EXHIBIT 10.8
INTERNATIONAL DISTRIBUTOR AGREEMENT
between
ECHELON CORPORATION
and
EBV ELEKTRONIK GMBH
AS OF DECEMBER 1, 0000
-x-
XXXXXXXXXXXXX DISTRIBUTOR AGREEMENT
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THIS AGREEMENT (the "Agreement") is entered into effective as of December
1, 1997 (the "Effective Date"), between Echelon Corporation ("Echelon"), a
Delaware corporation with principal offices at 0000 Xxxxxxx Xxxxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000, and EBV Elektronik GmbH ("Distributor"), a corporation
organized under the laws of Germany, with principal offices at Xxxxxxxxxxxx. 00,
X-00000 Xxxxxxxxx, Xxxxxxx.
WHEREAS, Echelon has developed and distributes products for intelligent
distributed control systems;
WHEREAS, Echelon wishes to appoint Distributor to distribute Echelon's
products on a non-exclusive basis in the Territory (as hereinafter defined); and
WHEREAS, Distributor is willing to accept such appointment.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS
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(a) "Products" shall mean those hardware and/or software products and
services for which Distributor will serve as a non-exclusive
distributor or sales representative, as applicable, hereunder, which
are identified in Exhibit A hereto, as it may be amended from time to
time pursuant to Section 9 below.
(b) "Development Products" shall mean those Products identified in Exhibit
A as such.
(c) "OEM Products" shall mean those Products identified in Exhibit A as
such.
(d) "Software Products" shall mean those Products identified in Exhibit A
as such.
(e) "Territory" shall mean the territory set forth in Exhibit B.
(f) "Development License Agreement" shall mean Echelon's standard
LonWorks(R) Development License Agreement and "OEM License Agreement"
shall mean Echelon's standard LonWorks OEM License Agreement.
(g) "Software" shall mean any Software Product that is listed in Exhibit A
and any software that is included in or with a Product that is listed
in Exhibit A. All references to the Products herein include reference
to the Software.
(h) "Software Copy" shall mean an object code copy of any of the Software,
together with a copy of any user manual or other documentation
customarily supplied with the Software Copy to end users by Echelon.
(i) Registered Customer" shall mean a customer of Distributor that has
been registered by Distributor with Echelon pursuant to Echelon's
standard customer registration policies and procedures. Such
registration policies and procedures (and a list of customers not
currently eligible for registration) are set forth in Exhibit A.
Echelon may amend the registration policies and procedures set forth
in Exhibit A from time to time in its sole discretion, including
eliminating the registration program. Any such change shall be
effective upon notice to Distributor.
(j) "Regular Product(s)" shall mean those products identified as such in
Exhibit H, as such list of products is amended by Echelon from time to
time in its sole discretion.
(k) "Target Inventory Level" shall mean the quantity set forth in Exhibit
H for each Regular Product, as such exhibit is amended by the parties
from time to time.
(l) "Volume Product(s)" shall mean those products identified as such in
Exhibit H, as such list of products is amended by Echelon from time to
time in its sole discretion.
(m) All references in this Agreement to the "sale" of or "selling"
Software or Software Copies shall mean the sale of a license to use
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such Software or Software Copies. All references in this Agreement to
the "purchase" of Software or Software Copies shall mean the purchase
of a license to use such Software or Software Copy.
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2. DUTIES OF DISTRIBUTOR
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(a) Activities of Distributor. Subject to the terms and conditions
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herein, Echelon hereby appoints and retains Distributor to solicit
sales of and distribute the Products identified with a "Distributor
Price" on Exhibit A hereto in the Territory on a non-exclusive basis.
As a distributor of the Products, Distributor shall have the right to
market and distribute Products solely to end user customers and not to
any party for subdistribution. Echelon further appoints Distributor as
a non-exclusive sales representative for the Products identified with
a "Sales Representative Commission" on Exhibit A hereto in the
Territory. As a sales representative of the Products, Distributor
shall have the non-exclusive right to solicit orders from end user
customers for sale and shipment by Echelon subject to the procedures
set forth in Exhibit A.
(b) Direct Activities by Echelon. Nothing herein shall prevent Echelon
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from marketing and distributing the Products directly to end user
customers or to other distributors in the Territory.
(c) Independent Contractors. The relationship of Distributor and Echelon
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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 venturers, principal
and agent, employer and employee, co-owners, franchisor and franchisee
or otherwise as participants in a joint undertaking, or (iii) allow
Distributor to create or assume any obligation on behalf of Echelon
for any purpose whatsoever. All financial and other obligations
associated with Distributor's business are the sole responsibility of
Distributor. Distributor shall be solely responsible for, and shall
indemnify and hold Echelon free and harmless from, any and all claims,
damages or lawsuits (including Echelon's attorneys' fees) arising out
of the acts of Distributor, its employees or its agents.
3. REMUNERATION.
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Distributor's sole remuneration with respect to the distribution of
Products hereunder shall be (i) the difference between Distributor's price
from Echelon and Distributor's price to its customers and (ii) any
commissions, sales credits, or bonus payable pursuant to Sections 8 (g), 8
(h), or 8(i), below.
4. LICENSE AGREEMENTS
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Distributor acknowledges and agrees that certain Products may only be
distributed pursuant to signed license agreements, as indicated by the
Licensing Requirements set forth in Exhibit A. Distributor shall only
distribute such Products to customers who have entered into all required
license agreements with Echelon.
5. FORECASTS AND ORDERS OF PRODUCTS
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(a) Forecasts. On a quarterly basis, Distributor shall provide Echelon
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with a one-year sales forecast setting forth its estimated monthly
requirements for shipment of Products by Echelon's model number for
the upcoming twelve (12) month period. The first such forecast shall
be furnished to Echelon upon execution of this Agreement in the form
of the Initial Order as defined in Section 5 (b) (ii), below, and each
subsequent forecast shall be furnished not later than the fifteenth
day of the month preceding the end of each calendar quarter. The
forecasts are non-binding and will be used by Echelon only for
planning purposes. Upon thirty (30) days' advance written notice to
Distributor, Echelon shall have the right in its sole discretion to
require monthly updates to the forecasts.
(b) Orders and Acceptance.
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i) Distributor shall initiate purchases under this Agreement by
submitting written or facsimile purchase orders to Echelon. All
purchase orders shall contain the following: (a) model numbers of
Products, (b) quantity of Products to be purchased, (c) shipping
point (Echelon's manufacturing facility or Echelon's European
shipping point) and special shipping instructions, if any, (d)
requested delivery schedule, which shall be within the next
succeeding six (6) months, and which
shall conform to the minimum lead times for such Products as set
forth in Exhibit A", (e) destination, (f) billing address if
different from address listed above and (g) the net price for the
Products, which shall conform to the minimum aggregate invoice
value set forth on Exhibit A. No purchase order shall be binding
upon Echelon until accepted by Echelon in writing. Echelon shall
use reasonable commercial efforts to notify Distributor of the
acceptance or rejection of a purchase order within fifteen (15)
days of receipt of the purchase order.
ii) As a material inducement for Echelon to enter into this
Agreement, Distributor has agreed to provide Echelon with the
initial order attached to this Agreement as Exhibit I (the
"Initial Order"). Echelon's acknowledgment thereof is attached to
this Agreement as Exhibit J. Echelon agrees that, notwithstanding
the requirements of Section 5 (b) (i), above, such Initial Order
sets forth delivery dates within the next succeeding twelve (12)
months. For each Regular Product the requested scheduled delivery
dates are December 15, 1997; March 15, 1998; June 15, 1998;
September 15, 1998 and November 15, 1998. Such dates will be
adjusted as set forth in Section 5 (b) (iii), below. For each
Volume Product there is one (1) requested scheduled delivery date
per month.
iii) With respect to each Regular Product, Distributor shall place one
order per calendar month by the tenth (10th) working day thereof
with a requested delivery date within such month. The quantity of
each Regular Product set forth on such order shall be determined
by subtracting Distributor's ending inventory for such Regular
Product as of the last day of the preceding month (including any
Products in transit from Echelon to Distributor) from the then
current Target Inventory Level for such Regular Product. During
the first twelve (12) months of this Agreement, or, if earlier,
until delivery of all units of such Regular Product scheduled for
delivery under the Initial Order, Distributor shall effect such
order by requesting a delivery date in the current month for a
portion of the Regular Product ordered on the Initial Order and
scheduled for delivery in a subsequent month. Thereafter,
Distributor shall place a new order each month for the quantity
of Regular Product determined hereunder. The parties will meet
once each calendar quarter to negotiate the following provisions
of Exhibit H, establishing the Target Inventory Levels for
Regular Products added to Exhibit A pursuant to Section 9 (a),
adjusting Target Inventory Levels for Regular Products deleted
from Exhibit A pursuant to Section 9 (b), or increasing or
decreasing the Target Inventory Level for any Regular Product
based upon current sales levels for such Regular Product.
iv) With respect to the Initial Order for each Volume Product,
Distributor may follow the procedure set forth in Section 5 (c)
to request modification of any scheduled delivery date.
Commencing in June
1998, Distributor shall place one order per month for that
quantity of each Volume Product requested for delivery six (6)
months thereafter, thereby maintaining an order backlog of six
(6) months for each Volume Product.
(c) Cancellation, Delay or Reduction of Orders.
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i) Distributor may not cancel, delay or reduce the quantity of Product(s)
on that portion of an order with a scheduled delivery date in the
period within and including sixty (60) days of the then current date
without Echelon's prior written approval granted in each instance in
Echelon's sole discretion, and subject to a fifteen percent (15%)
cancellation charge. Distributor will have no rights in partially
completed goods from canceled orders.
ii) One time with respect to each order, Distributor may cancel, delay or
reduce the quantity of Product(s) on that portion of an order that has
a scheduled delivery date in the period beyond sixty (60) days of the
then current date subject to the following provisions: (i) the
combined effect of such cancellation or reduction shall not reduce the
total quantity of each Product to be delivered on all scheduled
delivery dates in such period by more than forty percent (40%); (ii)
no scheduled delivery date may be delayed by more than three (3)
months; (iii) no scheduled delivery date with respect to the Initial
Order maybe delayed beyond November 30, 1998; (iv) with respect to
cancellation under the Initial Order, Distributor must order other
Products for delivery prior to November 30, 1998 to ensure that the
total dollar value of all shipments thereunder is no less than the
amount set forth on Schedule I; and (v) the remaining orders shall
continue to be subject to the minimum aggregate invoice value set
forth on Exhibit A. For purposes of this Section 5 (c), each scheduled
delivery under the Initial Order shall be deemed to be an individual
order. Notwithstanding the provisions of this Section 5 (c),
Distributor may not cancel, delay or reduce the quantity of any order
if the effect would be for Distributor's inventory level to fall below
the Target Inventory Level for any Regular Product.
iii) If under this Section 5 (c) Distributor is permitted a delay in
delivery, and if Echelon has, prior to Distributor's request therefor,
notified Distributor of Distributor Price changes that are effective
at the time of the new delivery date, then Echelon's price to
Distributor on Products for which delivery was delayed and any
penalties due to Echelon hereunder shall be based upon Echelon's new
Distributor Price.
6. SHIPPING AND RETURN
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(a) Delivery. Echelon shall use reasonable commercial efforts to deliver
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Products on the specified delivery date. Products shall be packaged in
anti-static material, as appropriate.
(b) Shipping. All Products delivered pursuant to this Agreement shall be
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marked for shipment to Distributor's facility at the address set forth
above or specified in Distributor's written purchase order, and
delivered to a carrier or forwarding agent chosen by Distributor and
approved by Echelon in its sole discretion; provided, that Echelon may
designate the carrier in the event Distributor fails to designate a
carrier or Echelon does not approve Distributor's selection; provided,
further, that if Distributor requests delivery from Echelon's European
shipping point, then Distributor agrees that Echelon shall have the
sole right to select the freight carrier and method of transportation.
Shipments shall be F.O.B. Echelon's manufacturing facility (currently
at the address set forth above), or Echelon's European shipping point,
as requested by Distributor, at which time risk of loss and, except as
provided in Section 7 below, title shall pass to Distributor. All
freight, insurance, duty and other shipping expenses, as well as any
special packing expenses, shall be borne by Distributor. Each
Distributor shipment shall have an individual packing list.
(c) Security Interest. Until the purchase price and all other charges
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payable to Echelon hereunder have been received in full, Echelon
hereby retains and Distributor hereby grants to Echelon a security
interest in the Products delivered to Distributor and any proceeds
therefrom. Distributor agrees to promptly execute all documents
reasonably requested by Echelon to perfect and protect such security
interest. In the event Distributor fails promptly to execute such
documents, Distributor hereby appoints Echelon 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.
(d) Return.
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i) With respect to Products shipped to Distributor (as opposed to
Products shipped directly to Distributor's customers),
Distributor shall inspect all such Products for visable defects
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 Echelon
in writing or by facsimile of its rejection and request a Return
Material Authorization ("RMA") number. Within ten (10) working
days of receipt of the RMA number, Distributor shall return the
rejected Product, freight prepaid and properly insured, in its
original shipping carton with the RMA number displayed on the
outside of the carton.
ii) If Echelon confirms the defect, Echelon shall, at Echelon's
option and expense, either repair or replace the Product. Echelon
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.
(e) Stock Rotation. Distributor shall be entitled to rotate its stock of
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OEM Products according to the policies and procedures set forth in
Exhibit A. Echelon may amend the stock rotation policies and
procedures set forth in Exhibit A from time to time in its sole
discretion, including eliminating the stock rotation program. Any such
change shall be effective upon notice to Distributor.
7. SOFTWARE
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(a) Notwithstanding anything to the contrary contained herein, title to
all Software shall remain with Echelon. Distributor shall have a
nonexclusive license to distribute Software Copies; provided, that
such Software Copies are delivered to customers in unopened packages
in good condition and at the same time as associated hardware
Products, if any.
(b) Distributor shall have no right to copy the Software or to reverse
engineer, disassemble, decompile or otherwise attempt to derive the
source code from the Software, except to the extent that such
activities may not be prohibited under local law. With respect to any
Software Copies to be used for demonstration purposes, in addition to
the requirements set forth in Sections 8 (b) and 17 (b) below,
Distributor agrees to the terms of the (i) Software License Agreement
accompanying the Software Copies, for Software identified with a Note
2, 3 or 4 Licensing Requirement in Exhibit A, and (ii) the Software
License Agreement set forth in Exhibit G hereto, for Software
identified with a Note 5 Licensing Requirement in Exhibit A.
Distributor shall not remove, alter, cover or obfuscate any copyright
notices or other proprietary rights notices placed or embedded by
Echelon on or in the Software.
8. PRICING AND PAYMENT
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(a) Pricing. Echelon shall provide Distributor with Echelon's Suggested
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International List Prices for the Products, as such prices are updated
from time to time. The Distributor Prices for the Products are set
forth in Exhibit A and may only be revised as set forth in SECTIONS 8
(C) AND 8 (D) BELOW. DISTRIBUTOR ACKNOWLEDGES THAT ECHELON SHALL
PUBLISH AND DISTRIBUTE FROM TIME TO TIME ITS PRICE LISTS TO ITS
CUSTOMERS.
(b) Demonstration Products. Distributor may purchase reasonable
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quantities of Development Products or OEM Products (other than those
Products identified in Exhibit A as "not available for
demonstration"), to be used solely for demonstration purposes, at the
demonstration products discount set forth in
Exhibit A off the Distributor Price set forth in Exhibit A. Upon
request, Echelon may, in it sole determination of Distributor's
demonstration capabilities, provide Distributor at no charge with one
(1) copy of any Software Product (other than those Software Products
identified in Exhibit A as "not available for demonstration"), to be
used solely for demonstration purposes. Distributor certifies that
Products purchased or provided on this basis ("Demonstration
Products") shall be used exclusively for demonstration and/or
troubleshooting purposes and shall in no event be resold by
Distributor. Distributor shall have the right to use and lend
Demonstration Products pursuant to Section 17 (b) below.
(c) Price Increase. Echelon has the right at any time to increase the
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Distributor Price of any Product upon thirty (30) days advance written
notice to Distributor. Such increases shall apply to all purchase
orders received after the effective date of the increase. Distributor
may order any quantity of Products within such thirty-day period at
the pre-revised price or discount; provided that Distributor requests
delivery to occur no later than fifteen (15) days after the effective
date of the price increase and pays for any invoices associated with
such order pursuant to the terms set forth in Section 8 (f) below.
(d) Price Decrease and Credit. In the event Echelon decreases the
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Distributor Price of a Product, Echelon shall notify Distributor in
writing of such decrease, and such decrease shall apply to Distributor
immediately on all unshipped Products. In addition, Distributor shall
be entitled to price protection on its inventory of OEM Products
according to Echelon's policies and procedures set forth in Exhibit A.
Echelon may amend the price protection policies and procedures set
forth in Exhibit A from time to time in its sole discretion, including
eliminating the price protection program. Any such change shall be
effective upon notice to Distributor.
(e) Taxes. All prices described herein are exclusive of any excise, sales,
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use, value added (VAT), withholding and similar taxes. Distributor
shall be liable for and shall pay all applicable taxes associated with
the Products. When Echelon has the legal obligation to collect such
taxes, the appropriate amount shall be added to Distributor's invoice
and paid by Distributor unless Distributor provides Echelon 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 Echelon, then Distributor
shall pay such additional amounts to Echelon as may be necessary to
assure that the actual amount received by Echelon 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.
(f) Payment. Echelon shall issue to Distributor invoices for each
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shipment made hereunder. All payments shall be made in United States
Dollars, on the terms set forth in Exhibit C hereto.
(g) Commissions. In the event Distributor solicits orders from end user
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customers on behalf of Echelon for the sale of any Software Products
identified with a Note 5 Licensing Requirement in Exhibit A or for any
other Products identified with a "Sales Representative Commission" on
Exhibit A, Echelon shall credit Distributor with a sales commission as
set forth in Exhibit A; provided, that (i) Distributor has provided
Echelon with an original copy of Echelon's Software License Agreement
for each such Software Product, signed by the end user customer, and
(ii) Distributor fulfills all obligations with respect to such order
as set forth in Exhibit D hereto. Commissions shall be computed on the
net selling price invoiced to the customer, and no commission shall be
paid with respect to charges for handling, freight, taxes, duties,
insurance, repairs, service and the like. Echelon shall pay the
commission in the currency in which payment is payable from the
customer. Sales commissions shall be in the form of a credit only and
shall be creditable to Distributor no later than the last day of the
month following the month in which Echelon invoices the customer for
such order. Echelon, in its sole discretion, may apportion the sales
commission among other parties entitled to a commission on any such
order. In the event Echelon accepts any returns from customers of
orders on which a commission was paid, or in the event Echelon writes
off as bad debt any or all of the net selling price on orders on which
a commission was paid, Echelon shall charge back to Distributor's
account any amounts previously credited to Distributor with respect to
such returns or bad debt.
(h) Sales Credits.
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i) General. The distributor price for Products hereunder, net of
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set forth in Section 8 (i), below, is intended to provide
Distributor with a net price at which Distributor can profitably
sell to end user customers generally within the Territory, and
therefore, there will not be any standard sales credit program.
ii) Special Sales Credits. If business conditions require a
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special sales credit, then such credit shall be negotiated
between the parties and set forth in a mutually signed written
document as set forth in Exhibit A (the "Special Sales Credit
Request Form"). The Special Sales Credit Request Form shall set
forth at a minimum: the name of the end user customer; the
Echelon part number; the projected quantity of Products to be
sold; and the per unit special sales credit. Receipt of the
foregoing special sales credit is conditioned upon (i)
verification by Distributor's POS Report (as described in Section
13 (d) below) of the type of Product(s) sold, (ii) verification
that the customer is a Registered Customer of Distributor; and
(iii) receipt of the Sales Credit Form set forth in Exhibit A.
Distributor will not be entitled to any special sales credit
unless such procedures have been fully complied with, and no
credits will be provided to Distributor for shipments made by
Distributor prior to the date that Echelon executes the
applicable Special Sales Credit Form.
(i) Bonus. During the initial term of this Agreement, Distributor shall
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be entitled to a bonus of five percent (5%) of Distributor's net
purchases of Products under this Agreement during such initial term,
provided that such net purchases exceed seven million three hundred
sixty eighty thousand dollars ($7,368,000). Net purchases means the
dollar amount of all shipments invoiced hereunder to Distributor less
any credits provided to Distributor under this Section 8 (other than
this Section 8 (i)). Any such bonus shall be in the form of a credit
only and shall be credited to Distributor by December 31, 1998. With
respect to any renewal terms hereunder, there shall be no such bonus
unless the parties agree to the terms thereof in writing as part of
the renewal of this Agreement pursuant to Section 15 (a).
9. PRODUCT CHANGES
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(a) Additional Products. Echelon may, from time to time, in its
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discretion, amend Exhibit A to add other products which shall be
available to Distributor under the terms of this Agreement.
(b) Deletion of Products. Echelon may delete any Product from Exhibit A
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effective thirty (30) days after written notice to Distributor of such
deletion. Distributor shall have the option to make a "last buy" of
obsolete OEM Products to meet customer requirements. Any OEM Product
purchased as part of this "last buy" is not eligible for return to
Echelon on any basis except for warranty purposes.
10. WARRANTY AND DISCLAIMER
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(a) Express Warranties. Echelon hereby warrants to Distributor that
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Products purchased hereunder shall be free from defects in materials
and workmanship for a period of one (1) year after the date of
shipment by Echelon to Distributor. Notwithstanding the foregoing, the
sole warranty for the Software is as set forth in Echelon's Software
License Agreement. Pursuant to Echelon's Software License Agreement,
Echelon makes a limited warranty to the end user regarding the
diskette on which the Software Copy is contained. Echelon's Software
License Agreement specifically disclaims all other warranties relating
to the Software Copies, including all warranties with respect to the
performance of the Software.
(b) Exclusions. The express warranties set forth in Section 10 (a) above
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specifically exclude and do not apply to defects to a Product: (a)
caused through no fault of Echelon 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 Echelon, (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.
(c) Disclaimer. EXCEPT FOR THE ABOVE EXPRESS LIMITED WARRANTIES, ECHELON
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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, AND ECHELON
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OR CONDITION OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THE FOREGOING
LIMITED WARRANTY IS MADE BY ECHELON SOLELY TO DISTRIBUTOR FOR
DISTRIBUTOR'S SOLE BENEFIT. DISTRIBUTOR SHALL NOT MAKE OR PASS ON TO
ANY CUSTOMER OR OTHER PARTY ANY WARRANTY OR REPRESENTATION ON BEHALF
OF ECHELON OTHER THAN ANY EXPRESS WARRANTY CONTAINED IN (1) ECHELON'S
SOFTWARE LICENSE AGREEMENT, FOR ANY SOFTWARE PRODUCTS, OR (2)
ECHELON'S TERMS AND CONDITIONS OF SALE OR PRICE LISTS, FOR ALL OTHER
PRODUCTS.
(d) Warranty Procedures. Distributor shall send Products with defects
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by the foregoing warranty to Echelon's address set forth above or such
other address provided by Echelon from time to time. Distributor shall
request in writing or by facsimile authorization from Echelon prior to
the return of each defective Product for repair or replacement by
Echelon. All such requests must be received by Echelon not later than
thirty (30) days after the expiration of the warranty period. Upon
receipt of such request, Echelon shall provide Distributor with a RMA
number to be prominently displayed on the shipping container for the
defective Product. Once Echelon authorizes the return of any defective
Product, Distributor shall ship such Product to Echelon, freight
prepaid, pursuant to the shipping and other requirements specified by
Echelon in its RMA. Upon verification by Echelon that the returned
Product is defective, Echelon shall provide a credit to Distributor's
account in an amount equal to the actual, reasonable freight costs
incurred by Distributor to return the Product. In addition, Echelon
shall, at its sole option and expense, repair or replace such Product,
employing at its option, new or used parts or Products to make such
repair or replacement, and shall ship the repaired or replaced Product
to Distributor, freight prepaid. The foregoing states the sole
liability and obligation of Echelon arising out of this warranty.
(e) Product Availability. Under no circumstances shall Echelon be
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responsible to Distributor or any other party for its failure to fill
accepted orders, or for its delay in filling accepted orders, when
such failure or delay is due to any cause beyond Echelon's reasonable
control.
(f) Limitation of Liability. ECHELON'S LIABILITY UNDER THE ABOVE
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WARRANTIES SHALL BE LIMITED TO A REFUND OF DISTRIBUTOR'S PURCHASE
PRICE. IN NO EVENT SHALL ECHELON BE LIABLE FOR THE COST OF PROCUREMENT
OF SUBSTITUTE GOODS BY DISTRIBUTOR OR THE CUSTOMER OR FOR ANY
SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES FOR BREACH OF WARRANTY.
11. OUT OF WARRANTY REPAIR AND SERVICE SUPPORT
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(a) Out of Warranty Repair and Service Support. During the term of this
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Agreement, any repair or reconditioning of any Product not covered by
warranty shall be subject to Echelon's then standard out of warranty
prices, terms and conditions.
(b) Freight Charges. Freight charges on Products returned to Echelon for
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repair are to be prepaid by Distributor. Repaired Products not covered
by warranty shall be returned to Distributor, freight collect.
12. ADDITIONAL OBLIGATIONS OF ECHELON
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(a) Promotions. Echelon shall use all reasonable efforts to include
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Distributor in promotional events appropriate for Echelon's authorized
distributors. Echelon shall provide Distributor with reasonable
quantities of promotional literature which Echelon makes generally
available to its authorized distributors for use by Distributor's
sales personnel. Echelon will bulk ship such promotional literature at
Echelon's cost on the most economical basis, provided that Distributor
may request expedited shipment at its sole expense. Any such
promotional program may be initiated, modified and withdrawn by
Echelon and the provisions of Section 8 (c) and (d) shall not apply to
any prices associated with such promotional program.
(b) Leads and Cooperative Marketing. Echelon shall include Distributor in
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any lead referral or other cooperative marketing activities which
Echelon makes generally available to its authorized distributors. Any
such program shall be described in Exhibit A. Echelon may amend the
cooperative marketing policies and procedures set forth in Exhibit A
from time to time in its sole discretion, including eliminating the
cooperative marketing program. Any such change shall be effective upon
notice to Distributor.
(c) Appointment of Additional Distributors. Echelon agrees to promptly
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provide Distributor with prior written notice of appointment of any
additional distributor for Volume Products in the Territory. Provided
that Distributor has accepted and continues to accept shipments as set
forth in the Initial Order, then such appointment and notice shall not
be made prior to May 31, 1998.
13. ADDITIONAL OBLIGATIONS OF DISTRIBUTOR
-------------------------------------
(a) Sales and Marketing Efforts. Distributor shall use its best efforts to
---------------------------
maximize sales of Products in the Territory. Distributor shall devote
sufficient facilities and technically qualified sales and service
personnel to the Products to fulfill its responsibilities under this
Agreement. Distributor shall make use of promotional material supplied
by Echelon. Distributor shall actively promote
and market the Products, including, without limitation, selling and
distributing the Products through its own sales force and marketing
the Products in Distributor's catalogues, if any, as soon as possible.
Without limiting the foregoing, Distributor shall fulfill the
additional marketing obligations set forth in Exhibit E hereto.
(b) Distribution Procedures. Distributor shall comply with all reasonable
-----------------------
procedures and restrictions adopted by Echelon from time to time for
distributing the Products. This is to include, but not be limited to,
the requirement to offer customers a full refund of their purchase
price if the customer cannot agree to the terms and conditions of the
Software License Agreement received with the Products, if any,
provided that the customer returns such Products unused within the
number of days set forth on the license notice set forth on such
Products. In addition, Distributor will notify Echelon of any known
breaches of any Software License Agreement. Distributor shall assist
and cooperate with Echelon as requested by Echelon, at Echelon's
expense, (except for the salaries of Distributor's employees), in
enforcing Echelon's rights in the Software.
(c) Customer Listing. To ensure the capability to provide prompt updates
----------------
to customers for the Products, Distributor shall maintain an up-to-
date listing that is accessible by Echelon. Such listing shall
comprise customers to which Distributor has shipped Products and the
Products purchased by such customers.
(d) Point of Sales (POS) Report. Distributor shall submit to Echelon a
---------------------------
monthly POS report on Product sales for each calendar month no later
than the 15th day of the following month. The following information
shall be provided for each sales transaction: Echelon part number;
Quantity sold; Unit sales price; Date product shipped (or scheduled to
be shipped) to customer; Customer name; and "Ship to" location. The
accuracy of each POS report shall be certified by Distributor. Echelon
shall have the right to audit Distributor's books and records to
verify the accuracy of any POS report without notice at any time
during Distributor's normal business hours; provided, that any such
audit shall not materially interfere with Distributor's normal
business operations.
(e) Translations. Distributor, at its election, shall have the right to
------------
engage in the translation and production of any promotional literature
for which Distributor determines local language versions are required
to effectively sell Products. Distributor shall provide Echelon with a
copy of all translated materials and revisions thereto promptly
following completion thereof. Echelon shall retain ownership of all
such translated versions. Distributor hereby assigns to Echelon all
right, title and interest, including all copyrights, in and to any
such translations. Echelon shall have the right to use, reproduce,
exploit and create derivative works of such translations for any
purpose. Distributor shall, and shall cause its translators to,
execute such additional documents and take such other actions as may
be reasonably necessary to perfect such assignment, including waiver
of moral rights. In the event Distributor fails to take such
action within a reasonable period, Distributor hereby appoints Echelon
its attorney-in-fact for the purpose of executing such documents,
which appointment shall be deemed a power coupled with an interest and
shall be irrevocable.
14. SUPPORT AND UPDATES
-------------------
(a) Support. Distributor shall train and furnish sufficient personnel to
-------
assist customers with basic technical support and answer basic
customer questions regarding the use and operation of the Products and
interpretation of accompanying documentation during normal business
hours. Customers requiring greater support will be directed by
Distributor to contact Echelon for in-depth support during the initial
warranty period and to contact Echelon with respect to entering into a
support contract thereafter.
(b) Updates. In the event Echelon issues any upgrades, updates, new
-------
releases or other modifications to the Software (collectively,
"Software Updates"), Distributor shall only market and distribute such
Software Updates to customers otherwise licensed to use a preceding
version of the Software, in quantities equal to the number of copies
of the Software that such customers were already licensed to use.
15. TERM AND TERMINATION
--------------------
(a) Term. This Agreement shall continue in force until November 30, 1998.
----
This Agreement may be renewed for additional one (1) year terms upon
the mutual written agreement of the parties prior to the expiration of
each fixed term, each party acting in its sole discretion.
(b) Termination for Convenience. This Agreement may be terminated by
---------------------------
either party for any reason or no reason, whether or not extended
beyond the first year, by giving the other party written notice of the
termination ninety (90) days in advance. In the event this Agreement
is terminated pursuant to this Section 15 (b), commissions creditable
pursuant to Section 8 (g) above shall be credited on all open orders
previously secured by Distributor which have delivery schedules within
one (1) year after the date of termination as follows: full rate for
shipments made within ninety (90) days after date of termination; one-
half rate thereafter until one (1) year from the date of termination.
(c) Termination for Cause. If either party materially defaults in its
---------------------
performance or breaches any of the terms or conditions of this
Agreement, then the other party may give written notice to the
breaching or defaulting party that if the breach or default is not
cured within thirty (30) days the Agreement will be terminated. If
such notice is given and the breach or default is not cured during the
thirty day period, then the Agreement shall automatically terminate at
the end of that period. Notwithstanding the foregoing, in the event
that Echelon determines that any POS Report furnished by Distributor
pursuant to Section 13 (d) above is intentionally and knowingly false
or misleading,
Echelon shall have the right to terminate this Agreement for cause
immediately upon written notice to Distributor, without opportunity to
cure.
(d) Termination for Insolvency. This Agreement shall terminate, without
--------------------------
notice, (i) upon the institution by or against Distributor of
insolvency, receivership or bankruptcy proceedings or any other
proceedings for the settlement of Distributor's debts, (ii) upon
Distributor's making an assignment for the benefit of creditors, or
(iii) upon Distributor's dissolution.
(e) Other Termination. This Agreement shall also terminate, upon notice
-----------------
by Echelon:
i) in the event that any current legislation or exchange controls
under applicable law preclude Distributor from making payments to
Echelon in United States currency for a period of sixty (60)
days; provided, however, that termination under this Section
shall not relieve Distributor of its payment obligations under
this Agreement; or
ii) upon the enactment of any law, decree, or regulation by the
government of the Territory which would impair or restrict (A)
the right of Echelon to terminate or elect not to renew this
Agreement as herein provided, (B) Echelon's right, title or
interest in the Products or the intellectual property rights
therein, or (C) Echelon's rights to receive the payments under
this Agreement.
(f) Distributor agrees to give Echelon prompt written notice of any law,
decree or regulation covered by this Section 15 (e).
(g) Fulfillment of Orders upon Termination.
--------------------------------------
i) Upon termination of this Agreement, and subject to Echelon's
right to require prepayment, Echelon may, but shall not be
obligated to, fulfill all orders accepted by Echelon prior to the
date of termination.
ii) If Echelon appoints an additional distributor for Volume Products
in the Territory, and provided that Distributor then terminates
the Agreement pursuant to Section 15 (b), Distributor shall have
the right to cancel any scheduled deliveries of Products under
the Initial Order that have scheduled delivery dates that are
later than the date of Distributor's notice of termination.
(h) Limitation on Liability. In the event of termination by either party
-----------------------
in accordance with any of the provisions of this Agreement, 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 Echelon or
Distributor. Termination shall not, however, relieve either party of
obligations incurred prior to the termination.
(i) Return of Materials. All Software, Product literature, translations
-------------------
and sales aids of every kind shall remain the property of Echelon.
Within thirty (30) days after the termination of this Agreement,
Distributor shall prepare all such items in its possession for
shipment, as Echelon may direct, at Echelon's expense. Distributor
shall not make or retain any copies of any confidential items or
information that may have been entrusted to it. Effective upon the
termination or expiration of this Agreement, Distributor shall cease
to use all trademarks, marks, and trade names of Echelon.
(j) Survival of Certain Terms. The provisions of Sections 7, 10, 15, 16,
-------------------------
17, 19 and 21 shall survive the termination or expiration of this
Agreement for any reason. All other rights and obligations of the
parties shall cease upon termination or expiration of this Agreement.
16. LIMITATION ON LIABILITY.
-----------------------
ECHELON'S LIABILITY ARISING OUT OF THIS AGREEMENT AND/OR THE SALE OF ANY
PRODUCT SHALL NOT EXCEED THE PRICE PAID BY DISTRIBUTOR FOR THE PRODUCT. IN
NO EVENT SHALL ECHELON BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE
GOODS BY ANYONE. IN NO EVENT SHALL ECHELON BE LIABLE TO DISTRIBUTOR OR ANY
OTHER ENTITY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT
DAMAGES OR LOST PROFITS, HOWEVER CAUSED, WHETHER FOR BREACH OF CONTRACT,
NEGLIGENCE OR OTHERWISE, AND WHETHER OR NOT ECHELON HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE. 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 ECHELON
ARISING OUT OF THIS AGREEMENT AND DISTRIBUTION OF THE PRODUCTS.
17. CONFIDENTIALITY
---------------
(a) Confidentiality.
---------------
i) Distributor agrees not to provide or otherwise make available any
Software Copies, in any form, to any person other than employees
of Distributor or Echelon or Distributor's customers in
connection with the distribution of the Software or its
demonstration (in accordance with Subsection 17 (b) below).
ii) Distributor acknowledges that the Software constitutes
confidential and proprietary information of Echelon developed at
substantial expense to Echelon. Distributor agrees to use the
Software only as authorized herein, and to treat the Software
with at least the degree of care and protection as its treats its
own most confidential information, and Distributor represents and
warrants that it takes reasonable measures to protect its own
confidential information. Distributor agrees that Distributor
will take appropriate action by instruction, agreement, or
otherwise with Distributor's employees to satisfy Distributor's
obligations under this Agreement with respect to use, copying,
modification and protection and security of the Software.
Distributor shall remain obligated, both during the term of this
Agreement and thereafter, to hold in confidence its knowledge of
the Software as a trade secret for the benefit of Echelon.
iii) Distributor acknowledges that by reason of its relationship with
Echelon hereunder it will have access to certain other
information and materials concerning the Products and Echelon's
business, plans, customers and technology that are confidential
and of substantial value to Echelon, 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
Echelon. Distributor shall take every reasonable precaution to
protect the confidentiality of such information, including, at
the request of Echelon, the entry by Distributor's agents and
employees into confidentiality agreements in a form approved by
Echelon, prohibiting any disclosure to third parties of
confidential information provided by Echelon. Distributor shall
not publish any technical description of any Software or Product
or other confidential information of Echelon beyond the
description published by Echelon. 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 Echelon, and Distributor shall not manufacture or
have manufactured any products utilizing any of Echelon's
confidential information. Distributor shall deliver to Echelon
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 Echelon's
business.
(b) Demonstration Products.
----------------------
i) Right to Use and Lend. Distributor shall have the right to use
---------------------
any Demonstration Products acquired from Echelon pursuant to
Section 8 (b) above for (i) demonstrations at Distributor's
facility and (ii) trouble shooting of customer systems.
Distributor shall also have the right to loan such Demonstration
Products to prospective customers for
evaluation purposes; provided, that Distributor furnishes Echelon
with an original copy of Echelon's Evaluation Agreement signed by
the prospective customer. The Evaluation Agreement shall be
either (i) in substantially the form attached hereto as Exhibit F
(with a ten (10) business day evaluation period) or (ii) in
substantially the form as furnished by Echelon (if Echelon in its
sole discretion elects to approve any request for a different
evaluation period). Distributor shall (i) use best efforts to
ensure that the prospective customer performs its obligation at
the end of the evaluation period to return the Product, any
accompanying documentation and any materials developed by such
customer relating to the Product, (ii) notify Echelon of any
known breach of such Evaluation Agreement and (iii) provide
Echelon with reasonable assistance in connection with the
enforcement of such Evaluation Agreement, including, without
limitation, granting Echelon full authority to proceed on
Distributor's behalf. Echelon shall reimburse Distributor for its
documented, pre-approved, out-of-pocket expenses incurred in
connection with such assistance. Subject to the prior approval of
Echelon, Distributor shall have the right to translate the
Evaluation Agreement. Any such approval granted by Echelon shall
be subject to the terms of Section 13 (e) above.
ii) Protection of Software. Distributor will be responsible to
----------------------
Echelon for the protection of Software used in any such
Demonstration Products during the installation and removal
thereof from the prospective customer's site. Such protection
shall include the deletion of Software previously stored on any
customer media and the removal of all copies of the Software and
documentation from the customer's premises at the conclusion of
such demonstration. Distributor shall assign a fully trained
employee to supervise the installation and removal of the
Software included in the Demonstration Product at each
prospective customer's site. In no event shall Distributor use
less care in the protection of Software during installation and
removal from a prospective customer's site than Distributor uses
for the protection of its own software products of like value.
18. TRADEMARKS AND TRADE NAMES
--------------------------
(a) Use. 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 Echelon may
adopt from time to time ("Echelon's Trademarks"). Distributor shall
not alter or remove any of Echelon's Trademarks applied to the
Products. Nothing herein shall grant to Distributor any right, title
or interest in Echelon's Trademarks. All uses of Echelon's Trademarks
by Distributor shall inure to the benefit of Echelon. At no time
during the term of this Agreement shall Distributor challenge or
assist others to challenge Echelon's Trademarks or the registration
thereof or attempt to
register any trademarks, service marks or trade names confusingly
similar to those of Echelon.
(b) Approval of Representations. All representations of Echelon's
---------------------------
Trademarks that Distributor intends to use shall first be submitted to
Echelon for approval (which shall not be unreasonably withheld) of
design, color, and other details or shall be exact copies of those
used by Echelon. If any of Echelon's Trademarks are to be used in
conjunction with another trademark on or in relation to the Products,
then Echelon's Trademark shall be presented equally legibly, equally
prominently, and of greater size than the other but nevertheless
separated from the other so that each appears to be a xxxx in its own
right, distinct from the other xxxx.
19. COPYRIGHT AND TRADEMARK INDEMNITY
---------------------------------
(a) Indemnification. Distributor agrees that Echelon has the right to
---------------
defend, or at its option to settle, and Echelon 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 of any third party copyright or trademark by the Products
distributed hereunder or the use thereof, subject to the limitations
hereinafter set forth. Echelon shall have sole control of any such
action or settlement negotiations, and Echelon 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 Echelon. Distributor agrees that Echelon at its
sole option shall be relieved of the foregoing obligations unless
Distributor or its customer notifies Echelon promptly in writing of
such claim, suit or proceeding and gives Echelon authority to proceed
as contemplated herein, and, at Echelon's expense, gives Echelon
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 Echelon may become, the subject of any
claim, suit or proceeding for infringement of any 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 Echelon may, at its option and expense: (i)
procure for Distributor and its customers the right under such
copyright or trademark to distribute or use, as appropriate, the
Products or such part thereof; or (ii) replace the Products, or part
thereof, with other suitable Products or parts; or (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, remove the Products, or part thereof, and refund the
aggregate payments paid therefor by Distributor, less a reasonable sum
for use and damage. Echelon shall not be liable for any costs or
expenses incurred without its prior written authorization.
(b) Limitation. Notwithstanding the provisions of Section 19(a) above,
----------
Echelon 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 infringements involving
any marking or branding not applied by Echelon or involving any
marking or branding applied at the request of Distributor; or (iii)
the modification of the Products, or any part thereof, unless such
modification was made by Echelon.
(c) Entire Liability. THE FOREGOING PROVISIONS OF THIS SECTION 19 STATE
----------------
THE ENTIRE LIABILITY AND OBLIGATION OF ECHELON 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.
20. COMPLIANCE WITH LAWS
--------------------
(a) Export Controls.
---------------
i) United States Export Controls. Distributor understands and
-----------------------------
acknowledges that Echelon 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
Echelon to provide products, software, 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
Echelon'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.
Without limiting the foregoing, Distributor agrees that unless
prior written authorization is obtained from the Bureau of Export
Administration, or the Export Administration Regulations
explicitly permit the reexport, it will not export, reexport, or
transship, directly or indirectly, to country groups S or Z (as
defined in the Export Administration Regulations and which
currently consist of Cuba, Libya and North Korea) any of the
technical data or software disclosed or provided to Distributor
or the direct product of such technical data or software (if the
direct products are commodities, software, or technical data
described on the Control List with a letter "A" following its
Export Control Number).
(b) Governmental Approval. Distributor represents and warrants that no
---------------------
consent, approval or authorization of or designation, declaration or
filing with any governmental authority in the Territory is required in
connection with the valid execution and delivery of this Agreement.
(c) Foreign Corrupt Practices Act. In conformity with the United States
-----------------------------
Foreign Corrupt Practices Act and with Echelon's established corporate
policies regarding foreign business practices, Distributor and its
employees and agents shall not directly or indirectly make and offer,
payment, promise to pay, or authorize payment, or offer a gift,
promise to give, or authorize the giving of anything of value for the
purpose of influencing an act or decision of an official of any
government within the Territory or the United States Government
(including a decision not to act) or inducing such a person to use his
influence to affect any such governmental act or decision in order to
assist Echelon in obtaining, retaining or directing any such business.
(d) Currency Control. Distributor represents and warrants that no
----------------
currency control laws applicable in the Territory prevent the payment
to Echelon 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 United States Dollars,
Distributor will notify Echelon immediately, and if so instructed by
Echelon, deposit all monies due Echelon to the account of Echelon in a
local bank of Echelon's choice in the Territory.
21. GENERAL PROVISIONS
------------------
(a) Governing Law. This Agreement shall not be governed by the 1980 U.N.
-------------
Convention on Contracts for the International Sale of Goods; rather,
this Agreement shall be governed by and construed under the laws of
the State of California, without reference to conflict of laws
principles.
(b) Language.
--------
i) 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.
ii) The parties hereto confirm that it is their wish that this
Agreement, as well as other documents relating hereto, including
Notices, have been and shall be written in the English language
only.
(c) Arbitration.
-----------
i) Arbitration. Either party may institute a suit for injunctive
-----------
relief to prevent a breach of this Agreement (plus an award of
costs), in any court of competent jurisdiction. Any other dispute
arising out of or in connection with or relating to this
Agreement shall be determined by binding arbitration conducted in
accordance with this Agreement.
ii) Initiation of Arbitration. Either party may commence an
-------------------------
arbitration proceeding hereunder by delivering a written demand
to the other party
describing the dispute in sufficient detail to apprise the other
party of the facts and legal theory upon which the demanding
party bases its claim and stating the relief requested.
iii) Selection of Arbitrators. If the parties are unable to agree on
------------------------
three (3) arbitrators within twenty (20) days after receipt of
the demand for arbitration, the parties shall, within ten (10)
days after expiration of the twenty-day period, exchange lists
setting forth fifteen (15) names of proposed arbitrators; each
party shall be entitled to strike up to nine (9) names from the
other party's list; and the unstricken names shall be submitted
to the President of the American Arbitration Association and the
arbitrators shall be selected by him or his designee from among
the names submitted. In the event of any failure in the process,
the arbitrators shall in any event be selected by the President
of the American Arbitration Association or his designee.
iv) Limitation on Powers of Arbitrators. The arbitrators shall apply
-----------------------------------
California law (without reference to rules of conflicts of law)
to the merits of the dispute but the arbitrators shall not in any
circumstances have the power or authority to add to or detract
from this Agreement, to find any provision of this Agreement
unconscionable or otherwise unenforceable or to award any party
punitive damages or any other remedy or damages prohibited by
this Agreement.
v) Arbitration Hearing. The arbitration hearing shall be conducted
-------------------
at a place (and at times) designated by the arbitrators in San
Francisco, California and shall begin not later than ninety (90)
days after receipt of the demand for arbitration and, regardless
of the number of issues presented, shall last no longer than
fifteen (15) business days, with each side limited to half of the
available hearing time for presentation of its evidence,
examination and cross-examination of witnesses and argument.
Except to the extent inconsistent with this Agreement, the
hearing shall be conducted in accordance with the provisions of
California Code of Civil Procedure (S)(S) 1282 and 1283, and such
other rules of procedure as the parties may agree upon. The
arbitral proceedings and all pleadings and written evidence shall
be in the English language. Any written evidence originally in a
language other than English shall be submitted in English
translation accompanied by the original or a true copy thereof.
vi) Decision; Costs. The arbitrators shall render a decision within
---------------
thirty (30) days after conclusion of the arbitration hearing.
Judgment on the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof. The joint costs of
arbitration (such as court reporting costs and the arbitrators'
fees) shall be borne equally by the parties except that the
arbitrators, in their discretion, may award such costs to be paid
by the losing party to the prevailing party.
(d) Force Majeure. Neither party shall be liable to the other for its
-------------
failure to perform any of its obligations hereunder during any period
in which such performance is delayed by circumstances beyond its
reasonable control including, but not limited to, fire, flood,
earthquake, war, embargo, strike, riot, inability to secure materials
and transportation facilities, or the intervention of any governmental
authority. If such delaying cause shall continue for more than sixty
(60) days, the party injured by the inability of the other to perform
shall have the right upon written notice to terminate this Agreement
pursuant to Section 15 (c).
(e) Assignment. Neither party may assign or delegate this Agreement or
----------
any of its licenses, rights or duties under this Agreement without the
prior written consent of the other; provided, that either party may
assign this Agreement to a person or entity which acquires or succeeds
to all or substantially all of its business and assets, and which has
assumed in writing its obligations under this Agreement.
(f) Authority. Each party represents that all corporate action necessary
---------
for the authorization, execution and delivery of this Agreement by
such party and the performance of its obligations hereunder has been
taken.
(g) Partial Invalidity. If any section, paragraph, provision, or clause
------------------
in this Agreement shall be found or be held to be invalid or
unenforceable in any jurisdiction in which this Agreement is being
performed, the remainder of this Agreement shall be valid and
enforceable and the parties shall negotiate, in good faith, a
substitute, valid and enforceable provision which most nearly effects
the parties' intent in entering into this Agreement.
(h) Counterparts. This Agreement may be executed in counterparts, which,
------------
taken together, shall be regarded as one and the same instrument.
(i) Modification. No alteration, amendment, waiver, cancellation or any
------------
other change in any term or condition of this Agreement shall be valid
or binding on either party unless the same shall have been mutually
assented to in writing by both parties.
(j) Waiver. The failure of either party to enforce at any time the
------
provisions of this Agreement, or the failure to require at any time
performance by the other party of any of the provisions of this
Agreement, shall in no way be constituted to be a present or future
waiver of such provisions, nor in any way affect the validity of
either party to enforce each and every such provision thereafter. The
express waiver by either party of any provision, condition or
requirement of this Agreement shall not constitute a waiver of any
future obligation to comply with such provision, condition or
requirement.
(k) Entire Agreement. The terms and conditions herein contained constitute
----------------
the entire agreement between the parties and supersede and terminate
all previous agreements and understandings, whether oral or written,
between the parties
hereto with respect to the subject matter hereof, including, without
limitation, any distribution and related agreements in effect as of
the date hereof.
(l) Section Headings. The section headings contained in this Agreement are
----------------
for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(m) Notices. Any notice required or permitted by this Agreement shall be
-------
in writing and shall be deemed given if sent by prepaid registered or
certified airmail, return receipt requested (if available), or sent by
telex, facsimile or similar communication, and confirmed by such
airmail, postage prepaid, addressed to the other party at the address
shown at the beginning of this Agreement or at such other address for
which such party gives notice hereunder.
(n) Severability. IT IS UNDERSTOOD AND AGREED THAT EACH AND EVERY
------------
PROVISION OF THE AGREEMENT WHICH PROVIDES FOR A LIMITATION OF
LIABILITY, DISCLAIMER OF WARRANTIES OR EXCLUSION OF DAMAGES IS
INTENDED BY THE PARTIES TO BE SEVERABLE AND INDEPENDENT FOR ANY OTHER
SUCH PROVISION AND TO BE ENFORCED AS SUCH. FURTHER, IT IS EXPRESSLY
UNDERSTOOD AND AGREED THAT IN THE EVENT ANY REMEDY HEREUNDER IS
DETERMINED TO HAVE FAILED OF ITS ESSENTIAL PURPOSE, ALL LIMITATIONS OF
LIABILITY AND EXCLUSIONS OF DAMAGES SET FORTH HEREIN SHALL REMAIN IN
EFFECT.
(o) Legal Expenses. The prevailing party in any legal action brought by
--------------
one party against the other and arising out of this Agreement shall be
entitled, in addition to any other rights and remedies it may have, to
reimbursement for its expenses, including court costs and reasonable
attorneys' fees.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
day and year first above written.
ECHELON CORPORATION
(Echelon) (Distributor)
By: /s/ Xxxxxx X Xxxxxxxxx By: /s/ Xxxxx Wiedehann
Xxxxxx X Xxxxxxxxx Xxxxx Wiedehann
(Print Name) (Print Name)
Title: VP & CFO Title: SALES MNGR.
Exhibit B
TERRITORY
European Economic Community, Switzerland, Norway, Poland, Czech Republic, Slovak
Republic, Hungary, Romania, Bulgaria, the countries comprising the geographic
area that was formerly the country of Yugoslavia, Russia, Xxxxxxx, Xxxxxxx,
Xxxxxxxxx, Xxxxxxx, Xxxxxx and Turkey.
Exhibit C
PAYMENT TERMS
Net thirty (30) days from date of the invoice
Exhibit D
SALES REPRESENTATIVE OBLIGATIONS
1. Pre-Sales Support. Distributor shall provide limited pre-sales support,
including distributing Echelon's promotional materials, answering technical
questions and expediting customer's completion of the applicable Software
License Agreement.
2. Post-Sales Support. Distributor shall provide limited post-sales
support. Customers requiring greater support will be directed by Distributor to
contact Echelon for in-depth support during the initial warranty period and to
contact Echelon with respect to entering into a support contract thereafter.
3. Transmittal Sheet. In order to receive a commission pursuant to Section
8 (g), the end user customer's order for the applicable Product(s) must be
received by Echelon with the Transmittal Sheet attached hereto.
Transmittal Sheet
Customer's Name and Address
Distributor's Name and Address
D-2
Exhibit E
ADDITIONAL MARKETING OBLIGATIONS
Distributor shall employ a minimum of eight (8) full time employees fully
trained to sell the products in the Territory and exclusively employed therefor,
including one (1) person each in Switzerland, the United Kingdom, a Nordic
country, Denmark, France, and Benelux, and two (2) persons in Germany.
Exhibit F
EVALUATION AGREEMENT
Upon receipt by Distributor as identified below (the "Distributor") of this
Agreement, signed and completed by the party identified below (the "Recipient"),
Distributor shall provide Recipient with a copy of the Echelon product(s) listed
below (the "Product(s)"). The Product(s) shall be furnished to Recipient solely
for Recipient's internal use and evaluation for a period of ten (10) business
days (the "Evaluation Period").
PRODUCT(S) NAME: __________________________________________________
The Recipient agrees that it is receiving a copy of the Product(s) for use only
on a single computer. The Recipient may make up to one (1) additional copy only
for back-up purposes. The Recipient agrees that all copies of the Product(s)
and all intellectual property rights in and to the Product(s) are owned by
Echelon Corporation ("Echelon") or its suppliers, that all copies will display
Echelon's copyright notice, and that all copies will be strictly safeguarded
against disclosure or use by persons not authorized by Echelon to use the
Product(s). The Recipient agrees that unauthorized copying will cause great
damage to Echelon or to any third party holding any right, title, or interest in
the Product(s). The Recipient agrees that it will not distribute to any third
party the Product(s), any portion thereof, or any program derived from the
Product(s) without the prior written consent of Echelon. Recipient agrees that
it will not modify, translate, reverse engineer, decompile, or disassemble the
Product(s). THE PRODUCT(S) IS PROVIDED "AS IS" WITHOUT WARRANTY OR CONDITION OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. THE RECIPIENT AGREES
THAT NEITHER ECHELON, ITS SUBSIDIARIES, NOR ANYONE ELSE INVOLVED IN CREATING,
PRODUCING, OR DELIVERING THE PRODUCT(S) SHALL BE LIABLE FOR ANY DIRECT,
INDIRECT, CONSEQUENTIAL, OR INCIDENTAL DAMAGES RELATING TO THE PRODUCT(S),
HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY. By the end of the Evaluation
Period, Recipient shall either sign and return to Distributor the appropriate
Product license agreement or deliver to Distributor all full or partial copies
of the Product(s), accompanying documentation, and all other materials provided
by Distributor or developed by Recipient relating to the Product(s). The
parties acknowledge that Echelon and its subsidiaries are third party
beneficiaries of this Agreement. This Agreement will be governed by California
law (without reference to rules of conflicts of law). All disputes arising out
of or in connection with this Agreement will be settled by binding arbitration
in San Francisco, California under the rules of arbitration of the American
Arbitration Association. Judgment on the arbitrator's award may be entered in
any court having jurisdiction thereof. Notwithstanding the foregoing
arbitration provision, Echelon may apply to any court of competent jurisdiction
for injunctive relief. This Agreement may not be assigned without Echelon's or
its subsidiary's consent. This Agreement is the entire agreement with respect
to the subject matter hereof and may only be modified in writing. The Recipient
agrees not to export or re-export , or cause to be exported or re-exported, the
Product(s), or the direct product of such Product(s), to any country which,
under the laws of the United States, Recipient is or might be prohibited from
exporting its technology or the direct product thereof.
Distributor Recipient
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Signature Signature
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Name (Please Print) Name (Please Print)
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Company Company
---------------------------------- ----------------------------------
Address Address
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City, State, Zip City, State, Zip
---------------------------------- ----------------------------------
Phone Number Phone Number
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Date Date
Revised 07/15/96
F-1
Exhibit G
SOFTWARE LICENSE AGREEMENT
This Agreement is entered into between Echelon Corporation ("Echelon") and
Distributor ("Licensee") on the following terms and conditions.
Echelon Corporation ("Echelon") grants to Licensee a non-exclusive, non-
transferable license to use the copy of the applicable software delivered
pursuant to the Agreement and any updates or upgrades thereto provided by
Echelon according to the terms set forth below. If Echelon provides any
software to Licensee as an update or upgrade to software which Licensee has
previously licensed, then Licensee agrees to destroy all copies of the prior
release of this software within thirty (30) days after opening the software
package; provided, however, that Licensee may retain one copy of the prior
release for backup, archival, and support purposes.
LICENSE
LICENSEE MAY:
a. install and use the software on only one computer or network node,
b. use the software only for demonstrating applications using Echelon's
LonWorks(R) tools and components,
c. make one (1) copy of the software in machine readable form solely for backup
purposes, provided that Licensee reproduces all proprietary notices on the
copy, and
d. physically transfer the software from one computer or network node to
another, provided that the software is removed from the computer or network
node on which it was installed and is used on only one computer or network
node at a time.
LICENSEE MAY NOT:
a. use the software on more than one computer or network node at a time or in a
multi-user system,
b. modify, translate, reverse engineer, decompile, or disassemble the software
(except to the extent that such acts may not be prohibited under applicable
law),
c. copy the software (except for the backup copy ) or copy the accompanying
documentation, or
d. rent, transfer, or grant any rights in the software or accompanying
documentation in any form to any person without the prior written consent of
Echelon, except as set forth in Section 17 of the Agreement.
This license is not a sale. Title and copyrights to the software, accompanying
documentation, and any copy made by Licensee remain with Echelon. Unauthorized
copying of the software or the accompanying documentation, or failure to comply
with the above restrictions, will result in automatic termination of this
license and will make available to Echelon other legal remedies.
LIMITED WARRANTY AND DISCLAIMER
ECHELON DISCLAIMS ALL WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY, OR
IN ANY COMMUNICATION WITH YOU, AND ECHELON SPECIFICALLY DISCLAIMS ANY IMPLIED
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
NONINFRINGEMENT AND THEIR EQUIVALENTS. does not warrant that the operation of
the software will be uninterrupted or error free or that the software will meet
Licensee's specific requirements.
LIMITATION OF LIABILITY
IN NO EVENT WILL ECHELON BE LIABLE FOR LOSS OF DATA, LOST PROFITS, COST OF
COVER, OR OTHER SPECIAL, INCIDENTAL, PUNITIVE, CONSEQUENTIAL, OR INDIRECT
DAMAGES ARISING FROM THE USE OF THE SOFTWARE OR ACCOMPANYING DOCUMENTATION,
HOWEVER CAUSED
AND ON ANY THEORY OF LIABILITY. THIS LIMITATION WILL APPLY EVEN IF ECHELON HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. LICENSEE ACKNOWLEDGES THAT THE
AMOUNTS PAID BY LICENSEE FOR THE SOFTWARE REFLECT THIS ALLOCATION OF RISK.
GENERAL
This Agreement shall be governed by the laws of the State of California, U.S.A.
This Agreement is the entire agreement between us and supersedes any other
communications or advertising with respect to the subject matter hereof. This
Agreement may only be amended in writing signed by an officer of each party.
The failure of Echelon to enforce any provision of this Agreement does not
constitute a waiver of such provision. If any provision of this Agreement is
held invalid, the remainder of this Agreement shall continue in full force and
effect. Use, duplication , or disclosure by the U. S. Government is subject to
restrictions set forth in subdivision (c)(1) (ii) of the rights in Technical
Data and Computer Software clause at DFARS 252.227-7013. [Xxxxxxx, please
check]
Echelon and LonWorks are U.S. registered trademarks of Echelon Corporation.
v. 071596
G-1
Exhibit H
REGULAR PRODUCTS, TARGET INVENTORY LEVELS AND VOLUME PRODUCTS
Regular Target
or Volume Inventory
Model Product Product Level
--------- ------- ------- -----
-----------
50051 FTT-10A Volume N/A
50040-01 LPT-10 Volume N/A
50090-02 PLT-21 Volume N/A
50100-01 PLT-30 Volume N/A
61000-100 RTR-10 Volume N/A
--------------------------------------------------------------------
50010-10 TPT/XP-78 Regular 1,800
50020-10 TPT/XF-1250 Regular 1,800
50080-02 PLT-10A Regular 20
00000-00 XXX-00 Xxxxxxxxx Regular 20
55010-00 TP/XF-78 Module Regular 400
--------------------------------------------------------------------
55010-10 TP/XF-78F Module Regular 20
55020-01 TP/FT-10 Module Regular 350
55020-10 TP/FT-10F Module Regular 1,000
55030-10 TP/XP-1250 Module Regular 40
56210-01 LPI-10 Module Regular 60
--------------------------------------------------------------------
58020-01 LPI-10 Dev Kit Regular -
57010 PLCA-10 Comm Anal. Regular -
58021-2 PLCA-21 Comm Anal. Regular 1
57010-032 PLCA-30 Comm Anal. Regular 1
65100-100 LTM-10 Module Regular 500
--------------------------------------------------------------------
65120 LTM-10 Mother Board Regular 5
65150-LxP LTM-10 Node T. Pair Regular 5
77010 TPM/XF-78 Regular 150
77030 TPM/XF-1250 Regular 60
77040 FTM-10 Regular 300
--------------------------------------------------------------------
77050 TPM-RS485 Regular 100
77090 PLM-10 Regular 5
77161 PLM-21 Regular 30
77180 PLM-30 Regular 10
78200-110 XX-00 X/X, 000XXX Regular -
--------------------------------------------------------------------
78200-120 XX-00 X/X, 000XXX Regular -
78200-121 XX-00 X/X, 000XXX Regular -
78200-211 XX-00 X/X, 000XXX Regular -
78200-220 XX-00 X/X, 000XXX Regular 5
78200-221 XX-00 X/X, 000XXX Regular 30
--------------------------------------------------------------------
78200-321 XX-00 X/X, 000XXX Regular 5
58030-01 Connectivity Starter Kit Regular 50
71000-11 Loa Works Roster (any) Regular 150
65200-100 LTS-10 SLTA Module Regular 125
65200-200 PSG-10 Regular 25
--------------------------------------------------------------------
73000-3 PSG/2 Regular -
73000-1 SLTA/2 Regular -
73551 SLTA-10/FT-10 Regular 300
73353 SLTA-10/TP-1250 Regular 20
73100-11 PCLTA Single Channel Regular 10
--------------------------------------------------------------------
73100-12 PCLTA Dual Channel Regular 5
73401 PCLTA-10/FT-10 Regular 200
73403 PCLTA-10/TP-1250 Regular 20
73200 PCC-10 PC Card Regular 75
78300 2-Conductor/XL Cable Regular 15
--------------------------------------------------------------------
78301 15-Conductor Cable Regular 20
78302 2-Conductor Cable Regular 75
33100-00 15A Conductor Analyser Regular 3
33100-10 PCC-10 Conductor Analyser Regular 10
34000-100 NSS-10 Module Regular 5
--------------------------------------------------------------------
35000-100 NSI-10 Module Regular 5
34100 PCNSS PC Interface Card Regular 20
35100 PCNSI PC Interface Card Regular 60
-----------
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Distributor Date
Page 1
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Echelon Date
