OEM AGREEMENT
-------------
THIS OEM AGREEMENT (this "Agreement") is made and entered into
as of the 15th day of September, 1997, effective as of September 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 FUJITSU BUSINESS COMMUNICATION SYSTEMS, INC., a California
corporation located at 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000
("Fujitsu").
RECITALS:
A. Vodavi is engaged in the business of designing,
manufacturing and supplying telecommunications products, including, without
limitation, V-192 and V-26 hybrid key telephone systems (HKT), comprised of,
among other things, key service unit (KSU) cabinets, keysets, D.S.S., phones,
specialized software developed by Vodavi (such software may hereinafter be
referred to as the "Software") and other accessories, all as are described in
Exhibit A as such exhibit may be amended from time to time (collectively, the
"Products") (the V-192 and V-26 hybrid key telephone systems constituting a
portion of the Products and described herein may hereinafter be referred to as
the "V-192 Systems" and the "V-26 Systems," respectively, and together as the
"HKT Systems").
B. Upon the terms and conditions set forth in this Agreement:
(i) Fujitsu desires to purchase and distribute the Products in the United States
of America using Fujitsu's trademarks and name, (ii) Fujitsu desires to
exclusively engage Vodavi to manufacture and supply Fujitsu with its
requirements of the HKT Systems; and (iii) Vodavi desires to manufacture and
sell the Products to Fujitsu, all as provided herein.
AGREEMENT:
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Vodavi and Fujitsu agree as
follows:
1. Appointment of Vodavi. Subject to and in accordance with
the terms and conditions of this Agreement, Fujitsu appoints Vodavi as a
manufacturer of all of Fujitsu's requirements of the HKT Systems. Vodavi hereby
accepts such appointment. Fujitsu agrees to purchase the HKT Systems for
customers and suppliers in the Territory (as hereinafter defined) only from
Vodavi during the term of this Agreement.
2. Distribution of Products by Vodavi. Nothing in this
Agreement shall be construed as restricting Vodavi's rights to manufacture, sell
and distribute any Products not bearing the trademark and/or name of Fujitsu,
except as specifically set forth in this Section 2. Vodavi agrees that it shall
not sell or distribute the V-192 Systems to dealers other than Fujitsu, Vodavi's
Infinite dealers and Vodavi's Starplus Priority dealers, in the Territory during
the term
1
of this Agreement so long as Fujitsu satisfies the Minimum Purchase Obligations
(as defined in Section 15) for the previous year. If Fujitsu 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, Vodavi shall have
the right to appoint all of Vodavi's Starplus dealers and other dealers as
distributors of the V-192 Systems in the Territory, so long as such V-192
Systems do not bear Fujitsu trademarks or tradenames.
3. Territory. The "Territory" for purposes of this Agreement
shall mean the United States of America and its territories. 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 for three (3) years until August 1, 2000
(the "Initial Term"). Following the expiration of the Initial Term, this
Agreement shall be automatically renewed for three (3) successive one-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 fifty (150) 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. Notwithstanding anything in this
Agreement to the contrary, at any time after the termination of the Initial
Term, the parties may renegotiate the pricing of the Products. Any renegotiated
prices will be added to Exhibit B and attached to this Agreement.
5. Pricing by Vodavi; Payments.
(a) Pricing.The purchase price for the Products shall
be as set forth on Exhibit B as may be amended from time to time pursuant to the
terms hereof. Notwithstanding the foregoing, all prices set forth on Exhibit B
attached hereto, shall remain firm for the first eighteen (18) months after the
Effective Date. Thereafter, Vodavi may increase such prices to pass through to
Fujitsu any actual costs incurred by Vodavi as a result of increases in costs of
manufacturing, force majeure or costs of finished goods delivered to Vodavi's
facility in Scottsdale, Arizona (including freight, insurance, customs, duties,
demurage charges, taxes and the like). Vodavi shall endeavor to provide Fujitsu
with as much advance notice of any cost increases as is reasonably possible;
however in no event shall any price increases be effective without Vodavi
providing Fujitsu with at least thirty (30) days prior written notice. Fujitsu
shall have the ability, on reasonable advance notice to Vodavi, to review and
audit Vodavi's documentation with respect to changes in prices.
(b) Payment. 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 as specified in Section 9, if any, incurred by Vodavi for the
account of Fujitsu. All payments for Products shall be due and
2
payable in full within thirty (30) days from the date of invoice. However,
payment for only Fujitsu's Initial Stocking Order, for Products, as hereinafter
defined, shall be due and payable in full within seventy-five (75) days from the
date of invoice. In no event shall the invoice date precede the shipping date of
the Products for which payment is due.
(c) Late Payment. If full payment of any invoice is
not received by Vodavi when due, then Fujitsu's account will be deemed
delinquent and Fujitsu shall pay Vodavi 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 following forty-five (45) days after the date of
invoice, or, for the Initial Stocking Order only, seventy-five (75) days after
the date of invoice. 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
Fujitsu's account is delinquent.
6. Private-Label Products. The Products shall, at Fujitsu's
request, be manufactured using Fujitsu's trademarks and name. Prior to tooling
Vodavi's equipment for the production of such private label Products, Fujitsu
shall furnish to Vodavi all molds, stamps, artwork, and other specialized
materials and instructions required to accurately place Fujitsu's name and logo
on the private label Products. All molds, stamps, artwork and other specialized
materials not provided by Fujitsu but required to label the private label
Products as instructed by Fujitsu shall be acquired and/or commissioned by
Vodavi at the sole cost and expense of Fujitsu, and Fujitsu agrees to promptly
pay all such costs and expenses. The Products may also bear the name and logo of
Vodavi anywhere on the interior components of the Products. Nothing in this
Agreement shall be construed to convey to Vodavi any right, title or interest in
any symbol, trademark, trade name, or other intellectual property of Fujitsu or
any of its affiliates.
7. Technical Support. 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 Fujitsu,
technical support for the Products as described on Exhibit C. Exhibit C also
sets forth the costs of any payment terms for the performance of technical
support. Fujitsu shall pay all such costs to Vodavi as and when due.
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, notwithstand ing 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 Fujitsu desires to purchase any of the Products from Vodavi,
Fujitsu shall deliver to Vodavi, on or prior to the fifth (5th) day of any month
during the term of this Agreement (each such 5th day an "Order Date"), a
numbered and signed written purchase order specifying the quantities and part
numbers of the Products desired to be purchased and the desired destination and
shipping date for the ordered Products, which shipping date must
3
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 D 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 Fujitsu a notice of rejection. The appropriate lead time for any of the
Products shall be one hundred twenty (120) days after the applicable Order Date.
Vodavi shall use reasonable best efforts to ship Products when and as required
by Fujitsu based on the shipping and lead time required by this Section. During
the thirty (30) day period after the applicable Order Date, Fujitsu may change,
modify or cancel the order upon written notice to Vodavi. On the thirtieth
(30th) day after the applicable Order Date, the purchase order shall become
firm. If Fujitsu desires that Vodavi delay a scheduled delivery date of a firm
purchase order, Fujitsu can request such a delay at any time prior to the
on-board date of the order from the factory, at no extra cost, request that
Vodavi delay the delivery for up to sixty (60) days after the scheduled delivery
date. Once the purchase order has gone on-board, Fujitsu must take delivery of
the order as scheduled. In no event shall Fujitsu extend delivery of a firm
purchase order beyond sixty (60) days.
9. Shipment of the Products. All deliveries of Products by
Vodavi to Fujitsu shall be shipped F.O.B. Vodavi's facility in Scottsdale,
Arizona, 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,
demurrage charges and turnover, sales, excise and other federal, state or local
taxes, shall be borne by Fujitsu or, if paid or incurred by Vodavi, shall be
reimbursed by Fujitsu. Fujitsu will contract directly with the applicable
freight carrier to pay all shipping costs. The payment of delivery freight shall
be the sole responsibility of Fujitsu, and Fujitsu shall promptly pay all such
charges. Vodavi shall use a freight carrier of its own choice, unless Fujitsu
designates an alternative freight carrier for delivery of Products, whereupon
Vodavi shall use Fujitsu's designated freight carrier for shipments of Products
whenever possible. Notwithstanding the foregoing, if, at any time, or from time
to time, Fujitsu requests that Vodavi use any of Fujitsu's designated freight
carriers, Vodavi shall comply with Fujitsu's request and shall ship Products as
instructed by Fujitsu, against Fujitsu's accounts with such designated freight
carriers.
10. Risk of Loss. Fujitsu 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. If Vodavi delays delivery of Products to the freight
carrier due to any action or request of Fujitsu, then the risk of loss shall
transfer to Fujitsu and Fujitsu shall pay all reasonable storage and insurance
charges incurred by Vodavi for such Products. If any of the Products are
returned by Fujitsu, risk of loss shall remain upon Fujitsu until the Products
are received by Vodavi. Fujitsu 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 Fujitsu. Vodavi agrees to indemnify and hold
Fujitsu harmless for, from and against any and all loss of or damage to the
Products sustained while risk of loss remains upon Vodavi.
11. Initial Stocking Order. Upon the execution of this
Agreement, Fujitsu shall provide Vodavi with an initial order in the amount of
up to One Million Dollars
4
($1,000,000.00) of Products (the "Initial Stocking Order"). Vodavi shall deliver
the Initial Stocking Order within thirty (30) days after Vodavi receives the
Initial Stocking Order. The Initial Stocking Order is intended to cover the
first three (3) months of projected sales of Products pursuant to this
Agreement. Notwithstanding the provisions of Paragraph 8 hereof, the Initial
Stocking Order shall be firm on the date it is received by Vodavi; thereafter
Fujitsu may not make any changes to such order.
12. HKT Software License Grant. Fujitsu acknowledges that
Vodavi has developed the Software for use in the HKT Systems as firmware.
Subject to Fujitsu's adherence to the terms of this Agreement, Vodavi grants to
Fujitsu for the term of this Agreement a non-exclusive license to use and sell
the Software, but only as incorporated into an HKT System manufactured by Vodavi
and sold within the Territory. This Agreement transfers no rights to Fujitsu or
any of Fujitsu's dealers or customers with respect to all or any portion of the
Software except as specifically provided herein. Fujitsu 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, or
export outside the Territory any of the Software or any Product containing 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. Fujitsu will cooperate with Vodavi in preventing and resolving
infringement of the Software and assist Vodavi in all other reasonable respects
to protect Vodavi's rights in and to the Software, including, without
limitations, reporting to Vodavi any infringement of such rights by any of
Fujitsu's dealers within ten (10) days after Fujitsu becomes aware of such
infringement. The foregoing shall not be interpreted to require Fujitsu to
resolve infringement claims on behalf of Vodavi. The reasonable costs incurred
by Fujitsu in resolving infringement claims, to the extent that such prosecution
assistance is requested by Vodavi, shall be borne by Vodavi.
13. Representations and Warranties by Vodavi. Vodavi
represents and warrants to Fujitsu 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 Fujitsu 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 of America; 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
5
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.
14. Representations and Warranties by Fujitsu. Fujitsu
represents and warrants to Vodavi that: (a) Fujitsu is a corporation duly
formed, validly existing and in good standing under the laws of the State of
California, 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 Fujitsu; (c) this Agreement constitutes the legal, valid and binding
obligation of Fujitsu, fully enforceable against Fujitsu 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 Fujitsu; (ii) any license, instrument, contract or agreement
to which Fujitsu is a party or by which Fujitsu is bound; or (iii) any law,
order, rule, regulation, writ, injunction or decree that is applicable to
Fujitsu.
15. Forecasts; Minimum Purchase Obligation. On or before the
fifth (5th) business day of each calendar month, Fujitsu will provide to Vodavi
a written report containing sales and customer data for the previous month and a
nonbinding forecast of its Product delivery requirements for the next
consecutive eleven (11) calendar month period (a "Forecast"). Fujitsu's delivery
requirements for the first one hundred twenty (120) days of each rolling
Forecast will include the purchase orders that have become firm purchase
commitments pursuant to Section 8, and Fujitsu 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 purchases of Products by Fujitsu from
Vodavi, shall be at least in those minimum dollar amounts as set forth on
Exhibit E attached hereto ("Minimum Purchase Obligations"). During the course of
the Initial Term, Fujitsu shall order at least the minimum quantities of certain
of the Products as is set forth in Exhibit E attached hereto ("Minimum Unit
Obligation"). The parties hereto shall update and amend Exhibit E 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. The only effect of Fujitsu failing to meet the Minimum Purchase
Obligations shall be as set forth in Section 2 of this Agreement, and Vodavi
shall not be entitled to any damages as a result thereof. The only effect of
Fujitsu failing to meet the Minimum Purchase Obligations shall be as set forth
in Section 2 of this Agreement. This Agreement shall not be construed as a take
or pay agreement and Vodavi shall not be entitled to any damages as a result of
Fujitsu failing to meet the Minimum Purchase Obligations.
6
16. Other Obligations of Fujitsu. Fujitsu agrees to
immediately conduct an introductory public promotion of the Products for the
purpose of developing customer interest and initial sales. Thereafter and
throughout the term of this Agreement Fujitsu agrees to encourage and develop
the full sales potential for the Products in the Territory, and to promptly meet
all demands and needs for marketing and after-sale support of the Products sold
by Fujitsu. Fujitsu shall endeavor to maintain adequate inventories of the
Products at all times, and shall encourage purchase of the Products by Fujitsu's
existing dealer and customer base. Except as set forth in Section 7 hereof,
Fujitsu 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.
17. Other Obligations of Vodavi. Vodavi agrees to use its
reasonable best efforts throughout the term of this Agreement to support Fujitsu
in its efforts to promote the sale of the Products by providing reasonable
technical and sales training assistance for Fujitsu's employees and sales
representatives in the Fujitsu sales organization, as set forth in Attachments C
and D to Exhibit F attached hereto. Vodavi's obligations shall include the
following:
a. Provide Fujitsu with timely reports detailing
marketing or technical information on Products, competitive comparisons, special
sales or service suggestions, competitive announcements and the like, and to
respond reasonably promptly to reasonable inquiries and requests for help from
Fujitsu.
b. Provide training for Fujitsu's technical training
staff, support engineers and sales force and other necessary materials for
Fujitsu's product service organization, which training shall consist of up to
five (5) training sessions, each consisting of up to five (5) days, at no cost
to Fujitsu if such training sessions are held at either party's Maricopa County,
Arizona training facilities.
c. Provide reasonable amounts of equipment and
manuals for evaluation and equipment trials, integration testing, or beta
testing by Fujitsu.
d. Participate jointly in trade shows with Fujitsu as
mutually agreed upon.
e. Participate in meetings with Fujitsu, as mutually
scheduled, to discuss product planning and marketing coordination.
f. For equipment under warranty, provide Fujitsu with
upgrades relating to correct product performance that does not meet
specifications at no cost. Additional features shall be provided to Fujitsu at
the then current price.
7
g. Provide Fujitsu information on all Product changes
and planned Product introductions three (3) months in advance of the Product
change or introduction.
h. Provide Fujitsu notice of Product and of life
plans six (6) months prior to initiating the Product's end of life process. If
another product of equivalent or compatible functionality and price is being
released to replace a discontinued Product, then Vodavi shall provide six (6)
months notice of the discontinuance of the Product.
i. Keep records of all Products shipped to or on
behalf of Fujitsu. Such records shall include serial numbers and revisions of
all separate assemblies shipped as integrated product or individual pieces.
Fujitsu may, if pertinent issues arise, request copies of such records, and
Vodavi shall provide them to Fujitsu within seven (7) days after any reasonable
request.
j. Compile the following information and provide such
information to Fujitsu as encountered: (i) pertinent information related to
hardware and software configuration control (i.e., forward and backward
compatibility); (ii) engineering change orders affecting form, fit and function;
(iii) manufacturing process changes affecting previously agreed to availability
plan; and (iv) problem resolution plans to include task, responsibility and
committed resolution date.
k. Provide Fujitsu, once per calendar year,
information on field returns for repair and data on the failed components.
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 Agreement. In addition, Fujitsu
and Vodavi agree to keep confidential and not disclose to any other person or
entity, any writings between Fujitsu and Vodavi that are conspicuously marked or
designated as "Confidential." These obligations shall not apply to identifiable
information that was previously known to the receiving party, or that is or
becomes in the public domain without violating this Agreement, or that is later
acquired by the receiving party from a third party without similar obligations
of confidentiality.
8
19. Advertising and Promotion; Use of Vodavi Name. Fujitsu
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 HKT Systems, 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 Fujitsu
is 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 Fujitsu shall not give Fujitsu any proprietary
rights therein.
20. Warranty of Products. Vodavi expressly warrants that the
Products sold to Fujitsu 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 F attached hereto. Repair and/or
replacement of Products by Vodavi shall be as provided in Exhibit F attached
hereto. Any delivery of Products under this Agreement shall meet Federal
Millennium Certification Standards, which require that the Products delivered
under this Agreement shall operate accurately in the manner in which they were
intended as it relates to date related operations when given a valid date
containing century, year, month and day. VODAVI MAKES NO WARRANTY OTHER THAN THE
ONE SET FORTH IN EXHIBIT F 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
FUJITSU IN CONNECTION WITH THE PURCHASE, POSSESSION, OPERATION, OR USE OF THE
PRODUCTS, SUCH CLAIMS BEING HEREBY EXPRESSLY WAIVED BY FUJITSU.
21. No Exclusive Rights in Vodavi Products Generally. This
Agreement is not to be construed as granting any exclusive rights to Fujitsu
with respect to the sale and marketing of any products manufactured by Vodavi
not bearing Fujitsu's trademarks or name. Vodavi shall have the right to sell
any of its own products to any and all potential purchasers, including, without
limitation, competitors of Fujitsu, except as expressly set forth herein.
9
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 Fujitsu 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 FUJITSU 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, AND THE AMOUNT OF ANY CLAIM BY
EITHER PARTY AGAINST THE OTHER, WHETHER BASED ON BREACH OF CONTRACT, BREACH OF
WARRANTY, NEGLIGENCE OR ANY OTHER LEGAL OR EQUITABLE GROUND FOR RELIEF, SHALL
NOT EXCEED THE PURCHASE PRICE OF THE PRODUCT OR PRODUCTS CONCERNING WHICH THE
CLAIM WAS MADE.
(c) Performance at Termination or Expiration. Upon
the termination or the expiration of this Agreement, Fujitsu shall pay to Vodavi
a sum equal to the total then outstanding balance of all of Fujitsu's accounts
with Vodavi, including, without limitation, all sums due for Products ordered
prior to the effective date of termination or expiration; except, however, if
orders are outstanding on the effective date of termination, Fujitsu shall not
be required to pay for any Products that do not bear Fujitsu's name and that can
be converted for sale to other Vodavi customers pursuant to purchase orders
received by Vodavi, in which case, Fujitsu shall pay to Vodavi the lower of the
purchase price of the Products as set forth on Exhibit B, or the actual
conversion costs to be incurred by Vodavi. Upon termination or expiration of
this Agreement, Vodavi shall deliver all Products ordered by Fujitsu prior to
the effective date of such termination or expiration, consistent with the terms
of this Agreement.
(d) Survival of Certain Obligations. Notwithstanding
any termination or expiration of this Agreement, Fujitsu 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.
10
(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.
(f) Termination after Initial Term. After the Initial
Term, either party may terminate this Agreement, without cause, upon six (6)
months prior written notice to the other party hereto.
23. Indemnification.
(a) Indemnification by Fujitsu; Product Liability;
Distribution Activities. Fujitsu 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 Fujitsu of any
obligation of, or agreement made by, Fujitsu 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 (1) modification of the
Products by Fujitsu, its employees or agents; or (2) a product specification
relating to product design provided by Fujitsu to Vodavi and implemented in the
Products.
(b) Indemnification by Vodavi; Product Liability;
Intellectual Property. Vodavi shall indemnify, defend and hold Fujitsu, 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 any action or
omission of Vodavi, its employees, agents or representatives or strict liability
theory; and/or (ii) any suit or proceedings brought against Fujitsu to the
extent it is based on a claim that any of the Products manufactured and supplied
by Vodavi to Fujitsu constitute a direct infringement of a patent, copyright or
other intellectual property of a third person in the United States, except, in
all cases, where the alleged infringement is based on (a) Vodavi's compliance
with any Product specification of Fujitsu; (b) Fujitsu's use of a Product in
combination with any other product (whether direct or contributory
infringement); or (c) modification of a Product by Fujitsu, or its employee,
agent or representative after the
11
Product has been delivered to Fujitsu. If a suit or proceeding is brought
against Vodavi based on a claim that the applicable Product manufactured and
supplied by Vodavi to Fujitsu 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), Fujitsu 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 Fujitsu
above. Fujitsu 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 Fujitsu trademarks and name)
and Fujitsu shall not take any action or make any claims contrary thereto.
24. Force Majeure. Neither Fujitsu 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, or
the voluntary foregoing of the right to acquire or use any of the foregoing in
order to accommodate or comply with the orders, requests, regulations,
recommendations or instructions of any government or any department or agency
thereof; (b) compliance with any law, ruling, order, regulation, requirement or
instruction of any government or any department or agency thereof; (c) acts of
God; or (d) 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. Fujitsu and Vodavi acknowledge and
agree that Vodavi is an independent contractor and that under this Agreement
neither Fujitsu 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 Fujitsu 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 Fujitsu 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.
12
(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
Fujitsu Business Communication Systems, Inc.
0000 Xxxxxxxx, Xxxxxxx, Xxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Corporate Counsel
cc: FBCS Sales, Mfgr Operations
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; Arbitration. This Agreement and
all questions relating to its validity, interpretation, performance and
enforcement, shall be governed by and
13
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. Except
for claims for injunctive relief, any controversy or claim arising out of or
relating to this Agreement or the breach thereof, shall be settled by
arbitration in accordance with the Rules of the American Arbitration
Association, as agreed to by the parties, and judgment upon the award rendered
by the arbitrator(s) thereof may be entered and executed upon if necessary in
any court having jurisdiction thereof. The arbitration is to be held in Phoenix,
Arizona, if initiated by Fujitsu, and in Anaheim, California, if initiated by
Vodavi. The prevailing party in any arbitration shall be entitled, in addition
to such other rights or remedies it may have, to reimbursement for its expenses
incurred thereby, including arbitration costs, reasonable attorneys' fees and
arbitrator fees.
(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 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) 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
14
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.
(k) Amendment. This Agreement may only be amended or
modified by written agreement signed by each 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 Xxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxxx
-------------------------------
Its: President
-------------------------------
FUJITSU BUSINESS COMMUNICATION SYSTEMS,
INC.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxxx
-------------------------------
Its: Sr. V.P. Sales & Mktg.
-------------------------------
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------------------
Its: V.P Mfgr Operations
-------------------------------
15
