EXHIBIT 10.14
INTERNATIONAL
DISTRIBUTOR AGREEMENT
This Distributor Agreement (the "Agreement") is made and entered into this 1st
day of January 2000 by and between Micro Linear Corporation, having it's
principal place of business at 0000 Xxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000
(hereinafter referred to as "MANUFACTURER") and TEKSEL Co., LTD having its
principal place of business at 0-00-00 Xxxxxxx, Xxxxxxx-xx, Xxxxx 000, Xxxxx
(hereinafter referred to as "DISTRIBUTOR").
In consideration of the mutual promises herein contained, the
MANUFACTURER and DISTRIBUTOR agree as follows:
1. APPOINTMENT
A. Subject to the terms stated herein, MANUFACTURER appoints
DISTRIBUTOR, and DISTRIBUTOR hereby accepts such appointment, as MANUFACTURER'S
authorized distributor for the Products in the territory (as defined in Section
3A below).
B. The relationship of MANUFACTURER and DISTRIBUTOR established by this
Agreement is that of independent contractors. Nothing contained in this
Agreement shall be construed to give either party the power to direct and
control the day-to-day activities of the other, or constitute the parties as
partners, joint ventures, co-owners or otherwise as participants in a joint or
common undertaking. DISTRIBUTOR, its agents, and employees are not the
representative of MANUFACTURER for any purpose except as expressly set forth in
the Agreement. They have no 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 MANUFACTURER for any purpose whatsoever. All financial
obligations associated with DISTRIBUTOR'S business are the sole responsibility
of DISTRIBUTOR. All sales and other agreements between DISTRIBUTOR and its
customers are DISTRIBUTOR'S exclusive responsibility and shall have no effect on
DISTRIBUTOR'S obligations under this Agreement. DISTRIBUTOR shall be solely
responsible for, and shall indemnify and hold MANUFACTURER free and harmless
from any and all claims, damages, or lawsuits arising solely out of the acts of
DISTRIBUTOR, its employees, and its agents.
2. DEFINITION OF "PRODUCTS"
A. The term "Products" shall mean all products offered for sale by
MANUFACTURER as set forth and described in MANUFACTURER'S current published
Distributor Price List.
B. Additional Products may be added to this agreement, including
products specified in MANUFACTURER'S Published Price List but not approved for
DISTRIBUTOR stocking, by mutual agreement between the parties.
3. DEFINITION OF "TERRITORY"
A. The term "Territory" shall mean the geographic areas known as Japan
4. TERM
This Agreement shall become effective on the date it is executed by
DISTRIBUTOR and shall continue in full force and effect until the end of the
calendar year in which it was executed, unless terminated earlier pursuant to
the terms of Section 32 of this Agreement. One month prior to the end of the
term, the parties shall negotiate in good faith the term and conditions of a new
one (1) year Agreement.
5. DISTRIBUTOR ACTIVITIES
A. DISTRIBUTOR agrees to actively and diligently solicit the trade in
the territory, and in general make all reasonable efforts to sell MANUFACTURERS
Products.
B. During the term of this Agreement, DISTRIBUTOR shall have the right
within the Territory to indicate to the public that it is an authorized
DISTRIBUTOR of the Products and to advertise such items under the trademarks,
service marks, and trade names that MANUFACTURER may adopt from time to time
("MANUFACTURER'S Trademarks"). DISTRIBUTOR shall not alter or remove any
MANUFACTURER'S Trademarks applied to the Products. Nothing herein shall grant to
DISTRIBUTOR any right, title or interest in MANUFACTURER'S Trademarks. All uses
of MANUFACTURER'S Trademarks by DISTRIBUTOR shall inure to the benefit of
MANUFACTURER. At no time during the term of this Agreement shall DISTRIBUTOR
challenge or assist others in challenging MANUFACTURER'S Trademarks or the
registration thereof nor attempt to register any trademarks, service marks or
trade names confusingly similar to those of MANUFACTURER.
C. Upon termination of this Agreement, DISTRIBUTOR shall forthwith cease
any further use of any trademark, service xxxx, or trade name for which consent
to use had been granted by MANUFACTURER.
D. DISTRIBUTOR agrees to examine, or cause to be examined, all Products
shipped by MANUFACTURER promptly upon receipt thereof, and to immediately file
or cause to be filed a claim with the carrier upon delivery for any damage to or
shortage in the Products, and to notify MANUFACTURER within ten (10) days after
receipt of the Products of any such claim pertaining thereto.
E. DISTRIBUTOR agrees to comply with all applicable laws and regulations
currently existing in the territory relating to the Products.
F. DISTRIBUTOR will pass on to its customers MANUFACTURER'S warranty
with respect to all products purchased by customers. DISTRIBUTOR will not pass
on to its customers any warranty that exceeds the scope of MANUFACTURER'S
written warranty. DISTRIBUTOR shall indemnify and hold MANUFACTURER harmless
from and against any and all claims and liabilities, costs, and expenses
(including the reasonable fees of attorneys and other professionals) incurred
by, or threatened against, MANUFACTURER in connection with any representation by
DISTRIBUTOR or DISTRIBUTOR'S personnel or agents inconsistent with or broader
than the warranties and disclaimers set forth in this Agreement.
G. DISTRIBUTOR shall use its reasonable best efforts, consistent with
prudent business practice, to maintain a representative inventory of Products in
reasonable sufficient quantities to provide reasonably adequate and timely
delivery to DISTRIBUTOR'S customers.
H. DISTRIBUTOR and its employees shall participate, when and to the
extent appropriate, in such training programs as may be offered by Supplier, to
the extent that such participation does not materially detract from the conduct
of DISTRIBUTORS business.
I. DISTRIBUTOR, at its election, may translate MANUFACTURER promotional
materials into local languages. DISTRIBUTOR will promptly provide MANUFACTURER
with a soft and hard copy of all translated materials and revisions thereto for
MANUFACTURER'S approval, which approval shall not be unreasonably withheld or
delayed. DISTRIBUTOR may publish or distribute such translated materials only
after MANUFACTURER has approved their use in writing. The copyright on all such
translations shall be owned by MANUFACTURER by virtue of the "work for hire"
doctrine or shall be transferred to MANUFACTURER.
6. MANUFACTURER OBLIGATIONS
A. MANUFACTURER shall maintain a policy of engaging in Product
merchandising and advertising on a worldwide basis to provide a continuing
demand for MANUFACTURER Products. MANUFACTURER will, at its sole discretion,
include DISTRIBUTORS name in such advertising from time to time, with prior
approval.
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B. MANUFACTURER shall furnish DISTRIBUTOR with price lists, sales
literature, books, catalogues, product briefs, advanced product information,
data sheets, and the like, as MANUFACTURER may prepare for national distribution
at no cost to DISTRIBUTOR. MANUFACTURER shall also provide DISTRIBUTOR with such
technical and sales support as may be necessary to assist DISTRIBUTOR in
effectively carrying out its activities under this Agreement.
C. MANUFACTURER agrees that its facilities will be regularly and
actively employed to the mutual benefit of MANUFACTURER and DISTRIBUTOR and to
assist DISTRIBUTOR in whatever manner is deemed proper by MANUFACTURER for the
sale of Products.
D. MANUFACTURER shall ship, xxxx and pack all Military Products in
accordance with the relevant specifications.
E. MANUFACTURER shall refer to DISTRIBUTOR: customers and potential
customers for quantities of the Products customarily handled by distributors.
F. MANUFACTURER shall establish and maintain such quality control
procedures, electrostatic discharge sensitivity procedures, testing of Products
and other customary programs as are necessary to ensure that the Products, as
manufactured and sold to DISTRIBUTOR, are of the highest quality and
reliability.
7. MANUFACTURER - DISTRIBUTOR LIABILITY
A. Neither MANUFACTURER nor DISTRIBUTOR shall be liable for failure to
perform any obligation under this Agreement if such failure is caused by
circumstances not directly under the party's control, including failures
resulting from force majeure, acts of God, acts of public authorities, war and
war measures, strikes, fires, or failures or delays of suppliers or carriers.
B. MANUFACTURER'S TOTAL LIABILITY ARISING OUT OF THIS AGREEMENT AND/OR
THE SALE OF ANY PRODUCT SHALL NOT EXCEED THE DISTRIBUTOR PRICE FOR THE PRODUCT
GIVING RISE TO THE LIABILITY. IN NO EVENT SHALL MANUFACTURER BE LIABLE FOR COSTS
OF PROCUREMENT OF SUBSTITUTE GOODS BY ANYONE. IN NO EVENT SHALL MANUFACTURER BE
LIABLE TO DISTRIBUTOR OR ANY OTHER ENTITY FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL, OR INDIRECT DAMAGES OR LOST PROFITS, HOWEVER CAUSED, WHETHER
PURSUANT TO A THEORY IN BREACH OF CONTRACT, NEGLIGENCE, OR OTHERWISE, AND
WHETHER OR NOT MANUFACTURER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE
OF ANY LIMITED REMEDY. THE ESSENTIAL PURPOSE OF THIS PROVISION IS TO LIMIT THE
POTENTIAL LIABILITY OF MANUFACTURER ARISING OUT OF THIS AGREEMENT AND
DISTRIBUTION OF PRODUCTS.
8. COMPLIANCE WITH LAWS
A. DISTRIBUTOR will comply with all laws and governmental regulations
which prohibit export or diversion of MANUFACTURERS products to certain
countries, and not knowingly assist or participate in any such diversion or
other violation of applicable U.S. laws and regulations.
B. DISTRIBUTOR understands and acknowledges that MANUFACTURER is subject
to regulation by agencies of the U.S. Government, including the U.S. Department
of Commerce, which prohibit export or diversion of certain products and
technology to certain countries. Any and all obligations of MANUFACTURER to
provide products or documentation or any media in which any of the foregoing is
contained, as well as any technical assistance, shall be subject in all respects
to MANUFACTURER'S compliance with such United States laws and regulations as
shall from time to time govern the license and delivery of technology and
products abroad by persons subject to the jurisdiction of the United States,
including the Export Administration Act of 1979, as amended, any successor
legislation, and the Export Administration Regulations issued by the Department
of Commerce, Bureau of Export Administration.
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C. Without limiting the foregoing, DISTRIBUTOR certifies that unless
prior written authorization is obtained from the United States Bureau of Export
Administration or the Export Administration Regulations explicitly permit the
re-export without such written authorization, it will not export, re-export, or
transship, directly or indirectly, the Products to country groups D-1 or E-2 (as
defined in the Export Administration Regulations), which currently consist of
Albania, Armenia, Azerbaijan, Belarus, Bulgaria, Cambodia, China (PRC), Cuba,
Estonia, Georgia, Kazakhstan, Kyrgyzstan, Laos, Latvia, Libya, Lithuania,
Moldova, Mongolia, North Korea, Romania, Russia, Tajikistan, Turkmenistan,
Ukraine, Uzbekistan and Vietnam, or to Iran, Iraq or Syria or to any other
country as to which the U.S. Government has placed an embargo against the
shipment of products, software or technology which is in effect during the term
of this Agreement. This Section 8.C. shall survive any termination of this
Agreement.
D. DISTRIBUTOR shall at all times during the term of the Agreement have
in effect all licenses, permits, and authorizations from all governmental
agencies necessary to the performance of its obligations hereunder, and shall
comply with all applicable laws, rules, and regulations affecting its activities
hereunder.
9. TERMS OF PAYMENT
A. MANUFACTURER will invoice DISTRIBUTOR upon shipment of each order.
Payment for all products shipped and invoiced by MANUFACTURER are on a net 30
basis.
B. All payments shall be made in the currency set forth in
MANUFACTURER'S Distributor Price List. DISTRIBUTOR represents and warrants that
no currency control laws applicable in the Territory prevent the payment to
MANUFACTURER of any sums due under this Agreement. In the event that any such
laws come into effect and the local government of the Territory does not permit
that payment be made in the currency described above, DISTRIBUTOR will notify
MANUFACTURER immediately, and if so instructed by MANUFACTURER, deposit all
monies due MANUFACTURER to the account of MANUFACTURER in a local bank of
MANUFACTURER'S choice in the Territory.
10. APPLICATION OF CREDITS
A. MANUFACTURER reserves the right to apply any outstanding credits due
to DISTRIBUTOR as a set-off against any debit due from DISTRIBUTOR to
MANUFACTURER.
B. In the event DISTRIBUTOR is entitled to a credit from MANUFACTURER
hereunder, and the amount of such credit exceeds DISTRIBUTOR'S obligation to
MANUFACTURER at the time, MANUFACTURER shall forthwith pay the amount of such
excess to DISTRIBUTOR.
11. REPORTS
A. Inventory Reports -
The DISTRIBUTOR will submit a monthly inventory report covering all of
MANUFACTURERS products on hand in each stocking location. This is to be supplied
along with the POS report described in paragraph 11B.
B. Point of Sales Reports -
DISTRIBUTOR agrees to submit monthly reports to MANUFACTURER
showing total sales of MANUFACTURER Products by complete part number, quantity
sold, unit price, price extension, and customer identification and location.
Each monthly report shall be submitted by the fifteenth (15th) of the month
immediately following the close of the preceding business month.
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12. PRICES
A. The prices to be paid by DISTRIBUTOR for Products purchased for
resale shall be those prices set forth in MANUFACTURER'S established Distributor
Price List in effect at the time of shipment from the Factory. For special
prices negotiated with the MANUFACTURER, all sales are final.
B. Prices quoted in MANUFACTURER'S Distributor Price List do not include
Federal, State, Local, Sales, Use, Value Added (VAT), Excise, Customs, Import or
similar taxes or duties imposed by any governmental agency that has jurisdiction
over the import, export, or purchase over the Products. DISTRIBUTOR shall be
liable for and shall pay all applicable taxes, duties, license fees or other
charges incident to the sale of Products when MANUFACTURER has the legal
obligation to collect such taxes. The appropriate amount shall be added to
MANUFACTURER'S invoice and paid by DISTRIBUTOR unless DISTRIBUTOR provides
MANUFACTURER with a valid tax exemption certificate authorized by the
appropriate taxing authority. In the event that DISTRIBUTOR is required by law
to make deductions or withholdings from payments to MANUFACTURER, then
DISTRIBUTOR shall pay such additional amounts to MANUFACTURER as may be
necessary to assure that the actual amount received by MANUFACTURER after
deduction or withholding (and after payment of any additional taxes due as a
consequence of such additional amount) shall equal the amount that would have
been received if such deduction or withholding were not required.
C. All prices shall be subject to change or withdrawal at the discretion
of MANUFACTURER with or without advance notice, subject to the provisions of
Section 14. Notice of any changes in prices shall be given DISTRIBUTOR by
furnishing new Distributor Price Lists or written advises.
D. MANUFACTURER represents and warrants that the prices and discounts,
if any, extended to DISTRIBUTOR in connection with the Products comply with all
applicable laws and are not, and will not be, less favorable than those extended
to other purchasers of similar quantities of Products from MANUFACTURER, or
other distributors.
13. F.O.B.
A. All prices are F.O.B. MANUFACTURER'S domestic shipping facility.
B. The mode of shipment from MANUFACTURER to the DISTRIBUTOR will be as
directed by the DISTRIBUTOR. MANUFACTURER will ship via the best way consistent
with the delivery schedule and MANUFACTURER'S requirement for traceability.
14. PRICE CHANGES AFFECT ONLY STANDARD PRODUCT SOLD AT STANDARD DISTRIBUTOR
COST
A. Price Increases -
Prior to the effective date of a price increase, DISTRIBUTOR may order
Products for delivery within the term of this Agreement. All Products shipped
under orders submitted by DISTRIBUTOR prior to the effective date of any price
increase will be shipped and invoiced at the price in effect at the time of
order placement.
B. Price Decreases -
In the event MANUFACTURER decreases the price of any Product,
DISTRIBUTOR shall be entitled to a credit equal to the difference between the
price paid for the Product by DISTRIBUTOR, less any prior credits granted by
MANUFACTURER on such Products, and the new decreased price for the Product,
multiplied by the quantity of such Product in DISTRIBUTOR'S inventory on the
effective date of the decrease. Similar price adjustment, if appropriate, will
also be made on all Products in transit to
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DISTRIBUTOR on the effective date of the price decrease and, for sixty (60) days
after such effective date, on all Products returned to DISTRIBUTOR. DISTRIBUTOR
shall submit to MANUFACTURER, within sixty (60) business days following the
effective date of such price decrease or the date DISTRIBUTOR actually receives
notice thereof, whichever occurs later, a report of the Products subject to the
price decrease. All Products shipped after the effective date of any price
decrease will be shipped and invoiced at the price in effect at the time of
shipment.
15. ORDERS
A. Orders for Products placed by DISTRIBUTOR shall be accepted subject
to those terms set forth in this Agreement. Any terms and conditions presented
on orders placed by DISTRIBUTOR which are in conflict with this Agreement shall
be inapplicable to the sale without the express written approval of
MANUFACTURER.
B. Orders shall describe the Products ordered, the quantities, shall
request delivery dates, shall set forth prices and shall provide shipping
instructions. MANUFACTURER will acknowledge each such order in writing at the
earliest possible date, but in any event within ten (10) business days following
receipt. In such acceptance, MANUFACTURER will confirm the requested shipment
date or specify an acknowledged shipment date. If the acknowledged shipment date
is more than thirty (30) days later than DISTRIBUTOR'S requested shipment date,
DISTRIBUTOR, at its election, may cancel the order without penalty.
C. Cancellations and Reschedules -
1. Orders may not be canceled or rescheduled within thirty (30)
days of acknowledged delivery.
2. DISTRIBUTOR may, upon at least thirty (30) days prior written
notice, reschedule the Acknowledged Shipment Date of, or cancel, any order. Any
such rescheduling or cancellation of deliveries shall be at no charge to
DISTRIBUTOR.
D. Drop Shipments -
Shipments to a DISTRIBUTOR customer will be made only if the quantity
exceeds the last column pricing established by the MANUFACTURER.
E. Early Shipments -
If any Products are delivered more than 2 weeks prior to their
Acknowledged Shipment Date, DISTRIBUTOR shall have the right in its discretion
to accept or reject any such delivery. If MANUFACTURER is notified of
DISTRIBUTOR'S intention to return any such delivery, it shall promptly issue a
Return Material Authorization. Notwithstanding the acceptance of such delivery
or any other term or provision in this Agreement, DISTRIBUTOR shall not become
obligated to pay any invoices submitted therefore until forty-five (45) days
after the Acknowledged Shipment Date.
16. TITLE AND RISK OF LOSS
A. The title, risk of loss and right of possession to any Product sold
to the DISTRIBUTOR shall remain a part of MANUFACTURER until shipped F.O.B.
Factory to DISTRIBUTOR. The title, risk of loss and right of possession to any
Product returned to MANUFACTURER by DISTRIBUTOR, which return is authorized by
MANUFACTURER, shall remain in DISTRIBUTOR until received by MANUFACTURER at its
plant, whereupon title and risk of loss shall pass to MANUFACTURER.
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B. Until the purchase price and all other charges payable to
MANUFACTURER hereunder have been received in full, MANUFACTURER hereby retains
and DISTRIBUTOR hereby grants to MANUFACTURER a security interest in the
Products delivered to DISTRIBUTOR and any proceeds therefrom. DISTRIBUTOR agrees
to promptly execute all documents reasonably requested by MANUFACTURER to
perfect and protect such security interest. In the event DISTRIBUTOR fails
promptly to execute such documents, DISTRIBUTOR hereby appoints MANUFACTURER its
attorney-in-fact for the sole purpose of executing such documents, which
appointment shall be a power coupled with an interest and shall be irrevocable.
C. DISTRIBUTOR shall inspect all Products upon receipt thereof, and
DISTRIBUTOR may reject any item that fails substantially to conform to the then
current Product specifications. To reject a Product, DISTRIBUTOR shall within
five (5) working days of receipt of such Product notify MANUFACTURER in writing
or by facsimile of its rejection and request a Return Material Authorization
(R.M.A.) number. Within ten (10) working days of receipt of the R.M.A. number,
DISTRIBUTOR shall return the rejected Product to MANUFACTURER'S designated
return facility, freight prepaid and properly insured, in its original shipping
carton with the R.M.A number displayed on the outside of the carton.
D. If MANUFACTURER confirms the defect, MANUFACTURER shall, at
MANUFACTURER'S option and expense, either repair or replace the Product.
MANUFACTURER shall reimburse DISTRIBUTOR for the shipping charges to return
properly rejected Products and shall pay the shipping charges for the delivery
of such repaired or replacement Products to DISTRIBUTOR; otherwise, DISTRIBUTOR
shall be responsible for all shipping charges.
17. NEW PRODUCT STOCKING
A. MANUFACTURER and DISTRIBUTOR shall agree on the appropriate initial
minimum level of inventory of each Product to be stocked by DISTRIBUTOR. Each
new Product of MANUFACTURER shall also be subject to stocking at a mutually
agreed initial minimum inventory level. The order and stocking of such new
product could be in conjunction with MANUFACTURER Advertising/Announcement in
which the DISTRIBUTOR will have Product on the shelf at the time of such
announcement. Non-periodic return within first year of slow or non-moving
recommended inventory is available to DISTRIBUTOR.
B. For the first twelve (12) months after appointment, a new DISTRIBUTOR
will have the right to return an amount up to 50% of their initial stocking
order with no restocking charge or offsetting order required.
C. Products in this section shall not be counted as "stock rotation" for
purposes of computing the amount of Products returnable by DISTRIBUTOR.
18. STOCK ROTATION APPLIES ONLY TO STANDARD PRODUCT BOUGHT AT STANDARD
DISTRIBUTOR COST
A. Slow-moving inventory, as defined by DISTRIBUTOR, may be returned for
a credit up to a value of five (5) percent of the prior 6 month purchases, with
approval of MANUFACTURER and subject to the following conditions:
1. Product shall be returned freight pre-paid at the
DISTRIBUTOR'S expense within 30 days of authorization by MANUFACTURER.
2. The period for stock rotations will be twice every twelve (12)
months and will be allowed only within MANUFACTURER'S Fiscal Month of February
and MANUFACTURER'S Fiscal Month of August in accordance with the MANUFACTURER'S
annual calendar.
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3. An offsetting purchase order for an equal dollar month must
accompany the request for the return. The requested delivery schedule of the
offsetting purchase order must be within 60 days of the order placement and is
non-cancelable.
4. All Product returned must be in the original condition as
shipped by MANUFACTURER.
B. DISTRIBUTOR may apply to MANUFACTURER for authorization to return
that portion of its inventory in an amount not exceeding five (5) percent of Net
Total Dollar Purchases of MANUFACTURER Products by DISTRIBUTOR during the
immediately preceding six (6) month period. Credit issued for such returned
Products will be based upon the price paid by DISTRIBUTOR less any prior credits
granted by MANUFACTURER on the returned Product.
19. NEW PRODUCT
MANUFACTURER will give DISTRIBUTOR at least thirty (30) days prior
notice of the introduction of any new Products that preclude or materially limit
DISTRIBUTOR from selling like Products in its inventory and shall work with
DISTRIBUTOR to move the effected inventory through resale for ninety (90) days.
If, after the above efforts, effected Product still remains in DISTRIBUTOR'S
inventory, MANUFACTURER agrees to replace it with the new products within one
hundred twenty (120) days of the official public announcement of such new
products or MANUFACTURER'S first shipment of the New Product, whichever occurs
first.
20. DISCONTINUANCE AND OBSOLESCENCE
A. MANUFACTURER reserves the right to discontinue the manufacture or
sale of, or otherwise render or treat as obsolete, any or all of the Products
covered by this Agreement upon at least thirty (30) days prior written notice to
DISTRIBUTOR.
B. DISTRIBUTOR may, within sixty (60) days following receipt of such
notice, notify supplier in writing of its intention to return any or all
discontinued or obsolete Products which remain in its inventory and shall
receive a credit for such Products equal to the net price paid by DISTRIBUTOR,
less any prior credits granted by MANUFACTURER on the returned product.
DISTRIBUTOR may make such returns from one or more stocking locations. Products
must be returned within 30 days of the date of DISTRIBUTOR'S receipt of
MANUFACTURER'S Return Material Authorization.
C. MANUFACTURER shall pay all freight and shipping charges in connection
with any such returns for discontinuance or obsolescence. DISTRIBUTOR shall not
count returns of Products under this section as "stock rotation" for purposes of
computing the amount of Products returnable.
21. MODIFICATION OF PRODUCTS
A. MANUFACTURER shall give DISTRIBUTOR at least ninety (90) days prior
written notice of all engineering modifications that will affect Products in
DISTRIBUTOR'S inventory if such changes affect form, fit, or function. If these
modifications preclude or materially limit DISTRIBUTOR'S inventory from selling
once the engineering modifications are implemented. MANUFACTURER will work with
DISTRIBUTOR to move the affected inventory through resale or repurchase for
ninety (90) days. If after the above efforts, affected Product still remains in
DISTRIBUTOR'S inventory, MANUFACTURER agrees to replace it with upgraded
Products within one hundred twenty (120) days of the official public
announcement of such modification or MANUFACTURERS first shipment of the
modified Product, whichever occurs first.
B. MANUFACTURER shall pay all freight and shipping charges in connection
with any such return or replacements. DISTRIBUTOR shall not count returns of
Products under this section as "stock rotation" for purposes of computing the
amount of Products returnable.
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22. RETURN MATERIAL AUTHORIZATION
A. All authorized returns shall be shipped to MANUFACTURER'S domestic
facility, and must display the appropriate MANUFACTURER Return Material
Authorization number on containers in which the returned Product is shipped.
B. Unauthorized returns will be reshipped to DISTRIBUTOR Freight
Collect.
C. Upon final approval by MANUFACTURER of credit for any returned
Product, such credit shall be computed on the basis of the price paid by
DISTRIBUTOR, less any prior credits granted by MANUFACTURER.
23. WARRANTY
A. The "Warranty Term" for a particular Product is twelve (12) months
from MANUFACTURER'S delivery of such Product F.O.B. as specified in Section 16.
B. MANUFACTURER shall warrant each Product against defects in material
and workmanship under normal use and service during the Product's Warranty Term.
Provided that MANUFACTURER has received a request in writing or by facsimile
authorization for warranty service not later than thirty (30) days after the
expiration of the Warranty Term, MANUFACTURER shall repair or replace any
defective Product, or issue a credit or refund, based on the purchase price
paid. MANUFACTURER shall have the right to elect which of the foregoing options
it wishes to invoke. MANUFACTURER shall pay, or refund the amount of, shipping
charges for any defective Products returned under this section.
C. The express warranties set forth in this Section 23 specifically
exclude and do not apply to defects to a Product: (a) caused through no fault of
MANUFACTURER during shipment to or from DISTRIBUTOR; (b) caused by the use or
operation of Products in an application or environment other than that specified
by MANUFACTURER; (c) caused by modifications or alterations made to the Products
by DISTRIBUTOR or any third party; (d) caused by maintenance performed on the
Products by DISTRIBUTOR or any third party; or (e) which are the result of the
Products being subjected to unusual physical or electrical stress.
D. EXCEPT FOR THE ABOVE EXPRESS LIMITED WARRANTIES, MANUFACTURER MAKES
AND DISTRIBUTOR RECEIVES NO WARRANTIES OR CONDITIONS ON THE PRODUCTS, EXPRESS,
IMPLIED, STATUTORY, OR IN ANY OTHER PROVISION OF THIS AGREEMENT OR COMMUNICATION
WITH DISTRIBUTOR. MANUFACTURER SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OR
CONDITION OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. MANUFACTURER
MAKES THE FOREGOING LIMITED WARRANTY SOLELY TO DISTRIBUTOR FOR DISTRIBUTOR'S
SOLE BENEFIT.
E. DISTRIBUTOR shall not make any representation, promise guarantee or
warranty, nor is authority given to assume to create obligations on behalf of
MANUFACTURER.
F. In all warranty or quality returns, final approval by MANUFACTURER as
to credit, or replacement shall depend upon inspection and/or testing of the
returned Product by MANUFACTURER. No credit or replacement will be given for
returned Product which falls into one or more of the exclusions set forth in
Section 23 and such Product will be returned to DISTRIBUTOR, Freight Collect.
24. REPURCHASES
By mutual agreement between MANUFACTURER and DISTRIBUTOR, and upon
receipt of written request by MANUFACTURER, DISTRIBUTOR shall deliver F.O.B.
point of origin such reasonable quantities of products out of DISTRIBUTOR'S
inventory to such regular customers of
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MANUFACTURER with whom MANUFACTURER has an agreement as may be designated by
MANUFACTURER and as are called for under orders issued by such customers.
25. SPECIAL PURCHASES
MANUFACTURER and DISTRIBUTOR may at any time during the term enter into
separate agreements for the special purchase of other Products including
non-standard Products and Products in greater quantities than those set forth in
MANUFACTURER'S then current Published Price List, and such agreements shall be
subject to all terms and conditions hereof.
26. NOTICES
All notices, except for termination, shall be sent by mail, postage
pre-paid to MANUFACTURER and DISTRIBUTOR to the addresses stated at the outset
of this Agreement, or such other places as either party may designate in
writing. Notification of Termination must be sent by Registered Mail.
27. TERMINATION
A. MANUFACTURER or DISTRIBUTOR may at any time terminate this Agreement
without cause and for its convenience by giving thirty (30) days prior written
notice to the other, via Registered Mail. Both MANUFACTURER and DISTRIBUTOR
represent that they have considered the making of expenditures in preparing to
perform under this Agreement, as well as the possible losses, which might result
in the event of any termination of the Agreement. Both parties acknowledge that
neither party shall in anyway be liable to the other for any loss, expense or
damage, including special, consequential, or incidental damages, by reason of
any termination of this Agreement. Without limiting the foregoing, neither party
shall be liable to the other, because of such termination, for compensation,
reimbursement or damages on account of the loss of prospective profits or
anticipated sales or on account of expenditures, inventory, investments, leases
or commitments in connection with the business or goodwill of MANUFACTURER or
DISTRIBUTOR.
B. This Agreement shall also terminate, immediately upon notice by
MANUFACTURER:
1. in the event that any legislation or exchange controls then in
effect under applicable law preclude DISTRIBUTOR from making payments to
MANUFACTURER in United States currency for a period of sixty (60) days;
provided, however, that termination under this subsection shall not relieve
DISTRIBUTOR of its payment obligations under this Agreement; or
2. upon the enactment of any law, decree, or regulation by the
government of the Territory which would impair or restrict (A) the right of
MANUFACTURER to terminate or elect not to renew this Agreement as herein
provided, (B) MANUFACTURER'S right, title, or interest in the Products or the
intellectual property rights therein, (C) MANUFACTURER'S rights to receive the
payments under this Agreement, or (D) MANUFACTURER'S or DISTRIBUTOR'S ability to
market, sell, or distribute the Products in the Territory.
DISTRIBUTOR agrees to give MANUFACTURER prompt written notice of any law,
decree, or regulation covered by this Section 27.B.
C. Upon termination of this Agreement, DISTRIBUTOR shall make such
disposition of price lists, advertising matter and other materials furnished by
MANUFACTURER as MANUFACTURER may direct. MANUFACTURER'S name, MANUFACTURER'S
Trademarks, and similar identifying symbols shall not be displayed or used by
DISTRIBUTOR thereafter.
D. In the event of any termination, MANUFACTURER shall, if requested to
do so by DISTRIBUTOR, honor any open DISTRIBUTOR purchase order outstanding as
of the date of notice of termination for delivery during a period of up to 90
days after the effective date of termination. Notwithstanding anything herein to
the contrary, in the event that DISTRIBUTOR retains by statute the
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right to distribute Products in the Territory to any customer or in any country
after expiration or termination of this Agreement, then the terms and conditions
of this Agreement shall remain in effect as to such customers or countries, as
the case may be, until such activities cease.
E. Upon termination of this Agreement for whatever reason, such
termination shall be without prejudice to any remedy of either party for the
recovery of any money due under this Agreement.
F. In the event of termination of this Agreement by MANUFACTURER,
DISTRIBUTOR agrees to sell and MANUFACTURER agrees to purchase DISTRIBUTOR'S
inventory of Products that are unaltered in any manner from the original form
and design, subject to test, inspection and acceptance by MANUFACTURER. The
price to be paid by MANUFACTURER for such inventory shall be the price the
DISTRIBUTOR purchased the inventory for, less any prior credits granted by
MANUFACTURER. MANUFACTURER shall pay all freight and shipping charges in
connection with such repurchase.
G. In the event of termination of the agreement by DISTRIBUTOR,
MANUFACTURER agrees to repurchase all inventories of DISTRIBUTOR at the price
the products were purchased from MANUFACTURER, less any prior credits granted by
MANUFACTURER. DISTRIBUTOR agrees to ship such inventory F.O.B. MANUFACTURERS
domestic facility.
H. Monies for repurchased inventory will be paid by MANUFACTURER to
DISTRIBUTOR within thirty (30) days of receipt of said inventory. The credit
will be computed using the price paid by DISTRIBUTOR, less any prior credit
granted by MANUFACTURER.
I. The provisions of Sections 5C, 5F, 5I, 7, 8, 23, 27, 28, 29, and 34
shall survive termination of this Agreement for any reason.
28. INDEMNIFICATION
A. DISTRIBUTOR agrees to indemnify, defend, and hold MANUFACTURER and
its directors, officers, employees, and agents harmless from, and against any
and all claims (including those for personal injury or death) and liabilities
(including attorneys' and other professional fees and other costs of litigation)
arising out of or attributable to the marketing, distribution, or sale of
Products, where and to the extent any associated liability for such liability is
alleged to have been caused by the negligence, willful misconduct or other fault
of DISTRIBUTOR, or its employees or agents and/or any breach of this Agreement
by DISTRIBUTOR.
B. DISTRIBUTOR agrees that MANUFACTURER has the right to defend, or at
its option to settle, and MANUFACTURER agrees, at its own expense, to defend or
at its option to settle, any claim, suit or proceeding brought against
DISTRIBUTOR or its customer on the issue of infringement or misappropriation of
any third party patent, maskwork right, trade secret, copyright or trademark,
each of the foregoing in the Territory, by Products distributed by DISTRIBUTOR
in the manner permitted in this Agreement, subject to the limitations
hereinafter set forth. MANUFACTURER shall have sole control of any such action
or settlement negotiations, and MANUFACTURER agrees to pay, subject to the
limitations hereinafter set forth, any final judgment entered against
DISTRIBUTOR or its customer on such issue in any such suit or proceeding
defended by MANUFACTURER. DISTRIBUTOR agrees that MANUFACTURER at its sole
option shall be relieved of the foregoing obligations unless DISTRIBUTOR or its
customer notifies MANUFACTURER promptly in writing of such claim, suit or
proceeding and gives MANUFACTURER authority to proceed as contemplated herein,
and, at MANUFACTURER'S expense, gives MANUFACTURER proper and full information
and assistance to settle and/or defend any such claim, suit or proceeding. If
the Products, or any part thereof, are, or in the opinion of MANUFACTURER may
become, the subject of any claim, suit or proceeding for infringement of any
patent, copyright or trademark, or if it is adjudicatively determined that the
Products, or any part thereof, infringe any copyright or trademark, or if the
distribution or use of the Products, or any part thereof, is, as a result,
enjoined, then MANUFACTURER may, at its option and expense: (i) procure for
DISTRIBUTOR and its customers the right under such patent, copyright or
trademark to distribute or use, as appropriate, the Products or such part
thereof; (ii) replace the Products, or part thereof, with other suitable
Products or parts;
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(iii) suitably modify the Products, or part thereof; or (iv) if the use of the
Products, or part thereof, is prevented by injunction or if the foregoing
alternatives cannot be accomplished on a commercially reasonable basis, require
DISTRIBUTOR to return all of the Products in inventory and refund the aggregate
payments paid therefore by DISTRIBUTOR. MANUFACTURER shall not be liable for any
costs or expenses incurred without its prior written authorization.
C. Notwithstanding the provisions of Section 28.B., MANUFACTURER assumes
no liability for (i) any infringement claims with respect to any product in or
with which any of the Products may be used but not covering the Products
standing alone; (ii) any trademark infringement involving any marking or
branding not applied by MANUFACTURER or involving any marking or branding
applied at the request of DISTRIBUTOR; (iii) the modification of the Products,
or any part thereof, unless such modification is made by MANUFACTURER; or (iv)
infringement resulting from DISTRIBUTOR'S distribution of Products after a
recall as specified in Section 28.B. (iv) above, which distribution shall be a
breach of this Agreement and result in the indemnification used for this Section
28.A.
D. THE FOREGOING PROVISIONS OF THIS SECTION 28 STATE THE ENTIRE
LIABILITY AND OBLIGATION OF MANUFACTURER AND THE EXCLUSIVE REMEDY OF DISTRIBUTOR
AND ITS CUSTOMERS WITH RESPECT TO ANY ALLEGED INFRINGEMENT OF PATENTS,
COPYRIGHTS, TRADEMARKS, OR OTHER INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS
29. CONFIDENTIAL INFORMATION
DISTRIBUTOR acknowledges that by reason of its relationship with
MANUFACTURER hereunder it will have access to certain other information and
materials concerning the Products and MANUFACTURER'S business, plans, customers
and technology that are confidential and of substantial value to MANUFACTURER,
which value would be impaired if such information were disclosed to third
parties. DISTRIBUTOR agrees that it shall not use in any way for its own account
or the account of any third party, nor disclose to any third party, any such
confidential information revealed to it by MANUFACTURER. DISTRIBUTOR shall take
every reasonable precaution to protect the confidentiality of such information,
including, at the request of MANUFACTURER, the entry by DISTRIBUTOR'S agents and
employees into confidentiality agreements in a form approved by MANUFACTURER,
prohibiting any disclosure to third parties of confidential information provided
by MANUFACTURER. DISTRIBUTOR shall not publish any technical description of any
Product or other confidential information of MANUFACTURER beyond the description
published by MANUFACTURER. In the event of termination or expiration of this
Agreement, there shall be no use or disclosure by DISTRIBUTOR, its agents, or
employees of any confidential information of MANUFACTURER, and DISTRIBUTOR shall
not manufacture or have manufactured any products utilizing any of
MANUFACTURER'S confidential information. Upon such termination, DISTRIBUTOR
shall deliver to MANUFACTURER all copies within its possession or within its
control of customer lists, catalogues, specifications, proposals, quotations,
price lists, contracts and all other documents and data relating to the Products
or the conduct of MANUFACTURER'S business.
30. FORCE MAJEURE
Nonperformance under this Agreement shall be excused, and neither party
shall be liable for any loss, damage, penalty or expense, to the extent that
such performance is rendered impossible or delayed by fire, flood, acts of God
or the public enemy, acts of the Government, labor difficulties, riot, inability
to obtain materials or any other cause where the failure to perform or delay is
beyond the reasonable control of the non-performing party and without the
negligence of such party.
31. INVALIDITY OF PROVISIONS
In the event that any term or provision of this Agreement shall be
deemed by a court of competent jurisdiction to be overly broad in scope,
duration or area of applicability, the court considering the same shall have the
power and hereby is authorized and directed to modify such term or provision to
limit such
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scope, duration or area, or all of them, so that such term or provision is no
longer overly broad and to enforce the same as so limited. Subject to the
foregoing sentence, in the event any provision of this Agreement shall be held
to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall attach only to such provision and shall not affect or
render invalid or unenforceable any other provision of this Agreement.
32. ASSIGNMENT
Neither party shall have the right to assign this Agreement or any
rights hereunder without the prior written consent of the other. For purposes
hereof, the term "assign" shall include, without limitation, a merger, sale of
assets or business, or other transfer of control by operation of law or
otherwise.
33. AUTHORITY
Both parties represent and warrant to each other that they have the
right and lawful authority to enter into this Agreement, and that there are no
other outstanding agreements or obligations inconsistent with the terms and
provisions between the parties.
34. GENERAL
A. This Agreement supersedes and cancels all prior Agreements between
the parties, written, oral or implied; except that it shall not relieve either
party from the payment of any debit owed the other party under any prior
Agreement there between.
B. No modification, change or amendment to neither this Agreement, nor
any waiver of any rights in respect hereto, shall be effective unless in writing
signed by the parties.
C. In the event of a conflict or inconsistency between the terms of this
Agreement and those of any order, quotation, solicitation or other communication
from one party to the other, the terms of this Agreement shall be controlling.
D. This Agreement is made under and shall be construed by the laws of
the State of California, U.S.A., without reference to provisions of conflicts of
laws. If a court of competent jurisdiction deems any provision unenforceable,
such provision shall be severable and the remaining provisions shall continue in
full force and effect. The parties expressly disclaim the application of the
United Nations Convention on the International Sale of Goods. Each party
consents to the jurisdiction of the state courts and federal courts in the
Northern District of California, U.S.A. which courts shall have the exclusive
jurisdiction and venue to resolve any dispute arising out of this Agreement.
Each party hereto agrees and consents to service of process by registered mail
to the address listed in this Agreement.
E. This Agreement shall be made in the English language, which language
shall be controlling in all respects, and all versions hereof in any other
language shall not be binding on the parties hereto. All communications and
notices to be made or given pursuant to this Agreement shall be in the English
language.
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IN WITNESS WHEREOF, THE PARTIES HERETO HAVE SIGNED THIS AGREEMENT AS OF THE YEAR
AND DAY FIRST WRITTEN.
MICRO LINEAR CORPORATION TEKSEL CO. LTD
By: By:
--------------------------------- --------------------------------
Title: Xxxxx X. Xxxxxxxx, V.P. Sales Title:
------------------------------ -----------------------------
Date: Date:
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