EXHIBIT 10.5
October 2, 2001
Xx. Xxx Xxxxx
CIDCO Communications, LLC
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx XX 00000
Re: Letter Agreement
Dear Ian:
Pursuant to discussions between Cidco, Incorporated ("Cidco") and CIDCO
Communications, LLC ("LLC") each party has agreed to memorialize in this letter
agreement (the "Agreement") several matters including a final adjustment of
amounts owed to each other, disposition of certain Cidco inventory, agreement to
enter into a sublease agreement for the premises occupied by LLC and settlement
of certain other matters. The Agreement is set forth below:
1. As a final adjustment and settlement, Cidco shall pay LLC $208,763.87.
This final amount represents the following: Receivable balance owed to
Cidco equals $2,806,216.44 including the inventory discussed below. Cidco
has agreed to assign and LLC has agreed to assume a Cidco debt owed to Act
Manufacturing in the amount of $2,067,021.99. This leaves a subtotal of
$739,194.45. Cidco now holds $947,958 of LLC's funds. Therefore, except
for the matters set forth below, each party agrees that in full discharge
of all its obligations to the other, Cidco shall pay LLC in immediately
available funds $208,763.87 as of the date of this Agreement. This amount
represents the difference between the amount due Cidco by LLC and the
amount due LLC from Cidco.
2. LLC agrees to pay $110,000 for all of Cidco's inventory as identified in
Attachment A to this Agreement. This amount is reflected in and included
in the calculations above. LLC agrees it will remove from Cidco's premises
this inventory within 30 days after the execution of this Agreement. If
said inventory is not removed within 30 days and after written notice to
LLC, Cidco may take any steps it deems necessary to dispose of inventory
not removed.
3. Upon an offer of standard and reasonable terms from Cidco acceptable to
the landlord and LLC, LLC agrees to enter into a sublease with Cidco and
rent the premises located at 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, XX 00000.
The parties agree the sublease terms will have the result of substituting
LLC for Cidco regarding all the benefits and commitments of the master
lease with the landlord.
4. Other matters: The ShenZen factory (the "Factory") has used $144,167 of
Cidco owned raw materials in building equipment for LLC and Cidco. Cidco
hereby assigns to LLC the right to collect this money owed by the Factory.
LLC agrees to pay Cidco as this debt is collected. LLC enjoys a Cidco
credit for the use of Nortel technology in certain LLC products. The
remaining credit is $35,425.75. LLC agrees to reimburse Cidco as LLC uses
the credit. The payments above are due immediately upon use or receipt of
payments. Effective 10/01/01, LLC agrees to reimburse its portion of
Cidco's monthly PBX maintenance fee in proportion to LLC's usage as
defined by Lucent's 10/02/01 independent audit.
5. This Agreement is binding upon and shall inure to the benefit of the
parties, their successors and assigns.
6. This Agreement may be executed in one or more counterparts each of which
shall be deemed an original.
If the above Agreement is acceptable, please have an authorized signatory of
CIDCO Communications, LLC sign below and return one original to me. Please
contact me with any questions at the address below.
Sincerely,
/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
President & CEO
Accepted and agreed
as of 10/17/01
________________________________
CIDCO Communications, LLC
By: /s/ Xxx Xxxxx
___________________________________
Name: Xxx Xxxxx
Title: CEO
________________________________
