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EXHIBIT 10.53
DISTRIBUTION AGREEMENT
This Distribution Agreement (hereinafter referred to as the
"Agreement") is made and entered into as of this 26th day of January 1999,
between Altera Corporation, having its principal place of business at 000
Xxxxxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx 00000 (hereinafter referred to as
"Altera") and Arrow Electronics Incorporated, having its principal place
of business at 00 Xxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000-0000, (hereinafter
referred to as "Distributor").
WITNESSETH:
WHEREAS, Altera is the owner, manufacturer, and developer of certain
Products defined below, and
WHEREAS, Distributor wishes to be appointed as a non-exclusive
distributor of the Products under the terms and conditions of this
Agreement;
NOW THEREFORE, the parties agree as follows:
1. DEFINITIONS
1.1 "Products" or "Product" means semiconductor components, programming
hardware, Software Products, and related materials that may be offered for
sale by Altera in the ordinary course of business and that have not been
excluded from the definition of Products by written notice from Altera to
Distributor.
1.2 "Sale" or "Purchase" shall also be understood to mean "License".
1.3 "Software Products" means software development tools for programmable
logic design, simulation, testing, and for programming as offered for
license by Altera in the ordinary course of business.
1.4 "Territory" means the following geographic area: The United States and
Canada.
1.5 "Trademarks" means (i) both the name "Altera" and the corresponding
stylized xxxx and logotype; and (ii) the trademarks, tradenames, and
service marks of the Products and the respective stylized marks and
logotypes for such trademarks, tradenames, and service marks.
2. APPOINTMENT
Altera hereby appoints Distributor and Distributor hereby accepts the
appointment, as a non-exclusive Distributor of the Products within the
Territory.
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3. DISTRIBUTOR RESPONSIBILITIES
3.1 Promotion and Sales Efforts. Distributor shall use its reasonable
best efforts to:
(a) Promote the sales of and distribute Products within the
Territory. Distributor shall not solicit sales of Products outside the
Territory.
(b) Obtain directly from Altera and authorized Altera distributors
100% of its requirements of Altera products.
(c) Make full use of all promotional material supplied by Altera.
(d) Maintain the total dollar value of inventory of Products at
Distributor in an amount mutually agreed to by both parties..
(e) Maintain inventories of a broad selection of Products, especially
newly introduced Products, sufficient to satisfy the needs of large and
small customers in a timely manner.
(f) Provide and maintain adequate sales facilities and sales and
support personnel in accordance with reasonable standards that from time
to time are established by Altera and that are reasonably agreed to by
Distributor.
(g) Provide and maintain Product programming facilities, equipment,
and personnel in accordance with reasonable standards that from time to
time are established by Altera and that are reasonably agreed to by
Distributor.
(h) Make available sales, engineering, and support personnel to
attend Altera sponsored training.
(i) Keep Altera informed of industry trends and competitive
conditions that may affect the sale of Altera Products.
(j) Adhere to operational policies and procedures that Altera will
publish (and revise from time to time), including the Distributor Policies
and Procedures Manual, in order to fulfill the provisions of this
Agreement, to facilitate Altera's business with Distributors, and promote
sales to customers. In the event of any inconsistency between such
published operational policies and the provisions of this Agreement, the
provisions of this Agreement shall govern.
3.2 Monthly Reporting Responsibilities. On or before the expiration of
five (5) working days after the end of each month, Distributor shall
provide a confidential report to Altera containing the following
information as well as any other information reasonably requested by
Altera from time to time:
(a) a sales report which contains the names of purchasers,
locations, part numbers, quantity and Dollar value of Products sold in
each such month; the part numbers, quantity
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and dollar value of any Products returned to Distributor by customers; and
any ship from stock and debit ("SSD") numbers; and
(b) an inventory report which contains a listing by part number and
quantity of all Products in stock as of the end of such month.
This monthly reporting is to be in the form of direct data transmission or
magnetic media in standard computer readable format.
3.3 Mutual Covenants.
(a) The Parties agree to conduct business in a manner that reflects
favorably at all times on the Products and the good name, goodwill and
reputation of one another. However, nothing in this paragraph shall
obligate Altera to grant Distributor any preferential treatment over other
distributors in the Territory.
(b) Neither party shall engage in deceptive, misleading, or unethical
practices that are or might be detrimental to the other party, the
Products, or the public, including, but not limited to, disparagement of
the other party or the Products and use of misleading advertising.
(c) Neither party shall make false or misleading representations with
regard to the other party and will make no representations to customers or
to the trade with respect to the specifications, features or capabilities
of the Products that are inconsistent with the literature distributed by
Altera.
3.4 Distributor's Financial Condition. Distributor is in satisfactory
financial condition, solvent and able to pay its bills when due. Altera
will have the right to establish credit limits and other financial
requirements as a condition of Distributor's right to place orders with
Altera and shall also have the right in its reasonable discretion to
change such credit limits and financial requirements at any time. In
connection with any decision by Altera to establish a credit limit for
Distributor, Distributor will furnish such financial reports and other
financial data as Altera may reasonably request as necessary to determine
Distributor's financial condition.
3.5 Compliance With Law. Each party will comply with all applicable
international, transnational, national, regional, and local laws and
regulations in performing its duties under this Agreement and in any
dealings with respect to Products.
3.6 Compliance With Export Administration Laws. In recognition of U.S. and
non-U.S. export control laws and regulations, each party agrees to obtain
any necessary export license or other documentation prior to exportation
of any Product, or technical data acquired from Altera under this
Agreement. Accordingly, neither party shall knowingly sell, export,
re-export, transfer, divert or otherwise dispose of any such Product or
technical data directly or indirectly to any person, firm or entity, or
country or countries, prohibited by the laws or regulations of the United
States or any other country. Further, Distributor shall use its
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reasonable best efforts to notify any person, firm or entity obtaining
such products or technical data from Distributor of the need to comply
with such laws and regulations.
3.7 Auditing. No more than twice during any year, at reasonable times and
upon reasonable prior notice, employees of Altera may (i) conduct a
physical inventory of Products in any stocking location (or, in automated
facilities, observe cycle counts and related methodology) or (ii) audit
such business records, located at Distributor's corporate headquarters as
pertain soley to the purchase of Products hereunder during any such year.
4. ALTERA'S RESPONSIBILITY
Altera will furnish Distributor without charge a reasonable supply of
Altera's current list of published suggested prices, sales literature,
books, catalogs, etc. as Altera may prepare for distribution, and shall
also provide Distributor with such technical and sales assistance as may
be necessary to assist Distributor in effectively carrying out its
obligations under this Agreement. Altera reserves the right to sell
directly to any and all customers.
5. ORDER PROCEDURE
5.1 Orders. Distributor will place individual orders for the Products from
time to time during the term of this Agreement either by means of
electronic data transmission or in written form. This Agreement shall
govern to the extent that any terms in this Agreement are inconsistent
with the terms of any agreement between Altera and Distributor relating to
electronic data transmission. Each order placed by Distributor will
contain the following minimum information: (i) identification of each
Product ordered by Product number, quantity, and price; (ii) shipping
instructions and destination; and (iii) a requested delivery date for each
Product.
5.2 Acceptance by Altera. All orders for the Products by Distributor shall
be subject to acceptance by Altera and shall not be binding until the
earlier of such acceptance or shipment, and, in the case of acceptance by
shipment, only as to the portion of the order actually shipped. Altera has
the right to refuse to accept, for any reason, any order placed by
Distributor. Altera shall use its reasonable best efforts to accept any
order for non-custom Products within ten (10) days of its receipt.
5.3 Controlling Terms. The terms of this Agreement will apply to each
order accepted or shipped by Altera under this Agreement. In the event
that any terms or conditions of sale contained in any communication
between Distributor and Altera contradict or are inconsistent with
anything contained in this Agreement, the terms and conditions of this
Agreement shall prevail. Altera's acceptance of any order from Distributor
under this Agreement is conditioned on Distributor agreeing that the terms
of this Agreement shall prevail over any additional or inconsistent terms
communicated by Distributor to Altera in any form whatsoever.
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5.4 Quantity. All component orders of custom Products only are subject to
an overrun or underrun of five percent (5%) of the quantity ordered which
shall constitute fulfillment of the order by Altera.
5.5 Change Orders and Cancellation by Distributor.
(a) Standard Products: All orders submitted by Distributor and
accepted by Altera are firm commitments by Distributor to buy Altera
Products. Distributor will notify Altera in a timely manner of its desire
to change any order. Altera shall have the right to deny any change order
request submitted by Distributor within ninety (90) days of the current
factory scheduled shipment date. However, within the period from thirty
(30) to ninety (90) days of the current factory scheduled shipment date,
Altera will accommodate reasonable requests for changes. Within the period
from zero (0) to thirty (30) days of current factory scheduled shipment
date, Altera will accept change orders only in extraordinary
circumstances; Altera's shall have the sole right to determine what
circumstances are extraordinary. Altera's acceptance of any change order
request within 30 days of current factory scheduled shipment shall not
obligate Altera to accept future change order requests submitted within 30
days of shipment. On an ongoing and regular basis, Distributor will use
its best efforts to reconcile its own records of orders on Altera with
Altera's records of order backlog.
(b) Custom Products: From time to time, Distributor may place orders
on Altera for Custom Product. (Custom Product is defined as Product that
is not listed in Altera's published distributor price list and/or that
requires special processing by Altera.) Once accepted by Altera, orders
for Custom Product may not be changed in any way without prior approval of
Altera. As a pre-condition to approving a request to change an order for
Custom Product, Altera may require Distributor to compensate Altera for
any costs incurred by Altera as a result of the change order.
5.6 Cancellation by Altera. Altera reserves the right to cancel any orders
placed by Distributor and accepted by Altera as set forth above, or to
refuse or delay shipment thereof, if:
(a) Distributor fails to make any payment as provided in this
Agreement or under the terms of payment set forth in any invoice or
otherwise agreed to by Altera and Distributor;
(b) Distributor fails to meet reasonable credit or financial
requirements established by Altera, including any limitations on allowable
credit;
(c) Distributor otherwise fails to comply with the terms and
conditions of this Agreement;
(d) this Agreement is terminated and the scheduled delivery would
take place after the Agreement's termination date; or
(e) circumstances beyond Altera's control prevent it from shipping
any order by the requested delivery date.
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Altera also reserves the right to discontinue the manufacture or
distribution of any or all of the Products at any time, and to cancel any
orders for such discontinued Products without liability of any kind to
Distributor or to any other person except as expressly set forth herein.
No such discontinuation will be deemed a termination (unless Altera so
advises Distributor) or breach of this Agreement by Altera. Altera will
attempt, but is not required, to provide Distributor with at least sixty
(60) days advance written notice of Product discontinuances in the same
manner as is provided to customers in general.
6. PAYMENT
6.1 Terms and Interest. Payment shall be made according to the terms
specified in writing by Altera. Interest shall be payable at the rate of
one-and-one-half percent (1.5%) per month or at the maximum rate permitted
by law, whichever is less, on all overdue and unpaid invoices. Altera has
the right to invoice Distributor for any unauthorized discounts or
deductions taken by Distributor, and Distributor shall make payment on
such invoices net thirty (30) days.
6.2 Method of Payment. Distributor shall make payment in Dollars as
designated by Altera or in such other method as agreed to by the parties
in writing.
6.3 Taxes, Tariffs, and Fees. Unless otherwise agreed in writing by
Altera, all prices quoted by Altera for the Products do not include any
national, state, or local sales, use, value added or other taxes, customs
duties, or similar tariffs and fees. Distributor shall be responsible and
liable for the payment of any taxes, customs duties, or other government
fees and tariffs applicable to the Products, except for taxes based on
Altera's net income, unless Distributor has provided Altera with an
exemption resale certificate in the appropriate form for the jurisdiction
to which the Products are to be directly shipped. Distributor agrees to
indemnify Altera for any claim for taxes, customs duties, or other
government fees and tariffs applicable to the Products that may be levied
on Altera.
7. SHIPMENT AND RISK OF LOSS:
7.1 Shipment. Orders issued by the Distributor will specify requested
shipment dates. Distributor will select the mode of shipment and the
carrier. Altera will pay for packing costs. Distributor will be
responsible for and pay all charges for shipping, freight, and any
insurance requested by Distributor, which charges Altera may require
Distributor to pay in advance.
7.2 Delays in Shipment. Altera will use commercially reasonable efforts to
ship products to arrive by any requested delivery dates quoted or
acknowledged. However, Altera will not be liable for any delay in shipment
or delay in performance under this Agreement due to unforeseen
circumstances or due to causes beyond its control including but not
limited to, acts of nature, acts of government, labor disputes, delays in
transportation, and delays in delivery or inability to deliver by Altera's
suppliers.
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7.3 Risk of Loss. All risk of loss of, or damage to, the Products will
pass to Distributor, or to such financing institution or other party or
parties as may have been designated to Altera by Distributor, upon
delivery by Altera to the carrier, freight forwarder or Distributor,
whichever first occurs. Distributor will bear the risk of loss or damage
in transit.
8. PRICES
8.1 Altera's Prices. Distributor shall purchase products at Altera's
prices as are in effect at the time the order is received from the
Distributor.
8.2 Price Changes: From time to time, Altera may decide to change the
prices for the Products.
(a) Price decreases: In the event of a price decrease by Altera,
Altera will invoice Distributor at the lower price for all orders placed
by Distributor that have not been delivered as of the effective date of
the price decrease.
(b) Price increases: In the event of a price increase, Altera will
announce to Distributor its intention to raise prices at least 30 days
before the effective date of such a price increase. All orders on Altera's
backlog as of the announcement of the price increase and scheduled for
delivery by Altera within 30 days of announcement shall be shipped at the
price that was effective before the price increase. All other orders shall
ship at the new, increased price. Distributor shall have the right to
cancel (within ten days of the announcement of a price increase) any
orders for Product for which Altera has announced a price increase.
8.3 Credit for Inventory Invoiced at Higher Price. In the event of a price
decrease, Altera shall issue a credit to Distributor in the amount of the
price decrease for all unsold Products then stocked by the Distributor
provided that Distributor satisfies the terms and conditions specified in
subparagraph 8.4 and 8.5(b) and (c).
8.4 Record Keeping for Price Decrease Credits. As a condition of Altera
issuing Distributor a credit pursuant to subparagraph 8.3, Altera must
receive an inventory report from Distributor no later than thirty (30)
days after the effective date of the price decrease. No credit will be due
Distributor if Distributor fails to furnish such inventory report within
the thirty-day period. Altera shall have the right to audit the
information provided in this report against the previous inventory reports
and subsequent resale reports. Altera may conduct such audit upon
reasonable notice during normal business hours at the Distributor's place
of business by, among other things, reviewing the Distributor's applicable
books and records. Upon verification of Distributor's claim for credit,
Altera shall issue a credit to Distributor's account.
8.5 Procedure for Submitting Claims for Credit.
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(a) Distributor must submit its claims for the following types of
credits within sixty days of the following:
(i) Price Discrepancies: the date of any invoice that contains
a price discrepancy; or
(ii) SSD (ship from stock debit): sales out date.
Altera will not honor any claims for credit submitted after the sixty-day
period.
(b) All claims for credit must specify the invoice number(s) to
which the claim applies.
(c) If Altera provided Distributor with a discount on its regular
prices at the time that Altera invoiced Distributor for the Products that
are the subject of a claim for credit, Altera shall subtract from the
credit the proportional amount of the prior discount.
9. STOCK ROTATION AND RETURNS
9.1 Return of Products. If Altera determines in accordance with its Stock
Rotation Policy that Distributor's inventory is overstocked with certain
Products, Distributor may return such Products to Altera pursuant to
subparagraph 9.2. Products that are obsolete or discontinued may be
returned pursuant to subparagraph 9.3 of this Agreement. Returns of
Products that are permitted in connection with the termination of this
Agreement are subject to paragraph 15. All returns require a Return
Material Authorization ("RMA").
Distributor shall bear all risk of loss or damage during shipment of
returned Products and shall ship returned Products in accordance with
Altera's reasonable instructions.
Altera will credit distributor's account in the amount of the net
price paid by Distributor for the returned Products after Altera receives
the Products and verifies their quantity and quality. All returned
Products must be unused, undamaged, and in sealed, factory-shipped boxes.
Distributor may not take any deductions from payments due to Altera before
Altera has issued a credit to Distributor; Altera will charge interest at
the rate of one-and-one-half percent (1.5%) per month or at the maximum
rate permitted by law, whichever is less, from the date that Distributor
makes any unauthorized deductions.
9.2 Procedure for Stock Rotations. At regular six-month intervals, Altera
will accept a Stock Rotation return from Distributor for the purpose of
clearing Distributor's inventory of Product that in Distributor's good
faith judgment is unlikely to be sold. Under this provision, Distributor
may return to Altera Product valued at up to 5% of Altera's net xxxxxxxx
to Distributor for the six months prior to the Stock Rotation. A certain
percentage of this amount may be allocated to scrap in accordance with the
guidelines established by Altera in the Distributor Policies and
Procedures Manual. As a precondition for accepting a Stock Rotation,
Altera may require that Distributor take delivery from Altera of Product
of value equal to or less than the value of the Product returned.
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9.3 Obsolete and Discontinued Products. Altera may render obsolete or
discontinue the manufacture and/or sale of any Product ("Discontinued
Product") and shall notify Distributor of any Discontinued Product.
Distributor shall have the right to return Discontinued Product to Altera.
Within thirty (30) days of the last date that orders will be accepted,
Distributor shall notify Altera of Distributor's intention to return any
Discontinued Product in its inventory which were purchased by Distributor
from Altera.
9.4 Administrative Procedures for Returns. Product returns to Altera
pursuant to subparagraphs 9.2, 9.3, and 15.5(c) as well as any other
Product returns to Altera are subject to the following provisions:
(a) Distributor must request and receive from Altera a Return
Material Authorization number for each return prior to shipping Product to
Altera. Altera will not unreasonably withhold return Material
Authorizations.
(b) Altera retains the right to review all line items prior to return
and approve or deny any item requested for return by Distributor. Altera
will establish and publish reasonable requirements not inconsistent with
the terms hereof for the approval of return line items, and for the
handling and packaging of Product to be returned, in order to protect the
quality of Altera Products and minimize the administrative expenses to
both parties associated with returns.
(c) Return Material Authorization numbers are valid for 60 days from
the date of issuance to Distributor. If Distributor fails to return the
Products within that 60-day period, Altera shall not be obligated to
accept the Products or to credit Distributor's account for the Products.
9.5 Defective Products. Defective or non-conforming Products shall be
subject to the warranty provision of paragraph 10 of this Agreement.
10. WARRANTIES
10.1 Altera's Warranties to Distributor.
(a) Semiconductor Products and Other Hardware Products. Altera
warrants that the Products (other than Software Products) (hereinafter
referred to as "Semiconductor Products") covered by this Agreement shall
be free from defects in materials and workmanship and shall conform to
Altera's published specifications for a period of up to one year from the
date of shipment to Distributor's customer but in no event longer than two
years from the date of shipment by Altera to Distributor. The foregoing
warranty does not apply to any Semiconductor Products that (i) have not
been stored, handled, or maintained in accordance with Altera's published
quality standards and procedures, including those set out in the
Distributor Policies and Procedures Manual, or (ii) have not been
programmed in accordance with Altera's published programming standards and
procedures, including those set out in the Distributor Policies and
Procedures Manual, or (iii) have otherwise been subject to misuse,
including static discharge, neglect, accident or modification or (iv) have
been soldered or altered and are not capable of being tested by Altera
under its normal test conditions. Altera's sole obligation to
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Distributor for Semiconductor Products failing to meet this warranty shall
be to replace the defective or non-conforming Semiconductor Products. This
obligation is conditioned on all of the following: (1) Distributor or
Distributor's customer providing Altera with written notice of any
nonconformity or defect within the applicable warranty period, and (2)
Distributor or Distributor's customer returning the non-conforming or
defective Semiconductor Product to Altera within 30 days of receiving
Altera's written notification to do so, and (3) Altera determining that
the Semiconductor Product is non-conforming or defective, and (4) Altera
determining that this warranty applies to the Semiconductor Product. Any
replacement of a Semiconductor Product by Altera shall carry only the
unexpired term of the original warranty.
(b) Software Products. Altera warrants that Software Products covered by
this Agreement, when properly installed and used, will perform
substantially in accordance with Altera's current Software Products
documentation for a period of up to ninety (90) days from the date of
shipment to Distributor's customer but in no event longer than one year
from the date of shipment to Distributor. Altera warrants the diskette(s)
on which Software Products are furnished to be free from defects in
materials and workmanship under normal use for a period of up to ninety
(90) days from the date of shipment to Distributor's customer but in no
event longer than one year from the date of shipment to Distributor. The
foregoing warranty does not apply to any Software Products that have been
damaged as a result of accident, abuse, misuse, neglect, or modification.
During the warranty period, (1) Altera will replace any Software Product
or diskette not meeting the foregoing warranty and which is returned to
Altera; or (2) if Altera is unable to deliver a replacement Software
Product which performs substantially in accordance with current Software
Product documentation or a diskette which is free of defects in materials
or workmanship, Distributor may return the Software Product for a credit
in the amount paid by Distributor. Any replacement Programs or diskettes
will be warranted for the remainder of the original warranty period or
thirty (30) days, whichever is longer.
(c) THE WARRANTIES CONTAINED IN PARAGRAPH 10 OF THIS AGREEMENT ARE THE
ONLY WARRANTIES MADE BY ALTERA WITH RESPECT TO THE PRODUCTS. EXCEPT AS
PROVIDED IN PARAGRAPH 10, ALTERA MAKES NO WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NONINFRINGEMENT. THE WARRANTIES PROVIDED IN
PARAGRAPH 10 MAY BE MODIFIED OR AMENDED BY ALTERA ONLY BY WRITTEN
INSTRUMENT SIGNED BY A DULY AUTHORIZED AGENT OF ALTERA.
10.2 Distributor Shall Make No Inconsistent Warranties. Distributor shall
make no representation, guarantee or warranty on Altera's behalf to
Distributor's customers with respect to the Products that is inconsistent
with the above warranties.
11. ALTERA'S INTELLECTUAL PROPERTY RIGHTS
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11.1 Trademark Use During Agreement. During the term of this Agreement,
Distributor is authorized by Altera to use the Trademarks in connection
with Distributor's advertisement, promotion, and distribution of the
Products. Distributor shall use the Trademarks only in signs and printed
material furnished or approved in writing by an authorized representative
of Altera. Distributor shall not use the Trademarks, or any part thereof,
separately or in combination, as a part of or in connection with its firm,
trade, or corporate name. Distributor's use of the Trademarks will be in
accordance with Altera's policies in effect from time to time, including
but not limited to trademark usage and co-operative advertising policies.
11.2 Copyright, Patent, and Trademark Notices. As both a covenant by
Distributor and a condition of Altera's sale or license of the Products to
Distributor, Distributor will include on each copy of the Products that it
distributes, and on all containers and storage media, all copyright,
patent, trademark, and other notices of proprietary rights included by
Altera on the Products. Distributor agrees not to alter, erase, deface, or
overprint any such notice on anything provided by Altera.
11.3 No Distributor Rights in Altera Intellectual Property Rights.
Distributor has paid no consideration for the use of Altera's copyrights,
patents, trademarks, or trade secrets and nothing contained in this
Agreement shall give Distributor any interest in any of them. Distributor
acknowledges that Altera owns or holds a license to all copyrights,
patents, trademarks, or trade secrets related to the Products and agrees
that it will not knowingly at any time during or after this Agreement
assert or claim any interest in or do anything that may adversely affect
the validity or enforceability of any copyrights, patents, trademarks, or
trade secrets owned by or licensed to Altera (including, without
limitation, any act, or assistance to act, which may infringe or lead to
the infringement of any copyrights, patents, trademarks, or trade secrets
related to the Products). Nothing in this paragraph shall prevent
Distributor from challenging the validity of any trademark, copyright, or
patent. Distributor agrees not to attach any additional trademarks, logos,
or trade names to any Product. Distributor further agrees not to affix any
of the Trademarks to any product not manufactured or sold by Altera.
11.4 No Continuing Rights in Trademarks. Upon expiration or termination of
this Agreement, Distributor will immediately cease all display,
advertising and use of all Trademarks and will not thereafter use,
advertise, or display any name, xxxx or logo which is, or any part of
which is, similar to, or confusing with, any Trademark or other name,
xxxx, logo or designation associated with any Product.
11.5 Obligation to Protect Proprietary Information. Altera and Distributor
have entered into or shall in the future enter into a non-disclosure
agreement that shall set forth the parties' obligations to protect
proprietary information.
11.6 Notification of Suspected Infringement. Distributor agrees to notify
Altera of any known or suspected infringement of Altera's trademark, trade
secret, copyright, and patent rights that comes to Distributor's
attention. Distributor also agrees not to induce, encourage, contribute
to, or support the infringement of Altera's trademark, trade secret,
copyright, and
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patent rights or the breach of the Altera Program License Agreement by
Distributor's customers or other third parties.
11.7 Intellectual Property Indemnification.
(a) Altera shall defend any suit, proceeding, or claim of
infringement asserted against Distributor in the Territory insofar as such
suit, proceeding, or claim of infringement alleges that any Product
manufactured and supplied by Altera to Distributor infringes any duly
issued patent, registered trademark, or copyright and Altera shall pay all
damages and costs finally awarded therein against Distributor, provided
that Altera promptly is informed and furnished a copy of each
communication, notice or other action relating to the alleged infringement
and is given authority, information, and assistance (at Altera's expense)
necessary to defend or settle said suit or proceeding. Altera shall have
the absolute right to control the defense and settlement of any
infringement suit or proceeding for which Distributor seeks
indemnification under this paragraph. Altera shall not be obligated to
defend or be liable for costs and damages if the infringement arises out
of (1) Products that are manufactured by Altera in accordance with
Distributor's specifications, or (2) the Products being combined with or
added to another product, or (3) the Products being modified after
delivery to Distributor by Altera (including any programming done by
Distributor or Distributor's customer), or (4) from use of the Products,
or any part thereof, in the practice of a process. Altera's obligations
hereunder shall not apply to any infringement occurring after Distributor
has received notice of such suit or proceeding alleging the infringement
unless Altera has given written permission for such use by Distributor.
(b) If any Product manufactured and supplied by Altera to Distributor
shall be held by any court in the Territory to infringe any patent,
registered trademark, or copyright and Distributor shall be enjoined from
using the same, Altera will at its option and at its expense (1) procure
for Distributor the right to use such Product free of any liability for
infringement or (2) replace such Product with non-infringing substitute
Product or (3) refund the purchase price of such Product.
(c) If the infringement by Distributor is alleged prior to Altera's
completion of delivery of the Products, Altera may decline to make further
shipments without being in breach of this Agreement.
(d) If any suit, proceeding, or claim of infringement is asserted
against Altera in the Territory based on a claim that the goods
manufactured by Altera in compliance with Distributor's specifications and
supplied to Distributor directly infringe any duly issued patent,
registered trademark, or copyright, then Distributor shall indemnify
Altera to the same extent as specified in subparagraph 11.7(a) of this
Agreement. However, Distributor shall not be obligated to indemnify Altera
for specifications developed solely by Distributor's end customers.
(e) THE FOREGOING STATES THE SOLE AND EXCLUSIVE LIABILITY OF THE
PARTIES HERETO FOR PATENT, TRADEMARK, OR COPYRIGHT
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INFRINGEMENT AND IS IN LIEU OF ALL WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, IN REGARD THERETO.
12. SOFTWARE LICENSE
Altera grants and Distributor accepts a non-exclusive license to use and
sublicense Altera Software Products and other copyrighted materials,
including but not limited to printed materials, on the following terms
(the "License"):
12.1 The Software Products covered by this Agreement are confidential and
proprietary to Altera and its licensors, and Altera and its licensors
retain all title, copyright, patent and other proprietary rights to the
Software Products and all copies thereof.
12.2 Distributor may sublicense Altera Software Products to its customers
for use in a manner that is not inconsistent with the terms of this
Agreement. Any sublicense granted to Distributor's customers must be made
subject to the terms of the Altera Program License Agreement. Any attempt
by Distributor to sublicense Altera Software Products in contravention of
this Agreement shall be null and void.
12.3 Distributor may use Altera Software Products to perform
demonstrations of the use of Altera Products, or to train sales people in
the use of Altera Products, or to train customers in the use of Altera
Products.
12.4 Distributor may use Altera Software Products to program other Altera
Products for Distributor's customers. Distributor may not use Altera
Software Products to program non-Altera Products.
12.5 Distributor may use a single copy of any Software Product only on a
single computer or on a single network of workstations.
12.6 Distributor may make one copy of any Software Product that it has
installed on a single computer or single network of workstations at
Distributor's place of business in any computer-readable or printed form
for back-up or archival purposes only and subject to the terms of this
Paragraph 12.
12.7 Except to the extent permitted in the preceding subparagraph,
Distributor may not copy, modify, revise, alter, reverse engineer,
decompile or disassemble any Altera Software Product under any
circumstance without the prior written permission of Altera.
12.8 Distributor agrees that it will not open any sealed Altera Software
Products that are intended for sublicensing, nor will it sublicense any
unsealed Altera Software Products. Distributor will not transfer,
sublicense, or give away any copy of an Altera Software Product that was
previously installed on any computer or single network of workstations at
Distributor's place of business.
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12.9 The terms of this License shall govern with respect to Distributor's
use of Altera Software products in the event that any such terms are
inconsistent with or omitted from the Altera Program License Agreement.
13. CO-OP ADVERTISING AND PROMOTION
Altera shall establish a fund for payment of advertising, promotion, and
Product literature localization costs ("Co-op Fund") in the Territory
equal to up to one-half of one percent (1/2%) of the net purchase price of
all Products purchased by Distributor during the preceding twelve (12)
months. Funds will be accrued on a 12-month rolling basis, and those funds
not committed to projects within that period revert to Altera. Specific
projects may be proposed by either Altera or Distributor, but only
projects that have been approved in writing by Altera will be eligible for
payment from the Co-op Fund.
If advertising and promotion costs for an approved project are incurred by
Altera or any of its affiliate companies, Distributor shall reimburse
Altera for up to one-half of the cost of such project; the exact amount of
such reimbursement shall be mutually agreed upon by the parties prior to
implementation of the project. Distributor shall make such payments to
such entity as may be designated by Altera in writing for the benefit of
Altera. If advertising and promotion costs for approved projects are
incurred by Distributor, Altera shall reimburse Distributor for up to
one-half (1/2) of such costs. Altera shall finally determine the exact
amount of such reimbursement.
14. ASSIGNMENT
This Agreement shall not be assignable by either party without the prior
written approval of the other party. Except in the case of a corporate
reorganization, a change in the persons or entities who control fifty
percent (50%) or more of the equity securities or voting interest of a
party shall be considered an assignment of that party's rights.
15. TERM AND TERMINATION
15.1 Term. This Agreement shall be in force for a period of one (1) year
from the date of this Agreement, which is indicated above. Thereafter,
this Agreement shall renew automatically for subsequent periods of one (1)
year unless notice of termination is served in accordance with
subparagraph 15.2 or this Agreement is terminated without notice pursuant
to subparagraph 15.3.
15.2 Termination With Notice. At any time, either party may terminate this
Agreement without cause upon providing the other party with ninety (90)
days prior written notice.
15.3 Termination For Cause. The Agreement may be terminated without notice
under the following circumstances:
(a) If either party is or becomes insolvent or admits its inability
to pay its debts as they become due, or makes an assignment for the
benefit of creditors, or if there are initiated by or
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against either party proceedings in bankruptcy or under insolvency laws or
for reorganization, receivership or dissolution, or if either party ceases
to conduct its operations in the normal course of business, the other
party shall have the right to terminate this Agreement effective
immediately upon giving notice.
(b) If either party is in breach hereof and does not cure such
breach within thirty (30) days of receipt of notice thereof.
15.4 Waiver of Damages in Event of Termination. The right of termination,
as provided herein, is absolute. Both Altera 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
the termination of this Agreement at any time, other than as expressively
provided in this Agreement.
15.5 Procedures Upon Termination.
(a) Unfilled Orders. Upon termination of this Agreement, Altera may,
at its option, cancel any or all unfilled orders that were previously
accepted by Altera pursuant to subparagraph 5.2. Except in those
circumstances governed by subparagraph 5.6 of the Agreement, Altera agrees
not to cancel orders which are for Products intended for resale pursuant
to firm orders (1) that have been placed by a specific customer with
Distributor and are scheduled for delivery within 90 days of the date that
notice of termination is given and (2) that Distributor, from among its
locations, does not have inventory stock to complete. Distributor shall
notify Altera in writing of such firm orders within 30 days of the date
that notice of termination is given.
(b) Promotion. Upon termination of this Agreement, Distributor agrees
to discontinue immediately all activities as an Altera Distributor
including, without limitation, all use of the Trademarks and all
advertising of or reference to Altera Products, except as permitted
pursuant to the disposition of inventory of Products pursuant to
subparagraph 15.5(c).
(c) Disposition of Inventory. In the event Altera terminates this
Agreement without cause pursuant to subparagraph 15.2 or Distributor
terminates on the ground that Altera has breached the Agreement, Altera
will repurchase from Distributor at Distributor's option any or all unsold
non-discontinued and non-obsolete Products in Distributor's inventory at
the net price paid by Distributor. Products returned under this provision
are subject to paragraph 9.1. In the event Distributor terminates this
Agreement without cause or Altera terminates with cause pursuant to
subparagraph 15.3 above, Altera may, at its option, repurchase from
Distributor any or all unsold Altera products in Distributor's inventory
at the same price as set forth in the sentence immediately preceding. The
party terminating this Agreement shall pay all transportation charges for
Products returned to Altera.
16. LIMITATION OF LIABILITY AND INDEMNIFICATION
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In no event shall either party be liable to the other party for indirect,
special, incidental, or consequential damages as a result of any claim or
liability relating to or arising out of this Agreement. Distributor shall
indemnify Altera for any claims asserted by any third party arising out of
or relating to Distributor's breach of this Agreement, negligence, or
wrongful conduct.
17. RELATIONSHIP OF THE PARTIES
It is expressly understood and agreed that the relationship between Altera
and Distributor under this Agreement is solely that of seller and buyer.
Distributor is an independent contractor and is in no way Altera's legal
representative or agent. Distributor has no authority to assume or create
any obligation on behalf of Altera, express or implied, with respect to
Products or otherwise. Nothing contained in this Agreement shall be
construed as a limitation or restriction upon Altera in the sale or other
disposition of any Product to any person, firm or corporation or in any
territory or country.
18. GOVERNING LAW, CHOICE OF FORUM, ATTORNEYS' FEES
It is expressly agreed that the validity and construction of this
Agreement, and performance hereunder, shall be governed by the laws of the
State of California, USA. The parties agree to submit to the jurisdiction
of the courts in the State of California for the resolution of any dispute
or claim arising out of or relating to this Agreement. The parties hereby
agree that the party who does not prevail with respect to any dispute,
claim, or controversy relating to this Agreement shall pay the costs
actually incurred by the prevailing party, including any attorneys' fees.
19. WAIVER
Either party's failure to enforce at any time any of the provisions of
this Agreement, or any right with respect thereto, or to exercise any
option herein provided, shall in no way be construed to be a waiver of
such provisions, rights or options or in any way affect the validity of
this Agreement. Either party's exercise of any of its rights hereunder or
of any options hereunder under the terms or covenants herein shall not
preclude or prejudice either party from thereafter exercising the same or
any other right it may have under this Agreement, irrespective of any
previous action or proceeding taken by either party.
20. NOTICE
All notices required by this Agreement shall be sufficiently given and
effective when sent by registered or certified mail, return receipt
requested, postage prepaid and addressed to the Distributor, attention of
the General Counsel, at its principal place of business, as listed above,
or to Altera Corporation, attention General Counsel, 000 Xxxxxxxxxx Xxxxx,
Xxx Xxxx, Xxxxxxxxxx 00000-0000, or to such other place or places as the
parties hereto may designate in writing. If notice is given in any other
manner, it shall be effective when received.
21. CAPTIONS
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The captions of the sections herein are intended for convenience only, and
the same shall not be determined to be interpretive of the content of such
section.
22. SEVERABLITY
If any provision, or part of a provision of this Agreement is invalidated
by operation of law or otherwise, the provision or part will to that
extent be deemed omitted and the remainder of this Agreement will remain
in full force and effect.
23. COMPLETE AGREEMENT
This Agreement supersedes and cancels any previous understanding or
agreements, whether written or oral, between the parties relating to the
subject matter hereof, including any existing distribution agreement
involving Altera semiconductor products. This Agreement supersedes but
does not cancel the Demand Creation Agreement between the parties dated
September 1, 1998. It expresses the complete and final understanding with
respect to the subject matter hereof and may not be changed in any way
except by an instrument in writing signed by authorized representatives of
both parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives and to become effective as of the
day and year first written above.
ARROW ELECTRONICS INCORPORATED ALTERA CORPORATION
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BY: BY:
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(Name): (Name):
TITLE: TITLE:
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DATE: DATE:
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