Exhibit 10.59

VODAVI KEY SYSTEM AGREEMENT

This AGREEMENT is made and entered into on the 1st day of January, 2005, by and
between LG Electronics Inc., a corporation organized and existing under the laws
of the Republic of Korea (hereinafter referred to as LGE), and Vodavi
Communication Systems, Inc., a subsidiary of Vodavi Technology, Inc., a Delaware
corporation (hereinafter referred to as “Vodavi”).

RECITAL

WHEREAS, LGE is in a position to supply for sale in the Territory (as
hereinafter defined) certain Products (as hereinafter defined) manufactured by
LGE.

WHEREAS, Vodavi has the facilities, the personnel and experience to undertake
the distribution of such Products.

NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledge, it is agreed as follows:

  1.   APPOINTMENT         LGE hereby grants to Vodavi the exclusive right to
distribute and sell the Products in the Territory, which means the United States
of America, the Caribbean Islands(except Cuba) and Canada, and non-exclusive
right to distribute and sell STS in Mexico during the term of the Agreement and
Vodavi accept such right.     2.   PRODUCTS AND MODELS

  a.   The terms Product, Products, and Models as used in this Agreement mean
certain key systems, hybrid key systems, IP key systems, key telephones, IP key
telephones, their associated parts and peripherals to make up an entire system
and maintenance parts, jointly developed by the parties, that are manufactured
by LGE and that will be sold by Vodavi under its trademarks and brand names in
the Territory.         The Products are categorized as follows:

  •   Starplus STS Systems and associated telephones and components     •  
Vodavi XTS Systems and associated telephones and components     •   Telenium IP
Systems and associated telephones and components     •   V44 Systems and
Components     •   Analog – Digital Voice Mail Systems

 

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  b.   Notwithstanding the provisions of Section 1, LGE may pursue relationships
with other potential customers in the Territory so long as that Product sold to
other customers is clearly differentiated from Vodavi’s Product, utilizing
different software, utilizing different designed plastics for the telephones and
associated terminals, and that the circuit boards will not be plug compatible in
the key service units (KSU’s).     c.   In the event Vodavi requests LGE to
develop a new and proprietary Product for introduction to the market in the
Territory, the cost of the sample working models and the dies necessary for the
production of such new proprietary Product shall be borne by Vodavi. The
development and related cost for development will be mutually agreed upon
between the parties for each such development and Vodavi shall provide LGE with
the information necessary for a new development such as functional
specification, unit application detail specifications (UADS), target cost and
forecast quantities for purchase.     d.   Vodavi may want to provide LGE with a
manufacturing package to contract manufacture Vodavi designed and developed
products from time to time. Any such product developed by Vodavi will be
proprietary to Vodavi and will not be manufactured by LGE for any other purpose
except for use by Vodavi. Vodavi will consider a licensing agreement with LGE
for any product developed by Vodavi at the request of LGE. Terms and conditions
of any such licensing agreement will be addressed and mutually agreed upon by
the parties for each individual case as the need by LGE might arise.     e.  
Any tools or dies purchased by Vodavi for the development of housings or
plastics to be used as terminals will be considered the proprietary property of
Vodavi, will not be used by LGE for any other purpose than for producing Product
for Vodavi without the prior written consent of Vodavi, and will be returned to
Vodavi at the request of Vodavi.

  3.   TERM OF AGREEMENT

  a.   This Agreement shall be effective on the execution date hereon and unless
terminated earlier as provided herein, will remain in full force and effect
until December 31, 2009.     b.   The expiration of the term of this Agreement
will not affect the obligations of either party to the other party pursuant to
any Purchase order previously delivered to and accepted by LGE, and the terms
and conditions of this Agreement will continue to apply to such Purchase Orders
as if this Agreement had not expired.

 

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  4.   PURCHASE PROJECTION         Vodavi makes the following purchase
projection during the Contract Period. “ First (1) Year” shall mean the period
commencing on the date of first shipment and having a duration of one year: and
thereafter the period commencing in each subsequent year on the corresponding
date having a duration of one year.

                                  1ST Year   2ND Year     3rd Year     4th Year
    5TH Year  
$18,000,000
  $ 18,900,000     $ 19,900,000     $ 20,800000     $ 21,800,000  

  5.   PRICES

  a.   The prices for all current Products are set forth in Exhibit A. Prices
for new Products added to this Agreement will be mutually agreed upon by the
parties and will be added to Exhibit A from time to time as the need arises. The
prices of the Products shall not include any sales, use or excise tax of any
jurisdiction in the destination country, which if applicable, are the
responsibility of Vodavi. The prices shall be F.O.B. Korean Seaport/F.C.A.
Korean Airport. All field trial products will be 50% of F.O.B. price.     b.  
LGE may want to increase prices from time to time and Vodavi may want to
decrease prices from time to time based on the competitiveness of the Products
as determined by the market in the Territory. Any changes in price must be
mutually agreed upon by the parties prior to any price changes taking effect.
Any price increases must be mutually agreed upon one hundred twenty (120) days
in advance of the effective price change date to allow Vodavi time to adjust its
sales strategy and customer pricing.

  6.   PAYMENT

  a.   All payments for the sale of the products shall be made in U.S. Dollars
and the terms will be 60 days from the on board date.     b.   Vodavi shall pay
the interest which will be charged at daily basis for some deferred payment, if
any, from the due date of each payment. The interest of such deferred payment
will be calculated by the following formula.

  1)   In case that Vodavi informs LGE to postpone the payment with the written
notice to LGE showing the requested period of postponement five(5) banking days
prior to the due date:

                      DEFERRED   DAYS   (LIBOR + 1.5 + 2)             X        
INTEREST RATE =   360       100    
 
               

  •   LIBOR: Three (3) months LIBOR New York closing rate on invoicing date.

 

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  2)   In case that the payment is delayed without Vodavi’s prior notice to LGE.

                      DEFERRED   DAYS   21             X         INTEREST RATE =
  360       100    
 
               

  7.   PURCHASE ORDERS AND FORECASTS

  a.   Purchases and sales between the parties hereto under the Agreement shall
be affected by the placement of Purchase Orders (P/Os) by Vodavi and of
acceptance thereof by LGE. Vodavi shall issue the P/Os ninety (90) days prior to
Vodavi’s requested on-board date by e-mail transmission addressed to LGE. Notice
of acceptance of any P/O or rejection of items for any reason shall be sent to
Vodavi within fourteen (14) days after the receipt by LGE of the P/O. LGE will
acknowledge the on-board date to Vodavi within fourteen (14) days after the
receipt of the P/O by LGE. If LGE fails to acknowledge any P/O within fourteen
(14) days after the receipt of such order, then the requested on-board date
shall be the acknowledged on-board date.     b.   Except to the extent that
other terms and conditions are agreed to in writing signed by both parties and
specifically stating that such other terms and conditions shall apply in lieu of
or in addition to the terms and conditions provided for herein, and
notwithstanding anything to the contrary provided in Vodavi’s Order or in LGE
acknowledgement thereof, each Order from Vodavi shall be subject only to the
terms and conditions set forth in this Agreement.     c.   Vodavi shall release
P/Os and a MRP reflecting the forecast to LGE within the first week of each
month.

  8.   DELIVERY OF PRODUCTS

  a.   LGE shall on board the Products by the date or dates acknowledged by LGE
to Vodavi. In the event that LGE’s actual delivery date of the P/O is delayed
more than ten (10) days past LGE’s acknowledged on-board date. LGE will pay the
freight expense for air shipment if requested by Vodavi. In the event LGE fails
to ship within one hundred twenty (120) days ARO, LGE will pay their freight
plus a penalty based on the following formula:

                      P/O VALUE OF DELAYED PRODUCT   X   DELAYED DAYS   X   21  
                                360       100    
 
                   

 

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  b.   Unless otherwise agreed by Vodavi, LGE shall for all P/Os placed
hereunder: (1) ship P/Os complete unless instructed otherwise, (2) ship to the
destination designated in the P/O in accordance with Vodavi’s specific
instructions. (3) ensure that all subordinate documents bear Vodavi’s P/O
number, (4) enclose a packing memorandum and when more than one package is
shipped, identify the package containing such packing memorandum, and (5) mark
Vodavi’s P/O number on all packages and shipping papers.     c.   All Products
purchased shall be packed by LGE, at no additional charge to Vodavi, in
containers adequate to prevent damage during shipping, handling and storage.

  9.   SCOPE

  a.   Subject to the terms of this Agreement, LGE shall sell to Vodavi such
Products described herein as are ordered by Vodavi hereunder, and such other
Products as are ordered by Vodavi hereunder, and such other Products as the
parties may agree to include hereunder. All P/Os must be consistent with this
Agreement including Exhibit A unless mutually agreed to in writing by the
parties.     b.   Each such P/O shall be numbered and shall include at least the
following items, as applicable to the Products covered by such P/O:

  (1)   The date of the P/O,     (2)   The incorporation of this Agreement by
reference,     (3)   A complete list of the products covered by the P/O,
specifying, attaching or referencing the quantity, model number, program name or
identification number     (4)   The price of each Product discount (if any),    
(5)   The address to which LGE’s invoice shall be sent,     (6)   Shipping
instructions,     (7)   The destination to which the products will be delivered
and the date and time the shipment goes on board and scheduled delivery.    
(8)   Any special terms and conditions mutually agreed upon.

  10.   TITLE AND RISK OF LOSS         The prices of the products shall not
include any sales, use or excise taxes of any jurisdiction in the destination
country, which if applicable, are the responsibility of Vodavi. The prices shall
be F.O.B. Korean Seaport/F.C.A. Korean Airport. Upon delivery, the title and
risk of loss passes to Vodavi and all charges and expenses incurred thereafter
shall be for the account of Vodavi (including insurance coverage and expenses
for the point of passage of the title).

 

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  11.   PROPRIETARY INFORMATION         No information furnished by Vodavi to
LGE or by LGE to Vodavi hereunder or in contemplation hereof shall be considered
to be confidential or proprietary unless it is conspicuously marked as such. If
either party provides the other party with any proprietary or confidential
information which is conspicuously marked as such, during the term of this
Agreement they shall use the same degree of care to prevent its use by or
disclosure to others as they use with respect to their own proprietary or
confidential information.         Notwithstanding the above paragraph, the
obligations with respect to the confidential or proprietary information shall
not apply to any information which either party can show:

  (a)   is already in the possession the other party; or
    (b)   is independently developed by the other party; or     (c)   is or
becomes publicly available without breach of this Agreement by the other party;
or     (d)   is rightfully received by the other party from a third party not
under an obligation of confidence to the party with respect thereto; or    
(e)   is released for disclosure by the other party with its written consent; or
    (f)   is disclosed pursuant to the requirement of a government agency or
operation of law, provided that each party is obligated to use its best efforts
to prevent disclosure under such circumstances; or     (g)   is furnished to a
third party by the other party without a similar restriction on the third
party’s rights; or     (h)   is readily discernible from any product or service
reasonably available in commerce.

  12.   ACCESS

  a.   Vodavi’s Premises:         LGE shall, when appropriate, have reasonable
access to Vodavi’s premises during normal business hours and at such other times
as may be agreed upon by the parties in order to enable LGE to perform its
obligations under the Agreement. LGE shall coordinate such access with Vodavi’s
designated representative prior to visiting such premises.     b.   LGE’s
Premises:         Vodavi shall, upon reasonable prior notice to LGE and at no
additional charge, have reasonable access to LGE’s premises during normal
business hours in order to observe LGE’s work with respect to the Products.
Vodavi’s notice shall specify the purpose of the visit.

 

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  13.   PATENTS         No licenses, express or implied, under any patents are
granted by Vodavi to LGE or by LGE to Vodavi hereunder.     14.   MARKING

  a.   Where applicable, all Products shall be marked for identification
purposes at no charge as follows:

  (1)   with model numbers and     (2)   date code of manufacture     (3)  
serial number     (4)   bar code where required

  b.   LGE will provide existing product marking for all Products in Exhibit A.
LGE agrees to add any other identification requested by Vodavi at charges to be
agreed upon.

  15.   INSIGNIA         Upon Vodavi’s written request, certain of Vodavi’s
insignia shall be property affixed by LGE to the Products furnished. Such
insignia shall not be affixed, used or otherwise displayed on the products
furnished or in connection herewith without Vodavi’s written approval. The
manner in which such insignia will be affixed must be approved in writing by
Vodavi. LGE hereby acknowledges and agrees that all registered trade names,
trademarks, service marks, brand names, logos and other identifying names or
marks of a proprietary nature currently being utilized by Vodavi (collectively,
the “Trademarks”) are legal and validly existing Trademarks. LGE hereby further
agrees that such Trademarks will not be challenged or utilized by LGE for any
purpose except those previously approved in writing by Vodavi.         LGE
hereby acknowledges and agrees that the terms and conditions of this Section 15
shall survive the termination date of this Agreement and shall remain in effect
and enforceable.     16.   ACCEPTANCE TESTS         Prior to initiating volume
manufacture of Products, Vodavi shall have the right to conduct acceptance
tests, at its expense, which may include but are not limited to technical
acceptance tests and consumer acceptance tests.     17.   CHANGES AND
SUSPENSIONS         LGE may not, without Vodavi’s prior written consent, make
any changes to form, fit, function and quantities with respect to the Products
specified in any Order hereunder. If LGE makes any changes without

 

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      Vodavi’s consent, LGE shall be liable for any consequential damages
arising as the result of those changes. Under no circumstances shall LGE make
any changes whatsoever to contract manufactured products without the written
consent of Vodavi.   18.   QUALITY CONTROL INSPECTION AND TESTING        
Products furnished hereunder by LGE shall be tested and inspected by LGE prior
to shipment. LGE agrees to perform required quality control functions to assure
conformance to Vodavi’s existing Quality Specifications. LGE shall maintain a
quality control system designed to identify, correct and prevent specific
quality deficiencies. LGE’s standard inspection records are to be maintained by
LGE and made available to Vodavi upon request.     19.   ACCEPTANCE OR REJECTION
        Any Products determined to be defective in materials or workmanship or
not to conform to the applicable specifications will be repaired or replaced, at
LGE’s option, through one or more of the following methods: (i) by LGE, at its
expense, upon return of any defective Products units to LGE; (ii) by LGE’s
appointment of a third party contractor to correct any such discovered defects
at LGE’s expense; or (iii) by Vodavi, at its respective facilities, at a
mutually agreed price to be paid by LGE.

  a.   No return of Products will be accepted without a return material
authorization number (an “RMA#”) which will be promptly issued by LGE, together
with a statement of LGE’s election pursuant to this Section 19 as to the manner
in which such allegedly defective Products will be repaired or replaced, within
five (5) working days after LGE’s receipt of Vodavi’s written request for any
such RMA#. Actual repair or replacement activity must be initiated within
fifteen (15) working days from Vodavi’s request.     b.   Any Products returned
must be in their original shipping cartons and must be complete with all packing
materials. A complete description regarding that nature of any alleged defect
must be included with all returned Product units.     c.   If any Products
returned are found to conform to the warranties set forth herein, then the party
returning such items shall promptly reimburse LGE for its reasonable expenses
incurred in handling and processing any such claim and such items shall be
returned at the risk and expense of Vodavi.     d.   If LGE does not receive a
written notice describing the non-conformance within thirty (30) days after
Vodavi’s receipt of product, the products shall be deemed accepted.

 

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  20.   WARRANTIES

  a.   LGE warrants that:

  (1)   LGE has good title to the Products and the Products are free from any
claim, lien, encumbrance, or security interest (other than any purchase money
security interest to secure the payment of the price by Vodavi). LGE is not
liable for any claims involving Vodavi designs.     (2)   The Products are free
from latent and patent defects in design, materials, or workmanship.

  b.   The warranties set forth in sub-paragraph (2) above (their “Product
Warranty”) shall remain in effect for the duration of the Warranty Period of
sixty (60) months from the date of receipt of the Products at Vodavi’s
warehouse.     c.   At any time during the applicable Warranty Period, LGE shall
repair any Product or component thereof which does not conform to the Product
Warranty or any provision thereof (hereinafter “defective product”).     d.   As
an alternative to repairing a defective Product as provided in Paragraph C with
Vodavi’s consent and at LGE’s option, LGE may replace such Product. Unless
otherwise agreed, such replacement shall be completed within forty-five
(45) days after Vodavi has given LGE notice of the defective Product.     e.  
The replacement or repair of a Product pursuant to this section shall not extend
or shorten the Warranty Period in effect when such Product was originally sold
to Vodavi hereunder, provided that the Product Warranty for each repaired or
replacement Product shall remain in effect no less than ninety (90) days after
delivery.     f.   LGE shall not believable under the Product Warranties for any
defect which was caused by the mishandling, abuse, misuse, or improper storage
of a Product.     g.   Vodavi’s exclusive remedy for breach of the Product
Warranty shall be repair or replacement of the defective Product in accordance
with paragraphs (b) through (e) above. LGE will not be liable for incidental or
consequential damages.     h.   No other warranties express or implied,
including the warranty of merchantability and fitness for a particular purpose
will apply to the Products.

 

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  i.   Unless otherwise specified herein. LGE’s and Vodavi’s warranties shall
survive the termination of this agreement and shall remain in effect for a
period of five (5) year following termination of this Agreement.     j.  
Warranty paragraphs (b) through (i) only apply to those Products that are sold
to Vodavi with warranty.

  21.   CONTINUING AVAILABILITY OF MAINTENANCE, REPLACEMENT AND REPAIR PARTS

  a.   LGE agrees to offer for sale to Vodavi during the term of this Agreement
and, unless otherwise specified, for a Support Period of five (5) years from
date of manufacture discontinuance, maintenance, replacement, and repair parts,
which have been specified in Exhibit B.     b.   If LGE fails to supply such
parts or LGE is unable to obtain another source of supply for Vodavi, LGE shall
notify Vodavi of its inability on hundred twenty (120) days prior to the
inability and then such inability shall be considered non-compliance with this
section, and Vodavi shall be entitled to require LGE to provide Vodavi with the
technical information or any other rights required on a non-exclusive basis, so
that Vodavi can have manufactured or can obtain such parts from other sources.  
  c.   Such technical information shall include, by example and not by way of
limitation: (a) manufacturing drawings and specifications of raw materials and
components comprising such parts, (b) manufacturing tooling and drawings and
specifications (at the expenses agreed upon by both parties) covering the
operation thereof, (c) a detailed list of all commercially available parts and
components purchased by LGE, disclosing the part number, name and location of
the supplier and price lists for the purchase thereof.

  22.   TERMINATION AND CANCELLATION         If either party is in material
default of any of its obligations under this Agreement and such default
continues for sixty (60) days after written notice thereof is received by the
party alleged to be in default, such non-defaulting party may terminate this
Agreement without liability to the other party, except as the alleged breaching
party may dispute the alleged default in time and should be allowed to resolve
the alleged default by arbitration.

 

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  23.   ASSIGNMENT         Except as otherwise provided in this Agreement
neither party shall assign its right under this Agreement or any Order hereunder
without the prior written consent of the other party.     24.   INDEPENDENT
CONTRACTOR         LGE and Vodavi hereby declares and represents that each is
engaged in an independent business and will perform its obligations under this
Agreement as an independent contractor and not as the agent or employee of the
other, that the persons performing the services hereunder are not agents or
employees of the other, that each has and hereby retains the right to exercise
full control of the supervision over the performance of their obligations
hereunder and full control over the employment, direction, compensation and
discharge of all employees assisting in the performance of such obligations;
that LGE and Vodavi will be solely responsible for all matters relating to
payment of such unemployment, disability insurance, social security, withholding
and all other federal, state and local laws, rules and regulations governing
such matters; and that LGE and Vodavi will be responsible for their own acts and
those of their agents, employees and contractors during the performance of their
obligations under this Agreement.     25.   AMENDMENTS         No provision of
this Agreement or any Order shall be deemed amended or modified by either party,
unless such waiver, amendment or modification is in writing and signed by an
authorized representative of the party against who it is sought to enforce such
waiver, amendment or modification.     26.   SEVERABILITY         If any of the
provisions of this Agreement shall be invalid or unenforceable, such invalidity
or unenforceability shall not invalidate or render unenforceable the entire
Agreement, but rather the entire agreement shall be construed as if not
containing the particular invalid or unenforceable provision or provisions and
the rights and obligations of LGE and Vodavi shall be construed and enforced
accordingly.     27.   GOVERNING LAW         The laws of the State of Arizona,
U.S.A. shall govern all questions related to the execution, construction
validity, interpretation, performance of this Agreement and to all other issues
or disputes arising hereunder.

 

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  28.   ARBITRATION         All disputes, controversies, or differences which
may arise between the parties, out of or in relation to or in connection with
this Agreement or for the breach thereof, shall first be settled amicably by
mutual consultation between the parties. If the parties fail to settle the same
amicably within sixty (6) days from its occurrence, it shall be settled by
arbitration in Seoul, the Republic of Korea, in accordance with the rules of the
Korean Commercial Arbitration Board, if LGE is the defending party, and in
Phoenix, Arizona, U.S.A. in accordance with the Commercial Arbitration Rules of
the American Arbitration Association, if Vodavi is the defending party.
Arbitrator’s award shall be final and binding in the parties hereto. The
expenses and fees incurred in Arbitration procedure shall be borne by the losing
party as determined by the arbitrator.     29.   FORCE MAJEURE         Neither
party shall be deemed in default of this Agreement or any Order hereunder to the
extent that any delay or failure in the performance of its obligations results
from an act of God, act of Civil or military authority, embargo, epidemic, war,
riot, insurrection, fire, explosion, earthquake, flood, unusually severe weather
conditions, strike (whether or not such strike could be settled by acceding to
the demands of a labor organization), or any cause beyond its reasonable
control, provided that such party gives the other party prompt notice of such
cause of contingency. If any force majeure continues more than sixty (60) days
and Vodavi’s customer will cancel its purchase order, Vodavi may cancel the
purchase order.     30.   ENTIRE AGREEMENT         This Agreement and any P/O
issued hereunder shall constitute the entire Agreement between Vodavi and LGE
with respect to the subject terms. Any and all prior representations and
agreements, oral or written, expressed or implied, with respect to the subject
matter hereof, are merged herein and are superseded by this Agreement. No terms
of Vodavi’s P/O or LGE’s acknowledgement of a P/O which are additional to the
terms of this Agreement shall be of any effect, unless agreed to in writing.    
31.   NOTICES         All notices hereunder shall be in writing and shall be
given by airmail letter (or cable or telegraph subsequently confirmed by airmail
letter) and shall be directed to the parties at their address as set forth below
unless contrary indication is given in writing to the other party.

 

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LG Electronics Inc.
  Vodavi Communications Systems
679 Yoksam-dong
  4717 E. Hilton Avenue, Suite 400
Kangnam-gu
  Phoenix, AZ 85034
Seoul, Korea
  Attn: President

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, as of the date first above written, by their respective duly
authorized representatives.

     
ON BEHALF OF
  ON BEHALF OF
LG ELECTRONICS INC.
  VODAVI COMMUNICATIONS

  SYSTEMS, INC.

     
BY: /s/ Keun. Lee                                       
  BY:  /s/ Gregory K. Roeper                                       

   
NAME: KEUN. LEE
  NAME: GREGORY K. ROEPER

   
TITLE: VICE PRESIDENT
  TITLE: PRESIDENT AND CEO

   
DATE:  March 4, 2005                                       
  DATE:  March 28, 2005