STRATEGIC ALLIANCE AGREEMENT
----------------------------
THIS STRATEGIC ALLIANCE AGREEMENT (this "Agreement") is made
and entered into as of the 22nd day of May, 1997, effective as of May 1, 1997
(the "Effective Date") by and between VODAVI COMMUNICATIONS SYSTEMS, INC., an
Arizona corporation located at 0000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx
00000 ("Vodavi"), and PARADYGM COMMUNICATIONS INC., a Delaware corporation
located at 0000 Xxxxxxxx Xxxxx XX, Xxxxxxx, Xxxxxxx 00000 ("Paradigm").
RECITALS:
A. Vodavi is engaged in the business of designing,
manufacturing and supplying telecommunications products, including, among other
things, (i) a Vodavi Digital PBX telephone system containing, among other
things, keysets, D.S.S. and specialized software developed by Vodavi (the
"Software") enabling its specialized use primarily in the hotel/motel
(hospitality) service industry, extended health care facilities and other
similar businesses (the "Industries") (the PBX system containing the Software
may hereinafter be referred to as the "PBX Systems"), (ii) feature telephones
("2600 Series Telephones"), (iii) single-line telephones ("2500 Series
Telephones"), and (iv) voice-mail/auto attendant systems ("Voice Systems") all
as are described in Exhibit A as the same may be amended from time to time
(collectively, the "Products").
B. Upon the terms and conditions set forth in this Agreement:
(i) Paradigm desires to purchase and become a distributor of the Products in
North America, (ii) Paradigm desires to exclusively engage Vodavi to manufacture
and supply Paradigm with its requirements of the Products; and (iii) Vodavi
desires to sell the Products to Paradigm.
AGREEMENT:
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Vodavi and Paradigm agree as
follows:
1. Appointment of Vodavi. Subject to and in accordance with
the terms and conditions of this Agreement, Paradigm appoints Vodavi as the
exclusive manufacturer of all of Paradigm's requirements of the Products. Vodavi
hereby accepts such appointment. Paradigm agrees to purchase the Products and
all similar telecommunication products for the Industries in the Territory (as
hereinafter defined) only from Vodavi during the Term of Exclusivity (as
hereinafter defined).
2. Appointment of Paradigm. Subject to and in accordance with
the terms and conditions of this Agreement, Vodavi appoints Paradigm as the
exclusive distributor of the PBX Systems and the software contained in the Voice
Systems, and a non-exclusive distributor
of the other Products, in the Territory until December 31, 1998 (the "Term of
Exclusivity"). Paradigm hereby accepts such appointment. Paradigm shall remain
the exclusive distributor of the PBX Systems and the software contained in the
Voice Systems in the Territory, and the Term of Exclusivity shall be extended,
from year to year thereafter during the term of this Agreement, provided that
Paradigm satisfies its Minimum Purchase Obligations (as defined in Section 14)
for the previous year. If Paradigm does not satisfy its Minimum Purchase
Obligation during any year of the term of this Agreement, then, at the end of
that year, and at the option of Vodavi, (i) the Term of Exclusivity shall end,
(ii) Paradigm shall become a non-exclusive distributor of the PBX Systems and
the software contained in the Voice Systems in the Territory, and a
non-exclusive licensee of the Software, and (iii) Vodavi shall have the right to
appoint other distributors of the PBX Systems and the software contained in the
Voice Systems in the Territory.
3. Territory. The "Territory" for purposes of this Agreement
shall mean North America, including Canada and the United States of America,
Puerto Rico, Guam, the U.S. Virgin Islands and to the extent permitted by
Vodavi's manufacturing partner, Mexico. The parties hereto may revise and update
the Territory at any time or from time to time by an amendment in writing
attached to this Agreement.
4. Term. The term of this Agreement shall commence on the
Effective Date and continue in effect until December 31, 2001 (the "Initial
Term"). Following the expiration of the Initial Term, this Agreement shall be
automatically renewed for successive three-year terms each individually referred
to as a "Renewal Term," unless either party notifies the other party in writing
of its desire not to renew no later than one hundred eighty (180) days prior to
the expiration of the Initial Term or any Renewal Term, as applicable, whereupon
this Agreement shall terminate at the end of the term within which such notice
is given.
5. Pricing by Vodavi; Payments. The purchase price for the
Products shall be set forth on Exhibit B as may be amended from time to time by
written notice from Vodavi to Paradigm of a price change at least ninety (90)
days prior to the effective date of the price change. Vodavi shall not increase
any prices prior to December 31, 1998, unless necessitated by a force majeure
described in Section 23 hereof; provided, however, that Vodavi provides Paradigm
with proof of the applicable cost increases to Vodavi caused by the force
majeure and provided further that the price increase does not exceed ten percent
(10%) of the applicable purchase price prior to the increase. Except as
otherwise expressly agreed in writing by the parties hereto, payment for the
Products shall be made in United States dollars in an amount adequate to cover
the full purchase price plus all other charges, if any, incurred by Vodavi for
the account of Paradigm. All payments for Products shall be due and payable in
full within thirty (30) days from the date of invoice. In no event shall the
invoice date precede (a) the shipping date of the Products for which payment is
due for Products Vodavi is not warehousing; or (b) the date of delivery of the
Products to Vodavi's warehouse for Products Vodavi is warehousing.
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All payments due shall at all times be secured by an
irrevocable standby letter of credit (the "Letter of Credit") obtained by
Paradigm and submitted to Vodavi, in a form and from a banking institution
acceptable to Vodavi. The Letter of Credit shall be in an amount equal to or in
excess of all outstanding invoices due from Paradigm to Vodavi plus payment
amounts for Products ordered by Paradigm. Upon execution of this Agreement,
Paradigm shall provide the Letter of Credit to Vodavi, which will have a one (1)
year term and shall be renewable annually or from time to time as required by
this Agreement. If full payment of any invoice is not received by Vodavi when
due, then Paradigm's account will be deemed delinquent and Vodavi shall be
entitled to draw down from the Letter of Credit the amount delinquent together
with a late payment fee of one percent (1%) of the balance due for each month,
or any part thereof, that any amount remains (or remained) delinquent. The late
payment fee permits Vodavi to be compensated for receiving a late payment and is
not intended to create a credit arrangement. Vodavi reserves the right to
suspend performance, to decline to deliver except for cash in advance and/or to
stop delivery of Products in transit whenever Paradigm's account is delinquent.
6. Private-Label Products. The PBX System keysets and, at
Paradigm's request, 2600 Series Telephones (collectively, the "Private Label
Products") shall be manufactured using Paradigm's, or another mutually
agreeable, name and logo. Prior to tooling Vodavi's equipment for the production
of the Private Label Products, Paradigm shall furnish to Vodavi all molds,
stamps, artwork, and other specialized materials and instructions required to
accurately place the name and logo on the Private Label Products. All molds,
stamps, artwork and other specialized materials not provided by Paradigm but
required to label the Private Label Products as instructed by Paradigm shall be
acquired and/or commissioned by Vodavi at the sole cost and expense of Paradigm,
and Paradigm agrees to promptly pay all such costs and expenses. The Private
Label Products may also bear the name and logo of Vodavi on the outside metal
base and anywhere on the interior components of the Private Label Products. The
PBX Systems and other Products may bear the trade marks, name and logo of Vodavi
and Paradigm.
7. Warehousing; Inventory Fulfillment; Technical Support.
Commencing on the Effective Date and continuing until ninety (90) days after
Vodavi receives written notice to cease warehousing Products, Vodavi shall
perform, for and on behalf of Paradigm, the warehousing and inventory
fulfillment functions described and at the costs set forth, on Exhibit C.
Exhibit C also sets forth the costs any payment terms for the performance of
warehousing and inventory fulfillment. Paradigm shall pay all such costs to
Vodavi as and when due.
Commencing on the Effective Date and continuing until ninety
(90) days after Vodavi receives written notice to cease providing technical
support, Vodavi shall perform, for and on behalf of Paradigm, technical support
for the Products as described on Exhibit D. Exhibit D also sets forth the costs
of any payment terms for the performance of technical support. Paradigm shall
pay all such costs to Vodavi as and when due.
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8. Ordering Procedures. All orders of the Products pursuant to
this Agreement shall be subject to the terms and conditions set forth in this
Agreement, notwithstanding the terms specified in any purchase order, and the
terms and conditions of this Agreement shall supersede all pre-printed terms and
conditions of any such purchase order, unless otherwise agreed to in writing by
Vodavi. Whenever Paradigm desires to purchase any of the Products from Vodavi,
Paradigm shall deliver to Vodavi a numbered and signed written purchase order
specifying the quantities and model numbers of the Products desired to be
purchased and the desired destination and shipping date for the ordered
Products, which shipping date must take into account an appropriate lead time to
manufacture such Products. All purchase orders shall be made for Products in at
least the minimum quantities set forth in Exhibit E attached hereto as may be
amended from time to time. All orders made in compliance with this Agreement
shall be deemed accepted by Vodavi on the tenth (10th) day after receipt unless
prior to such time Vodavi delivers to Paradigm a notice of rejection.
All orders for 2500 and 2600 Series Telephones (other than
Private Label Products) shall be shipped within forty-eight (48) hours after
receipt by Vodavi to the extent such Products are available in Vodavi's
warehouse. Vodavi shall use its best reasonable efforts to stock in its
warehouse sufficient quantities of such telephones to meet Paradigm's Forecasts,
as set forth in Section 14; in all events however, orders for such will be
shipped within one hundred twenty (120) days. All orders for Voicemail shall be
shipped within ten (10) days after receipt by Vodavi. The appropriate lead time
for any quantity of PBX Systems shall be one hundred fifty (150) days, and the
appropriate lead time for any quantity of any other Private Label Products shall
be one hundred twenty (120) days. Vodavi shall use reasonable best efforts to
ship Products when and as required by Paradigm based on the shipping and lead
times set forth in this Section.
9. Shipment of the Products. All deliveries of Products by
Vodavi to Paradigm shall be shipped F.O.B. Vodavi's facility in Scottsdale,
Arizona, F.O.B. Vodavi's facility in Norcross, Georgia, or F.O.B. Vodavi's other
domestic facility. Vodavi shall ship all Products to the address specified for
shipment on the applicable purchase order. All Products shall be packaged by
Vodavi as Vodavi deems proper for protection against normal handling. All
charges incurred subsequent to the delivery of Products for shipment, including
without limitation, freight, insurance, customs, duties, demurrage charges and
turnover, sales, excise and other foreign, federal, state or local taxes, shall
be borne by Paradigm or, if paid or incurred by Vodavi, shall be reimbursed by
Paradigm. Paradigm will contract directly with the applicable freight carrier to
pay all shipping costs. The payment of delivery freight shall be the sole
responsibility of Paradigm, and Paradigm shall promptly pay all such charges.
Vodavi shall use a freight carrier of its own choice, unless Paradigm designates
an alternative freight carrier for delivery of Products, whereupon Vodavi shall
use Paradigm's designated freight carrier for shipments of Products whenever
possible.
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10. Risk of Loss. Paradigm shall bear the entire risk of loss
of or damage to Products occurring at any time after delivery of the Products to
the freight carrier to the extent Vodavi is not warehousing the Products, and at
any time after delivery to Vodavi's warehouse to the extent Vodavi is
warehousing the Products. If Vodavi delays delivery of Products to the freight
carrier due to any action or request of Paradigm, then Paradigm shall pay all
reasonable storage and insurance charges incurred by Vodavi for such Products.
If any of the Products are returned by Paradigm, risk of loss shall remain upon
Paradigm until the Products are received by Vodavi. Paradigm agrees to indemnify
and hold Vodavi harmless for, from and against any and all loss of or damage to
the Products sustained while risk of loss remains upon Paradigm. Vodavi agrees
to indemnify and hold Paradigm harmless for, from and against any and all loss
of or damage to the Products sustained while risk of loss remains upon Vodavi.
11. PBX Software License Grant. Paradigm acknowledges that
Vodavi has developed certain software for use only in the PBX Systems that
enables the PBX Systems to be used primarily in the hotel/motel (hospitality)
service industry and may be adapted to the other Industries (the "Software").
Subject to Paradigm's adherence to the terms of this Agreement, Vodavi grants to
Paradigm for the Term of Exclusivity a non-exclusive license to use the Software
and to sublicense use of the Software by Paradigm's customers, but only as
incorporated into a PBX System manufactured by Vodavi and used in connection
with the Industries in the Territory. This Agreement transfers no rights to
Paradigm or any of Paradigm's customers with respect to all or any portion of
the Software except as specifically provided herein. Paradigm is hereby
prohibited from reverse engineering (by disassembly, decompilation or otherwise)
the Software and may not copy or reproduce all or any portion of the Software
for any purpose whatsoever. Notwithstanding anything in this Agreement, Vodavi
retains all title to, and, except as expressly and unambiguously licensed
herein, all rights to the Software, all copies and derivative works thereof (by
whomever produced) and all related documentation and materials. Paradigm will
cooperate with Vodavi in preventing infringement of the Software and assist
Vodavi in all reasonable respects to protect its rights in and to the Software.
12. Representations and Warranties by Vodavi. Vodavi
represents and warrants to Paradigm that: (a) Vodavi is a corporation duly
formed, validly existing and in good standing under the laws of Arizona, with
the full right, power and authority, corporate and otherwise, to manufacture and
to sell the Products to Paradigm according to the terms of this Agreement and to
carry out the transactions contemplated hereunder in all jurisdictions where
such authority is required; (b) the execution and delivery of this Agreement,
the timely consummation of the transactions contemplated hereby and the complete
and timely fulfillment of the terms hereof have been duly and validly authorized
by all necessary action on the part of Vodavi; (c) this Agreement constitutes
the legal, valid and binding obligation of Vodavi, enforceable against Vodavi in
the United States; and (d) neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will conflict
with, violate or result in a breach of or
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default under (with or without the giving of notice or the passage of time, or
both): (i) the articles of incorporation or bylaws of Vodavi; (ii) any license,
instrument, contract or agreement to which Vodavi is a party or by which Vodavi
is bound; or (iii) any law, order, rule, regulation, writ, injunction or decree
that is applicable to Vodavi.
13. Representations and Warranties by Paradigm. Paradigm
represents and warrants to Vodavi that: (a) Paradigm is a corporation duly
formed, validly existing and in good standing under the laws of the State of
Delaware, with the full right, power and authority, corporate and otherwise, to
purchase, market and sell the Products and perform all other duties arising
under the terms of this Agreement and to carry out the transactions contemplated
hereunder in all jurisdictions where such authority is required; (b) the
execution and delivery of this Agreement, the timely consummation of the
transactions contemplated hereby, and the complete and timely fulfillment of the
terms hereof have been duly and validly authorized by all necessary action on
the part of Paradigm; (c) this Agreement constitutes the legal, valid and
binding obligation of Paradigm, fully enforceable against Paradigm in accordance
with its terms; and (d) neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will conflict
with, violate or result in a breach of or default under (with or without the
giving of notice or the passage of time, or both): (i) the incorporation
documents or corporate bylaws of Paradigm; (ii) any license, instrument,
contract or agreement to which Paradigm is a party or by which Paradigm is
bound; or (iii) any law, order, rule, regulation, writ, injunction or decree
that is applicable to Paradigm.
14. Forecasts; Minimum Purchase Obligation. On or before the
tenth (10th) business day of each calendar month, Paradigm will provide to
Vodavi a written report containing sales and customer data for the previous
month and a forecast of its Product delivery requirements for the next
consecutive eleven (11) calendar month period (a "Forecast"). The initial
Forecast will indicate scheduled shipment for the first four (4) months of the
Initial Term for Private Label telephones and for the first five (5) months of
the Initial Term for all other Products, and forecasted deliveries of all
Products for the six (6) months subsequent to the first five (5) months of the
Initial Term. The first (5) five months (four (4) months for Private Label
telephones) of each rolling Forecast will represent a firm purchase commitment
from Paradigm to Vodavi, and Paradigm shall submit purchase orders to Vodavi for
such purchase commitments. The rolling Forecast submitted each month shall take
into account the firm purchase commitments from the preceding month's rolling
Forecast. On an annual basis, the total of the purchases of Products by Paradigm
from Vodavi, shall be at least in those minimum annual dollar amounts as set
forth on Exhibit F attached hereto ("Minimum Purchase Obligations"). During the
course of the Initial Term, Paradigm shall order at least the minimum quantities
of certain of the Products as is set forth in Exhibit F attached hereto
("Minimum Unit Obligation"). The parties hereto shall update and amend Exhibit F
from time to time as new Products are added to Exhibit A attached hereto, new
areas of Territory are added and within one hundred eighty (180) days prior to
any Renewal Term. To the extent Vodavi
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does not timely deliver Products, recalls Products, delivers defective Products
or in the event of a force majeure, as discussed in Section 24, the Minimum
Purchase Obligations and Minimum Unit Obligations shall be reasonably adjusted
accordingly.
15. Other Obligations of Paradigm. Paradigm agrees to use its
best efforts throughout the term of this Agreement to encourage and develop the
full sales potential for the Products in the Industries in the Territory, and to
promptly meet all demands and needs for marketing and after-sale support of the
Products sold by Paradigm. Paradigm shall endeavor to maintain adequate
inventories of the Products at all times, and shall encourage purchase of the
Products by Paradigm's existing customer base. Except as set forth in Section 7
hereof, Paradigm shall be responsible for all costs and expenses associated with
the installation of the Products, after-sale service, customer support and
training of the end-users of the Products.
16. Other Obligations of Vodavi. Vodavi agrees to use its
reasonable best efforts throughout the term of this Agreement to support
Paradigm in its efforts to promote the sale of the Products by providing
reasonable technical and sales training assistance for Paradigm's employees and
sales representatives in the Paradigm sales organization, as set forth in
Attachments D and E to Exhibit G attached hereto.
17. Acceptance and Inspection. To the extent that Vodavi does
not warehouse the Products, Paradigm shall have a period of thirty (30) days
following the delivery of a shipment of Products from Vodavi to inspect that
shipment for defects and nonconformities. Failure to notify Vodavi, in writing,
of a rejection of any Products received within the thirty (30) day period, for
reason of defect and/or nonconformity, shall be deemed an acceptance of the
entire shipment by Paradigm. Paradigm's acceptance of Products shall not be
deemed to cover defects that could not have been discovered by a reasonable and
customary inspection, in which case Paradigm shall have sixty (60) days from the
date of delivery to notify Vodavi, in writing, of a rejection of such Products.
All written rejections of any Products by Paradigm made in accordance with this
Section, shall specify in detail the defects and/or nonconformities in the
Products for which the rejection is made.
18. Nondisclosure and Limited Use of Confidential and
Proprietary Information. Each party hereto shall refrain from disclosing to any
third parties, or using for any purpose unrelated to this Agreement, the
existence of, or any of the terms of, this Agreement, all information concerning
the pricing of the Products, any customer lists, operating, financial,
marketing, sales or technical information or other confidential or proprietary
information of the other, including, without limitation, information as to their
respective customers or the relationship established hereunder; and each party
hereto shall cause its employees and agents to refrain from disclosing to any
third parties, or using, for any purpose unrelated to the performance of this
Agreement, any such confidential or proprietary information of the other. Each
party hereto shall limit its use of any confidential or proprietary information
received from the other to the purposes of this
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Agreement. In addition, Paradigm and Vodavi agree to keep confidential and not
disclose to any other person or entity, any writings between Paradigm and Vodavi
that are conspicuously marked or designated as "Confidential."
19. Advertising and Promotion; Use of Vodavi Name. Paradigm
shall have the right, privilege and license during the term of this Agreement to
advertise and to promote the Products by telephone, mail, newspaper, magazine,
radio, television and any other lawful means using the name "Vodavi" and any
other tradename, symbol, trademark or corporate name used by Vodavi with respect
to the Products, provided such use conforms to standards and guidelines relating
thereto that Vodavi may furnish from time to time. Use of tradenames, symbols,
trademarks, corporate names and other intellectual property of Vodavi by
Paradigm will be subject to prepublication or prior review and approval by
Vodavi. The use of any tradenames, symbols, trademarks, corporate names or other
intellectual property rights of Vodavi by Paradigm shall not give Paradigm any
proprietary rights therein.
20. Warranty of Products. Vodavi expressly warrants that the
Products sold to Paradigm will be free of defects in materials and workmanship
under normal use and service for the warranty period in accordance with the
terms and conditions set forth in Exhibit G attached hereto. Repair and/or
replacement of Products by Vodavi shall be as provided in Exhibit G attached
hereto. VODAVI MAKES NO WARRANTY OTHER THAN THE ONE SET FORTH IN EXHIBIT G
ATTACHED HERETO. THE WARRANTY SET FORTH THEREIN IS IN LIEU OF ALL OTHER
WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY EXPRESSED OR
IMPLIED WARRANTY OF MERCHANTABILITY, OF FITNESS FOR A PARTICULAR PURPOSE, OR
AGAINST INFRINGEMENT, AND IT CONSTITUTES THE ONLY WARRANTY MADE WITH RESPECT TO
THE PRODUCTS COVERED BY THESE TERMS AND CONDITIONS. IN NO EVENT SHALL VODAVI BE
LIABLE FOR LOSS OF ANTICIPATED PROFITS, INCIDENTAL OR CONSEQUENTIAL DAMAGE, LOSS
OF TIME, OR OTHER LOSSES INCURRED BY PARADIGM IN CONNECTION WITH THE PURCHASE,
POSSESSION, OPERATION, OR USE OF THE PRODUCTS, SUCH CLAIMS BEING HEREBY
EXPRESSLY WAIVED BY PARADIGM.
21. No Exclusive Rights in Vodavi Products Generally. This
Agreement is not to be construed as granting any exclusive rights to Paradigm
with respect to the sale and marketing of (a) any telephones manufactured by
Vodavi not bearing Paradigm's name or logo, or (b) PBX systems or switches
manufactured by Vodavi for industries other than the Industries. Vodavi shall
have the right to sell its own products to any and all potential purchasers,
including, without limitation, competitors of Paradigm.
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22. Termination.
(a) Generally. Except as otherwise provided for in
this Agreement, if either party materially defaults in the performance of any of
its obligations under this Agreement, the other party may defer its performance
hereunder until the default is cured. If the material default is not cured
within forty-five (45) days after the giving of written notice thereof to the
defaulting party, at the option of the non-defaulting party exercised in writing
to the defaulting party, this Agreement shall terminate at the end of the
forty-five (45) day period. The nondefaulting party may also pursue all other
available legal and equitable remedies. A material default within the meaning of
this Section shall include, without limitation, a failure of Paradigm to timely
pay any amounts owing to Vodavi, as provided in this Agreement.
(b) Exclusion of Certain Liability. EXCEPT TO THE
EXTENT OF ANY LIABILITY ARISING PURSUANT TO SECTION 23 HEREOF, UNDER NO
CIRCUMSTANCES SHALL VODAVI OR PARADIGM BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL, CONSEQUENTIAL, INDIRECT OR EXEMPLARY LOSSES OR DAMAGES PERTAINING IN
ANY WAY TO THE PRODUCTS UNDER THIS AGREEMENT.
(c) Balance Due at Termination or Expiration. Upon
the termination or the expiration of this Agreement, Paradigm shall pay to
Vodavi a sum equal to the total then outstanding balance of all of Paradigm's
accounts with Vodavi, including, without limitation, all sums due for Products
ordered prior to the effective date of termination or expiration.
(d) Survival of Certain Obligations. Notwithstanding
any termination or expiration of this Agreement, Paradigm shall not be relieved
of its obligation to pay for all Products ordered prior to termination or
expiration, and neither party shall be relieved of its warranty and
indemnification obligations set forth herein.
(e) Events of Default. Notwithstanding anything set
forth in this Agreement to the contrary, the occurrence of any of the following
events shall be considered an event of default hereunder for which the
nondefaulting party may terminate this Agreement upon five (5) days prior
written notice to the defaulting party: (a) the filing of any voluntary or
involuntary petition for bankruptcy or upon any agreement (oral or written) in
respect of any arrangement for the benefit of creditors; (b) the sale, transfer,
conveyance or other disposition of either the capital stock or beneficial
interest in the party resulting in a "change of control" of such party, or of
substantially all of the assets of such party in any case without the prior
written consent of the other party, which shall not be unreasonably withheld; or
(c) with respect to Vodavi, Vodavi's decision to discontinue the manufacture,
sale or distribution of the Products or a component necessary for the assembly
of the Products.
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23. Indemnification.
(a) Indemnification by Paradigm; Product Liability;
Distribution Activities. Paradigm shall indemnify, defend and hold Vodavi, its
officers, directors, shareholders, employees, agents and representatives
harmless for, from and against any claims, losses, costs, damages, expenses or
liabilities to third parties, including, without limitation, any governmental
agencies (including, without limitation, reasonable attorneys' fees) arising out
of or resulting from (i) the performance or nonperformance by Paradigm of any
obligation of, or agreement made by, Paradigm relating to its distribution of
the Products, or in connection with the performance of its duties as a
distributor; and/or (ii) any products liability resulting from an action or
omission of Paradigm, its employees, agents, representatives or customers.
(b) Indemnification by Vodavi; Product Liability;
Intellectual Property. Vodavi shall indemnify, defend and hold Paradigm, its
officers, directors, shareholders, employees, agents and representatives
harmless for, from and against any claims, losses, costs, damages, expenses or
liabilities to third parties, including, without limitation, any governmental
agencies (including, without limitation, reasonable attorneys' fees) arising out
of or resulting from (i) any products liability resulting from an action or
omission of Vodavi, its employees, agents or representatives; and/or (ii) any
suit or proceedings brought against Paradigm to the extent it is based on a
claim that any of the Products manufactured and supplied by Vodavi to Paradigm
constitute a direct infringement of a patent, copyright or other intellectual
property of a third person, except where the alleged infringement is based on
(a) Vodavi compliance with any Product specification of Paradigm; (b) Paradigm's
use of a Product in combination with any other product (whether direct or
contributory infringement); or (c) modification of a Product by Paradigm, its
employees, agents or representatives after the Product has been delivered to
Paradigm. If a suit or proceeding is brought against Vodavi based on a claim
that the applicable Product manufactured and supplied by Vodavi to Paradigm
constitutes a direct infringement of a patent, copyright or other intellectual
property of a third person, based on any of events recited in (a), (b) or (c)
above in this Section 23(b), Paradigm shall defend such claim and indemnify
Vodavi for, from and against any and all damages and costs awarded against
Vodavi on the same basis as applicable to Paradigm above. Paradigm acknowledges
and agrees that Vodavi is the owner of all confidential and proprietary
information, software, firmware and protocols embodied in the Products (with the
exception of the Paradigm name and logo) and Paradigm shall not take any action
or make any claims contrary thereto.
24. Force Majeure. Neither Paradigm nor Vodavi shall be
responsible for any loss or damage resulting from any delay or failure in
performing any provision of this Agreement, other than a delay or failure to
make payments hereunder when due, if the delay or failure results from: (a)
transportation shortages, inadequate supply of labor, materials or energy; (b)
compliance with any law, ruling, order, regulation, requirement or instruction
of any government or any department or agency thereof, including, without
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limitation, required payment of duties, taxes or the like; (c) acts of God; (d)
acts or omissions of the other party; or (e) fires, strikes, labor slowdowns,
embargoes, war or riot. Any delay or failure to perform resulting from any of
such causes shall extend performance accordingly or excuse performance in whole
or in part, as may be necessary.
25. Independent Contractor. Paradigm and Vodavi acknowledge
and agree that Vodavi is an independent contractor and that under this Agreement
neither Paradigm nor Vodavi shall be considered for any purpose to be the agent,
partner, franchisor, franchisee or joint venturer of the other. Nor shall Vodavi
or Paradigm have any obligation or responsibility to act on behalf of or in the
name of the other, or the power or authority to bind the other in any manner
whatsoever. Any representation to the contrary by Paradigm or by Vodavi, or the
employees or agents of either, shall be a material breach of this Agreement.
26. General Provisions.
(a) Further Assurances. Each of the parties hereto
shall execute and deliver all such other instruments and take all such actions
as either party may reasonably request from time to time of the other in order
to effectuate the purposes of this Agreement and the transactions provided for
herein.
(b) Notices. All notices, requests, demands and
other communications required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given, made and received when
delivered against receipt, twelve (12) hours after being sent by facsimile, or
three (3) days after being sent by registered or certified mail, postage
prepaid, return receipt requested, addressed to the recipient's address as set
forth below:
Vodavi Communications Systems, Inc.
0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Vice President - New Business Development
Paradygm Communications Inc.
0000 Xxxxxxxx Xxxxx XX
Xxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: President
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Either party may alter the address to which communications are to be sent by
giving notice of the change of address in conformity with the provisions of this
paragraph for the giving of notice.
(c) Binding Nature of Agreement; Assignment. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that neither party hereto
may assign or transfer its rights or obligations under this Agreement without
prior written consent of the other, and any such assignment or transfer without
such approval shall constitute a breach hereof and shall be null and void and of
no force or effect, and shall not convey any rights to or interest in this
Agreement.
(d) Entire Agreement. This Agreement contains the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof, and supersedes and is in lieu of all prior and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter hereof. The express terms hereof control and supersede any course
of performance or usage of the trade inconsistent with any of the terms hereof.
(e) Governing Law. THIS AGREEMENT AND ALL QUESTIONS
RELATING TO ITS VALIDITY, INTERPRETATION, PERFORMANCE AND ENFORCEMENT, SHALL BE
GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF ARIZONA WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS OF
SUCH STATE.
(f) Remedies Cumulative. Except as specifically set
forth herein to the contrary, the remedies of the parties hereto under this
Agreement are cumulative and will not preclude the recovery, award or grant of
any other remedies to which any party may be lawfully entitled.
(g) Indulgences Not Waivers. Neither the failure nor
any delay on the part of a party to exercise any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right, remedy, power
or privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
(h) Provisions Severable. The provisions of this
Agreement are independent of and severable from each other, and no provision
shall be affected or
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rendered invalid or unenforceable by virtue of the fact that for any reason any
other or others of them may be invalid or unenforceable in whole or in part.
(i) Numbers of Days. In computing the number of days
for purposes of this Agreement, all days shall be counted (unless otherwise
specified herein), including Saturdays, Sundays and holidays in the State of
Arizona; provided, however, that if the final day of any time period falls on a
Saturday, Sunday or holiday in the State of Arizona, then the final day shall be
deemed to be the next day that is not a Saturday, Sunday or holiday in the State
of Arizona.
(j) Attorneys' Fees. If any action is brought to
enforce the provisions of this Agreement, the prevailing party in the action
shall be entitled, in addition to any other relief, to recover reasonable
attorneys' fees and other costs and expenses incurred in the action in an amount
to be fixed and determined by the arbitrator(s) agreed upon by the parties or by
the court.
(k) Construction. The parties hereto acknowledge and
agree that each party has participated in the drafting of this Agreement and
that this document has been reviewed by the respective legal counsel for the
parties hereto and that the rule of construction to the effect that any
ambiguities are to be resolved against the drafting party will not be applied to
the interpretation of this Agreement. No inference in favor of, or against, any
party shall be drawn from the fact that one party has drafted any portion
hereof. The headings in this Agreement are inserted for convenience only, and do
not define, limit, or expand the intent, scope or meaning of this Agreement.
(l) Amendment. This Agreement may only be amended or
modified by written agreement signed by all of the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their proper and duly authorized representatives as
of the date first above written.
VODAVI COMMUNICATIONS SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx
Its: President
PARADYGM COMMUNICATIONS INC.
By: /s/ X.X. Xxxxx
Name: X.X. Xxxxx
Its: Chairman
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