STRATEGIC ALLIANCE AGREEMENT
This Agreement (hereinafter: the "Agreement") is made and entered as of the 8th
day of October, 1996, by and between RADLINX LTD., a limited company
incorporated and validly existing under the laws of the State of Israel, with
registered offices at 0, Xxxxxxxxxxx Xxxxxx, Xxxxxx (hereinafter: "Radlinx") and
I.C.A. INTERNATIONAL CALLERS ASSOCIATION B.V., a limited company incorporated
and validly existing under the laws of The Netherlands, with registered offices
at Xxxxxx 00 - 0000 XX Xxxxxxxxxxxxxx, Xxx Xxxxxxxxxxx (hereinafter: "Strategic
Partner") (Radlinx and Strategic Partner shall hereinafter be collectively
referred to as: the "Parties").
WHEREAS Radlinx is engaged in the design, manufacture and marketing of
equipment, hardware and software designed for the transmission
of facsimile messages over the Internet, which are known as
"Fax Over Internet" Products; and
WHEREAS Strategic Partner wishes to establish an international "Fax
Over Internet" service network and to insure a reliable,
ongoing, supply source for the equipment, hardware and
software it will need in order to establish, maintain and
further develop such network; and
WHEREAS the Parties wish to set up a strategic alliance in accordance
with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the respective
representations and warranties hereinafter set forth and the covenants and
undertakings contained herein, the Parties agree as follows:
1. INTRODUCTION
1.1 The preamble and Annexes to this Agreement form an integral
part hereof.
1.2 The paragraph headings used in this Agreement are inserted for
convenience only, and shall not be used in the construction of
any provision hereof.
2. DEFINITIONS
As used herein, each of the following terms shall, unless the context
clearly indicates otherwise, have the meaning ascribed to it herein:
2.1 "Proprietary shall mean the patents, trade-names and
Rights" designs relating Rights" to the Products (as
defined below), which are registered or
pending in the name of Radlinx,as elaborated
and broken down by specific countries in
ANNEX 2.1, as well as such other
intellectual property rights which Radlinx
legally owns.
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2.2 "Products" shall mean equipment, hardware
and software designed for the transmission
of facsimile messages over the Internet,
designed and manufactured by Radlinx, which
are known as "Fax Over Internet" Products,
as elaborated in ANNEX 2.2, as such Annex
may from time to time be modified or
expanded with Strategic Partner's written
consent.
3. REPRESENTATIONS AND WARRANTIES OF RADLINX
Radlinx hereby represents and warrants to Strategic Partner as follows:
3.1 Radlinx is a limited liability company, duly incorporated,
validly existing and in good standing under the laws of the
State of Israel. Radlinx has full power and authority to own
its property, and to conduct its current business, as well as
the business contemplated under this Agreement.
3.2 Radlinx has the technical know-how required for the
fulfillment of its obligations hereunder.
3.3 Radlinx has tested the Products, and represents that they
satisfactorily perform, in all material respects, the
functions which they are designed to perform.
3.4 To the best of its knowledge, no consents or approvals of any
government, government agency, or any third party are required
for the execution, delivery or performance of this Agreement
by Radlinx.
3.5 Radlinx has full power and authority to execute, deliver and
perform this Agreement. This Agreement, once executed, shall
constitute a valid and binding obligation of Radlinx,
enforceable against Radlinx in accordance with its terms and
conditions.
3.6 This Agreement has been duly executed and delivered by the
authorized officers of Radlinx on its behalf.
3.7 To the best of its knowledge, Radlinx has legal rights and
good and marketable title to all of its assets, both real and
personal, tangible and intangible, including the Proprietary
Rights.
3.8 To the best of Radlinx's knowledge, it has complied in all
material respects with all laws and regulations applicable to
it and to its business. To the best of Radlinx's knowledge, it
has obtained and is holding all permits, licenses, consents
and approvals which are required or necessary in connection
with its business, including in connection with the
development, sale and distribution of its products, and it is
not in default under any of such permits, licenses consents or
approvals. To the best knowledge of Radlinx, no suspension or
cancellation of any such
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permit, license, consent or approval is pending or threatened,
nor does Radlinx anticipate any difficulties in their renewal.
3.9 To the best of Radlinx's knowledge, it has the full power,
right and authority to use the Proprietary Rights in
connection with the conduct of its business, and such use does
not infringe or violate any third party rights. Radlinx is not
aware of any claim that has been asserted by any third party
concerning its ownership or right to use any of the
Proprietary Rights, or challenging or questioning the validity
of any of the Proprietary Rights, and it is unaware of the
existence of any grounds for such claim. Each of the
Proprietary Rights is valid and subsisting, has not been
canceled, abandoned or otherwise terminated and, where
applicable, has been duly issued or filed.
Radlinx has no knowledge of any claim or inquiry as to whether
any product, activity or operation of Radlinx infringes upon
or involves, or has resulted in the infringement of, any
proprietary right of any other person, corporation or any
other entity.
3.10 To the best of Radlinx's knowledge, since the inception of
Radlinx, it or any one acting on its behalf has not violated
and has not been claimed to have violated the Foreign Corrupt
Practices Act or of any similar state or federal statute
relating to bribery.
3.11 That the representations and warranties set forth above shall
be true and complete as of the execution hereof, and that it
shall use its best efforts to insure that the representations
and warranties set forth above concerning matters relating to
the performance of Radlinx's obligations hereunder, shall
survive the execution hereof for the duration of such
performance, regardless of what investigations, if any,
Strategic Partner shall have made thereof.
4. REPRESENTATIONS AND WARRANTIES OF STRATEGIC PARTNER
Strategic Partner hereby represents and warrants to Radlinx as follows:
4.1 I.C.A. International Callers Association B.V. is a
corporation, duly incorporated, validly existing and in good
standing under the laws of The Netherlands.
4.2 Strategic Partner shall make its best efforts to have the
resources, financial and otherwise, required for the
fulfillment of its obligations herein; Strategic Partner has
the ability to market, distribute, and sell the Products
worldwide in the manner set forth herein.
4.3 No consents or approvals of any government, government agency
or any other third party are required in connection with the
execution, delivery and performance of this Agreement by
Strategic Partner, except that Strategic Partner may have to
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obtain certain permits and licenses in connection with the
importation, marketing, distribution, sale, installation and
service of the Products in certain countries pursuant to
Section 8.1.1 of this Agreement.
4.4 This Agreement, once executed by Strategic Partner, shall be a
valid and binding obligation of Strategic Partner, enforceable
against Strategic Partner in accordance with its terms and
conditions.
4.5 This Agreement has been duly executed and delivered by the
authorized officers of Strategic Partner, on its behalf.
5. THE COOPERATION
5.1 In consideration of the timely and complete fulfillment of the
Parties' obligations hereunder, the Parties hereto agree to
cooperate in the planning, design, research and development,
and marketing of the Products. More specifically, the Parties
agree as follows:
5.1.1 Radlinx shall use its best efforts in demonstrating
the Products to potential investors and/or customers
of Strategic Partner, including but not limited to a
demonstration involving the transmission of a fax
over the Internet to the sites designated by
Strategic Partner.
5.1.2 In the event that Radlinx shall seek to discontinue
the manufacture of any Product, which it may do for
valid business reasons and only upon a 120 day
advance written notice to Strategic Partner, Radlinx
shall insure the uninterrupted supply to Strategic
Partner of a compatible and suitable Product, as well
as the support of both the discontinued Product as
well as the replacement Product, in accordance with
ANNEX 8.2.1, in a manner that will not jeopardize
Strategic Partner's ability to timely meet its
business plans and commitments.
5.1.3 The Parties shall mutually agree what activities
Radlinx shall carry out in connection with the
research, development, design and manufacture of Fax
Over Internet products, for sale to Strategic
Partner, all of which shall be considered as
"Products" hereunder, and shall accordingly modify
ANNEX 7.4 hereof to reflect such agreement.
5.1.4 Radlinx shall invite its clients and dealers to
participate in Strategic Partner's network of dealers
of telephone and facsimile communication equipment.
5.2 Strategic Partner shall furnish Radlinx, on an annual basis,
with a forecast of its acquisition of Products during the
following year.
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6. ORDERS; PURCHASE OF PRODUCTS
6.1 Strategic Partner shall forward its firm non-cancelable order
for the Products it wishes to purchase from Radlinx during
each month hereof (hereinafter: the "Relevant Month"), at
least 90 days prior to the commencement of the Relevant Month,
it being agreed that the size and nature of Strategic
Partner's order for each of the first three months hereof
shall be mutually agreed upon by the Parties as soon as
possible after the execution of this Agreement. Strategic
Partner agrees to place an order for 750 "ports" of the
Product within 30 days from the execution of this Agreement,
for delivery within 60 days from execution hereof, it being
agreed that this first order shall account as part of the
order which Strategic Partner is supposed to place for the
first month of the First 12 Month Period under Section
12.2.1.1 below.
6.2 Strategic Partner shall be entitled to a "most favored
customer" status, such that any Products purchased from
Radlinx by Strategic Partner shall be supplied to Strategic
Partner on a first priority basis compared to other Radlinx
customers.
6.3 Without derogating from paragraph 6.2 above, Strategic Partner
shall have the right to purchase the Products from Radlinx at
the prices as set forth in ANNEX 6.3, but in no event more
than the prices charged by Radlinx from other customers for
such Products.
6.4 The terms of payment for Products purchased from Radlinx by
Strategic Partner hereunder shall be 45 (forty five) days from
Radlinx's shipping of the relevant and Products and its
issuance of an invoice therefor. Payment shall be made by wire
transfer to Radlinx's bank account.
7. OPTION FEE
7.1 In consideration of Strategic Partner's option to acquire
shares of Radlinx's by way of subscription for new shares, in
accordance with the principles elaborated in ANNEX 7.1 hereof
(hereinafter: the "Option"), Strategic Partner shall pay to
Radlinx an option fee (hereinafter: the "Option Fee") in the
amount of up to $1,000,000 (one million US Dollars). The
Option Fee shall be paid to Radlinx in three equal
installments, each in the middle of the relevant quarter, as
elaborated in ANNEX 7.1.
7.2 If the Option is not exercised by Strategic Partner in
accordance with ANNEX 7.1, the Option Fee shall become
non-refundable. However, if the Option is exercised, then the
Option Fee shall be considered an advance payment on account
of the shares issued to Strategic partners, and shall be
deducted from the consideration otherwise payable to Radlinx
for such shares.
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7.3 In the event that ANNEX 7.1 has not been drafted and executed
by both Parties by the expiration of 30 days from execution of
this Agreement at the latest, then either Party may terminate
this Agreement upon a 10 day notice to the other, in which
event this Agreement shall become null and void, and neither
Party shall have any claim or cause of action against the
other in connection therewith. This provision shall survive
the termination of this Agreement.
7.4 Radlinx shall conduct research and development activities
concerning its Fax over Internet products, in accordance with
ANNEX 7.4, as it may be modified from time to time with the
Parties' mutual written consent.
8. UNDERTAKINGS
8.1 Strategic Partner hereby undertakes as follows:
8.1.1 to abide by and obey, in all material respects, all
laws, permits, licenses, ordinances, by-laws, rules
and regulations of any competent authority pertaining
to the Products purchased from Radlinx and the
import, marketing, distribution, sale, installation
and service thereof in any territory where Strategic
Partner may engage in such activity. Strategic
Partner shall bear the full responsibility and cost
to apply for, obtain, and maintain all permits,
licenses, and approvals, governmental or otherwise,
required in connection with the importation,
marketing, distribution, sale, installation and
servicing of any Product purchased form Radlinx, and
any such permit, license or approval shall be owned
by Strategic Partner;
8.1.2 to follow Radlinx's storage, shipping, handling,
installation and use instructions concerning the
Products purchased from the Radlinx.
8.2 Radlinx hereby undertakes as follows:
8.2.1 to Sell the Products to Strategic Partner as provided
hereunder and to support such Products in accordance
with Annex 8.2.1 hereof,
8.2.2 to abide by and obey, in all material respects, all
laws, permits, licenses, ordinances, by-laws, rules
and regulations of any competent authority pertaining
to the Products sold to Strategic Partner and the
export, marketing, distribution, sale, and service
thereof in any territory where Radlinx may engage in
such activity. Radlinx shall bear the full
responsibility and cost to apply for, obtain, and
maintain all permits, licenses, and approvals,
governmental or otherwise, required in Israel in
connection with the exportation, marketing,
distribution and sale of any Product sold to
Strategic Partner hereunder.
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8.2.3 to cooperate with Strategic Partner with respect to
Strategic Partner's compliance with its undertakings
in 8.1.2 hereunder.
8.3 Effective as of the execution of this Agreement, Strategic
Partner shall have the right to use the "Radlinx" name and
Radlinx's trade names "PASSAFAX" and "PASSAPORT" in connection
with Products purchased from Radlinx.
9. WARRANTY
Products purchased by Strategic Partner from Radlinx shall be subject
to Radlinx's standard warranty and to Radlinx's Return Material
Authorization Procedure, both of which in the form attached hereto as
ANNEX 9.
10. CONFIDENTIALITY
During the term of this Agreement and at any time thereafter, except as
required by applicable law, each party shall maintain in complete
confidence all information pertaining to the other party's business
and/or its products, including, without limitation, any technical
information, design or data with respect to such products, and any
marketing techniques or client list, and shall take all necessary
measures to ensure that such information and data shall not be made
available to any third party. The confidentiality obligations hereunder
shall not apply to information which is or becomes part of the public
domain due to no fault of the Party claiming nonconfidentiality
thereof, or is already known to the receiving Party at the time
disclosure is made hereunder or becomes available to that Party from a
third party who is entitled to disclose such information. Each Party
acknowledges that the information received or to be received by it
hereunder shall constitute "confidential information" hereunder,
subject to the exceptions enumerated above.
11. RELATIONSHIP OF PARTIES
Nothing contained herein shall be deemed to constitute either Party or
anyone acting on its behalf as a partner and/or employee and/or agent
and/or legal representative of the other Party, and neither Party shall
make any statements or representations to the contrary. Strategic
Partner shall effect all sales of the Products hereunder as a principal
on its own account.
12. TERM OF AGREEMENT
12.1 This Agreement shall remain in effect until the forth
anniversary of the date hereof, at which time it may be
renewed upon the mutual written consent of the Parties.
12.2 Notwithstanding the above, upon the occurrence of the event
referred to in this paragraph below, Strategic Partner shall
not entitled to the special terms of sale as set forth in
Section 6 above, but shall be entitled to purchase the
Products at
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market prices, terms and conditions. In addition, upon the
occurrence of the event referred to in this paragraph below,
Radlinx shall be entitled to market, sell or otherwise
distribute any of the Products to any party, and shall not be
bound to the provisions of Section 13.2 below, all in
accordance with Section 13.2 below:
12.2.1 if Strategic Partner shall not purchase from Radlinx
the following quantities of the Products during the
first 12 month period commencing upon the expiration
of 90 days from the execution of this Agreement (the
"First 12 Month Period"), it being clarified that
reference herein is made to the number of "ports" of
the Products purchased:
12.2.1.1 during the first month of the First
12 Month Period - 1,500 ports;
12.2.1.2 during the second month of the First
12 Month Period - 2,000 ports;
12.2.1.3 during the third month of the First
12 Month Period - 2,500 ports;
12.2.1.4 during each of the forth through the
twelfth month of the First 12 Month
Period - 3,000 ports.
12.2.2 If Strategic Partner shall not purchase from Radlinx
during the 12 month period following the First 12
Month Period (as defined above) at least 70% of the
quantities of the Products it has undertaken to
purchase during the First 12 Month Period.
12.3 Notwithstanding paragraphs 12.2.1 and 12.2.2 above, if, in any
given month, Strategic Partner fails to meet the minimum
amount for that month, it shall nevertheless be deemed to have
met the minimum amount for that month if it had exceeded the
minimum amount set for any of the preceding months by at least
the shortfall amount.
12.4 Radlinx's sole remedy in the event of a breach by Strategic
Partner of its minimum purchase obligation hereunder shall be
to terminate this Agreement, provided that Strategic Partner
has been given a 60 day advance written notice within which to
remedy such breach, and that it has not cured the breach
within the said period. It is clarified that, notwithstanding
the termination of this Agreement by Radlinx due to Strategic
Partner's failure to meet its minimum purchase obligation
hereunder, Radlinx shall continue supplying the Products
ordered by Strategic Partner, at market prices, terms and
conditions.
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13. EXCLUSIVITY
13.1 Strategic Partner agrees that, during the term of this
Agreement, Radlinx shall be its sole supplier of Fax over
Internet Products it may require, and that Strategic Partner
shall not in any way market or otherwise distribute any
competing products, provided, however, that Radlinx is able to
produce and timely deliver the Products ordered by Strategic
Partner from time to time at the agreed upon prices. In the
event that Radlinx is unable to produce or deliver one or more
of the Products, Strategic Partner may purchase a competing
product or products immediately upon giving Radlinx prior
written notice to that effect, and Strategic Partner shall be
entitled to continue purchasing such competing product or
products for as long as Radlinx is unable to supply the
relevant Product or Products hereunder.
13.2 Radlinx undertakes that, during the first 24 months of this
Agreement (starting from the expiration of 90 days from
execution hereof) and provided Strategic Partner is in
compliance with its minimum purchase obligations under
paragraph 12.2.1 above, it shall not directly or indirectly
sell, market or distribute the Products or any of them, and
shall directly or indirectly sell, market or distribute any of
the Products to any third party that, to Radlinx's knowledge,
is or plans to become an international fax service provider
over the Internet, offering its services to the public, in any
location(s) or territory(ies) throughout the world and
competing with Strategic Partner's services. Radlinx further
undertakes that its abovementioned exclusivity obligations
shall continue for the 24 month period starting upon the
expiration of the 24 month period referred to earlier in this
paragraph, provided Strategic Partner is in compliance with
its minimum purchase obligations under paragraph 12.2.2 above.
14. ASSIGNMENT
Strategic Partner shall be entitled to use sub-contractors and/or
dealers for the sale and distribution of Radlinx products, but shall
not be entitled to assign its rights or delegate its obligations under
this Agreement to any third party, except with the prior written
consent of Radlinx.
15. FORCE MAJEURE
15.1 If either party is affected by Force Majeure it shall
forthwith notify the other party of the nature and extent
thereof.
15.2 Neither party shall be deemed to be in breach of this
Agreement or otherwise liable to the other by reason of any
delay in performance or nonperformance of any of the
obligations hereunder to the extent that such delay or
non-performance is due to any Force Majeure.
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15.3 If the Force Majeure in question prevails for a continuous
period in excess of 60 days, the parties shall enter into bona
fide discussions with the view to alleviating its effects or
agreeing to alternative arrangements which could include
termination of this Agreement.
15.4 "Force Majeure" for the purposes of this section shall mean
any circumstances beyond the reasonable control of each party,
including, without limitation, decrees of governments, acts of
God, strikes, lock-out, war, riot, civil unrest, sabotage,
floods, fires, unavoidable accidents, explosions, earthquakes,
embargo and acts of civil or military authority.
15.5 In the case of Force Majeure, and for such period it will
prevail, Strategic Partner shall be entitled to purchase
products similar to the Products herein from any other party.
16. MODIFICATION AND WAIVER
No modification or amendment of any of the provisions of this
Agreement, nor any Waiver by any party or its consent to any deviation
from the conditions of this Agreement shall be binding upon any of the
parties unless made in writing and signed by all the parties. No waiver
of any rights by any party hereto shall be construed as a waiver of the
same or any other right at any prior or subsequent time.
17. ENTIRE AGREEMENT
This Agreement, together with its annexes, forms an entire and
conclusive agreement between the parties and supersedes all proposals,
agreements, understandings, representations and warranties, whether
oral or written, expressed or implied, that were communicated between
the parties prior to signature hereof and the same will be of no effect
and inadmissible as evidence.
18. ENFORCEABILITY
If any term, provisions, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or their authority to be
invalid, void, unenforceable or against its regulatory or public
policy, the remainder of the terms, provisions, covenants and
restriction of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
19. BINDING EFFECT
This Agreement shall inure to the benefit of and shall be binding upon
the parties hereto and their respective heirs, executors,
representatives and assigns. The rights and obligations of the parties
hereto may not be assigned in whole or in part
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20. JURISDICTION AND GOVERNING LAW
Any action, suit or proceeding arising out of or relating to this
Agreement against Radlinx shall be brought exclusively in the courts of
Tel-Aviv-Jaffa. Any action, suit or proceeding arising out of or
relating to this Agreement against Strategic Partner shall be brought
exclusively in the competent state or federal court sitting in Dallas,
Texas. The law applicable to all such actions, suits or proceedings, as
well to the construction of this Agreement, shall be the law of the
jurisdiction where the action is instituted.
21. COUNTERPARTS
This Agreement may be signed in one or more counterparts each of which
shall constitute an original and all of which shall constitute one and
the same agreement.
22. BOARD APPROVALS
This Agreement and the Parties' obligations thereunder is subject to
the approval of the Parties' respective Boards of Directors. If Such
approvals have not been given by the expiration of 30 days from the
execution of this Agreement, this Agreement shall become null and void
and neither Party shall have any claim or cause or action against the
other in connection therewith. This provision shall survive termination
of this Agreement.
23. PROPRIETARY RIGHTS
Radlinx shall remain the owner of all proprietary rights relating to
the Products, with the exception of the Products listed in ANNEX 23 (as
modified from time to time with the Parties' written consent) with
regard to which Strategic Partner shall be the sole owner of all
proprietary rights.
24. NOTICES
Any notice hereunder shall be sent by both: (i) certified or
registered mail and (ii) facsimile or hand delivery, and shall be
addressed to the addresses specified above or any other address of
which either party shall advise the other in writing. The notice shall
be deemed to have been received three (3) business days after mailing
and transmission as prescribed above. The Parties' respective
facsimile numbers are as follows:
(i) Radlinx: 000-0-0000000; (ii) Strategic Partner: (000) 000-0000.
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of
the date first above written.
RADLINX LTD. I.C.A. INTERNATIONAL CALLERS
ASSOCIATION B.V.
By: By:
------------------------- ------------------------
Name: Name:
------------------------- ----------------------
Title: Title:
--------------------------- ---------------------
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ANNEX 2.1
PROPRIETARY RIGHTS
List of trademarks
Name Serial Number Reg. no. action due
Passafax 75/009219 Filed on October 23, 1995
Filed on August 27, 1996
Passaport 74/492048 1932268
List of patents
Patent pending no. 08/662635
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ANNEX 2.2
At the time of execution hereof, the Products are:
1. PFI
2. PF8
as per the Technical Specifications and brochure attached hereto.
[The Technical Specifications and brochure are omitted]
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ANNEX 6.3
The price payable by Strategic for each Product purchased hereunder shall be
determined in accordance with the following formula:
Price per Product = "cost" (as defined below) divided by 0.65,
where "cost" shall consist only of the actual and substantiated cost to Radlinx
of the following items: cost of raw materials; assembly costs; cost of final
testing and royalties paid to third parties.
However, the Parties specifically agree that the Price as determined in
accordance with the above formula shall in no event exceed $250 for each unit of
the Product known as PF1 (including the power supply) and $750 for each unit of
the Product known as PF8.
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ANNEX 7.4
[Product development schedule omitted]
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ANNEX 9
[Warranty and related information omitted]
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ANNEX 23
The Products are: the routing server and the management software of the Fax
over Internet products.
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