Non-Exclusive Distribution Agreement - DSP Telecommunications Ltd. and Tomen Electronics Corp.
NON-EXCLUSIVE DISTRIBUTION AGREEMENT
DSP TELECOMMUNICATIONS LTD.
HAVING A PRINCIPAL OFFICE
11 BEN GURION STREET
GIVAT SHMUEL 51901 ISRAEL
(HEREINAFTER CALLED "DSPT")
TOMEN ELECTRONICS CORP.
A JAPAN CORPORATION
CORPORATION, GENERAL/LIMITED PARTNERSHIP
WHOSE PRINCIPAL OFFICE
IS LOCATED AT
CHIYODA-KU, TOKYO, JAPAN
(HEREINAFTER CALLED "DISTRIBUTOR")
THIS AGREEMENT is made and entered into as of 1st day of January, 1994 between
DSP TELECOMMUNICATIONS LTD. with place of business at 11 Ben Gurion Street,
Givat Shmuel 51901, Israel and TOMEN ELECTRONICS CORP. (Distributor) with place
of business at 2-1-1, Uchisaiwaicho, Chiyoda-Ku, Tokyo, Japan, which
collectively are referred to hereinafter as "the parties".
NOW THEREFORE, the parties hereto as follows:
1. DISTRIBUTOR SALES
Distributor shall have the non-exclusive right to purchase Product (as
hereinafter defined) from DSPT for resale through its distribution network in
the country of JAPAN. Sales of such Product in the country of JAPAN to other
than Distributor directly by DSPT's representatives, agents, or other authorized
distributors shall not be of this Agreement.
(a) Performance under this Agreement shall be in accordance with the terms and
conditions set forth herein and in Exhibit A (DSPT's current published
Distributor Price List), Exhibit B (DSPT's Terms of Sale) and Exhibit C
Exhibits are hereby incorporated fully into and made a part of this Agreement.
In the event that any part of any Exhibit has been modified by, or are in
conflict with the body of this Agreement, the language of the Agreement body
(b) The relationship of DSPT and Distributor established by this Agreement is
that of independent contractors, and nothing contained in this Agreement shall
be construed to (i) give either party the power to direct and control the
day-to-day activities of the other (ii) constitute the parties as partners,
joint ventures, co-owners or otherwise as participants in a joint or common
undertaking, or (iii) allow Distributor to create or assume any obligation on
behalf of DSPT for any purpose whatsoever. All financial obligations associated
with Distributor's business are the sole responsibility of Distributor. All
sales and other agreements between Distributor and its customers are
Distributor's exclusive responsibility and shall have no effect on Distributor's
obligation under this Agreement. DSPT shall not create or assume any
obligation on behalf of Distributor for any purpose whatsoever.
3. TERM OF AGREEMENT
The term of this Agreement shall be twelve (12) months, commencing as of the
date first written above, subject to the terms and conditions of Article 14
herein entitled Termination. In the absence of any such termination,
this Agreement shall
continue from year, automatically renewing upon each anniversary date, subject
to the same terms and conditions contained herein.
(a) Product covered by this Agreement is defined as the terms listed in DSPT's
Distributor Price List attached as Exhibit A, as modified from time to time by
DSPT upon written notice to Distributor.
(b) Additional Product may be added to this Agreement through mutual agreement
on the conditions applicable to each Product by both parties.
(c) In the event that DSPT shall agree to supply Distributor with any Product
not listed in, or under conditions not covered in, DSPT's Distributor Price List
attached as Exhibit A under this Agreement, where such Product is concerned
certain provisions of this agreement may not apply, if both parties so agree in
writing. the provisions which may not apply include price of such Product must
be determined prior to acceptance by DSPT of Distributor's purchase order for
(a) DSPT shall sell to Distributor, and Distributor shall buy from DSPT Product
at the prices shown in Exhibit A hereto, with payment therefore to be made in
U.S. dollars. Should this Agreement be terminated by either party, for any
reason, prior to payment of amounts due hereunder or pursuant hereto, such
amount shall be paid as and when due on accordance with the terms hereof. DSPT
will provide Distributor with "suggested OEM resale pricing" for the Product as
guidelines only. Distributor shall have the unilateral right to establish the
prices at which it will sell Product to its customers.
(b) The pricing shown in Exhibit A does not include any federal, state or local
taxes that may be applicable to the Product, and is subject to change at any
time by DSPT. DSPT shall provide Distributor with notice of any such change,
and the effective date thereof, by furnishing written notice to Distributor
thirty (30) days prior to such effective date.
(c) In the event DSPT decreases the published Distributor price in any
product shown in Exhibit A, DSPT will furnish Distributor with a listing of
items affected, showing the old price and the new price. Distributor may
apply for a credit equal to the difference between the price paid by the
Distributor, less any prior credits granted by DSPT and the new decreased
price for the product, multiplied by the quantity of such Product in
Distributor's inventory on the effective date of the price reduction.
Issuance of such credit by DSPT may be contingent upon DSP's verification of
Distributor's inventory report. All such credits
will forthwith be applied to Distributor's account for subsequent purchase of
Product. All products shipped after the effective date of a price decrease will
be invoiced at the new/lower price.
(d) In the event DSPT increases the published price on any Product shown in
Exhibit A, such Product shipped on or after the effective date of such price
increase shall be invoiced at the price in effect at the time Distributor's
purchase order is accepted by DSPT.
(e) The price for each item on every purchase order issued by Distributor shall
be based on the quantity ordered at the time of purchase order placement and on
DSPT's published price list in Exhibit A, as amended from time to time by DSPT.
(f) In the event that a price reduction is authorized prior to the completion
of an order, or a special situation occurs, where prior approval for a price
reduction is authorized, a special equivalent to the amount requested times the
appropriate quantity will be credited in the form of a shipment of no-charge
Product at the end of each month in which the appropriate invoice is paid by
6. DELIVERY, TITLE AND RISK
(a) Shipment of all Product shall be F.O.B. DSPT's point of shipment, freight
collect. Title to; and risk of loss or damage to, product shall pass to
Distributor, upon delivery to carrier at the shipping point. In the event of
carrier's miss-delivery, DSPT shall aid the Distributor in dealing with the
carrier in tracing the shipment and obtaining delivery. Shipment made more than
five (5) days ahead of schedule of shipments made against canceled orders are
made at DSPT's risk and Distributor is not responsible or liable for the
Product, but Distributor will aid DSPT in tracing the shipment and obtaining
(b) DSPT shall not be liable for delays in delivery or failure to manufacture
due to causes beyond its reasonable control, such as but not limited to: acts of
God, acts or omissions of Distributor, priorities, fire, strikes, floods,
epidemics, quarantine restrictions, riots, war and delays in transportation. In
the event of any such delay, the date of delivery shall be extended for a period
equal to the time lost by reason of the delay.
7. EXPORT CONTROL
(a) Distributor agrees and warrants to DSPT that unless prior authorization is
obtained from the United States Department of Commerce, neither Distributor nor
its subsidiaries shall knowingly:
(1) export or re-export, directly or indirectly, any technical data (as
defined in Part 779 of the U.S.
Export Administration Regulations), including software, received from
(2) disclose such technical data or,
(3) export re-export, directly or indirectly, any direct product of such
to any destination or country to which the export or release of such technical
data or products is restricted or prohibited by U.S. law. Such countries or
destinations presently include:
Afghanistan, Albania, Bulgaria, Cambodia, Cuba, Czechoslovakia,
Estonia, the German Democratic Republic (including East Berlin),
Hungary, Laos, Latvia, Libya, Lithuania, Mongolian People's Republic,
Nicaragua, North Korea, Peoples Republic of China, Poland, Romania,
The Union of Soviet Socialist Republics and Vietnam and military
police or apartheid-enforcing entities in Namibia and South Africa.
(b) The foregoing assurance is furnished by Distributor to satisfy the general
license GTDR written assurance requirements under Part 779 of the U.S. Export
(c) Distributor further agrees to obtain any necessary export license or other
documentations prior to export or re-export of any Product or technical data,
including software, acquired from DSPT or any product of such technical data.
Accordingly, otherwise dispose of any such Product or technical data directly or
indirectly to any person, firm or entity, or country or countries, prohibited by
U.S., Japan or applicable other country law.
(d) Further, Distributor shall give notice to the need to comply with such law
to any person, firm entity which it has reason to
believe is obtaining any such technical data or Product from DSPT with intention
(e) Each party shall secure, at its sole expense, such licenses and export and
import documents as are necessary for it to fulfill its obligations under this
(f) This Article shall survive the cancellation or termination of this
(g) Seller shall attempt to give prior written notice of any contingent tax
which might be imposed by the U.S. Government, including any federal, state, or
(a) All purchases of Products pursuant to this Agreement shall be effected by
the issuance of Purchase Orders by Distributor to the terms and conditions of
this Agreement. Such Purchase Orders
shall state unit quantities, unit descriptions, applicable prices, requested
delivery dates, F.O.B. point of shipment, payment terms and shipping
instructions. Distributor shall endeavor to provide firm quantity and shipment
releases consistent with DSPT's lead time for subject Products.
(b) All Purchase Orders Issued by Distributor are subject to acceptance by DSPT
at DSPT's home office in the U.S.A.
(a) For the purposes of this Article the following definitions shall apply:
(i) "Standard Product" is defined as any Product which can be sold to any
customer free of proprietary restrictions; and
(ii) "Custom Product" is defined as any Product which has been developed
for a specific customer and which is not free of proprietary
restrictions regarding its use or sale.
(b) Distributor may reschedule certain deliveries on existing orders for
Standard Product upon written notice to DSPT according to the following
Number of Days in Advance of
DSPT's committed Delivery Date Permitted Rescheduling
[**** ** ***** ****] [**** *******]
[********* **** ** *** *******] [* *** **** **********]
[*** ****** *****] [** *** **** **** *****]
[**** **** ** * *** **]
[***** ******* ***** **]
[*** ******* *** ********** *****] [*** ************]
(c) Distributor may reschedule certain deliveries on existing orders for Custom
Product upon written notice to DSPT according to the following schedule:
Number of Days in Advance of
DSPT's Committed Delivery Date Permitted Rescheduling
[**** ** ***** ****] [**** *******]
[********* **** ** *** *******] [* *** **** **********]
[*** ****** ****] [** *** **** **** ******]
[**** **** ** * *** **]
[***** ******* ***** **]
[*** ********* ********]
[*** ******* *** ********** ****] [*** ************]
(d) Distributor may cancel deliveries on existing orders for Standard or Custom
Product upon written notice to DSPT. In such event, Distributor shall pay a
cancellation charge according to the following schedule.
Cancellation Charge as of % of
Cancelled order Value
Number of Days in Advance of
DSPT'S Committed Delivery Date Standard Product Custom Prodcut
- ------------------------------ -------------------------------
[**** ** ***** ****] [****] [****]
[********* **** ** *** *******] [***] [****]
[*** ****** *****]
[*** ******* *** ********** ****] [**] [******]
(e) Notwithstanding the cancellation charges in paragraph (d) above,
Distributor may, within [**** *** ******** ****] from the placement of any order
with DSPT, cancel that order without penalty as long as DSPT has not shipped the
Distributor shall send to DSPT within twenty (20) working days after the end of
each month, a written report containing the following information by location:
(a) A detailed inventory of all Products, at the end of said month, with
quantities and prices paid.
(b) A detailed Point of Sale (P.O.C.) activity report including the names of
customers with programs, Products, quantities purchased, and the dollar amounts
invoiced to said customers.
(c) Sales projections and bookings targets for the next six (6) months.
(d) "Design-in" status activity with Distributor's assigned accounts.
11. ADVERTISING AND PROMOTION
(a) DSPT agrees to supply Distributor with its usual sales promotion and
advertising materia, in quantities to be mutually agreed upon, without cost to
Distributor and to support the efforts of Distributor with DSPT's usual
advertising and other sales promotion efforts. All such material shall be
DSPT in good condition, except for reasonable wear, immediately upon demand by
(b) Distributor agrees to promote the sale of DSPT's Product, at its own
expense, through various media advertising and other sales promotional efforts.
Special advertising pr promotion programs may be agreed upon from time to time
in which the parties will agree to some sharing of the costs.
(c) A coop advertising program will be defined with a budget established which
is equivalent to .2% of annual sales.
(a) DSPT agrees to extend the [*** ****] limited warranty to Distributor as
stated in Exhibit B to a period of [******** **** ******] from date of shipment
by DSPT to Distributor, or [*** *** ****] from date of shipment from Distributor
to Distributor's customer, whichever comes first.
(b) THE WARRANTY IN EXHIBIT B AS EXTENDED ABOVE IS EXPRESSED IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND IN LIEU
OF ALL OTHER OBLIGATIONS OR LIABILITIES ON THE PART OD DSPT.
(c) DSPT's LIABILITY UNDER THE WARRANTY SHALL BE LIMITED TO A REFUND OF THE
DISTRIBUTOR'S PURCHASE PRICE. IN NO EVENT SHALL DSPT BE LIABLE FOR THE COST OF
PROCUREMENT OF SUBSTITUTE GOODS OR FOR ANY SPECIAL INCIDENTAL OR CONSEQUENTIAL
DAMAGES FOR BREACH OR WARRANTY.
13. RETURNS AND REPURCHASES
(a) Within thirty (30) days after the initial twelve (12) month period of this
Agreement, and within thiety (30) days following each successive twelve (12)
month period thereafter, Distributor may return any slow or non-moving Product
in a new and unused condition for credit to be applied against future
purchases, at the net price paid less any prior credits granted by DSPT to the
Distributor for such returned Product. For the purposes of this paragraph,
"slow or non-moving Product" shall mean those Products for which Distributor's
inventory turns (period unit sales divided by ending unit inventory) for the
previous twelve (12) month period are less than six (6).
(b) Products inventoried as new Products introduced by DSPT for original
stocking orders of recommended stocking programs may by returned for credit to
by applied against future purchases by the Distributor at the ecperation of the
initial twelve (12) month period of stocking. These returns will not be subject
to any offsetting order requirements.
(a) Either party may at any time terminate this Agreement with or without cause
upon ninety (90) days written notice after having a review meeting with the
other party to discuss the termination. It is expressly understood and agreed
that the rights of termination set forth above are absolute and that both
parties hereto have considered the making of expenditures in preparing for
performance under this Agreement and possible losses incident and resulting to
them in the event of its termination. Therefore, in agreeing to said terms of
termination, it is with full knowledge of such possibilities and either party
hereto shall not be responsible to the other for damage, or otherwise, by reason
of the fact of termination of the Agreement.
(b) Distributor warrants that all identifying signs, literature, logos and
other evidence provided by DSPT upon termination of this Agreement. Distributor
will cease production of any such materials upon termination, and shall cease
advertising that there is any business relationship between the parties.
(c) Should this Agreement be terminated by either party prior to payment of
amounts due hereunder or pursuant hereto, such amount shall be paid as and when
due in accordance with the terms hereof.
(d) In event of termination of this Agreement without cause, all orders
received and accepted by DSPT as of the date of such termination notice shall be
unaffected by such notice. DSPT will accept orders from Distributor os
contractually obligated to furnish its customers and does not have in its
inventory provided Distributor notifies DSPT of any and all such transactions in
writing within (30) days of the termination date.
(e) If this Agreement is terminated by DSPT without cause, by Distributor with
cause, or by Distributor for any reason during the first twelve (12) months term
of this Agreement, DSPT shall repurchase at Distributor's option, any of all
Products remaining in Distributor's inventory, provided that Distributor
requests such repurchases in writing within thirty (30) days of such
termination, subject to the following:
(1) If price to be paid for the repurchase of said inventory shall be the
net amount of Distributor cost at the time of purchase less any
subsequent price credits issues by DSPT.
(2) All Products must be new, unused, undamaged, and in good merchantable
condition after inspection and testing by DSPT will supply proper
(3) All Products will be shipped F.O.B. Distributor's designated facility,
(f) If this Agreement is terminated by DSPT with cause, by Distributor without
cause, following the first twelve (12) months term of this Agreement, DSPT shall
repurchase at DSPT's option,
all unsold Products remaining in Distributor's inventory subject to the
(1) The price to be paid for the repurchase of said inventory shall be the
net amount of Distributor's cost at time of purchase less any
subsequent price credits issued.
(2) All Product must be new, unused, undamaged, and in good merchantable
condition after inspection and testing by DSPT.
(3) All Product will be shipped F.O.B. Distributor's designated facility,
(a) Terms of Payment:
[****] discount for [***** *** ****] payment, net
[****** **** ****]
(b) Billbacks (Rebills)
DSPT and Distributor shall be jointly responsible for reconciling their accounts
in a timely manner, Distributor adjustments, debit memos, and Billbacks must be
forwarded to DSPT within [***** **** ****] of the transaction date. DSPT must
reply to any such adjustment, debit memo, and billback-in writing within [*****
**** ****] of the date of notification. Any other entries will be considered
valid and closed to further negotiations. The only exception to this policy
will be for formal DSPT audit findings.
(c) DSPT Audits
DSPT may request audits of physical inventory and books of record pertaining to
DSPT Product of annual basis. No audit shall be retroactive more than fifteen
(15) months. Audit findings will be submitted to the Distributor in writing
within ninety (90) days from the day the audit stated. Therefore, when the
audit findings are received by the Distributor, no item will be more than
eighteen (18) months old.
(a) This Agreement, including any Exhibits hereto attached or incorporated
by reference, constitutes the sole and entire Agreement between DSPT and
Distributor concerning the subject matter hereof, supersedes all prior
communications or agreements written of oral, and is intended as a complete
and exclusive statement of the terms of the Agreement between the parties.
Except as explicitly permitted herein, this Agreement may be modified only in
writing, signed by authorized representatives of both parties.
(b) Both parties represent and warrant to each other that each has the right
and power to enter into this Agreement, and that there are no outstanding
assignments, grants, licenses, encumbrances, obligations or agreements, either
written, oral or implied, inconsistent with this Agreement.
(c) The transfer, delegation or assignment by either party of this Agreement,
or any of its duties, obligations, or rights hereunder, without the prior
written consent of the other party shall be void.
(d) IN NO EVENT SHALL DSPT BE LIABLE TO DISTRIBUTOR OR ANY OTHER ENTITY FOR ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR OTHER DAMAGES, HOWEVER CAUSED, INCIDENTAL,
CONSEQUENTIAL OR OTHER DAMAGES HOWEVER CAUSED, WHETHER OR NOT DSPT HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE ESSENTIAL PURPOSE OF THIS
PROVISION IS TO LIMIT THE POTENTIAL LIABILITY OF DSPT ARISING OUT TO THIS
AGREEMENT AND/OR SALE OF PRODUCTS HEREUNDER.
(e) DSPT shall not be liable or delays in delivery or failure to manufacture
due to causes beyond its reasonable control, such as but not limited to
inability to obtain necessary labor, materials, or manufacturing facilities.
(f) Distributor agrees that DSPT owns all right, title, and interest in the
product lines that include the Product now or hereafter subject to this
Agreement, and in all of DSPT patents, trade marks, trade names, inventions,
copyrights, know-how and trade secrets relating to the design, manufacture, or
operation of the Products. The use by Distributor of any of these property
rights is authorized only for the purposes herein set forth, and upon
termination of this Agreement for any reason such authorization shall cease.
(g) Distributor acknowledges that by reason of its relationship to DSPT
hereunder, it may have access to certain information and materials concerning
DSPT business, plans, customers, technology, and products that are
confidential and of substantial value to DSPT, which value would be impaired
if such information were disclosed to third parties. Distributor agrees that
it will not use in any way for its own account or the account of any third
party, nor disclose to any third party, any such confidential information
revealed to it by DSPT. Only items marked confidential by DSPT shall not
publish any technical description of the Products beyond the description
published by DSPT. In the even of termination of Agreement, there shall be
no use or disclosure by Distributor of any confidential information of DSPT.
Distributor shall not manufacture or have manufactured any devices,
components or assemblers utilizing any of DSPT's confidential information.
(h) All notices required to be given hereunder shall be given in writing by
personal delivery or by a certified letter to the respective address as may be
designated in writing by either party and delivered to the other party. Notice
given by certified mail shall be deemed given five (5) days after mailing date
to the current address of the party. The current addresses of the parties are
DSPT: DSP TELECOMMUNICATION LTD.
11 Ben Gurion Street
Givat Shmuel 51901
Distributor: TOMEN ELECTRONICS CORP.
Chiyoda-ku, Tokyo, Japan
(i) This Agreement and all acts and transactions pursuant hereto and the rights
and obligations of the parties hereto shall be governed, construed, and
interpreted in accordance with the laws of the State of California, U.S.A.
(j) Any dispute between the parties arising out of this Agreement shall be
submitted to final and binding arbitration of San Jose, California, under the
then current Arbitration Rules and supervision of the American Arbitration
Association, upon written notification and demand by either party hereto. The
American Arbitration Association shall be requested to submit a list of
prospective arbitrators expericnced in commercial contracts involving the
semiconductor industry, and the parties shall select a single arbitrator from
such list to conduct the arbitration. The arbitrator may not award punitive or
exemplary damages, and the decision and award of the arbitrator shall be final
and binding and may be entered and any court of competent jurisdiction. The
parties hereto agree to pay their own attorneys' fees associated with the
arbitration, and to pay the other costs and expenses of the arbitration as the
rules of the American Arbitration Association provided. The provisions of
California Code of Civil Procedure Section 1283.05 permitting the taking of
depositions and obtaining discovery shall be applicable to any arbitration.
(k) The terms and conditions herein contained together with the Exhibits
attached hereto and incorporated by reference constitute the entire and final
Agreement between the parties with respect to the subject matter hereof,
supersede all previous communications, representations, understanding or
agreements, either oral of written, between the parties with respect to such
subject matter, and shall take precedence over any additional or conflicting
terms which may be contained in either party's Quotations, Purchase Orders,
Acknowledgements or invoices.
(l) No agreement or understanding varying or extending any of the terms or
provisions hereof shall be binding on either party unless in writing and signed
by duly authorized representative of both parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first written above.
DSP TELECOMMUNICATION LTD. ("DISTRIBUTOR")
(DSPT) TOMEN ELECTRONICS CORP.
By: \s\ Gideon Barak By: \s\ J. Ishikawa
Printed Name: Gideon Barak Printed Name: J. Ishikawa
Title: President Title: President
Date: December 1, 1993 Date: February 15, 1994
DSP TELECOMMUNICATION LTD. DISTRIBUTOR PRICE LIST
TO BE PROVIDED
DSP TELECOMMUNICATIONS INC.
TERMS AND CONDITIONS OF SALE
1. GENERAL: The terms and conditions of sale contained herein apply to all
quotations mad and purchase orders entered into by the Seller. The said terms
and conditions may in some instances conflict with some of the terms and
conditions affixed to the form order blank and/or specified by the Buyer.
Therefore, acceptance of the Buyer's order is made only on the express
understanding and condition that insofar as the terms and conditions of this
acceptance conflict with any terms and conditions of the Buyer's order, the
terms and conditions of this acceptance shall govern, Irrespective of whether
the Buyer accepts these conditions by written acknowledgement, by implication,
or acceptance and payment of goods ordered thereunder. Seller's failure to
object to provisions contained in amy communication from Buyer shall not be
deemed a waiver of the provisions contained herein must specifically be agreed
to in writing by the general manager of the Sellers before becoming binding on
either the Seller or the Buyer.
All orders or contracts must be approved and accepted by the Seller at his home
The said terms and conditions of sale shall be applicable whether or not they
are attached to or enclosed with the products to be sold or sold hereunder.
2. PRICES: Irrespective of any prices quoted by Seller or listed on Buyer's
order, and order is accepted only at the prices shown on Seller's
Prices quoted for the items described on said acknowledgement are firm and not
subject to audit or price redetermination. Prices are subject to revision only
when interruptions, engineering changes or changes in the quality are caused or
requested by Buyer.
3. TAXES: All prices are quoted, all orders accepted, and all billings
rendered exclusive of all federal, state and local excise, sales, use and
similar taxes. Consequently, in addition to the prices specified herein, the
amount of any present or future excise, sales, use or similar tax applicable to
the sale of the product hereunder shall be paid by Buyer, or in lieu thereof
Shall provide Seller with a tax exemption certificate, to the taxing
authorities. such taxes, when receives a proper tax-exemption certificate from
Buyer prior to shipment.
4. TERMS AND METHOD OF PAYMENT: Where Seller has extended credit to Buyer,
terms of payment shall be net [****** **** ****] from date of invoice. No
discounts are authorized. The amount
of credit may be changed or credit whitdrawn by Seller at any time. On any
order on which credit is not extend by Seller, With Order (in whole or part),
C.O.D.' or Sight Draft attached to Bill of Lading or other shipping documents,
with all costs of collection for the account of Buyer.
If in the judgement of the Seller, the financial condition of the Buyer at any
time does not justify continuation of production or shipment on the terms of
payment originally specified, the Seller may require full or partial payment in
advance and, in the event of the bankruptcy or insolvency of the Buyer or in the
event any proceeding is brought entitled to cancel any order then outstanding
and shall receive reimbursement for its cancellation charges.
Each shipment shall be considered a separate independent transaction, and
payment therefore shall be made accordingly. If shipments are delayed by the
Buyer, payments shall become due on the date when the Seller is prepared to make
shipment. If the work covered by the purchase order is delayed by the Buyer.
The Seller reserves the right to shop to its order and make collection by sight
draft with bell of lading attached.
5. TITLE AND DELIVERY: All sales are made F.O.B. point of shipment. Seller's
title passes to Buyer and Seller's liability as to delivery ceases upon making
delivery of material purchased hereunder to carrier at shipping point in good
condition, the carrier acting as Buyer's agent. All claims for damages must be
filed with the carrier. All shipments will normally be made by Parcel Post,
Railway Express, Air Express or Air Freight. Unless specific instructions from
Buyer specify which of the foregoing methods of shipment is to be used, the
Seller will exercise his own discretion.
Shipping dates are approximate and are based upon receipt from Buyer of all
Seller shall not be responsible for any failure to perform arising from causes
beyond its control. These causes shall include but not be restricted to fire.
storm, flood, earthquake, explosion, accident, acts of the public enemy, war,
rebellion, insurrection, epidemic, quarantine restrictions, labor disputes,
labor shortages, transportation embargoes, or failure or delays in
transportation, inability to secure raw materials or machinery for the
manufacture of its devices, acts of God, acts of the Federal Government or any
agency thereof, and judicial action.
In the event of any such delay the date of delivery shall, at the request of the
Seller, be deferred for a period equal to the time lost by reason of the delay.
In the event of any delay by Buyer, Seller may decline to make further shipments
without in any way affecting its rights under such order. If despite any
default by Buyer's Seller elects to continue to make shipments, its action shall
not constitute a waiver of any default by Buyer or in any way affect Seller's
legal remedies of any such default. Right of possession of the
products sold hereunder shall remain with Seller and such products shall remain
personal property until all pay payments hereunder (including deferred payments
whether evidence by notes or otherwise) shall have been made in full in each,
and Buyer agrees to do all acts necessary to perfect and maintain such right and
title in Seller.
6. ASSIGNMENTS: The Buyer shall not assign his order or any interest therein
or any rights thereunder without the prior written consent of Seller.
7. PATENTS: Buyer shall indemnify, defend and hold Seller harmless against
any expenses, damages or costs resulting from any suit or proceeding brought for
infringement of patents or trademarks or unfair competition arising from
compliance with Buyer's designs or specifications or instructions.
With respect to products manufactured solely to Seller's designs or
specifications, Seller shall defend any suit or proceeding brought against Buyer
so far as based on a claim that any such products, or any parts thereof,
furnished hereunder constitutes an infringement of any patent of the United
States, if notified promptly of such claim in writing and given authority,
information and assistance (at Seller's expenses) for the defense of same, and
Seller shall pay all damages and costs awarded therein against Buyer. In case
said products or any parts thereof, are in such suit held to constitute
infringement and the use of said products or parts is enjoined, Seller shall, in
its sole discretion, at its own expense, wither procure for the Buyer the right
to continue using said products or parts or replace same with noninfringing
products, or modify them so they become noninfringing, or remove said products
and refund the purchase price and the transportation costs thereof. The
foregoing states the entire liability of the Seller of patent infringement by
the said products or any part thereof.
Seller shall not be liable for any costs or damages incurred by Buyer as a
result of any suit or proceeding brought against the Buyer and Buyer will
indemnify, defend and hold Seller harmless from any expenses, damages or costs
resulting from any suit or proceeding brought against Seller, either severally,
or jointly with Buyer, so far as such suit or processing brought against Seller,
wither severally, or jointly with Buyer, so far as such suit or proceeding is
based on claims (a) that use of any product or any part thereof, furnished
hereunder, in combination with products not supplied by Seller or (b) that a
manufacturing or other process utilizing any product, or any part thereof
furnished hereunder, constitute either direct or contributory infringement of
any patent of the United States.
Sale of products or any parts thereof, hereunder confers on the Buyer no license
under any patent rights of Seller governing or relating to (a) the structure of
any devices to which the products or parts may be applied, or (b) a process or
machine in connection with which they may be used.
8. WARRANTIES AND ADJUSTMENTS: (a) Standard Products Warranty and
Adjustments. Standard products of Seller are warranted to
be free from defects in materials and workmanship and to meet the applicable
specifications when tested to published specifications for a period of [***
****] from date of shipment. THE FOREGOING IS IN LIEU OF ANY OTHER WARRANTY,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH OTHER
WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. The liability of Seller under this
warranty is limited solely in replacing, or repairing, or issuing credit (at the
discretion of Seller) for such products that become defective or fail to meet
the specifications during the schedule period, or prior to the date Buyer uses
or resells such products, whichever date sooner occurs, provided that, Seller
will not be liable under this warranty unless (i) Seller is promptly notified in
writing by Buyer upon discovery of defects or failure too meet specifications,
(ii) the defective unit is received by seller for adjustment no later than
[**** *****] following the last day of the warranty periods, and (iv) Seller's
examination of such unit shall disclose, to its satisfaction, that such defects
or failure have not been caused by misuse, neglect, improper installation,
repair, alteration or accident. Any authorization for repairs or alteration
must be in writing or prevent voiding warranty. IN NO EVENT SHALL SELLER BE
LIABLE TO BUYER FOR LOSS OF PROFITS, LOSS OF USE OR DAMAGES OF ANY KIND BASED
UPON A CLAIM FOR BREACH OF WARRANT. This warranty excludes developmental
products, which are covered by separate warranty.
(b) Developmental Products Warranty. Developmental products of Seller are
warranted to be free from defects in materials and workmanship and to meet
the applicable preliminary specifications. Upon receipt by Buyer. THE
FOREGOING IS IN LIEU OF ANY OTHER WARRANTY EXPRESS, IMPLIED OR STATUTORY,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE ALL OF WHICH OTHER WARRANTIES ARE HEREBY EXPRESSLY
The liability of Seller under this warranty is limited solely to replacing, or
issuing credit (which will be negotiated by both parties) for such products as
are defective at the time they are received by Buyer, provided that Seller will
be liable under this warranty unless (i) Seller is promptly notified in writing
upon discovery of defects by Buyer, (ii) the defective unit is returned to
Seller for adjustment no later than [**** ***** **** *****] following the date
on which such products are first shipped by Seller, and (iv) Seller's
examination of such unit shall disclose, to its satisfaction, that such defects
have not been caused by misuse, neglect, improper installation, repair,
alteration or accident. IN NO EVENT SHALL SELLER BE LIABLE TO BUYER FOR LOSS OF
PROFITS, LOSS OF USE, OR DAMAGES OF ANY KIND BASED UPON A CLAIM FOR BREACH OF
Technical Advice. Seller's warranties as hereinabove set forth shall not be
enlarged, diminished or affected by, and no obligation or liability shall arise
or grow out of, Seller's rendering of technical advice or service in connection
with Buyer's order or the products furnished hereunder.
9. LIMITATION OF LIABILITY: IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL (INCLUDING LOSS OF PROFITS OR GOODWILL) OR
SPECIAL DAMAGES RESULTING FROM ITS PERFORMANCE OR PERFORMANCE OR USE OF ANY
GOODS OR SERVICES SOLD PURSUANT HERETO, WHETHER DUE TO A BREACH OF CONTRACT,
BREACH OF WARRANTY, OR SUCH PARTY'S NEGLIGENCE.
A. TERMINATION FOR CAUSE
Any of the following events or occurrences are defined as a breach of the
Agreement, giving the injured party the right to terminate the Agreement for
cause, such termination exercisable by the injured party at its option. The
waiver of any instance of breach under the Agreement shall not constitute
waiving of the right to terminate the Agreement for any subsequent or like
(1) Any proceeding in bankruptcy or insolvency filed by or against either
party, or appointment of a Receiver or Trustee for such party or of a
substantial assignment for the benefit of the creditors of either party without
the prior written consent of the other party.
(2) Failure by either party to substantially perform any material covenant,
obligation or warranty set forth in the Agreement; or violation by either party
of any material covenant, obligation, agreement or warranty set forth in the
(3) Any significant change in ownership of wither party that adversely affects
the relationship of the parties.
B. TERMINATION WITHOUT CAUSE
Termination without cause is the termination of the Agreement, by either party,
upon the unilateral action of the terminating party for its primary convenience
and interest, for reasons other than those defined as breach.
Product will be considered discontinued by manufacture if it is removed from
DSP'T Distributor Price List upon advance written notice to Distributor.
When DSPT has the legal obligation to collect federal, state, or local taxes,
the appropriate amount shall be added to Distributor's invoice and paid by
Distributor unless Distributor provides manufacturer with a valid tax exemption
certificate acceptable to the appropriate taxing authority.