EXHIBIT 10.25
DISTRIBUTOR AGREEMENT
This Agreement, made and entered into this second day of February, 2000
(the "Effective Date"), by and between ZiLOG, INC., a Delaware Corporation
and its wholly owned subsidiaries (hereinafter collectively referred to as
"ZiLOG") and PIONEER-STANDARD ELECTRONICS, INC., a corporation organized
under the laws of Ohio (hereinafter referred to as "Distributor").
IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, THE PARTIES
AGREE AS FOLLOWS:
1. DEFINITIONS
When used herein,
(a) "Code X Products" shall mean those Products that are not recommended
for distributor stock. These Products are listed under the Code X
category in the ZiLOG Price List as it may be revised from time to time.
(b) "Customer Product Specifications", "CPS" or "Product Specifications"
shall mean those ZiLOG documents that specify the performance
characteristics of particular ZiLOG Products.
(c) "Discontinued Products" means Products which ZiLOG no longer intends
to produce or which ZiLOG no longer produces.
(d) "Distributor Confidential Information" means all trade secrets related
to Distributor which is communicated by Distributor to ZiLOG will be
deemed as if marked confidential, including, without limitation,
Distributor's business plans, marketing plans, customer lists, information
contained in point-of-sale reports supplied by Distributor to ZiLOG
pursuant to the terms hereof, pricing, contractual terms, sales plans, and
inventory and inventory strategies and programs; provided, however, that
Distributor Confidential Information does not include: (i) any
information which ZiLOG had in its possession through lawful means prior
to disclosure by Distributor; (ii) any information which is or becomes
publicly known through no action or inaction of the ZiLOG; (iii) any
information which is furnished to others by Distributor without
restriction on disclosure; (iv) any information which is hereafter
furnished to ZiLOG by a third party, as a matter of right and without
restriction on disclosure; or (v) information which is independently
developed by ZiLOG without use of or reference to the Distributor
Confidential Information.
(e) "DSR" means a Distributor Stock Rotation authorization issued by ZiLOG
to Distributor;
(f) "Industrial Property Rights" means all patents, trademarks, mask work
rights, trade names, inventions, copyrights, know-how or trade secrets
relating to the origin, design, manufacture, programming, operation or
service of the Products, owned by ZiLOG or to which ZiLOG has a legitimate
right of use, as the same exists as of the date of this Agreement or is
developed or acquired by ZiLOG during the term hereof;
(g) "Non Standard Products" means a Product manufactured to either a
specific requirement of one or a limited number of customers, a Product or
a Product containing packaging or labeling which is customized in any
manner to meet the specific needs of one or a limited number of customers,
or a Product not included in the Price List or identified by ZiLOG as not
being approved for stock rotation, return or price protection privileges.
Non Standard Products include, but are not limited, to ROM coded Products,
OTP Products programmed By ZiLOG, Products with unusual or nonstandard
packaging or markings, and Products with certain SL XX numbers assigned.
(h) "Price" means those prices set forth from time to time in the ZiLOG
Price Book; as Distributor cost.
(i) "Price Book" means the standard Price List maintained and updated from
time to time by ZiLOG;
(j) "Products" means the Standard Products, the Non Standard Products and
Code X Products.
(k) "RMA" means a return material authorization issued by ZiLOG to
Distributor;
(l) "Technical Data" means all information in written, graphic or tangible
form, or in any magnetic, electronic or machine readable form, relating to
the design, manufacture, programming, operation, fit, function or service
of the Products including, without limitation, Industrial Property Rights;
(m) "Territory" means the geographic area or areas described in Exhibit A,
attached to this Agreement and incorporated herein by reference, as such
Exhibit may hereafter be amended from time to time by ZiLOG;
(n) "Trademarks" means those trademarks, service marks, trade names,
slogans, labels, logos and other trade-identifying symbols as are or have
been developed, used and owned by ZiLOG;
(o) Standard Products are those ZiLOG Products that are not Non Standard
Products or Code X Products, and are purchased by Distributor from ZiLOG
at the distributor cost as shown in the ZiLOG Distributor Price List.
2. APPOINTMENT AND RELATIONSHIP
(a) Subject to the terms stated herein, ZiLOG appoints Distributor, and
Distributor hereby accepts such appointment, as ZiLOG's authorized full-
service Distributor for the Products in the Territory. To the extent the
Products contain any software which is being licensed under the terms
contained in the documentation accompanying such software, ZiLOG hereby
grants to Distributor a license to sublicense such software, upon the
terms and conditions set forth in the documentation accompanying such
software, to its customers.
(b) During the initial twelve (12) month period following the Effective
Date, Distributor shall be the exclusive full-service distributor of
Products within the Territory. Following the completion of the initial
twelve (12) month period, Distributor shall continue to be the exclusive
distributor of Products within the Territory unless such exclusivity is
terminated by ZiLOG at any time thereafter by giving Distributor at least
thirty (30) days notice of the termination of the exclusivity prior to the
effective date of such termination. Any such termination of exclusivity
shall be in ZiLOG's sole and absolute discretion, with or without cause,
and ZiLOG shall have no liability whatsoever on account of ZiLOG's
termination of the exclusivity pursuant hereto.
(c) Notwithstanding the provisions of paragraph (b), above, ZiLOG shall
have the right to terminate Distributor's exclusivity if Distributor
defaults under any provision of this Agreement and such default is not
cured within any applicable cure periods specified herein. Termination of
Distributor's exclusivity following a default is in addition to any other
rights and remedies ZiLOG may have either hereunder (including, without
limitation, termination of this Agreement) or at law or in equity. In
addition, ZiLOG shall have the right to terminate Distributor's
exclusivity if Distributor fails to meet sales objectives for the
Products, as such sales objectives have been previously mutually agreed to
by the parties. Upon termination of Distributor's exclusivity without
termination of this Agreement, all rights and obligations of Distributor
and of ZiLOG hereunder shall continue with the exception that Distributor
will, from that point forward, be a non-exclusive distributor of the
Products in the Territory.
(d) Notwithstanding the provisions of paragraph (b), above, the following
shall constitute exceptions to the exclusivity granted to Distributor
pursuant to subparagraph (b), above:
(i) ZiLOG reserves the right, on behalf of itself and any of its
subsidiaries and affiliates, to sell Products directly to customers within
the Territory. In addition, ZiLOG and its subsidiaries and affiliates may
establish house accounts within the Territory, which may be exclusively
serviced by ZiLOG.
(ii) ZiLOG may authorize so-called "catalog houses" who are not full
service distributors to sell Products within the Territory.
(iii) Distributor acknowledges that, as of the Effective Date, ZiLOG
currently has relationships within the Territory with other third party
distributors. ZiLOG shall promptly attempt to terminate these
relationships with other third party full service distributors in the
Territory. In the event ZiLOG is unable to terminate the existing
agreements with such distributors on terms and conditions which, in
ZiLOG's sole opinion, are commercially reasonable, then the exclusivity
provided in subparagraph (b), above, shall not be applicable to any such
Distributor. For so long as it may reasonably take ZiLOG to extricate
itself from relationships with other third party distributors in the
Territory, Distributors will not seek remedies from ZiLOG, but will build
its capabilities to serve ZiLOG as an exclusive full service Distributor
within the territory. Should the period for ZiLOG to extricate itself
from relationships with other third party distributors in the Territory
exceed six (6) months from the Effective Date of this Agreement, the
parties will meet to make mutually acceptable business arrangements under
the circumstances that exist at that time.
(iv) Distributor acknowledges that, as of the Effective Date, ZiLOG has an
existing agreement for exclusive distribution of Products for use by the
United States military and/or in military applications with a third party
distributor. In the event ZiLOG is unable to terminate that agreement on
terms and conditions which, in ZiLOG's sole opinion, are commercially
reasonable, then the exclusivity provided in subparagraph (b), above,
shall not apply to such distributor, and Distributor shall be prohibited
hereunder from distributing Products for or to the United States military
or for use in military applications.
(v) In the event ZiLOG is able to terminate one or more of the agreements
referenced in subparagraphs (iii) and (iv), above, on commercially
reasonable terms, then Distributor's exclusivity shall not be applicable
to any sales by any such distributors made in the Territory in accordance
with the terms and conditions of the termination agreement negotiated
between ZiLOG and such distributors.
(vi) The exclusivity granted to Distributor pursuant to paragraph (b)
shall not be applicable to any sales which are the subject of any of the
exceptions set forth in this subparagraph (d).
(e) The relationship of ZiLOG and Distributor established by this
Agreement is that of independent contractors, and nothing contained in
this agreement shall be construed to: (1) give either party the power to
direct and control the day-to-day activities of the other; or (2)
constitute the parties as partners, joint ventures, co-owners or as
participants in a joint or common undertaking. Distributor, its agents
and employees, are not the representatives of ZiLOG for any purpose except
as expressly set forth in this Agreement, and they do not have any power
or authority as agent, employee or in any other capacity to represent, act
for, bind, or otherwise create or assume any obligation on behalf of ZiLOG
for any purpose whatsoever. All financial obligations associated with
Distributor's business are the sole responsibility of Distributor. All
sales and other agreements between Distributor and its customers are
Distributor's exclusive responsibility and will have no effect on
Distributor's obligations under this Agreement. Distributor shall be
solely responsible for, and shall indemnify and hold ZiLOG free and
harmless from, any and all claims, liabilities, causes of action, damages,
lawsuits, costs or expenses (including, without limitation, attorneys'
fees) arising out of or related to the acts of Distributor, its employees,
servants, agents, contractors, independent sales personnel or
representatives, or any of them.
(f) ZiLOG agrees that, subject to the exceptions granted pursuant to
subparagraph (d), above, ZiLOG shall not authorize any other full service
distributors to sell Products within the Territory. In the event a full
service distributor other than Distributor does sell within the Territory
without ZiLOG's authorization, ZiLOG may, but shall not be required to,
initiate such action as ZiLOG may determine is appropriate under the
circumstances. ZiLOG shall have no liability whatsoever to Distributor as
a result of any action or failure to act by ZiLOG against any unauthorized
distributor selling Products within the Territory. In the event any such
unauthorized full service distributor sells a substantial quantity of the
Products within the Territory which substantially undermines the exclusive
nature of Distributor's relationship hereunder, and ZiLOG does not elect
to initiate some action against such unauthorized Distributor within sixty
(60) days of receiving written notice from Distributor that Distributor
considers the unauthorized distributor as substantially undermining its
exclusivity hereunder, then Distributor shall have the right to terminate
the exclusive nature of this Agreement by written notice thereof to ZiLOG.
From and after the effective date of such notice, Distributor shall become
a non-exclusive distributor of ZiLOG hereunder, and ZiLOG shall have the
right to authorize other full-service distributors within the Territory.
(g) Notwithstanding any other provision of this Agreement, Distributor
acknowledges that the Products are not designed, made, or intended for use
in any application where failure or inaccuracy might cause death or
personal injury including, without limitation, life support applications
and products, and notwithstanding any other provision of this Agreement to
the contrary, Distributor is hereby prohibited from using the Products or
selling the Products to customers where a Product, or any part thereof, is
to be used in any such application. Distributor agrees that ZiLOG shall
not be liable, in whole or in part, for any claims or damages arising out
of or in connection with the use and performance of any Product in such
applications. If Distributor uses a Product or sells to a customer who
uses such Product for such applications, Distributor shall indemnify and
hold ZiLOG harmless from any claims, loss, cost, damage, expense, or
liability, including attorneys' fees, arising out of or in connection with
such use.
3. OBLIGATIONS OF DISTRIBUTOR
In addition to the other obligations of Distributor set forth elsewhere in
this Agreement, Distributor shall at its own expense:
(a) Exert its commercially reasonable efforts to introduce, diligently
promote and solicit the sale of the Products through advertising; personal
customer contact; distribution of information literature, catalogs, data
sheets and other sales and marketing materials furnished by ZiLOG for such
purpose; and other appropriate sales and marketing techniques;
(b) Exert its commercially reasonable efforts to meet or exceed the sales
objectives for the Products which have previously been mutually agreed to
by the parties;
(c) Participate, upon reasonable notice, in training activities, business
reviews and programs
sponsored by ZiLOG;
(d) Inform ZiLOG of all stocking locations.
(e) Assist ZiLOG in assessing customer requirements for the Products and
modifications and improvements thereto, in terms of quantity, quality,
design, functional capability and other features, with a view toward
maximizing the potential market for the Products within the Territory. To
this end, Distributor will promptly furnish ZiLOG with copies of any
correspondence or other communications, or written descriptions of any
verbal communications, from its customers, potential customers and other
contacts with respect to the use of or application for the Products,
suggested modifications or improvements to the Products, reliability of
the Products, or otherwise related in any manner to the Products or the
design, functionality, fit or other aspects of the Products, and the like;
provided, however, that Distributor shall not be required to disclose
proprietary information of such customers which are protected by
nondisclosure agreements and which relate to the technical specifications
of products developed by such customers or business plans of such
customers, it being agreed that Distributor shall not enter into any
nondisclosure agreements with customers which prohibit Distributor from
making any of the disclosures required herein as they relate to the
Products or the use thereof by such customers;
(f) Devote sufficient financial resources and qualified personnel,
including appropriate numbers of application engineers, to effectively
interact with customers in the Distributor's Territory as may be required
to fulfill Distributor's responsibilities under this Agreement.
Distributor agrees that it shall exclusively dedicate no less than twenty
(20) full-time personnel whose sole function shall be to interact with and
service customers for Products within the Territory. ZiLOG acknowledges
that Distributor does not presently as of the Effective Date of this
Agreement have personnel in place in this regard, and that Distributor
will be proceeding to staff these positions as soon as possible hereafter.
Notwithstanding the foregoing, however, in the event Distributor's
exclusivity is terminated by either party hereunder, and Distributor
continues to act as a non-exclusive distributor for ZiLOG, then the
requirements imposed for exclusive dedication of full time personnel under
this subparagraph (f) shall no longer be applicable to Distributor from
and after the date Distributor is no longer acting as the exclusive
Distributor of ZiLOG. The parties shall meet and mutually agree upon
commercially reasonable staffing levels for Distributor to maintain in its
role as a non-exclusive Distributor in the Territory pursuant to the
applicable terms of this Agreement.
(g) Arrange for specialty application engineering assistance from ZiLOG
when such technical assistance is required or requested by a customer;
(h) Distributor shall send to ZiLOG within 10 working days after the end
of each calendar month, a resale report listing all sales transactions and
current inventory relating to ZiLOG Products. Such resale report will be
submitted to ZiLOG, covering the previous month, in a format, and
containing the information, as may be requested from time to time by
ZiLOG. ZiLOG shall have the right, upon no less than twenty-four (24)
hours prior written notice, to audit or have audited all such information
from time to time, and shall be given access to the relevant books,
records and place or places of business of Distributor for this purpose.
The right to audit shall be exercisable not more than once in any twelve
(12) month period unless the audit reveals a material discrepancy in the
reports submitted by Distributor, in which case ZiLOG shall have the right
to audit any time after three (3) months following the adverse audit
report. The obligation to send monthly reports, together with the right
to audit, shall continue for twelve (12) months after termination of this
Agreement, or until Distributor no longer holds any Products in inventory,
whichever is shorter. All costs associated with any such audit shall be
borne by ZiLOG unless the audit reveals a material discrepancy in such
information, in which case Distributor shall reimburse ZiLOG for all costs
incurred by ZiLOG in conducting such audit. For purposes of this
subparagraph (h), a "material discrepancy" exists if dollar or unit
volumes for any customer or in the aggregate are misstated by more than
ten percent (10%); or if there is a failure to report sales of Products to
any specific customer. All such monthly resale and inventory reports
shall be subject to the confidentiality provisions set forth in paragraph
14, below.
(i) Obtain tax exemption certificates or pay all sales and use taxes
applicable to the sale or purchase of Products hereunder. Distributor is
solely liable and agrees to indemnify and hold ZiLOG harmless with respect
to all tariffs, duties, excise, value added, sales, use or other taxes or
charges levied on the purchase, sale, export or re-export of the Products
by Distributor.
(j) Distributor shall exercise reasonable efforts to maintain a sufficient
inventory of the Products so that customer demands will be satisfied
without undue delay. As the inventory of the Products is reduced through
resales, Distributor will reorder sufficient quantities to replenish stock
to levels which ensure that customer demands will be satisfied without
undue delay.
4. OBLIGATIONS OF ZiLOG
ZiLOG shall:
(a) Exert its reasonable efforts to supply Distributor's requirements for
the Products on the terms and conditions of this Agreement; provided,
however, that ZiLOG shall be under no obligation to Distributor to
develop, continue, discontinue, change or retain any of the Products;
(b) Keep Distributor informed of all new Products offered for sale in the
Territory;
(c) Furnish engineering and sales assistance, training and consultation at
ZiLOG's manufacturing plant or elsewhere as determined by ZiLOG and as
required or desirable, in ZiLOG's judgment, to Distributor's personnel;
(d) Provide Distributor, with reasonable quantities of Product literature;
(e) Allow Distributor to have access to ZiLOG's design centers situated
within the Territory for purposes which are necessary or appropriate to
fulfill Distributor's distribution function hereunder;
(f) Provide assistance to Distributor in affecting the orderly transition
of accounts from the current distributors of ZiLOG to Distributor.
5. PRODUCT RETURN RIGHTS
(a) Standard Products are returnable for warranty claims under the terms
and conditions of Section 8 below. Standard Products are price protected
under the terms of Section 9 below and are subject to stock
rotation privileges under Section 11 below. Standard Products may be
returned in accordance with the provisions of Section 11 below if ZiLOG
discontinues that Product.
(b) Code X Products and Non Standard Products may not be returned by
distributor to ZiLOG at any time, except for warranty claims under Section
8 below. In addition, Code X Products and Non Standard Products are not
price protected, and are not subject to being stock rotatedCode X Products
and Non Standard Products are not subject to return for any reason,
whether on termination of this Agreement, if ZiLOG discontinues this type
of Product, or otherwise.
6. PURCHASE TERMS
(a) All Products purchased by Distributor from ZiLOG during the term of
this Agreement shall be pursuant to purchase orders issued by Distributor
as confirmed by ZiLOG's sales order acknowledgment and subject to the
terms and conditions of this Agreement. Nothing contained in any such
request for quotation, purchase order or sales order acknowledgement shall
in any way effect the standard terms and conditions of purchase and sale.
Any preprinted terms and conditions contained on any credit applications,
purchase orders, order acknowledgments, request for quotations,
quotations, packing slips, invoices, payment instruments or other
documents submitted by either party which are different than, in addition
to or inconsistent with any term or condition specified in this Agreement
shall be null, void and of no force or effect unless such term or terms
are specifically agreed to by both parties in a separate written document
executed by both parties specifically referencing such terms and
specifically indicating each party's acceptance thereof.
(b) All purchase orders submitted by Distributor to ZiLOG are subject to
acceptance by ZiLOG at its corporate office in Campbell, California or
such other place as ZiLOG may designate in writing to Distributor. ZiLOG
reserves the right in its sole discretion to refuse to accept new purchase
orders, or to place existing purchase orders on hold. All orders accepted
by ZiLOG shall be subject to, and ZiLOG will have no liability for,
cancellation by ZiLOG due to force majeure, Product allocations, Product
shortages, delays or failures in production or delivery, manufacturing or
production capacity shortages, or for any other reason, as determined by
ZiLOG. ZiLOG shall notify Distributor of any purchase orders or any
portion of any purchase order which cannot be filled as soon as reasonably
possible after ZiLOG determines that such purchase order or portion
thereof cannot be filled. ZiLOG reserves the right to reject any order
without prejudicing the relationship between ZiLOG and Distributor;
(c) The purchase price for each Product listed in the Price Book shall be
as specified in the Distributor Cost column in ZiLOG's then current Price
Book. For any Products not listed in the Price Book, Distributor shall
request a quote from ZiLOG. Prices quoted by ZiLOG on Products not in the
Price Book shall be valid for thirty (30) days following the date of the
quote from ZiLOG unless otherwise specified; provided, however, that the
quoted price shall be valid only for Products booked during such thirty
(30) day period for which shipment shall occur within twelve (12) months
from the date of booking. ZiLOG may, from time to time, in its sole
discretion, amend the Price List and/or its specific Product quotations as
it applies to some or all of the Products. The amended prices shall be
applied as specified in paragraph 9, below.
(d) Minimum order and line item quantities for purchase orders from
Distributor for other than Standard Products shall be those specified in
the Price List or by separate agreement if not specified in the Price
List. All Products must be entered in conformance with ZiLOG's order
entry procedures.
(e) Distributor may cancel or reschedule the delivery of any purchase
order or portion thereof, without charge, in accordance with the
following:
Product Category
Days prior to
scheduled delivery
Cancellation or
reschedule privilege
Standard
0 - 30 days
Not permitted
Over 30 days
Permitted
Non Standard Products
and Code X Products
0 - 60 days
Over 60 days
Not permitted
Permitted
(g) Terms of payment to ZiLOG for the purchase price of the Products
(including freight, taxes and other costs to be paid by Distributor) shall
either be two percent (2%) discount if received net ten (10) days from the
date of invoice, or full amount due net thirty (30) days from date of
invoice, cash in advance, cash on delivery, or letter of credit at ZiLOG's
sole discretion. For payments made by mail, the date of payment is the
date of receipt by ZiLOG. ZiLOG reserves the right to modify any credit
terms provided to Distributor from time to time, as determined by ZiLOG in
its sole discretion; provided, however, that if such modification does not
result from late payments or lack of payments from Distributor, ZiLOG
shall give at least thirty (30) days notice of the change in credit terms
to Distributor prior to the effective date of such change. Such right
shall include, but not be limited to, withholding shipment or ceasing
production on any of Distributor's orders until ZiLOG receives valid
payment on all outstanding sums owed to ZiLOG by Distributor, or until
ZiLOG receives full payment in advance, at ZiLOG's option. Any such
action shall not effect the liability of Distributor for payment for any
Products on purchase orders, or portions thereof, which are outstanding
and which are not subject to cancellation by Distributor hereunder.
7. DELIVERY, TITLE AND RISKS
(a) Delivery schedules are estimates based on anticipated production,
yields, and the like. ZiLOG will not be liable to Distributor or its
customer for delays or non-delivery of Products. If circumstances
warrant, ZiLOG may allocate production and deliveries of the Products
among various customers and/or distributors in such manner as ZiLOG may
determine, in its sole discretion. ZiLOG shall use commercially
reasonable efforts to provide Distributor with notice of any such delays
or circumstances promptly upon becoming aware of the same.
(b) Title and risk of loss or damage to the Products will pass to
Distributor at the time of delivery of the shipment to the carrier at San
Francisco, California, or such other place within the continental United
States as ZiLOG may designate to Distributor in writing. Distributor will
give ZiLOG timely notice in designating a carrier, and any such
designation will not affect the foregoing passage of title and risks or
Distributor's responsibility for payment of transportation charges. It is
the responsibility of the Distributor to note any discrepancies (missing
or damaged cartons, broken seals, etc.) on carrier's waybill at the time
of receipt.
(c) ZiLOG may drop ship Products to the customer of Distributor at the
request of Distributor. Distributor will be responsible for such drop
shipments in the same manner as though the shipment had been made directly
to Distributor.
(d) If ZiLOG ships Product against an order that was cancelled validly by
Distributor in accordance with Section 6 supra, ZiLOG shall assume the
risk of loss for such Product during shipment. Distributor shall use
reasonable best efforts to recover any such shipments and return same to
ZiLOG. All shipping and freight costs for any Product shipped by ZiLOG as
set forth in this Section 7(d) shall be borne by ZiLOG.
(e) All costs related to the shipment of Product to Distributor including,
without limitation, costs of insurance, transportation and freight, shall
be paid by, and be the exclusive liability of, Distributor.
8. WARRANTY
(a) ZiLOG warrants to Distributor that, for one (1) year from the date of
shipment from Distributor to its customer or one (1) year from the date of
drop shipment by ZiLOG to Distributor's customer, that Products are free
from defects in material and workmanship, and conform to the published
Customer Product Specifications (CPS) or Product Specifications
applicable to the particular Product at the time of production.
Notwithstanding the foregoing, however, ZiLOG makes no warranty for any
software which it may deliver to Distributor, nor does it make any
warranty on any part or product not manufactured or produced by ZiLOG, and
any such software or non-manufactured parts are provided strictly in an
"AS-IS" condition, without any representation or warranty whatsoever,
unless such the documentation accompanying such software and/or non-
manufactured parts provide otherwise. The express warranties for Products
provided in this subsection (a), subject to all limitations set forth
elsewhere in this agreement including, without limitation, the limitations
set forth in this paragraph 8 and in paragraph 19(b), below, shall inure
to the benefit of Distributor's customers; provided, however, that
Distributor shall facilitate any warranty claims which may be made by
customers hereunder.
(b) Except as otherwise stated herein, ZiLOG will either repair, replace
or issue a credit for the purchase price of any defective Products,
provided: (1) ZiLOG is notified promptly on discovery of the asserted
defect or manifestation thereof, but not later than a period of time equal
to ZiLOG's warranty period applicable to the allegedly defective Products,
as specified in subparagraph (a), above; and (2) ZiLOG verifies the
asserted defect.
(c) No warranty shall apply to experimental, developmental, preproduction,
sample, "fallout" (i.e., out of specification, with notice) or promotional
Products. The warranty for Non Standard Products will be that, if any,
expressly set forth in ZiLOG's sales order acknowledgment of Distributor's
purchase order for the Non Standard Product.
(d) Products which are allegedly defective must, in all cases, be returned
by Distributor in accordance with the provisions of Section 10.
(e) The warranties stated herein will be ineffective: (i) where the
Products which Distributor alleges are defective have been repaired or
altered by anyone other than the personnel or authorized representatives
of ZiLOG, unless such repair or alteration was effected pursuant to the
prior written approval of ZiLOG or (ii) where testing and examination by
ZiLOG reveals the alleged defect to have been caused by misuse, neglect,
improper installation or any other cause beyond the range of intended use
of the Products, or by accident, fire or other hazard.
(f) Distributor or Distributor's customer retains sole responsibility for
all software, information or memory data stored on or integrated with any
of the Non Standard Product returned to ZiLOG under this warranty.
(g) ZiLOG MAKES NO OTHER WARRANTIES AND DISTRIBUTOR ACCEPTS THE FOREGOING
IN LIEU OF ANY AND ALL OTHER WARRANTIES WHETHER EXPRESS, IMPLIED OR
STATUTORY, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF
MERCHANTABILITY, ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE,
OR ANY IMPLIED OR STATUTORY WARRANTY OF NONINFRINGEMENT. ZiLOG's
WARRANTIES WILL NOT BE ENLARGED BY ANY REPRESENTATIONS, DESCRIPTION,
ADVICE, SAMPLES, MODELS OR OTHERWISE.
(h) DISTRIBUTOR, ON BEHALF OF ITSELF AND ALL OF ITS CUSTOMERS, SUCCESSORS
AND ASSIGNS, ACKNOWLEDGES AND AGREES THAT THE SOLE AND EXCLUSIVE REMEDY
FOR ANY DEFECTIVE PRODUCT SHALL BE THE REPAIR, REPLACEMENT OR CREDIT OF
THE PURCHASE PRICE ASSOCIATED WITH SUCH DEFECTIVE PRODUCT, AND DISTRIBUTOR
HEREBY WAIVES ANY AND ALL CLAIMS, LIABILITIES, DAMAGES AND CAUSES OF
ACTION, WHETHER IN CONTRACT, WARRANTY, TORT OR OTHERWISE, AGAINST ZiLOG ON
ACCOUNT OF ANY SUCH DEFECTIVE PRODUCT. IN THE EVENT DISTRIBUTOR FAILS TO
OBTAIN LIMITATIONS ON DAMAGES WHICH LIMIT LIABILITY TO A CUSTOMER OR
CUSTOMERS TO AT LEAST THE SAME DEGREE AS STATED HEREIN, DISTRIBUTOR AGREES
TO INDEMNIFY AND HOLD ZiLOG HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS,
LIABILITIES, CAUSES OF ACTION, COSTS AND EXPENSES INCURRED BY ZiLOG FROM
SUCH CUSTOMERS ON ACCOUNT OF ANY ALLEGEDLY DEFECTIVE PRODUCT SHIPPED TO
DISTRIBUTOR OR DROP SHIPPED TO DISTRIBUTOR'S CUSTOMER BY ZiLOG IN EXCESS
OF THE LIABILITY AMOUNTS STATED HEREIN. DISTRIBUTOR ACKNOWLEDGES AND
AGREES THAT THE REMEDIES PROVIDED HEREIN ARE EXCLUSIVE, AND THAT
DISTRIBUTOR SHALL HAVE NO OTHER REMEDIES, WHETHER AT LAW OR IN EQUITY.
(i) Infringement Claims:
(1) Notwithstanding the other provisions of this paragraph 8 to the
contrary, but subject to the limitations contained in this paragraph 8 and
in paragraph 19(b), below, ZiLOG agrees, at its own expense, to defend
Distributor from and against any claim, suit or proceeding, and to pay all
judgments and costs finally awarded against Distributor by reason of any
claim, suit or proceeding insofar as it is based upon an allegation that
the Products or any part thereof furnished by ZiLOG infringe any U.S.
patent or copyright, if ZiLOG is notified properly of such claim in
writing and is given authority and full and proper information and
assistance for defense of the same. In case such Products, or any part
thereof, are held in such suit to constitute infringement and the use of
such Products or any part is enjoined, ZiLOG shall, at is sole discretion
and at its own expense: (1) procure for Distributor the right to continue
using the Products or part; (2) replace or modify the same so that it
become noninfringing; or (3) remove such Products or part thereof and,
upon return of the Product or part held in Distributor's inventory, grant
Distributor a credit for the price paid by Distributor for such Product or
part held in Distributor's inventory. The items listed herein, subject to
the limitations set forth in this paragraph 8 and in paragraph 19(b),
below, constitute ZiLOG's sole and exclusive obligations for any
infringement allegation, and constitutes the sole and exclusive remedies
of Distributor for any such infringement allegation.
(2) Distributor shall have the right to employ separate counsel in any
claim, suit or proceeding set forth in subparagraph 8(i)(1), above and to
participate in the defense thereof, but the fees and expenses of
Distributor's counsel shall not be borne by ZiLOG. ZiLOG shall not be
liable to indemnify Distributor for any settlement effected without
ZiLOG's consent.
(3) The indemnification set forth in subparagraph 8(i)(1), above, shall
not apply and Distributor shall indemnify ZiLOG and hold it harmless from
all liability, claim, damage or expense (including, without limitation,
costs of suit and attorneys' fees) if the infringement is alleged to arise
from or is otherwise based upon ZiLOG's compliance with particular
requirements of Distributor or Distributor's customer that differ from
ZiLOG's standard specifications for the Products, or the infringement is
alleged to arise from modifications or alterations of the Products, or the
infringement arises from a combination of the Products with other items
not furnished or manufactured by ZiLOG.
(4) Distributor agrees that ZiLOG shall not be liable for any collateral,
incidental or consequential damages arising out of an infringement claim.
(5) The foregoing indemnities are personal to Distributor, and do not
apply to any customer of Distributor or any other third party other than
Distributor.
(6) The foregoing, as limited under this paragraph 8 and under paragraph
19(b) states the entire liability of ZiLOG for infringement claims.
9. PRICING
a) Pricing for Standard Products for purchase by distributors are
published by ZiLOG in one or more price books (each being termed a
"Distributor Price Book"), which are issued periodically. Distributor is
entitled to use this pricing for orders of all Standard Products from
ZiLOG. ZiLOG reserves the right to change prices for Standard Products
upon at least thirty (30) days prior notice to Distributor. Notification
of changed pricing shall be via a new price list or addendum to the
Distributor Price Book.
(b) In the event of a reduction in the price of Standard Products sold
hereunder, ZiLOG will issue a price protection form to Distributor listing
the affected Products, their old and new prices. On the effective date of
such price change, representatives of ZiLOG may audit the physical
inventory of selected locations to check the accuracy of the physical
inventory of the affected Standard Products and complete the price
protection form, which if not completed by ZiLOG, will be completed by
Distributor, setting forth the credit due the Distributor which shall be
equal to the difference between the old price previously paid to ZiLOG by
Distributor, less any prior price protection or other credits granted by
ZiLOG, and the new price for the Product multiplied by the quantity of
each such Product which was acquired directly from ZiLOG in Distributor's
inventories. In determining the price previously paid to ZiLOG by
Distributor, a first-in first-out inventory system will be presumed, with
the price of the latest shipments applying to the on-hand inventory first.
Notwithstanding the foregoing, however, price protection will not be
afforded for Products that were in Distributor's inventory for more than
twenty-four (24) months. This price protection provision shall not apply
to any Code X Products or Non Standard Products. As of the date of the
price decrease, the current backlog for the affected Product(s) will be
changed to reflect the new (lower) pricing.
(c) Distributor will not be eligible for price protection credit if
Distributor fails to return the price protection claim within forty-five
(45) days from the date of the price change. ZiLOG shall have the right
to conduct a physical inventory at any or all locations for which price
protection is requested. Price protection will only apply to Standard
Products procured directly from ZiLOG by the Distributor. Price
Protection is not available as a cash refund; it applies only as a credit
to monies due on account or future purchase orders unless this agreement
is terminated. In that case, payment will be issued if necessary.
(d) In the event of a price increase of Standard Products, the new
(higher) price will be effective on the date specified in the notice of
price change (which shall be no sooner than thirty (30) days after the
date of the notice), and pricing of the current backlog for the affected
Standard Product(s) as of the effective date will be changed to reflect
the new (higher) pricing on the effective date specified in the notice of
price increase as required in Section 9 (a) above. Notwithstanding the
foregoing, if the Distributor demonstrates to ZiLOG that Distributor had,
prior to receipt of notification of the price increase, a valid order from
its customers at the lower price for the affected Standard Products
scheduled to ship within ninety (90) days of the price increase, then
ZiLOG will honor the old, lower price for the affected Standard Product(s)
if that order ships as scheduled. Neither cancellations nor adjustments
to the schedule shall be permitted without triggering the price increase.
Price increases on all Products other than Standard shall be effective
immediately on the effective date of the notice specified in Section 9 (a)
above.
10. RETURN AND RETURN MATERIAL AUTHORIZATION (RMA) PROCEDURE
(a) If Distributor wishes to return any defective Products covered under
the warranty provisions hereof to ZiLOG, Distributor must first contact
the sales office of ZiLOG or a ZiLOG sales representative. At ZiLOG's
discretion and dependent upon problems involved, ZiLOG may dispatch a
representative to Distributor or Distributor's customer to examine the
Products and remove samples for testing by ZiLOG, or may require
Distributor or Distributor's customer to send ZiLOG a representative
sample for testing by ZiLOG. If ZiLOG determines that the Products are,
in fact, defective, and are covered by the warranty provisions contained
herein, then ZiLOG will issue an RMA number to Distributor. On receipt of
an RMA number, Distributor may return the applicable Products to the ZiLOG
facility indicated on the RMA within thirty (30) days from the issuance
date of such RMA. ZiLOG will assume the risk of loss or damages to
authorized returns after receipt of the Products at ZiLOG's plant.
(b) Distributor will prepay return freight, and clearly label each
container with the RMA number. Unauthorized or nonconforming returns will
be reshipped to Distributor at Distributor's cost.
(c) All returned Products are subject to inspection and test by ZiLOG. If
such inspection and test establishes to ZiLOG's reasonable satisfaction
that the Product is defective and the Product is covered under the
warranty provisions contained herein, then credit, repair or replacement
will be given for the returned Products provided the same are in
acceptable containers, have not been misused or altered in any manner from
the original form and design, and are otherwise covered under the warranty
provisions contained herein. If ZiLOG determines that the Products meet
specification or have been misused or altered as specified above, ZiLOG
shall reship the Products to Distributor, with all shipping charges being
paid or reimbursed by Distributor. The parts count of ZiLOG shall prevail
to resolve any dispute on returned shipment quantities absent manifest
error. In the event of a dispute between the Distributor and ZiLOG as to
the existence of a quality related reason or as to quantities of a
returned shipment, the Distributor will be given an opportunity to verify
ZiLOG's determination, but absent manifest error, ZiLOG's determination
shall prevail.
11. INVENTORY AND STOCK ADJUSTMENT
(a) Distributor shall exercise reasonable efforts to maintain a sufficient
inventory of the Products so that customer demands will be satisfied
without undue delay. In this respect, Distributor shall maintain a
minimum aggregate inventory at mutually agreed upon quantities.
(b) ZiLOG will give Distributor written notice of the discontinuance or
change in status to Code X of any of its Standard Products. Within sixty
(60) days of receipt of such notice, Distributor shall notify ZiLOG in
writing of its inventories of such formerly Standard Products - now
Discontinued Products or Code X Products. Thereafter, ZiLOG will issue
an RMA to Distributor authorizing the return of the newly classified
Discontinued Products or Code X Products to ZiLOG that were originally
purchased by Distributor directly from ZiLOG and that ZiLOG and
Distributor mutually agree may be returned. Provided that Distributor has
complied with all the requirements set forth in subsection (d) below and
the newly classified Discontinued or Code X Product is returned to ZiLOG
within thirty (30) days after issuance of an RMA, newly classified
Discontinued Products or Code X Products returned for credit, will be
credited at either the current Price or at the original purchase price
paid by Distributor, less any price reduction credits received by
Distributor, whichever is less. In determining the original purchase
price paid by Distributor, a first in first out inventory valuation system
shall be used. Any RMA issued pursuant to this subsection shall be and
become null and void if Distributor fails to return the subject newly
classified Discontinued Products or Code X Products within said thirty
(30) day period.
(c) ZiLOG will allow Distributor to return for exchange a stock rotation
of Standard Products which Distributor acquired directly from ZiLOG. No
stock rotation will be provided for Code X Products or Non Standard
Products. Prior written authorization must be provided by ZiLOG and
issuance of a Distributor Stock Rotation Form must be obtained from ZiLOG
in each instance that Distributor wishes to effect an exchange of Standard
Products. The return for exchange privilege granted Distributor hereunder
shall be limited to once every three (3) months, and shall be limited to
four percent (4%) of the net dollar amount of Standard Product purchases
during the proceeding three (3) months. Code X Products and Nonstandard
Products will be excluded from any calculation of net dollar amount, as
they are not eligible for return. All DSR returns must be preceded or
accompanied by a noncancelable purchase order equal to or greater in value
than the returned Standard Product. The noncancelable purchase order may
be applied to orders previously submitted by Distributor which have not
yet been finalized and noncancelable. Delivery must be requested within
the same month as the RMA is issued.
(d) Distributor may, during the thirty (30) day period following the
completion of the first twelve (12) months of this Agreement, return for
credit up to one hundred percent (100%) of the first stocking order
submitted by Distributor hereunder. In addition, Distributor may, after
the twelve (12) month period following the introduction of a new Product,
and within thirty (30) days after the expiration of such twelve (12) month
period, return for credit up to one hundred percent (100%) of the first
new Product stocking order. Returns under this subparagraph 11(d) shall
be subject to all terms and conditions set forth in subparagraph 11(c),
above; provided, however, that such returns will not be counted as "stock
rotation" for purposes of computing the quantity of Products otherwise
returnable by Distributor under subparagraph 11(c), above. Distributor
shall have no right to return any of the Products specified hereunder
after the expiration of the thirty (30) day period in which Distributor
has the right to return a Product specified herein.
(e) The following shall apply to all returns:
(i) To be sent to the facility specified by ZiLOG at the risk and expense
(freight prepaid) of Distributor;
(ii) To be in acceptable containers, original packaging and to be in
resalable condition as determined by ZiLOG;
(iii) No returns accepted for a return value of the Products of less than
$100.00 per return.
(iv) Products discontinued by ZiLOG may be returned for credit.
Discontinued Products must be returned within thirty (30) days of date
Distributor is notified by ZiLOG of discontinuance or in conformance with
Return Material Authorization.
12. DISTRIBUTOR DESIGN WIN REGISTRATION PROGRAM
ZiLOG provides a design registration program, whereby distributors will be
eligible for special pricing based upon their ability to secure design-ins
at their customers for certain Products, upon such terms and conditions as
ZiLOG shall determine from time to time and as communicated to
Distributor.
13. TERM AND TERMINATION
(a) This Agreement shall continue in full force and effect from the date
set forth in the first paragraph of this Agreement until terminated by:
(i) Either party, without cause, provided at least thirty (30) days' prior
written notice to such effect is given to the other party; provided,
however, that ZiLOG may not terminate this Agreement pursuant to this
Paragraph 13(a)(i) without cause during the first twelve (12) months
following the Effective Date; or
(ii) Either party, if one of the parties shall fail to perform any of the
material covenants of this Agreement which it has an obligation to perform
and such breach or alleged breach is not cured and/or substantial activity
proving due diligence in curing the breach is not undertaken within the
applicable cure period specified in Paragraph 18, below; or
(iii) Either party, if any proceeding in bankruptcy, insolvency or other
law for the relief of debtors, including the appointment of any receiver
or trustee or assignment for the benefit of creditors, shall be instituted
by or against either party.
(b) Both ZiLOG and Distributor have considered the possibility of
expenditures necessary in preparing for performance of this Agreement and
the possible losses and damage incident to each in the event of
termination, and it is understood that neither party shall be liable to
the other for damages in any form by reason of termination of this
Agreement at any time, even though, for example, ZiLOG or any other
distributor may thereafter complete a transaction initiated by
Distributor.
(c) At the effective date of termination of this Agreement the following
shall occur:
(i) ZiLOG may, at its option, cancel any or all unfilled purchase orders
with delivery scheduled beyond three (3) months of the effective date of
the termination.
(ii) Distributor shall discontinue immediately all activities as a ZiLOG
Distributor including, without limitation, all advertising or reference to
the Products, save already printed catalogs or for selling Products
remaining in inventory or which are shipped by ZiLOG following termination
hereof;
(iii) In the event ZiLOG terminates this Agreement without cause, or in
the event Distributor cancels this Agreement with cause, ZiLOG will
repurchase from Distributor any or all unsold Standard Products purchased
from ZiLOG within the last twenty-four (24) months, in Distributor's
inventory at the price paid by Distributor after deduction of all price
protection credits or other credits issued by ZiLOG granted in Section 9
of this Agreement or otherwise, using a first in first out inventory
valuation system.
(iv) In the event Distributor terminates this Agreement without cause, or
ZiLOG terminates this Agreement with cause, ZiLOG will repurchase from
Distributor any or all unsold Standard Products purchased from ZiLOG
within the last twenty-four (24) months, in Distributor's inventory at the
same price as set forth in subsection (c) (iii) above, less a fifteen
percent (15%) restocking charge to be deducted by ZiLOG, using a first in
first out inventory valuation system.
(v) Unless otherwise agreed to in writing, ZiLOG will have no obligation
to repurchase Non-Standard Products or Code X Products from Distributor.
14. INDUSTRIAL PROPERTY RIGHTS AND CONFIDENTIAL INFORMATION
(a) Distributor agrees that the Industrial Property Rights to the Products
and all Trademarks are and shall remain the sole property of ZiLOG. The
use by Distributor of any Industrial Property Rights and Trademarks
(including, but not limited to, any trademark, trade name or copyrighted
material) is authorized only for the purposes herein set forth and upon
termination of this Agreement for any reason such authorization shall
cease.
(b) Distributor acknowledges that all information included in the
Technical Data and any other information unique to ZiLOG's business
operation which is disclosed or revealed to Distributor in connection with
the performance of this Agreement other than the information included in
customer literature prepared by ZiLOG ("Confidential Information", is
confidential and of substantial value to ZiLOG, which value would be
impaired if such information were disclosed to third parties.
Confidential Information includes, but is not limited to, communications
or data in any form including, without limitation, oral, written, graphic
or electromagnetic form, which contain any information related to ZILOG
and/or its products and/or its business including, without limitation,
processes, patents, patent applications, technology, know-how, techniques,
improvements, inventions, business plans and strategies, marketing plans,
product plans, trade secrets, customer lists, supplier lists, transaction
methods and relationships between ZILOG and other entities, clients,
financial records or information, phone numbers, addresses, security
records and methods, formulas, development and marketing methods, designs,
design practices, product or material sources and relationships, potential
customers and listings, employee information, contractor information, any
information learned by Distributor in the process of examining any
information supplied by ZILOG, and any other information of any nature and
in any form disclosed to Distributor by ZILOG or learned by Distributor,
which relates to or is useful in ZILOG's current or anticipated future
business operations, but does not include any information which
Distributor proves it had in its possession through lawful means prior to
disclosure by ZILOG, and any information which is or becomes publicly
known through no action or inaction of Distributor. Confidential
Information shall include all such information, whether disclosed to
Distributor prior to or subsequent to Distributor's execution of this
Agreement. Distributor will not use in any way for its own account or the
account of any third party, nor disclose to any third party, any
Confidential Information of ZiLOG. Distributor will take every reasonable
precaution to protect the confidentiality of such Confidential Information
consistent with the efforts exercised by it with respect to its own
confidential business information, but in no event less than a reasonable
level of protection. Distributor will not publish any technical
description of the Products beyond the descriptions published by ZiLOG.
In the event of termination of this Agreement, the obligations of
Distributor hereunder shall survive such termination and there shall be no
use or disclosure by Distributor of any Confidential Information of ZiLOG
until such time as the Confidential Information enters the public domain
through no act or omission of Distributor.
(c) ZiLOG agrees that the Distributor Confidential Information and all
trademarks belonging to Distributor are and shall remain the sole property
of Distributor. ZiLOG is permitted to use any Distributor Confidential
Information internally only (including ZiLOG's agents) for purposes of
paying commissions to sales representatives, studying markets and demand
information, determining potential new product development, and
determining Distributor's compliance with the terms and conditions of this
Agreement. ZiLOG agrees to keep any Distributor Confidential Information
confidential, and agrees to protect such information to the same degree as
it protects its own trade secrets. The Distributor Confidential
Information in any point of sale reports shall not be used by any of
ZiLOG's personnel, agents or by any other authorized distributors of ZiLOG
to the detriment or damage of Distributor or Distributor's sales of any
Products to any of its customers. The obligation to maintain the
confidentiality of the Distributor Confidential Information, and the
restrictions on use of the Distributor Confidential Information, shall
survive for a period of two (2) years following the termination of this
Agreement, after which ZiLOG shall have the full right to use Distributor
Confidential Information for any purpose.
15. TRADEMARKS
(a) ZiLOG authorizes Distributor to use the Trademarks in the Territory
during the term of this Agreement for the sole purpose of the sale and
distribution of Products. Distributor acquires no right to the Trademarks
by its use and may only use Trademarks for the duration of this Agreement
and to the extent specified herein. Distributor will not adopt or use
either during the term of this Agreement or thereafter any trademark trade
name, slogan, label or logo similar to the Trademarks. Distributor will
not use or display the Trademarks in any manner which states or implies
that the relationship between Distributor and ZiLOG is anything but a
Distributor relationship. ZiLOG may, in its sole discretion, modify,
amend, alter or revoke Distributor's rights to use any Trademarks, and
Distributor agrees to comply with all rules and regulations regarding the
use of Trademarks as ZiLOG may, from time to time, set forth in its
Distributor Policies.
(b) Distributor will not, without ZiLOG's prior written consent, remove,
alter or modify the identification numbers, date codes, labels, or
Trademarks on the Products.
(c) Distributor recognizes that the Trademarks, whether or not registered,
are valid and the exclusive property of ZiLOG, and Distributor's right to
use the Trademarks arises only out of this Agreement. Distributor shall
do nothing which might impair the validity or dilute the distinctiveness
of the Trademarks or the goodwill attached thereto and symbolized thereby
and Distributor will cooperate fully with ZiLOG in protecting the
Trademarks including executing and filing whatever documents and
performing whatever actions are considered necessary or desirable by ZiLOG
for maintenance and protection of the Trademarks.
16. ETHICS, CONFLICT OF INTEREST
(a) Each party shall comply with all applicable laws and governmental
rules and regulations. Each party acknowledges that neither party is
expected or authorized to take any action in the name of or on behalf of
the other which would violate any such laws, rules or regulations.
(b) Distributor agrees that all financial settlements, reports, and
▇▇▇▇▇▇▇▇ rendered will, in reasonable detail, accurately and fairly
reflect the facts about all activities and transactions handled.
(c) Each party shall at all times during the term of this Agreement use
reasonable efforts to ensure that no action is taken by such party, its
agents and subcontractors which could or might result in or give rise to
the existence of conditions prejudicial to or in conflict with the best
interest ofthe other. In particular, but without limiting the generality
of the foregoing, each party shall take or cause to be taken all necessary
and proper precautions to prevent such party's agents, employees and
subcontractors from receiving or making, providing or offering to any
person who could or might be in a position to influence the decisions
hereunder of the other party with respect to the Agreement any substantial
gift, entertainment, payment, loan or other consideration.
17. EXPORT CONTROL REGULATIONS
(a) All sales of the Products to Distributor shall be subject to the
pertinent laws, rules and regulations including, without limitation, as
the Export Administration Regulations of the United States, the Tax Reform
Act and the laws of the Territory. This Agreement is specifically subject
to all applicable federal and state laws and regulations relating to
restrictive trade practices or boycotts. In no event shall either party
be bound by any terms and conditions that contravene such pertinent laws.
(b) ZiLOG shall take all steps necessary to obtain, at ZiLOG's expense,
all required licenses from the United States Office of Export
Administration and/or other authorities to permit the exportation of
Products to Distributor's place of business in the Territory. Any further
licenses required for Distributor to export any Products to its customers
shall be obtained by Distributor at its sole cost and expense. Each party
represents and warrants that it will fully comply with any and all import,
export and other laws of any governmental agency having jurisdiction over
import and/or export of Products bysuch party, and each party agrees to
indemnify and hold the other harmless from and against any and all claims,
liabilities, causes of action, damages, fines, penalties, costs and
expenses (including, without limitation, attorneys' fees) which may be
incurred by the other as a result of such party's failing to comply with
all import and export laws applicable to such party's sale of Products.
(c) ALL ORDERS ISSUED PURSUANT TO THIS AGREEMENT ARE SUBJECT TO THE
OBTAINING OF THE SAID LICENSES.
(d) Distributor agrees that the Products and documentation will not be
used, sold, leased, disclosed, reexported, or otherwise dealt with in
violation of the licenses and applicable regulations. Distributor
acknowledges its awareness of the regulations and the requirements to
obtain approval from the U.S. Government for reexport.
(e) If Distributor wishes to receive Products as a consignee under ZiLOG's
distribution license, Distributor acknowledges the requirement to have an
Export Compliance Program, subject to review by ZiLOG and the U.S.
Government.
18. DEFAULT
(a) ZiLOG shall not be in default of this Agreement unless Distributor has
given ZiLOG written notice of its default, and ZiLOG has not, within
thirty (30) days of its receipt of Distributor's notice of default, cured
such default or, if the nature of the default is such that it cannot be
reasonably cured within a thirty (30) day period, has commenced curing
such default within such thirty (30) day period and diligently prosecutes
curing such default to completion. In the event of a default by ZiLOG,
then, in no event shall ZiLOG be liable for an amount greater than the
purchase price paid by Distributor to ZiLOG for any Product purchased by
Distributor which is the subject of ZiLOG's default, or, if the default
does not involve Product which has been shipped to Distributor, then
Distributor's sole and exclusive remedy shall be to terminate this
Agreement. Distributor hereby waives any and all other remedies it may
have on account of ZiLOG's default hereunder.
(b) Distributor shall not be in default of this Agreement unless ZiLOG has
given Distributor written notice of its default, and Distributor has not,
within thirty (30) days of the date of ZiLOG's notice, cured such default
or, if the nature of the default is such that it cannot be reasonably
cured within a thirty (30) day period, has commenced curing such default
within such thirty (30) day period and diligently prosecutes curing such
default to completion. In the event of a default by Distributor, then
ZiLOG shall have all rights and remedies available to it under this
Agreement, at law or in equity.
19. EXCLUSIVE REMEDIES
(a) THE REMEDIES PROVIDED ▇▇▇▇▇ ARE DISTRIBUTOR'S AND ZILOGS SOLE AND
EXCLUSIVE REMEDIES FOR ANY ACTION ARISING OUT OF OR RELATED TO THIS
AGREEMENT. NEITHER ZiLOG NOR DISTRIBUTOR WILL BE LIABLE FOR ANY DIRECT,
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER LEGAL THEORY. IN ADDITION, NEITHER ZiLOG NOR
DISTRIBUTOR WILL BE LIABLE FOR LOST PROFITS OR INJURY TO GOODWILL, EVEN IF
ZiLOG OR DISTRIBUTOR SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SAME.
(b) THE MAXIMUM LIABILITY OF ZiLOG OR DISTRIBUTOR RESPECTIVELY AND THE
MAXIMUM RECOVERY AVAILABLE TO THE OTHER FOR ANY CLAIM ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR INVOLVING PRODUCTS PURCHASED FOR RESALE WILL
NOT IN THE AGGREGATE EXCEED THE PURCHASE PRICE ACTUALLY PAID FOR THE
PRODUCTS WHICH ARE THE SUBJECT OF THE CLAIM DURING THE SIX (6) MONTH
PERIOD PRECEDING THE CLAIM, LESS ANY CREDITS PREVIOUSLY GRANTED TO
DISTRIBUTOR ON ACCOUNT OF SUCH PRODUCTS OR FIVE MILLION DOLLARS ($5
Million), WHICHEVER IS LOWER.
20. CHOICE OF LAW, ARBITRATION, LIMITATIONS
(a) This Agreement is made and entered into in the state of California,
and shall be construed and the legal relationship between the parties
hereto determined in accordance with the laws of California, without
giving effect to any conflict of laws principles.
(b) With the exception of any controversy or claim involving a third party
or arising out of the confidentiality and intellectual property
indemnification provisions of this Agreement, the parties agree that any
other controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled by arbitration in accordance with
the then current expedited rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrator(s) may be entered
in any court having jurisdiction thereof. Any such arbitration shall be
conducted in San Jose, California. Each party shall bear its own expenses
for any arbitration. The arbitrator shall have no authority to award
punitive damages and may not, in any event, make any ruling, finding or
award that does not conform to the plain reading of the terms and
conditions of this Agreement.
(c) Debits from Distributor will not be accepted on such items as alleged
short shipment, proof of delivery or pricing issues more than six (6)
months from the date of shipment of Product. Such claims will be null and
void after six (6) months from the date of shipment. This provision shall
not take precedence over more restrictive provisions including but not
limited to Sections 9 (c), 11 (b) and 11 (d) (vi).
21. NOTICES
Any notice, report, request or demand required or permitted by this
Agreement shall be given either personally or sent by either party to the
other by registered or certified mail, return receipt requested, addressed
to the other party at their principal business address set forth below:
IF NOTICE TO ZiLOG:
ZiLOG, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice President, Sales
and, if such notice relates to a breach of this Agreement by ZiLOG or
termination by Distributor, then a copy shall be provided to:
ZiLOG, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
IF TO DISTRIBUTOR;
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: President, Industrial Electronics Division
or such other address as either party may designate to the other by
written notice so given. All such notices, requests, demands and other
communications shall be deemed to be given or made when received by the
named addressee.
22. GENERAL
(a) Setoffs. Distributor shall not be permitted to set off any debts owed
by Distributor to ZiLOG without written agreement by ZiLOG confirming the
proposed set off.
(b) Waivers. Any delay or failure to enforce any right or remedy
hereunder will not constitute a waiver of such right or remedy with
respect to any current or subsequent default.
(c) Assignment. This Agreement is personal to Distributor and shall not
be assigned by Distributor except with the prior written consent of ZiLOG,
which consent may be granted or withheld in ZiLOG's sole discretion. Any
assignment without such consent shall give ZiLOG the right to declare this
Agreement null and void, without thereby relieving Distributor of any debt
owed to ZiLOG hereunder. A material change in ownership of Distributor
shall be deemed to be an attempted assignment. ZiLOG may assign this
Agreement to a successor in interest. Permitted assignments shall, among
other things, require that the assignee assume all of the rights, duties
and liabilities of the assignor as of the date of assignment.
(d) Modifications. No modification, change or amendment to this
Agreement, nor any waiver of any rights in respect hereto, shall be
effective unless in writing signed by the parties.
(e) No License. No rights to manufacture, duplicate or otherwise copy or
reproduce the Products (including software supplied with such Products)
are granted by this Agreement. Further, no licenses are granted or
implied by this Agreement under any rights, except the right to sell the
Products. ZiLOG reserves the right to license any company, within or
without the Territory, to manufacture any Products. Such licensing
agreements may grant sale and distribution rights to the licensee within
and/or without the Territory.
(f) Severability. If any provision of this Agreement proves to be or
becomes invalid or unenforceable under any applicable law, then such
provision shall be deemed modified to the extent necessary to make such
provision valid and enforceable; if such provision may not be so saved, it
shall be severed from the Agreement and the remainder of the Agreement
shall remain in full force and effect.
(g) Entire Agreement. This Agreement constitutes the entire agreement
between the parties relating to the subject matter hereof, and merges and
integrates herein all substantive discussions and communications on which
agreement had been reached between the parties up to the date hereof.
This Agreement supersedes all prior agreements, understanding,
communications and courses of dealing between the parties, except that
neither party shall be relieved thereby from payment of any invoice or
rightful claim, under a prior written agreement, which was outstanding and
unpaid on the date hereof
(h) Attorneys' Fees. In the event that any litigation, arbitration, or
other proceeding is commenced between the parties hereto or their personal
representatives, successors or assigns concerning the enforcement or
interpretation of any provision of this Agreement or the rights and duties
of any party in relation thereto, the party or parties prevailing in such
litigation, arbitration or other proceeding shall be entitled, in addition
to such other relief as may be granted, to all attorneys' fees and costs
incurred in such litigation, arbitration or other proceeding, and in any
appeal or enforcement of any judgment rendered therein.
(i) Neutral construction. The parties hereto agree that this Agreement
will be interpreted neutrally, and that it should not be construed for or
against any party deemed to be the drafter thereof.
IN WITNESS WHEREOF, each of the parties has signed this Agreement on the
date first set forth above.
ZiLOG, INC. PIONEER-STANDARD ELECTRONICS, INC.
By: /s/▇▇▇▇▇▇ ▇. Crawford____ By: /s/Art Rhein___________
Printed Name: ▇▇▇▇▇▇ ▇. Crawford__ Printed Name: Art Rhein____
Title: President and CEO_________ Title: President and COO___
EXHIBIT A
TERRITORY:
The Territory(ies) appointed shall be: That portion of the United States
of America consisting of the fifty (50) states of the United States of
America, the District of Columbia and Puerto Rico; all provinces and
territories in Canada; and all states in Mexico.