Contract
Exhibit 4(a)
This Share Payment Agreement (the
“Agreement”) is made this 9th day
of October, 2009, between the CJK Dictionary Institute, Inc. (hereinafter
“CJK”), a corporation of Japan, having a principal address at Komine Building, 2
chome 34-15 Tohoku, Niiza shi, Saitama 352-0001, Japan, and Fonix Speech Inc.,
(hereinafter “Fonix”), a Delaware corporation having a principal place of
business at 000 Xxxxx 000 Xxxx, Xxxxx 000, Xxxxxx, Xxxx 00000 XXX.
RECITALS
A.
On approximately October 16, 2007, CJK and Fonix entered into
a Licensing Agreement dated October 16, 2007, as amended by amendments dated
April 18, 2008 and June 19, 2008 (collectively the “License”) (attached as
Exhibit A, B and C, respectively) pursuant to which CJK granted Fonix a
world-wide, non-exclusive, perpetual right to incorporate into Fonix products a
Chinese Lexical Database, a Japanese Lexical Database, and a Korean Lexical
Database (collectively the “CJK Databases”).
B. Pursuant
to the License, CJK was entitled to a licensing fee (the “Fee”) after delivery
of the CJK Databases. During November of 2007, CJK delivered the CJK
Databases to Fonix.
C. CJK
has agreed to accept shares of Fonix Common Stock (the “Shares”) as payment of
the Fee, and Fonix has agreed to pay the Fee to CJK through the issuance of the
Shares, pursuant to this Agreement.
NOW,
THEREFORE, FONIX AND CJK AGREE AS FOLLOWS:
1.
Payment of the
Fee.
A. Fonix
agrees to pay the Fee earned by CJK in November 2007 by issuing to CJK shares of
Class A common stock of Fonix Corporation (the “Shares”) having a value of
$85,000 (USD) as of the date of issuance, with the number of Shares to be issued
being determined by dividing $85,000 by the per share market price of Fonix’s
common stock on the day immediately prior to issuance. Fonix agrees
to file a registration statement on Form S-8 (the “Registration Statement”) with
the U.S. Securities Exchange Commission to register the issuance of the
shares. The Registration Statement shall be filed within five (5)
business days of the execution of this Agreement, and the Shares will be issued
within five (5) business days of the filing of the Registration
Statement. Counsel for Fonix shall provide an opinion that upon
issuance of the Shares, the same may be immediately sold and that there is no
restriction imposed pursuant to State or Federal Securities laws which would
restrict or delay sale of the Shares, except as set forth in paragraph 2
below.
B. In
the event that CJK observes the conditions of Section 2 of this Agreement, and
sale of the Shares does not result in realization of $85,000 in sales proceeds,
Fonix agrees to issue additional shares to CJK until the full $85,000 has been
realized from the sale of Fonix shares. However, in the event CJK
observes the conditions of Section 2 of this Agreement, and the sale of the
Shares results in realization of more than $85,000 in sales proceeds, CJK agrees
to return to Fonix: (a) all sales proceeds in excess of $85,000; and (b) all
unsold Shares.
2.
Restriction on the Sale of
the Shares. CJK agrees that it is shall not allow its agent to
sell more than $1,500 worth of Shares on any given day in order to maintain a
market for Fonix stock. CJK agrees that if it breaches this
provision, it will forfeit all rights to, and shall return to Fonix, all of the
Shares that are not sold as of the date of the breach.
3. Consideration. The
parties acknowledge and agree that the mutual covenants set forth in this
Agreement constitute good and valuable consideration for this Agreement, the
sufficiency of which is hereby acknowledged.
1
4. Full and Independent
Knowledge. The parties represent that they have been
represented by counsel in connection with the preparation and review of this
Agreement, that they have specifically discussed with counsel the meaning and
effect of this Agreement, and that they have carefully read and understand the
scope and effect of each provision of this Agreement. The parties
further represent that they have not relied upon any representation or
statement
5. Successors and
Assigns. This Agreement shall bind and inure to the benefit of
the parties’ heirs, administrators, successors, and assigns, provided however,
that no party hereto may sell, assign, transfer, encumber, convey, or otherwise
dispose of its rights or obligations hereunder to any third party without the
prior written approval of the other parties hereto.
6. Preparation of this
Agreement and Construction of its Terms. The parties agree
that each of them have, through counsel participated in and contributed to the
preparation of this Agreement. The parties agree that this Agreement
shall be regarded and deemed as having been prepared jointly by the parties
hereto. Any ambiguity or uncertainty existing herein shall not be
interpreted or construed against any party thereto by virtue of who may have
drafted such provision.
7. Amendment to this
Agreement. This Agreement may not be altered, amended,
modified or otherwise changed in any respect or particular whatsoever except by
a writing executed by an authorized representative of each party
hereto.
8. Further
Assurances. Each of the parties, without further
consideration, agrees to execute and deliver such other documents and take such
other action as may be reasonably necessary to consummate more effectively the
subject matter hereof.
9. Authorization. Any
person signing this Agreement for or on behalf of an entity other than a natural
person does by said signature warrant that he or she is duly authorized by said
entity to undertake such action on its behalf, and that such signature is the
valid and binding act of that entity.
10. Severability. Should
any part, term or provision of this Agreement be declared or determined by any
court to be illegal or invalid, the validity of the remaining parts, terms and
provisions shall not be affected thereby and said illegal or invalid part, term
or provision shall be deemed not to be part of this Agreement.
11. Entire
Agreement. The parties agree that this Agreement sets forth
the entire agreement between them regarding the subject matters addressed by
this Agreement.
12. Execution in
Counterparts. The parties hereto agree that this Agreement may
be executed in counterparts and that it is the intent of the parties that the
copy signed by a party will be fully enforceable against said party, and all
signed counterparts (whether a facsimile or original) shall be deemed to be an
original.
Fonix
Corporation
|
The
CJK Dictionary Institute
|
By:
|
/s/
|
By:
|
/s/
|
||
Xxxxx
X. Xxxxxx, Chief Executive Officer
|
Xxxx
Xxxxxxx, Chief Executive Officer
|
||||
Date:
|
|
Date:
|
2