shall have the right to
authorize other full-service distributors within North America.
(g) Notwithstanding any other provision of this Agreement,
Distributor acknowledges that the Products are not designed, made,
or intended for use in any application where failure or inaccuracy
might cause death or personal injury including, without
limitation, life support applications and products (collectively,
the "Prohibited Applications"), and notwithstanding any other
provision of this Agreement to the contrary, Distributor is hereby
prohibited from using the Products, or selling the Products to
customers where Distributor has actual prior knowledge that a
Product, or any part thereof, is to be used in any such
application; provided, that Distributor shall be required to
include in its standard terms and conditions a specific
prohibition by its customers of any use of a Product in a
Prohibited Application. If Distributor violates the terms of this
subparagraph (g), then (a) Distributor agrees that ZiLOG shall not
be liable in whole or in part, for any claims or damages arising
out of or in connection with the use or performance of any Product
in such applications and (b) Distributor shall indemnify and hold
ZiLOG harmless from any claims, loss, cost, damage, expense, or
liability, including attorneys' fees, arising out of or in
connection with such use or performance.
3. OBLIGATIONS OF DISTRIBUTOR
In addition to the other obligations of Distributor set forth elsewhere in
this Agreement, Distributor shall at its own expense:
(a) Exert its commercially reasonable efforts to introduce,
diligently promote and solicit the sale of the Products through
advertising, personal customer contact, distribution of
information literature, catalogs, data sheets and other sales and
marketing materials furnished by ZiLOG for such purpose, and other
appropriate sales and marketing techniques;
(b) Exert its commercially reasonable efforts to meet or exceed
the sales objectives for the Products which have previously been
mutually agreed to by the Parties;
(c) Participate, upon reasonable notice, in training activities,
business reviews and programs sponsored by ZiLOG.;
(d) Inform ZiLOG of all stocking locations;
(e) Assist ZiLOG in assessing customer requirements for the
Products and modifications and improvements thereto, in terms of
quantity, quality, design, functional capability and other
features, with a view toward maximizing the potential market for
the Products within the Territory;
(f) Devote sufficient financial resources and qualified personnel,
including appropriate numbers of application engineers, to
effectively interact with customers in the Distributor's Territory
as may be required to fulfill Distributor's responsibilities under
this Agreement;
(g) Arrange for specialty application engineering assistance from
ZiLOG when such technical assistance is required or requested by a
customer;
(h) Establish and maintain an electronic data interface reasonable
satisfactory to ZiLOG in order to facilitate in-time
communications between the Parties;
(i) Distributor shall send to ZiLOG within one (1) working day
after the end of each calendar week, a resale report listing all
sales transactions and current inventory relating to ZiLOG
Products. Such resale report will be submitted to ZiLOG, covering
the previous week, in a format, and containing the information, as
may be requested from time to time by ZiLOG. ZiLOG shall have the
right, upon no less than five (5) business days prior written
notice, to audit or have audited all such information from time to
time, and shall be given access to the relevant books, records and
place or places of business of Distributor for this purpose. The
right to audit shall be exercisable not more than once in any
twelve (12) month period unless the audit reveals a material
discrepancy in the reports submitted by Distributor, in which case
ZiLOG shall have the right to audit any time after three (3)
months following the adverse audit report. The obligation to send
weekly reports, together with the right to audit, shall continue
for twelve (12) months after termination of this Agreement, or
until Distributor no longer holds any Products in inventory,
whichever is shorter. All costs associated with any such audit
shall be borne by ZiLOG unless the audit reveals a material
discrepancy in such information, in which case Distributor shall
reimburse ZiLOG for all costs incurred by ZiLOG in conducting such
audit. For purposes of this subparagraph (h), a "material
discrepancy" exists if dollar or unit volumes for any customer or
in the aggregate are misstated by more than ten percent (10%), or
if there is a failure to report sales of Products to any specific
customer. All such weekly resale and inventory reports shall be
subject to the confidentiality provisions set forth in Section 14,
below.
(j) Obtain tax exemption certificates or pay all sales and use
taxes applicable to the sale or purchase of Products hereunder.
Distributor is solely liable and agrees to indemnify and hold
ZiLOG harmless with respect to all tariffs, duties, excise, value
added, sales, use or other taxes or charges levied on the
purchase, sale, export or re-export of the Products by
Distributor.
(k) Distributor shall exercise reasonable efforts to maintain a
sufficient inventory of the Products so that customer demands will
be satisfied without undue delay. As the inventory of the Products
is reduced through resales, Distributor will reorder in an orderly
process sufficient quantities to replenish stock to levels which
ensure that customer demands will be satisfied without undue
delay.
4. OBLIGATIONS OF ZiLOG
ZiLOG shall:
(a) Exert its commercially reasonable efforts to supply
Distributor's requirements for the Products on the terms and
conditions of this Agreement; provided, however, that ZiLOG shall
be under no obligation to Distributor to develop, continue,
discontinue, change or retain any of the Products.
(b) Keep Distributor informed of all new Products offered for sale
in the Territory.
(c) Furnish engineering and sales assistance, training and
consultation at ZiLOG's manufacturing plant or elsewhere, as
determined by ZiLOG and as required or desirable, in ZiLOG's
judgment, to Distributor's personnel.
(d) Provide Distributor with reasonable quantities of Product
literature.
(e) Allow Distributor to have reasonable access to ZiLOG's design
centers situated within the Territory for purposes which are
necessary or appropriate to fulfill Distributor's distribution
function hereunder.
(f) Provide assistance to Distributor in affecting the orderly
transition of accounts from the current distributors of ZiLOG to
Distributor.
5. PRODUCT RETURN RIGHTS
(a) Standard Products are returnable for warranty claims under the
terms and conditions of Section 8, below. Standard Products are
price protected under the terms of Section 9, below, and are
subject to stock rotation privileges under Section 11, below.
Standard Products may be returned in accordance with the
provisions of Section 11, below, if ZiLOG discontinues that
Product.
(b) Code X Products and Non-Standard Products may not be returned
by Distributor to ZiLOG at any time, except for warranty claims
under Section 8, below. In addition, Code X Products and
Non-Standard Products are not price protected, and are not subject
to being stock rotated. Code X Products and Non-Standard Products
are not subject to return for any reason, whether on termination
of this Agreement, if ZiLOG discontinues this type of Product, or
otherwise.
6. PURCHASE TERMS
(a) All Products purchased by Distributor from ZiLOG during the
term of this Agreement shall be pursuant to purchase orders issued
by Distributor as confirmed by ZiLOG's sales order acknowledgement
and subject to the terms and conditions of this Agreement. Nothing
contained in any such request for quotation, purchase order or
sales order acknowledgement shall in any way affect the standard
terms and conditions of purchase and sale. Any preprinted terms
and conditions contained on any credit applications, purchase
orders, order acknowledgements, request for quotations,
quotations, packing slips, invoices, payment instruments or other
documents submitted by either Party which are different than, in
addition to or inconsistent with any term or condition specified
in this Agreement shall be null, void and of no force or effect
unless such term or terms are specifically agreed to by both
Parties in a separate written document executed by both Parties
specifically referencing such terms and specifically indicating
each Party's acceptance thereof.
(b) All purchase orders submitted by Distributor to ZiLOG are
subject to acceptance by ZiLOG at its corporate office in San
Jose, California, or such other place as ZiLOG may designate in
writing to Distributor. ZiLOG reserves the right in its sole
discretion to refuse to accept new purchase orders, or to place
existing purchase orders on hold. All orders accepted by ZiLOG
shall be subject to, and ZiLOG will have no liability for,
cancellation by ZiLOG due to force majeure, Product allocations,
Product shortages, delays or failures in production or delivery,
manufacturing or production capacity shortages, or for any other
reason, as determined by ZiLOG. ZiLOG shall notify Distributor of
any purchase orders or any portion of any purchase order which
cannot be filled as soon as reasonably possible after ZiLOG
determines that such purchase order or portion thereof cannot be
filled. ZiLOG reserves the right to reject any order without
prejudicing the relationship between ZiLOG and Distributor or
violating any of the terms and conditions of this Agreement.
(c) The purchase price for each Product listed in the Price Book
shall be as specified in the Distributor Cost column in ZiLOG's
then current Price Book. For any Products not listed in the Price
Book, Distributor shall request a quote from ZiLOG. Prices quoted
by ZiLOG on Products not in the Price Book shall be valid for
thirty (30) days following the date of the quote from ZiLOG unless
otherwise specified; provided, however, that the quoted price
shall be valid only for Products booked during such thirty (30)
day period for which shipment shall occur within twelve (12)
months from the date of booking. ZiLOG may, from time to time, in
its sole discretion, amend the Price List and/or its specific
Product quotations as it applies to some or all of the Products.
The amended prices shall be applied as specified in Section 9,
below.
(d) Minimum order and line item quantities for purchase orders
from Distributor for other than Standard Products shall be those
specified in the Price List or by separate agreement if not
specified in the Price List. All Products must be entered in
conformance with ZiLOG's order entry procedures.
(e) Distributor may cancel or reschedule the delivery of any
purchase order or portion thereof, without charge, in accordance
with the following:
------------------------------- ----------------------------- ----------------------------------
Days prior to scheduled Cancellation or reschedule
Product Category delivery privilege
------------------------------- ----------------------------- ----------------------------------
Standard 0 - 30 days Not permitted
Over 30 days Permitted
------------------------------- ----------------------------- ----------------------------------
Non-Standard Products, and 0 - 60 days Not permitted
Code X Products Over 60 days Permitted
------------------------------- ----------------------------- ----------------------------------
(f) ZiLOG will invoice Distributor upon or following shipment of
each order. Such invoices shall be payable by Distributor monthly
following date of invoice. Distributor shall be entitled to a two
percent (2%) deduction on the net amount of payment when invoices
dated the first (1st) through the fifteenth (15th) are paid within
two (2) business days of the twenty-fifth (25th) day of the same
month, and invoices dated the sixteenth (16th) through the end of
the month are paid within two (2) business days of the tenth
(10th) day of the following month. An invoice shall be deemed paid
when the check has actually been sent by an agreed upon overnight
courier. ZiLOG reserves the right to modify any credit terms
provided to Distributor from time to time, as determined by ZiLOG
in its sole discretion; provided, however, that if such
modification does not result from late payments or lack of
payments from Distributor, ZiLOG shall give at least thirty (30)
days notice of the change in credit terms to Distributor prior to
the effective date of such change. Such right shall include, but
not be limited to, withholding shipment or ceasing production on
any of Distributor's orders until ZiLOG receives valid payment on
all outstanding sums owed to ZiLOG by Distributor, or until ZiLOG
receives full payment in advance, at ZiLOG's option. Any such
action shall not affect the liability of Distributor for payment
for any Products on purchase orders, or portions thereof, which
are outstanding and which are not subject to cancellation by
Distributor hereunder.
7. DELIVERY, TITLE AND RISKS
(a) Delivery schedules are estimates based on anticipated
production, yields, and the like. ZiLOG will not be liable to
Distributor or its customer for delays or non-delivery of
Products. If circumstances warrant, ZiLOG may allocate production
and deliveries of the Products among various customers and/or
distributors in such manner as ZiLOG may determine, in its sole
discretion. ZiLOG shall use commercially reasonable efforts to
provide Distributor with notice of any such delays or
circumstances promptly upon becoming aware of the same.
(b) Title and risk of loss or damage to the Products will pass to
Distributor at the time of delivery of the shipment to the carrier
at Anchorage, Alaska or such other place within the continental
United States as ZiLOG may designate to Distributor in writing.
Distributor will give ZiLOG timely notice in designating a
carrier, and any such designation will not affect the foregoing
passage of title and risks or Distributor's responsibility for
payment of transportation charges. It is the responsibility of the
Distributor to note any discrepancies (missing or damaged cartons,
broken seals, etc.) on carrier's waybill at the time of receipt.
(c) ZiLOG may drop ship Products to the customer of Distributor at
the request of Distributor. Distributor will be responsible for
such drop shipments in the same manner as though the shipment had
been made directly to Distributor.
(d) If ZiLOG ships Product against an order that was cancelled
validly by Distributor in accordance with Section 6 above, ZiLOG
shall assume the risk of loss for such Product during shipment.
Distributor shall use reasonable best efforts to recover any such
shipments and return same to ZiLOG. All shipping and freight costs
for any Product shipped by ZiLOG as set forth in this Section 7(d)
shall be borne by ZiLOG.
(e) All costs related to the shipment of Product to Distributor
including, without limitation, costs of insurance, transportation
and freight, shall be paid by, and be the exclusive liability of,
Distributor.
8. WARRANTY
(a) ZiLOG warrants to Distributor that, for one (1) year from the
date of shipment from Distributor to its customer or one (1) year
from the date of drop shipment by ZiLOG to Distributor's customer,
that Products are free from defects in material and workmanship,
and conform to the published Customer Product Specifications (CPS)
or Product Specifications applicable to the particular Product at
the time of production. Notwithstanding the foregoing, however,
ZiLOG makes no warranty for any software which it may deliver to
Distributor, nor does it make any warranty on any part or product
not manufactured or produced by ZiLOG, and any such software or
non-manufactured parts are provided strictly in an "AS-IS"
condition, without any representation or warranty whatsoever,
unless such documentation accompanying such software and/or
non-manufactured parts provided otherwise. The express warranties
for Products provided in this subparagraph (a), subject to all
limitations set forth elsewhere in this Agreement, including,
without limitation, the limitations set forth in this Section 8
and in Section 19(b) shall inure to the benefit of Distributor's
customers; provided, however, that Distributor shall facilitate
any warranty claims which may be made by customers hereunder.
(b) Except as otherwise stated herein, ZiLOG will either repair,
replace or issue a credit for the purchase price of any defective
Products, provided: (1) ZiLOG is notified promptly on discovery of
the asserted defect or manifestation thereof, but not later than a
period of time equal to ZiLOG's warranty period applicable to the
allegedly defective Products, as specified in subparagraph (a),
above; and (2) ZiLOG verifies the asserted defect.
(c) No warranty shall apply to experimental, developmental,
pre-production, sample, "fallout" (i.e., out of specification,
with notice) or promotional Products. The warranty for
Non-Standard Products will be that, if any, expressly set forth in
ZiLOG's sales order acknowledgement of Distributor's purchase
order for the Non-Standard Product.
(d) Products which are allegedly defective, must, in all cases, be
returned by Distributor in accordance with the provisions of
Section 10.
(e) The warranties stated herein will be ineffective:
(i) where the Products which Distributor alleges are
defective have been repaired or altered by anyone other
than the personnel or authorized representatives of
ZiLOG, unless such repair or alteration was effected
pursuant to the prior written approval of ZiLOG, or
(ii) where testing and examination by ZiLOG reveals the
alleged defect to have been caused by misuse, neglect,
improper installation or any other cause beyond the range
of intended use of the Products, or by accident, fire or
other hazard.
(f) Distributor or Distributor's customer retains sole
responsibility for all software, information or memory data stored
on or integrated with any of the Non-Standard Product returned to
ZiLOG under this warranty.
(g) ZiLOG MAKES NO OTHER WARRANTIES AND DISTRIBUTOR ACCEPTS THE
FOREGOING IN LIEU OF ANY AND ALL OTHER WARRANTIES WHETHER EXPRESS,
IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO ANY IMPLIED
WARRANTY OF MERCHANTABILITY, ANY IMPLIED WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE, OR ANY IMPLIED OR STATUTORY WARRANTY OF
NONINFRINGEMENT. ZiLOG's WARRANTIES WILL NOT BE ENLARGED BY ANY
REPRESENTATIONS, DESCRIPTION, ADVICE, SAMPLES, MODELS OR
OTHERWISE.
(h) SUBJECT TO THE TERMS OF SECTION 19(C), DISTRIBUTOR, ON BEHALF
OF ITSELF AND ITS SUCCESSORS AND ASSIGNS, ACKNOWLEDGES AND AGREES
THAT THE SOLE AND EXCLUSIVE REMEDY FOR ANY DEFECTIVE PRODUCT SHALL
BE THE REPAIR, REPLACEMENT OR CREDIT OF THE PURCHASE PRICE
ASSOCIATED WITH SUCH DEFECTIVE PRODUCT, AND DISTRIBUTOR HEREBY
WAIVES ANY AND ALL CLAIMS, LIABILITIES, DAMAGES AND CAUSES OF
ACTION, WHETHER IN CONTRACT, WARRANTY, TORT OR OTHERWISE, AGAINST
ZiLOG ON ACCOUNT OF ANY SUCH DEFECTIVE PRODUCT. DISTRIBUTOR
ACKNOWLEDGES AND AGREES THAT THE REMEDIES PROVIDED HEREIN ARE
EXCLUSIVE, AND THAT DISTRIBUTOR SHALL HAVE NO OTHER REMEDIES,
WHETHER AT LAW OR IN EQUITY. DISTRIBUTOR SHALL INCLUDE IN ITS
STANDARD TERMS AND CONDITIONS A CLAUSE OR CLAUSES WHICH SEEK TO
LIMIT CUSTOMER'S REMEDIES TO REPAIR, REPLACEMENT OR CREDIT OF THE
PURCHASE PRICE ASSOCIATED WITH SUCH DEFECTIVE PRODUCT.
(i) Infringement Claims:
(1) Notwithstanding the other provisions of this Section
8 to the contrary, but subject to the limitations
contained in this Section 8 and in Section 19(b), below,
ZiLOG agrees, at its own expense, to indemnify, defend
and hold harmless Distributor from and against any claim,
suit or proceeding (collectively, an "Infringement
Claim"), and to pay all judgments and costs finally
awarded against Distributor by reason of any Infringement
Claim insofar as it is based upon an allegation that the
Products or any part thereof furnished by ZiLOG infringe
any patent or copyright in any of the Territories but
only if (a) ZiLOG is given reasonable written notice of
such Infringement Claim in writing, (b) Distributor
allows ZiLOG, at its option, to control, or participate
in, (in whole or in part), any defense or settlement of
any such Infringement Claim; and (c) Distributor fully
cooperates with ZiLOG in the defense or settlement of any
such Infringement Claim, including providing ZiLOG with
any information that it may request. In case such
Products, or any part thereof, are held in such suit to
constitute infringement and the use of such Products or
any part is enjoined, ZiLOG shall, at is sole discretion
and at its own expense:
(A) procure for Distributor the right to
continue to resell the Products or part;
(B) replace or modify the same so that it become
non-infringing; or,
(C) remove such Products or part thereof and,
upon return of the Product or part held in
Distributor's inventory, grant Distributor a
credit for the price paid by Distributor for
such Product or part held in Distributor's
inventory.
The items listed herein, subject to the limitations set
forth in this Section 8 and in Section 19(b), below,
constitute ZiLOG's sole and exclusive obligations for any
Infringement Claim, and constitutes the sole and
exclusive remedies of Distributor for any such
Infringement Claim.
(2) Distributor shall have the right to employ separate
counsel in any Infringement Claim and to participate in
the defense thereof , but the fees and expenses of
Distributor's counsel shall not be borne by ZiLOG. ZiLOG
shall not be liable to indemnify Distributor for any
settlement effected without ZiLOG's consent.
(3) The indemnification set forth in Section 8(i)(1),
above, shall not apply and Distributor shall indemnify
ZiLOG and hold it harmless from all liability, claim,
damage or expense (including, without limitation, costs
of suit and attorneys' fees) if the infringement is
alleged to arise from or is otherwise based upon ZiLOG's
compliance with particular requirements of Distributor
that differ from ZiLOG's standard specifications for the
Products, or the infringement is alleged to arise from
modifications or alterations of the Products other than
by ZiLOG or designated representative of ZiLOG, or the
infringement arises from a combination of the Products
with other items not furnished or manufactured by ZiLOG.
(4) The foregoing indemnities are personal to
Distributor, and do not apply to any customer of
Distributor or any other third party other than
Distributor.
(5) Subject to Section 19, the foregoing, as limited
under this Section 8, states the entire liability of
ZiLOG for Infringement Claims.
9. PRICING
(a) Pricing for Standard Products for purchase by distributors are
published by ZiLOG in one or more price books (each being termed a
"Distributor Price Book"), which are issued periodically.
Distributor is entitled to use this pricing for orders of all
Standard Products from ZiLOG or Distributor may purchase Products
from ZiLOG at market prices as negotiated between the parties.
ZiLOG reserves the right to change prices for Standard Products
upon at least thirty (30) days prior notice to Distributor.
Notification of changed pricing shall be via a new price list or
addendum to the Distributor Price Book.
(b) In the event of a reduction in the price of Standard Products
sold hereunder, ZiLOG will issue a price protection form to
Distributor listing the affected Products, their old and new
prices. On the effective date of such price change,
representatives of ZiLOG may audit the physical inventory of
selected locations to check the accuracy of the physical inventory
of the affected Standard Products and complete the price
protection form, which if not completed by ZiLOG, will be
completed by Distributor, setting forth the credit due the
Distributor which shall be equal to the difference between the old
price previously paid to ZiLOG by Distributor, less any prior
price protection or other credits granted by ZiLOG, and the new
price for the Product multiplied by the quantity of each such
Product which was acquired directly from ZiLOG in Distributor's
inventories. In determining the price previously paid to ZiLOG by
Distributor, a first-in first-out inventory system will be
presumed, with the price of the latest shipments applying to the
on-hand inventory first. This price protection provision shall not
apply to any Code X Products or Non-Standard Products. As of the
date of the price decrease, the current backlog for the affected
Product(s) will be changed to reflect the new (lower) pricing.
(c) Distributor will not be eligible for price protection credit
if Distributor fails to return the price protection claim within
forty-five (45) days from the date of the price change. ZiLOG
shall have the right to conduct a physical inventory at any or all
locations for which price protection is requested. Price
protection will only apply to Standard Products procured directly
from ZiLOG by the Distributor. Price Protection is not available
as a cash refund; it applies only as a credit to monies due on
account or future purchase orders unless this agreement is
terminated. In that case, payment will be issued if necessary.
(d) In the event of a price increase of Standard Products
purchased pursuant to pricing in the Distributor Price Book prior
to the effective date of a price increase, Distributor may order
Products before the price increase takes effect at the prior (i.e.
lower) price. Furthermore, all Products ordered by Distributor and
acknowledged by ZiLOG, prior to notification of a price increase
are exempt from the increase and will be shipped and invoiced at
the price in effect at the time of order placement. This section
shall not apply to Product purchased at market prices as
negotiated between the parties.
10. RETURN AND RETURN MATERIAL AUTHORIZATION (RMA) PROCEDURE
(a) If Distributor wishes to return any defective Products covered
under the warranty provisions hereof to ZiLOG, Distributor must
first contact the sales office of ZiLOG or a ZiLOG sales
representative. At ZiLOG's discretion and dependent upon problems
involved, ZiLOG may dispatch a representative to Distributor or
Distributor's customer to examine the Products and remove samples
for testing by ZiLOG, or may require Distributor or Distributor's
customer to send ZiLOG a representative sample for testing by
ZiLOG. If ZiLOG determines that the Products are, in fact,
defective, and are covered by the warranty provisions contained
herein, then ZiLOG will issue an RMA number to Distributor. On
receipt of an RMA number, Distributor may return the applicable
Products to the ZiLOG facility indicated on the RMA within thirty
(30) days from the issuance date of such RMA. ZiLOG will assume
the risk of loss or damages to authorized returns after receipt of
the Products at ZiLOG's plant.
(b) Except for returns of defective Products which will be
returned at ZiLOG's cost, Distributor will prepay return freight,
and clearly label each container with the RMA number. Unauthorized
or nonconforming returns will be reshipped to Distributor at
Distributor's cost.
(c)All returned Products are subject to inspection and test by
ZiLOG. If such inspection and test establishes to ZiLOG's
reasonable satisfaction that the Product is defective and the
Product is covered under the warranty provisions contained herein,
then credit, repair or replacement will be given for the returned
Products provided the same are in acceptable containers, have not
been misused or altered in any manner from the original form and
design, and are otherwise covered under the warranty provisions
contained herein. If ZiLOG determines that the Products meet
specification or have been misused or altered as specified above,
ZiLOG shall reship the Products to Distributor, with all shipping
charges being paid or reimbursed by Distributor. The parts count
of ZiLOG shall prevail to resolve any dispute on returned shipment
quantities absent manifest error. In the event of a dispute
between the Distributor and ZiLOG as to the existence of a quality
related reason or as to quantities of a returned shipment, the
Distributor will be given an opportunity to verify ZiLOG's
determination, but absent manifest error, ZiLOG's determination
shall prevail.
11. INVENTORY AND STOCK ADJUSTMENT
(a) Distributor shall exercise reasonable efforts to maintain a
sufficient inventory of the Products so that customer demands will
be satisfied without undue delay. In this respect, Distributor
shall maintain a minimum aggregate inventory at mutually agreed
upon quantities.
(b) ZiLOG will give Distributor written notice of the
discontinuance or change in status to Code X of any of its
Standard Products. Within sixty (60) days of receipt of such
notice, Distributor shall notify ZiLOG in writing of its
inventories of such formerly Standard Products - now Discontinued
Products or Code X Products. Thereafter, ZiLOG will issue an RMA
to Distributor authorizing the return of the newly classified
Discontinued Products or Code X Products to ZiLOG that were
originally purchased by Distributor directly from ZiLOG and that
ZiLOG and Distributor mutually agree may be returned. Provided
that Distributor has complied with all the requirements set forth
in subparagraph (d) below and the newly classified Discontinued or
Code X Product is returned to ZiLOG within thirty (30) days after
issuance of an RMA, newly classified Discontinued Products or Code
X Products returned for credit, will be credited at either the
current Price or at the original purchase price paid by
Distributor, less any price reduction credits received by
Distributor, whichever is less. In determining the original
purchase price paid by Distributor, a first in first out inventory
valuation system shall be used. Any RMA issued pursuant to this
subparagraph shall be and become null and void if Distributor
fails to return the subject newly classified Discontinued Products
or Code X Products within said thirty (30) day period.
(c) ZiLOG will allow Distributor to return for exchange a stock
rotation of Standard Products which Distributor acquired directly
from ZiLOG. No stock rotation will be provided for Code X Products
or Non-Standard Products. Prior written authorization must be
provided by ZiLOG and issuance of a Distributor Stock Rotation
Form must be obtained from ZiLOG in each instance that Distributor
wishes to effect an exchange of Standard Products. Within
forty-five (45) calendar days following each period of six (6)
consecutive months during the Term, Distributor may return to
ZiLOG, for credit, a quantity of Products the value of ten percent
(10%) of the net sales dollars invoiced by ZiLOG to Distributor
for all Products purchased by Distributor during the previous six
(6) month period. Code X Products and Non-Standard Products will
be excluded from any calculation of net dollar amount, as they are
not eligible for return. All DSR returns must be preceded or
accompanied by a purchase order equal to or greater in value than
the returned Standard Product. The purchase order may be applied
to orders previously submitted by Distributor which have not yet
been finalized. Delivery must be requested within the same month
as the RMA is issued.
(d) Distributor may, during the thirty (30) day period following
the completion of the first twelve(12) months of this Agreement,
return for credit up to one hundred percent (100%) of the first
stocking order submitted by Distributor hereunder. In addition,
Distributor may, after the twelve (12) month period following the
introduction of a new product, and within thirty (30) days after
the expiration of such twelve (12) month period, return for credit
up to one hundred percent (100%) of the first new product stocking
order. Returns under this Section 11(d) shall be subject to all
terms and conditions set forth in Section 11(c), above (save and
except that no offsetting orders shall be required of
Distributor); provided, however, that such returns will not be
counted as "stock rotation" for purposes of computing the quantity
of Products otherwise returnable by Distributor under Section
11(c), above. Distributor shall have no right to return any of the
Products specified hereunder after the expiration of the thirty
(30) day period in which Distributor has the right to return a
Product specified herein.
(e) The following shall apply to all returns:
(i) To be sent to the facility specified by ZiLOG at the
risk and expense (freight prepaid) of Distributor;
(ii) To be in acceptable containers, smallest original
factory sealed packaging and to be in re-salable
condition as determined by ZiLOG;
(iii) No returns accepted for a return value of the
Products of less than $100.00 per return;
(iv) Products discontinued by ZiLOG may be returned for
credit. Discontinued Products must be returned within
thirty (30) days of date Distributor is notified by ZiLOG
of discontinuance or in conformance with Return Material
Authorization.
12. DISTRIBUTOR DESIGN WIN REGISTRATION PROGRAM
ZiLOG provides a design registration program, whereby distributors
may be eligible for special pricing based upon their ability to
secure design-ins at their customers for certain Products, upon
such terms and conditions as ZiLOG shall determine from time to
time and as communicated to Distributor.
13. TERM AND TERMINATION
(a) This Agreement shall continue in full force and effect from
the Effective Date until terminated by:
(i) Either Party, without cause, provided at least thirty
(30) days' prior written notice to such effect is given
to the other Party; provided, however, that ZiLOG may not
terminate this Agreement pursuant to this Section
13(a)(i) without cause during the first eighteen (18)
months following the Effective Date; or
(ii) Either Party, if one of the Parties shall fail to
perform any of the covenants of this Agreement which it
has an obligation to perform, and such breach or alleged
breach is not cured, and/or substantial activity proving
due diligence in curing the breach is not undertaken
within the applicable cure period specified in Section
18, below; or
(iii) Either Party, if any proceeding in bankruptcy,
insolvency or other law for the relief of debtors,
including the appointment of any receiver or trustee or
assignment for the benefit of creditors, shall be
instituted by or against either Party.
(a) Both ZiLOG and Distributor have considered the possibility of
expenditures necessary in preparing for performance of this
Agreement and the possible losses and damage incident to each in
the event of termination, and it is understood that neither Party
shall be liable to the other for damages in any form by reason of
termination of this Agreement at any time, even though, for
example, ZiLOG or any other distributor may thereafter complete a
transaction initiated by Distributor.
(c) At the effective date of termination of this Agreement the
following shall occur:
(i) ZiLOG may, at its option, cancel any or all unfilled
purchase orders with delivery scheduled beyond three (3)
months of the effective date of the termination.
(ii) Distributor shall discontinue immediately all
activities as a ZiLOG Distributor including, without
limitation, all advertising or reference to the Products,
save already printed catalogs or for selling Products
remaining in inventory or which are shipped by ZiLOG
following termination hereof;
(iii) In the event that ZiLOG terminates this Agreement
with or without cause, ZiLOG will repurchase from
Distributor any or all unsold Standard Products purchased
from ZiLOG in Distributor's inventory at the price paid
by Distributor after deduction of all price protection
credits or other credits issued by ZiLOG granted in
Section 9 of this Agreement or otherwise, using a first
in first out inventory valuation system.
(iv) In the event Distributor terminates this Agreement
with or without cause, ZiLOG shall be obligated to,
repurchase from Distributor on or before the first year
anniversary of such termination (the "Anniversary Date")
any or all unsold Standard Products purchased from ZiLOG
in Distributor's inventory at the same price as set forth
in subparagraph (c) (iii), above, using a first in first
out inventory valuation system. Such repurchases may be
done in whole or in part throughout the period between
the termination date and the Anniversary Date. Until
ZiLOG repurchases such unsold Standard Products,
Distributor shall retain custody and ownership of any
such Standard Products.
(v) Unless otherwise agreed to in writing, ZiLOG will
have no obligation to repurchase Non-Standard Products or
Code X Products from Distributor.
14. INDUSTRIAL PROPERTY RIGHTS AND CONFIDENTIAL INFORMATION
(a) Distributor agrees that the Industrial Property Rights to the
Products and all Trademarks are and shall remain the sole property
of ZiLOG. The use by Distributor of any Industrial Property Rights
and Trademarks (including, but not limited to, any trademark,
trade name or copyrighted material) is authorized only for the
purposes herein set forth and upon termination of this Agreement
for any reason such authorization shall cease.
(b)Distributor acknowledges that all information included in the
Technical Data and any other information unique to ZiLOG's
business operation which is disclosed or revealed to Distributor
in connection with the performance of this Agreement other than
the information included in customer literature prepared by ZiLOG
("Confidential Information"), is confidential and of substantial
value to ZiLOG, which value would be impaired if such information
were disclosed to third parties. Confidential Information
includes, but is not limited to, communications or data in any
form including, without limitation, oral, written, graphic or
electromagnetic form, which contain any information related to
ZiLOG and/or its products and/or its business including, without
limitation, processes, patents, patent applications, technology,
know-how, techniques, improvements, inventions, business plans and
strategies, marketing plans, product plans, trade secrets,
customer lists, supplier lists, transaction methods and
relationships between ZiLOG and other entities, clients, financial
records or information, phone numbers, addresses, security records
and methods, formulas, development and marketing methods, designs,
design practices, product or material sources and relationships,
potential customers and listings, employee information, contractor
information, any information learned by Distributor in the process
of examining any information supplied by ZiLOG, and any other
information of any nature and in any form disclosed to Distributor
by ZiLOG or learned by Distributor, which relates to or is useful
in ZiLOG's current or anticipated future business operations, but
does not include any information which Distributor had in its
possession through lawful means prior to disclosure by ZiLOG, and
any information which is or becomes publicly known through no
action or inaction of Distributor. Confidential Information shall
include all such information, whether disclosed to Distributor
prior to or subsequent to Distributor's execution of this
Agreement. Distributor will not use in any way for its own account
or the account of any third party, nor disclose to any third
party, any Confidential Information of ZiLOG. Distributor will
take every reasonable precaution to protect the confidentiality of
such Confidential Information consistent with the efforts
exercised by it with respect to its own confidential business
information, but in no event less than a reasonable level of
protection. Distributor will not publish any technical description
of the Products beyond the descriptions published by ZiLOG. In the
event of termination of this Agreement, the obligations of
Distributor hereunder shall survive such termination and there
shall be no use or disclosure by Distributor of any Confidential
Information of ZiLOG until such time as the Confidential
Information enters the public domain through no act or omission of
Distributor.
(c) ZiLOG agrees that the Distributor Confidential Information and
all trademarks belonging to Distributor are and shall remain the
sole property of Distributor. ZiLOG is permitted to use any
Distributor Confidential Information internally only (including
ZiLOG's agents) for purposes of paying commissions to sales
representatives, studying markets and demand information,
determining potential new product development, and determining
Distributor's compliance with the terms and conditions of this
Agreement. ZiLOG agrees to keep any Distributor Confidential
Information confidential, and agrees to protect such information
to the same degree as it protects its own trade secrets. The
Distributor Confidential Information in any point of sale reports
shall not be used by any of ZiLOG's personnel, agents or by any
other authorized distributors of ZiLOG to the detriment or damage
of Distributor or Distributor's sales of any Products to any of
its customers. The obligation to maintain the confidentiality of
the Distributor Confidential Information and the restrictions on
use of the Distributor Confidential Information shall survive for
a period of two (2) years following the termination of this
Agreement, after which ZiLOG shall have the full right to use
Distributor Confidential Information for any purpose.
15. TRADEMARKS
(a) ZiLOG authorizes Distributor to use the Trademarks in the
Territory during the term of this Agreement for the sole purpose
of the sale and distribution of Products. Distributor acquires no
right to the Trademarks by its use and may only use Trademarks for
the duration of this Agreement and to the extent specified herein.
Distributor will not adopt or use either during the term of this
Agreement or thereafter any trademark, trade name, slogan, label
or logo similar to the Trademarks. Distributor will not use or
display the Trademarks in any manner which states or implies that
the relationship between Distributor and ZiLOG is anything but a
Distributor relationship. ZiLOG may, in its sole discretion,
modify, amend, alter or revoke Distributor's rights to use any
Trademarks, and Distributor agrees to comply with all rules and
regulations regarding the use of Trademarks as ZiLOG may, from
time to time, set forth in its Distributor Policies.
(b) Distributor will not, without ZiLOG's prior written consent,
remove, alter or modify the identification numbers, date codes,
labels, or Trademarks on the Products.
(c) Distributor recognizes that the Trademarks, whether or not
registered, are valid and the exclusive property of ZiLOG, and
Distributor's right to use the Trademarks arises only out of this
Agreement. Distributor shall do nothing which might impair the
validity or dilute the distinctiveness of the Trademarks or the
goodwill attached thereto and symbolized thereby and Distributor
will cooperate fully with ZiLOG in protecting the Trademarks
including executing and filing whatever documents and performing
whatever actions are considered necessary or desirable by ZiLOG
for maintenance and protection of the Trademarks.
16. COMPLIANCE WITH LAWS
(a) The Parties hereto shall comply in all material respects with
all applicable laws and governmental rules and regulations. Each
Party acknowledges that neither Party is expected or authorized to
take any action in the name of or on behalf of the other which
would violate any such laws, rules or regulations.
(b) The Parties hereto agree that all financial settlements,
reports, and xxxxxxxx rendered will, in reasonable detail,
accurately and fairly reflect in all material respects the facts
about all activities and transactions handled.
(c) The Parties hereto shall at all times during the term of this
Agreement use reasonable efforts to ensure that no action is taken
by such Party, its agents and subcontractors, which reasonably
could or might result in or give rise to the existence of
conditions prejudicial to or in conflict with the best interest of
the other Party. In particular, but without limiting the
generality of the foregoing, each Party shall take or cause to be
taken all necessary and proper precautions to prevent each Party's
agents, employees and subcontractors from receiving or making,
providing or offering to any person who could or might be in a
position to influence the decisions hereunder of the other Party
with respect to the Agreement, any substantial gift,
entertainment, payment, loan or other consideration.
17. EXPORT CONTROL REGULATIONS
(a) All sales of the Products to Distributor shall be subject to
the pertinent laws, rules and regulations including, without
limitation, as the Export Administration Regulations of the United
States, the Tax Reform Act and the laws of the Territory. This
Agreement is specifically subject to all applicable federal and
state laws and regulations relating to restrictive trade practices
or boycotts. In no event shall either Party be bound by any terms
and conditions that contravene such pertinent laws.
(b) ZiLOG shall take all steps necessary to obtain, at ZiLOG's
expense, all required licenses from the United States Office of
Export Administration and/or other authorities to permit the
exportation of Products to Distributor's place of business. Any
further licenses required for Distributor to export any Products
to its customers shall be obtained by Distributor at its sole cost
and expense. Each Party represents and warrants that it will fully
comply with any and all import, export and other laws of any
governmental agency having jurisdiction over import and/or export
of Products by such Party, and each Party agrees to indemnify and
hold the other harmless from and against any and all claims,
liabilities, causes of action, damages, fines, penalties, costs
and expenses (including, without limitation, attorneys' fees)
which may be incurred by the other as a result of such Party's
failing to comply with all import and export laws applicable to
such Party's sale of Products.
(c) ALL ORDERS ISSUED PURSUANT TO THIS AGREEMENT ARE SUBJECT TO
THE OBTAINING OF THE SAID LICENSES.
(d) Distributor agrees that the Products and documentation will
not be used, sold, leased, disclosed, re-exported, or otherwise
dealt with in violation of the licenses and applicable
regulations. Distributor acknowledges its awareness of the
regulations and the requirements to obtain approval from the U.S.
Government for re-export.
(e) If Distributor wishes to receive Products as a consignee under
ZiLOG's distribution license Distributor acknowledges the
requirement to have an Export Compliance Program, subject to
review by ZiLOG and the U.S. Government.
18. DEFAULT
(a) ZiLOG shall not be in default of this Agreement unless
Distributor has given ZiLOG written notice of its default, and
ZiLOG has not, within thirty (30) days of its receipt of
Distributor's notice of default, cured such default or, if the
nature of the default is such that it cannot be reasonably cured
within a thirty (30) day period, has commenced curing such default
within such thirty (30) day period and diligently prosecutes
curing such default to completion. In the event of a default by
ZiLOG, then, in no event shall ZiLOG be liable for an amount
greater than the purchase price paid by Distributor to ZiLOG for
any Product purchased by Distributor which is the subject of
ZiLOG's default, or, if the default does not involve Product which
has been shipped to Distributor, then Distributor's sole and
exclusive remedy shall be to terminate this Agreement. Distributor
hereby waives any and all other remedies it may have on account of
ZiLOG's default hereunder.
(b) Distributor shall not be in default of this Agreement unless
ZiLOG has given Distributor written notice of its default, and
Distributor has not, within thirty (30) days of the date of
ZiLOG's notice, cured such default or, if the nature of the
default is such that it cannot be reasonably cured within a thirty
(30) day period, has commenced curing such default within such
thirty (30) day period and diligently prosecutes curing such
default to completion. In the event of a default by Distributor,
then ZiLOG shall have all rights and remedies available to it
under this Agreement, at law or in equity.
(c) Notwithstanding the foregoing, either Party may terminate this
Agreement for cause by providing written notice upon the other
Party ceasing to function as a going concern, declaring bankruptcy
or having a receiver appointed for it, or otherwise taking
advantage of any insolvency law Each Party hereby expressly
reserves, and each Party acknowledges and agrees to such
reservation, any rights which either Party may have under the
federal bankruptcy laws or other applicable federal, state or
territorial bankruptcy, insolvency, or other similar law, as now
or hereafter in effect.
19. EXCLUSIVE REMEDIES
(a) EXCEPT AS SET FORTH IN 8(i) AND 19(c),THE REMEDIES PROVIDED
HEREIN ARE DISTRIBUTOR'S AND ZiLOG's SOLE AND EXCLUSIVE REMEDIES
FOR ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT.
NEITHER ZiLOG NOR DISTRIBUTOR WILL BE LIABLE FOR ANY DIRECT OR
INDIRECT SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES,
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY. IN
ADDITION, NEITHER ZiLOG NOR DISTRIBUTOR WILL BE LIABLE FOR LOST
PROFITS OR INJURY TO GOODWILL, EVEN IF ZiLOG OR DISTRIBUTOR SHALL
HAVE BEEN ADVISED OF THE POSSIBILITY OF SAME.
(b) EXCEPT AS SET FORTH IN 8(i) AND 19(c), THE MAXIMUM LIABILITY
OF ZiLOG OR DISTRIBUTOR, RESPECTIVELY, AND THE MAXIMUM RECOVERY
AVAILABLE TO THE OTHER FOR ANY CLAIM ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR INVOLVING PRODUCTS PURCHASED FOR RESALE WILL NOT
IN THE AGGREGATE EXCEED THE PURCHASE PRICE ACTUALLY PAID FOR THE
PRODUCTS BY THE EFFECTED CLIENT OF DISTRIBUTOR WHICH ARE THE
SUBJECT OF THE CLAIM DURING THE TWELVE MONTH PERIOD COMMENCING
AFTER THE SALE BY DISTRIBUTOR TO THE EFFECTED CLIENT.
(c) Product Defect Claims:
(1) Notwithstanding the other provisions of Section 19(b)
to the contrary, but subject to the limitations contained
in Section 19(a), ZiLOG agrees, at its own expense, to
indemnify, defend and hold harmless Distributor from and
against any claim, suit or proceeding, and to pay all
judgments and costs finally awarded against Distributor
by reason of any claim, suit or proceeding insofar as it
is based upon an alleged Product defect (collectively, a
"Product Claim") but only if (a) ZiLOG is given
reasonable written notice of such claim in writing, (b)
Distributor allows ZiLOG, at its option, to control, or
participate in, (in whole or in part), any defense or
settlement of any such Product Claim; and (c) Distributor
fully cooperates with ZiLOG in the defense or settlement
of any such Product Claim, including providing ZiLOG with
any information that it may request. In case such
Products, or any part thereof, are held in such suit to
be defective and for which ZiLOG is found to be
responsible, ZiLOG shall, at is sole discretion and at
its own expense: (A) replace or repair the defective
Product; or, (B) remove such defective Products or part
thereof and, upon return of the Product or part held in
Distributor's inventory, grant Distributor a credit for
the price paid by Distributor for such Product or part
held in Distributor's inventory. The items listed herein,
subject to the limitations set forth in this Section
19(c) constitute ZiLOG's sole and exclusive obligations
for any alleged Product defect, and constitutes the sole
and exclusive remedies of Distributor for any such
Product Claim.
(2) Distributor shall have the right to employ separate
counsel in any Product Claim set forth in Section
19(c)(1) and to participate in the defense thereof , but
the fees and expenses of Distributor's counsel shall not
be borne by ZiLOG. ZiLOG shall not be liable to indemnify
Distributor for any settlement effected without ZiLOG's
consent.
(3) The indemnification set forth in Section 19 (c)(1), shall
not apply and Distributor shall indemnify ZiLOG and hold
it harmless from all liability, claim, damage or expense
(including, without limitation, costs of suit and
attorneys' fees) if the Product defect or Product Claim
was caused by, or in connection with, any act or omission
of Distributor.
(4) The foregoing indemnities are personal to Distributor,
and do not apply to any customer of Distributor or any
other third party other than Distributor.
20. CHOICE OF LAW, ARBITRATION, LIMITATIONS
(a) This Agreement is made and entered into in the state of
California, and shall be construed and the legal relationship
between the Parties hereto determined in accordance with the laws
of California, without giving effect to any conflict of laws
principles.
(b) With the exception of any controversy or claim involving a
third party or arising out of the confidentiality and intellectual
property indemnification provisions of this Agreement, the Parties
agree that any other controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be
settled by arbitration in accordance with the then current
expedited rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Any such
arbitration shall be conducted in San Jose, California. Each Party
shall bear its own expenses for any arbitration. The arbitrator
shall have no authority to award punitive damages and may not, in
any event, make any ruling, finding or award that does not conform
to the plain reading of the terms and conditions of this
Agreement.
(c) Debits from Distributor will not be accepted on such items as
alleged short shipment, proof of delivery or pricing issues more
than six (6) months from the date of shipment of Product. Such
claims will be null and void after six (6) months from the date of
shipment. This provision shall not take precedence over more
restrictive provisions including but not limited to Sections 9
(c), 11 (b) and 11(d) (vi).
21. NOTICES
Any notice, report, request or demand required or permitted by this
Agreement shall be given personally; by facsimile transmission with
confirmation; by registered or certified mail; return receipt requested; or
by overnight delivery, addressed to the other Party at their principal
business address set forth below and shall be considered delivered upon
actual receipt.:
IF NOTICE TO ZiLOG:
ZiLOG, INC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Vice President, WW Distribution
and, if such notice relates to a breach of this Agreement by ZiLOG or
termination by Distributor, then a copy shall be provided to:
ZiLOG, INC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
IF TO DISTRIBUTOR;
Future Electronics, Inc.
000 Xxxxx Xxxx.
Xxxxxx-Xxxxxx, Xxxxxx
X0X0X0
Attention: Xxx Xxxxxx
With a copy to: General Counsel
or such other address as either Party may designate to the other by written
notice so given. All such notices, requests, demands and other
communications shall be deemed to be given or made when received by the
named addressee.
22. GENERAL
(a) Setoffs. Distributor shall not be permitted to set off any
debts owed by Distributor to ZiLOG without written agreement by
ZiLOG confirming the proposed set off.
(b) Waivers. Any delay or failure to enforce any right or remedy
hereunder will not constitute a waiver of such right or remedy
with respect to any current or subsequent default.
(c) Assignment. This Agreement is personal to Distributor and
shall not be assigned by Distributor except with the prior written
consent of ZiLOG, which consent may be granted or withheld in
ZiLOG's sole discretion. Any assignment without such consent shall
give ZiLOG the right to declare this Agreement null and void,
without thereby relieving Distributor of any debt owed to ZiLOG
hereunder. A material change in ownership of Distributor shall be
deemed to be an attempted assignment. ZiLOG may assign this
Agreement to a successor in interest. Permitted assignments shall,
among other things, require that the assignee assume all of the
rights, duties and liabilities of the assignor as of the date of
assignment.
(d) Modifications. No modification, change or amendment to this
Agreement, nor any waiver of any rights in respect hereto, shall
be effective unless in writing signed by the Parties.
(e) No License. No rights to manufacture, duplicate or otherwise
copy or reproduce the Products (including software supplied with
such Products) are granted by this Agreement. Further, no licenses
are granted or implied by this Agreement under any rights, except
the right to sell the Products. ZiLOG reserves the right to
license any company, within or without the Territory, to
manufacture any Products. Such licensing agreements may grant sale
and distribution rights to the licensee within and/or without the
Territory.
(f) Severability. If any provision of this Agreement proves to be
or becomes invalid or unenforceable under any applicable law, then
such provision shall be deemed modified to the extent necessary to
make such provision valid and enforceable; if such provision may
not be so saved, it shall be severed from the Agreement and the
remainder of the Agreement shall remain in full force and effect.
(g) Entire Agreement. This Agreement constitutes the entire
agreement between the Parties relating to the subject matter
hereof, and merges and integrates herein all substantive
discussions and communications on which agreement had been reached
between the Parties up to the date hereof. This Agreement
supersedes all prior agreements, understanding, communications and
courses of dealing between the Parties, except that neither Party
shall be relieved thereby from payment of any invoice or rightful
claim, under a prior written agreement, which was outstanding and
unpaid on the date hereof.
(h) Neutral construction. The Parties hereto agree that this
Agreement will be interpreted neutrally, and that it should not be
construed for or against any Party deemed to be the drafter
thereof.
23. Cooperative Advertising
To assist Distributor in advertising and promoting the Products,
ZiLOG and Distributor shall agree from time to time a reasonable
budget for such activities.
IN WITNESS WHEREOF, each of the Parties has signed this Agreement
on the date first set forth above.
ZiLOG, INC. FUTURE ELECTRONICS, INC.
By: /s/ By: /s/
------------------------------ -------------------------------
Printed Name: Printed Name:
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Title: Title:
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EXHIBIT A
TERRITORY:
The Territory(ies) appointed shall be: Exclusive - North America.
Non-Exclusive - Rest of World.
