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Exhibit 10.1.1
SETTLEMENT AGREEMENT
This Agreement is made this 13th day of November, 1996 ("Effective
Date"), by and between Voice Powered Technology International, Inc. ("VPTI"), a
California Corporation, with its principal offices in Xxxxxxx Oaks, California,
and MobileMedia Corporation ("MMC"), a Delaware Corporation, within principal
offices in Ridgefield Park, New Jersey.
RECITALS
WHEREAS, VPTI and MobileComm Nationwide Operations, Inc. ("MobileComm")
have previously entered into a Purchase and Joint Marketing Agreement dated
December 11, 1995 (the "PJM Agreement"), and:
WHEREAS, MobileComm was subsequently acquired by or otherwise combined
with MMC and the PJM Agreement was assigned and assumed by MMC and;
WHEREAS, MMC has received from VPTI as of the date herein a certain
number of units of the Device (as defined in the PJM Agreement including Exhibit
A thereto) and MMC owes to VPTI a balance equal to $100 times the number of
units received as a result of such purchase (the "Trade Balance"), and;
WHEREAS, MMC has determined that it will not purchase any more Devices
from VPTI pursuant to the PJM Agreement and agrees to be subject to a
Cancellation Fee of $200,000, and;
WHEREAS, VPTI desires to continue to market, promote and distribute the
Devices utilizing, at VPTI's option, the MMC frequency of 931.8875 MHZ and the
MobileComm trademark to existing retail customers of MMC, and customers of VPTI
for activation of MMC's radio paging system, and;
WHEREAS VPTI, and MMC intend this Agreement to provide for the payment of
the Trade Balance and the Cancellation Fee, as well as allow VPTI to continue
to market, promote and distribute the Device pursuant to the terms and
conditions set forth below.
NOW THEREFORE, for valuable consideration, the parties agree as follows:
1. PAYMENTS TO VPTI
A. Trade-Balance
MMC hereby agrees to pay to VPTI the Trade Balance of $352,400
pursuant to the following payment schedule:
On or More Cash Payment Amount
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November 20, 1996 $100,000
December 15, 1996 100,000
January 15, 1997 100,000
February 15, 1997 52,400
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B. Cancellation Fee
MMC hereby agrees to pay to VPTI a Cancellation Fee of
$100,000 in two equal installments of $50,000 each on
February 15, 1997 and March 15, 1997. Such Cancellation
Fee shall be in lieu of the Cancellation Fees set forth in
Section 4 of the PJM Agreement.
2. ACTIVATION AND SERVICE BY MMC
MMC hereby agrees to activate and provide paging services for end
users of all Devices distributed by VPTI with a frequency of
931.8875 MHZ under MMC's then-current applicable rates and term
and conditions. MMC further agrees to introduce VPTI to vendors
of MMC to purchase collateral materials relating to the Devices
normally included in pagers sold by MMC which have the capability
of both local and nationwide services.
3. RESIDUAL FEES
MMC hereby agrees to pay to VPTI a residual fee of five percent
(5%) of the base air time fees received by MMC from purchasers
of the Device for as long as such Device remains in service on
MMC's radio paging system through the period ending twenty-four
(24) months after VPTI ceases selling the Device. Such payments
will be payable to VPTI monthly within sixty (60) days from the
end of each calendar month. The residual fee described in this
Section 3 shall be in lieu of any fees or charges set forth in
Section 7.F of the PJM Agreement.
4. RIGHT TO USE TRADEMARK
MMC hereby grants a license during the Term (as defined below) to
VPTI to xxxx the Devices sold or distributed by VPTI for
activation on MMC's radio paging system with a frequency of
931.8875 MHZ with the logo and trademark of MobileComm. Such
license shall be subject to uniform standards provided by MMC and
each such use shall be subject to prior written approval by MMC.
Without limiting the foregoing, VPTI acknowledges that use of the
MobileComm logo and trademark may be restricted in certain areas
as identified by MobileComm from time to time and agrees that VPTI
has no right to use the MobileComm logo and trademark in such
areas. As of the Effective Date, such restricted areas include
the greater Cincinnati metropolitan area. This license may be
revoked by MMC by the giving of one hundred and eighty (180) days
written notice, provided that if VPTI uses the MobileComm logo or
trademark in a manner not approved by MMC, MMC may revoke such
license upon thirty (30) days written notice.
5. TERMINATION BY VPTI
A. VPTI shall have the right to terminate this
Agreement upon the occurrence of any one of the
following events:
(i) MMC fails to pay when due any of the payment
required pursuant to Section 1(A) and 1(B)
herein and such failure continues for a
period of fifteen (15) business days after
the written notice by VPTI.
(ii) MMC fails to activate and provide paging
services for purchasers of the Devices in
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accordance with Section 2 herein and such
failure continues after the giving of
fifteen (15) business days written notice by
VPTI.
(iii) An order for relief is entered with respect
to MMC in any voluntary or involuntary case
filed under the United States Bankruptcy Code
and at such time MMC is not current with its
payments under Section 1 hereof.
(iv) An involuntary petition is filed against MMC
under the United States Bankruptcy Code and
such petition is not dismissed within
(60)days after the date of filing and at such
time MMC is not current with its payments
under Section 1 hereof.
(v) A receiver is appointed with respect to
substantially all of the assets of MMC, or
MMC makes a general assignment for the
benefit of creditors, or MMC is dissolved or
substantially all of the assets are
liquidated not in the ordinary course of
business and at such time MMC is not current
with its payments under Section 1 hereof.
B. In the event and to the extent MMC does not make payments to MMC
in accordance with the schedule under Section 1 and VPTI elects
to terminate under Section 5.A(i) then:
(i) The Cancellation Fee pursuant to Section 1(B)
herein shall be increased by an additional
$100,000 which amount shall be immediately
due and payable.
(ii) MMC will be obligated to continue to provide
paging services pursuant to Section 2 herein
and will continue to activate new Devices
for a period of one year from the date
of termination.
6. MUTUAL COOPERATION
Both MMC and VPTI hereby agree to use reasonable efforts to cooperate
with the other in order to enable VPTI to directly sell the Devices
in accordance with this Agreement to retail customers which are
retail customers of MMC on the Effective Date for activation on MMC's
radio paging system.
7. RELATIONSHIP TO PJM AGREEMENT
This Agreement is intended to supersede and replace the PJM Agreement
including Exhibits B and C thereto. Notwithstanding the foregoing,
the parties agree that Sections 12 and 13 and Exhibit A and, with
respect to the units of the Device purchased by MMC as of the
Effective Date, Section 3 of the PJM Agreement shall survive and be
incorporated herein by reference. This Agreement supersedes all oral
or written agreements with regard to the subject matter herein and can
be modified only by written agreement of both parties.
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8. TERM
The Term of this Agreement shall commence on the Effective Date
and terminate on December 31, 1997. Upon the expiration of the
Term, this Agreement, excluding Sections 1 and 5, may be renewed
for successive one year renewal terms by mutual agreement of the
parties. VPTI's rights under Section 3 hereof shall continue for
twelve (12) months following termination under this Section.
9. RESOLUTION OF OUTSTANDING ISSUES
This Agreement shall resolve any outstanding issues under the PJM
Agreement, and VPTI, along with its affiliates, successors and assigns
and its employees, shareholders, partners, limited partners, directors,
officers, parents, subsidiaries, representatives and agents, does hereby
release, acquit and discharge MMC, along with its affiliates, sucessors
and assigns and its employees, shareholders, partners, limited partners,
directors, officers, parents, subsidiaries, representatives and agents
from any and all claims, liabilities, demands, causes of action, costs,
expenses and attorneys' fees arising out of the PJM Agreement prior to the
date of this Agreement.
10. LIABILITY
Regardless of the legal or equitable basis of any claim or of actual
notice, neither party shall be liable for any incidental, indirect,
special or consequential loss or damages.
11. NOTICES
Any notices to be given under this Agreement shall be in writing and
transmitted via Certified Mail or commercial overnight courier addressed
as follows:
If to MMC:
General Counsel
MobileComm
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
With a copy to,
Xxxxxx Xxxxxxxxx, Director of Logistics
If to VPTI: Xxxxxxxx X. Xxxxx
Vice President/CFO
Voice Powered Technology International, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
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12. GOVERNING LAW
This Agreement shall be subject to and governed by the laws of the
State of California in all respects. This Agreement shall be governed
by the laws of the State of California applicable to agreements entered
into and to be wholly performed within the State of California by
residents of such state. Unless otherwise agreed to by the parties,
all claims or disputes between the parties arising out of or relating
to this Agreement, or breach thereof, shall be resolved by arbitration
according to the rules of J.A.M.S./Endispute.
Agreed to and executed as of the date first written above by:
VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
By: /s/ XXXXXXXX X. XXXXX
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Xxxxxxxx X. Xxxxx
Vice President, Finance and Operations
MOBILEMEDIA CORPORATION
By: /s/ XXXXXXXX XXXX
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Xxxxxxxx Xxxx
Secretary & Acting General Counsel
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