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EXHIBIT 10.1
PURCHASE AND JOINT MARKETING AGREEMENT
THIS AGREEMENT is made and effective this 11th day of December,
1995 by and between Voice Powered Technology International, Inc. ("VPTI") with
its principal offices in Xxxxxxx Oaks, California and MobileComm Nationwide
Operations, Inc. ("MobileComm") with its principal offices in Ridgeland,
Mississippi as follows:
1. The purpose of this Agreement is to establish a relationship
between the parties to accomplish the development and subsequent joint
marketing of a voice activated pager/organizer according to the design and
specifications developed by VPTI and incorporating performance characteristics
suggested by MobileComm. The said relationship between the parties shall be
governed by the terms of VPTI's November 9, 1995 Business Proposal to
MobileComm. except as modified by the terms of this Agreement. The said
Business Proposal is attached hereto as Exhibit "C" and incorporated into this
Agreement by this reference. In the event of any conflict between the terms of
the said Business Proposal and this Agreement, the terms of this Agreement
shall prevail.
2. The term of this Agreement is one year commencing as of the
date recited hereinabove. This Agreement shall be automatically renewed for
one successive term unless either party gives to the other written notice of
its intention not to renew. Such notice must be given no less than sixty days
prior to the expiration of the original term hereof.
3. The voice activated pager/organizer devices ("Devices") which
are the subject of this Agreement will be developed and manufactured by or for
VPTI at its expense. The Devices will be sold by VPTI with a standard warranty
to the end-user on parts and labor for ninety days and with a further warranty
to the end-user on parts (only) for one year from the date of receipt. Any
claims under the warranty on the basis of defective parts after the initial
ninety day warranty period, but within the one year period, will be repaired or
replaced, at VPTI's sole option, for a charge not to exceed VPTI's actual and
reasonable cost for labor ordinarily incurred in making such repair.
4. The prices and related terms of the sale of the Devices by
VPTI to MobileComm are as follows:
A. MobileComm agrees to purchase a minimum of forty thousand
Devices from VPTI during the initial term of this Agreement at a unit price
of One Hundred Eight Dollars, for a total of Four Million Three Hundred Twenty
Thousand Dollars. Thereafter, the unit price shall be as follows:
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Cumulative Number of Units Unit Price
-------------------------- ----------
40,001 - 100,000 $105.00
100,001 - 250,000 $101.00
Over 250,000 $98.00
Provided, however, that the said prices are dependent upon the prices of
certain key components incorporated into the Devices and the parties agree that
the prices may be adjusted to reflect the actual changes in cost of components.
Any such price changes shall be made only in the event a price changes by five
percent or more and then only after written notice is given to MobileComm.
Such notice shall be in writing and shall specify the component(s) involved
and the precise amount of the change in the cost of such components. All
prices are F.O.B. MobileComm's receiving dock in Jackson, Mississippi unless
otherwise specified in the respective Purchase Order(s).
B. In the event that MobileComm falls to meet the initial annual
minimum purchase commitment of 40,000 units, pursuant to the following schedule
and pursuant to Paragraph 7B hereof, MobileComm will pay to VPTI the following
amounts representing fees for cancellation of such commitment for the unit
quantities and time frame indicated:
Purchase
Quantity Cancellation
Timing Committed Fee if not Purchased
------ --------- --------------------
Four weeks following the
submission of prototypes 5,000 $200,000
Thereafter following the
initial order of units:
First three months 10,000 $150,000
Second three months 10,000 $100,000
Third three months 15,000 $ 50,000
C. Provided, however, that such cancellation fees are not
applicable if: 1) the number of Devices otherwise committed to are not
available for shipment to MobileComm at the scheduled time and; 2) MobileComm
has complied with the minimum purchasing requirements pursuant to Section 7B
herein."
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D. VPTI will credit MobileComm for returned product not to exceed
15% (fifteen percent) of units shipped to MobileComm by VPTI in the immediately
proceeding three (3) month period from the date the return of such product is
authorized by VPTI.
5. The Product Definition pertaining to the Devices is set forth on
Exhibit "A" attached hereto and incorporated into this Agreement by this
reference. Provided, however, that the reference to the POCSAG Protocol on
Exhibit "A" pertains to Devices first sold and shipped under this Agreement.
It is the intention of the parties that VPTI will produce a Device utilizing
the Motorola FLEX protocol (with a similar feature set) and offer SAME to
MobileComm within twelve months after the initial product launch. VPTI agrees
that it will actively and in good faith negotiate with Motorola (and others as
appropriate) to obtain a license permitting VPTI to utilize the FLEX protocol
in such Devices.
6. VPTI undertakes and agrees:
A. Utilize reasonable and best efforts to develop and manufacture
the Devices at its sole expense, and consistent with the product specifications
jointly agreed to with MobileComm, with the development scheduled to be
completed within nine months of the date hereof. The Devices will provide A
feature set and the paging function will perform in conformance with Exhibit
"A".
B. Utilize reasonable and best efforts to deliver completed Devices
to MobileComm according to the schedule agreed to in writing by the parties.
C. To sell the Devices to MobileComm on an exclusive basis for a
period of twelve (12) months commencing with the date of MobileComm's receipt
of goods from the initial order pursuant to Section 7(E) (the "Initial Term").
The parties hereby agree, beginning ninety (90) days prior to the expiration of
the Initial Term, to negotiate in good faith in order to establish a new annual
minimum purchase commitment for the next twelve (12) month period following the
Initial Term. However, if MobileComm purchases 125% of the annual minimum
purchase commitment in accordance with Section 4(B) for the Initial Term, then
MobileComm will have the option, but not the obligation, to extend the period
of exclusivity for a second twelve (12) month period subject to the same annual
minimunm purchase commitment that was in effect for the Initial Term. In the
event that MobileComm fails to purchase the number of Devices in accordance
with Section 4(B) herein, VPTI will have the right to terminate the exclusivity
of MobileComm anytime after thirty (30) days following the close of the
calendar quarter in which MobileComm failed to purchase the required number of
Devices.
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D. VPTI will market the Device through its own marketing channels
which will not include any retailers which are established and ongoing
customers for pagers distributed by MobileComm. VPTI will promote the radio
paging service of MobileComm to purchasers of the Device on an exclusive basis
for a period equal to thirty (30) days beyond the termination of the
exclusivity period applicable to MobileComm's sales of the Device. Thereafter,
VPTI will promote MobileComm's radio paging service on a non-exclusive basis.
E. Deliver three non-working models of the Device to MobileComm,
not later than January 1, 1996. The schedule for development and testing of
the Device by VPTI shall substantially conform to the schedule set forth in
Exhibit "B" which is attached and incorporated into this Agreement.
7. MobileComm undertakes and agrees to:
A. To assist VPTI in the development of final specifications
relating to the Device. Such assistance will consist of testing, evaluation
and critique of test model Devices according to mutually agreed testing and
evaluation procedures. Such assistance will be rendered at the expense of
MobileCommm and consistent with the restrictions applicable to MobileComm by
virtue of the Modified Final Judgment ("MFJ"), as amended, rendered in that
certain civil action styled United States of America vs. Western Electric Co.,
Inc. et al, Civil Action No. 82-0192 in the U.S. District Court for the
District of Columbia.
B. To place and pay for orders for the Devices in quantities and
upon such terms as are incorporated into the Purchase Orders issued hereunder.
Each order shall be made on the basis of a non-cancelable Purchase Order issued
by MobileComm which shall not include any material terms and conditions which
conflict with thosse indicated in this Agreement. Each such Purchase Order
will specify quantities of the Device to be delivered thereunder which quantity
will not ordinarily exceed the quantity of buffer stock maintained by VPTI for
MobileComm's account, and will allow no less than thirty days for the delivery
of each shipment thereunder. If the quantity on my Purchase Order exceeds the
quantity maintained by VPTI as buffer stock, VPTI shall have ninety days to
deliver that part of the ordered quantity which exceeds the quantity in the
buffer stock.
C. Market and sell the Device through its retail and other
distribution channels;
D. Promptly pay when due all sums owed to VPTI, including the
amounts due under the aforesaid Purchase Orders and agreed processing and
residual fees related to customer subscriptions generated by
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MobileComm, with respect to the Devices. All invoices for Devices from VPTI to
MobileComm will be due and payable within forty-five (45) days from date of
shipment.
E. Issue an initial, non-cancelable purchase order for not less
than 5,000 Devices upon satisfactory completion of Alpha testing, but not later
than four weeks from VPTI's submission of prototype samples to MobileComm,
which samples shall be in compliance with the agreed specifications. Delivery
of said initial quantity of Devices shall be made not less than ninety days,
nor more than one hundred fifty days, from the date of such initial Purchase
Order.
F. MobileComm will assign to VPTI on each of the Devices sold by
VPTI and activated on MobileComm's radio paging system the $15 processing fee
in addition to paying to VPTI a five percent (5%) residual fee on the base air
time rate, beginning on the sixty first day following the activation date for
as long as such Device remains in service on MobileComm's radio paging system
through the period ending twenty-four (24) months after VPTI ceases selling the
Device. MobileComm will pay to VPTI on all Devices sold by MobileComm and
activated on MobileComm's radio paging system a $5.00 per unit processing fee
in addition to a three percent (3%) residual fee on the base air time rates
beginning on day ninety-one (91) following the activation date for as long as
such Device remains in service on MobileComm's radio paging system through the
period ending twelve (12) months after MobileComm's exclusivity has been
terminated by VPTI. All payments for residuals and processing fees will be
payable monthly within thirty (30) days from the end of each calendar month.
8. The parties will coordinate their marketing and sales
activities pertaining to the Device and MobileComm's radio paging service.
Advertising and other expenses related to the respective marketing and sales
activities of the parties shall be borne by the party conducting the activity.
9. VPTI shall exert its best reasonable efforts to develop the
POCSAG version of the Device timely so as to meet the objectives of this
Agreement, all substantially in accord with the Schedule set forth in Exhibit
"B".
10. This Agreement shall be interpreted and enforced according to
the laws of the State of California. In the event any dispute arises between
the parties pertaining to this Agreement and such dispute cannot be amicably
resolved by the parties, such dispute shall be submitted to binding arbitration
for resolution. Unless the parties agree otherwise, any such arbitration
proceedings are to be conducted according to the applicable Rules of the
American Arbitration Association, in California.
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11. Any notices to be given under this Agreement shall be in
writing and transmitted via certified U.S. Mail addressed as follows:
IF TO MOBILECOMM:
General Counsel
MobileComm
0000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
IF TO VPTI:
Xxxxxxxx X. Xxxxx
Vice President/CFO
Voice Powered Technology Intl., Inc.
00000 Xxxxxxx Xxxx.
Xxxxx 0000
Xxxxxxx Xxxx, XX 00000
12. All information (whether or not in writing) disclosed by one
party to the other is to be considered proprietary and confidential Property of
the providing party and shall be safeguarded accordingly. This obligation
shall survive the termination or expiration of this Agreement and applies to
any information which is not proven to be in the public domain at the time of
such disclosure.
13. Miscellaneous Administrative Provisions
A. Records Audit.
VPTI or its designated representative shall have the right to
inspect the books and records of MobileComm relevant to this Agreement to
verify the accuracy of payments to be made by MobileComm to VPTI hereunder.
Any such inspection shall be conducted at MobileComm offices maintaining such
records and shall be during ordinary business hours and following no less than
ten days notice.
B. Trade Name and Trademark.
(1) Each party recognizes the right, title and
interest of the other party and its affiliated and associated companies to all
service marks, logos, trademarks and trade names used in association with their
business activities and agrees not to engage in any activities or commit any
acts, directly or indirectly, which may contest, dispute or otherwise impair
such right, title and interest. Each party hereby agrees that all its uses of
such service marks, logos, trademarks and trade names of the other
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party shall only be according to reasonable and uniform standards furnished by
the other party, shall be subject to prior written approval by the other party
which approval may be revoked at any time upon 15 days' notice, and shall be in
such manner as to inure at all times to the benefit of the other party.
(2) This section shall survive termination of this Agreement, and,
in the event of termination, no service marks, logos, trademarks or trade names
of a party shall be registered or used which are the same as, or confusingly
similar to, service marks, logos, trademarks and trade names of the other
party. Use or ownership by either party of any trade name or style containing
any xxxx or trade name confusingly similar to that of the other party shall be
immediately surrendered or abandoned.
C. Force Majeure.
(1) Either party may suspend or reduce, in whole or in part, the
provision of the Services or any of its obligations hereunder, for the time and
to the extent such suspension or reduction is occasioned by an event or an act
of God, war, fire or other casualty, acts of any governmental body or similar
causes or conditions beyond the party's reasonable control and such event is
not due to the negligence or willful act or omission that party (any such act
is hereinafter referred to as an "Event"). The suspending party agrees to use
its best efforts to restore in full, as quickly as possible and to the extent
possible the performance reduced or suspended as a result of the Event.
(2) Any other term or provision herein to the contrary
notwithstanding, if any Event continues and remains not fully remedied for a
period in excess of 60 days, the non-suspending party may terminate all its
obligations under this Agreement and resort to whatever other or additional
remedies may be available to it under this Agreement, at law or in equity.
D. Proprietary Information: Confidentiality, Non-Solicitation.
(1) Each party acknowledges that, during the term of this
Agreement, it will be provided with confidential information relating to the
business policies and procedures and products of the other party. Each party
agrees that it will not use such confidential information for any purpose
except the performance of this Agreement, and that it will not disclose any
such confidential information to any third party unless such disclosure is
authorized in advance by the other party in writing or is required
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by order of a court or regulatory agency of competent jurisdiction with notice
of same being given to the other party. Each party agrees that the terms and
conditions of this Agreement are, except to the extent disclosure is required by
law, necessary to the protection of a party's rights or mutually agreed to by
the parties in writing, confidential and restricted by this Article as to their
disclosure to any third party.
(2) Either party's noncompliance with such conditions shall be
considered to be a material breach of this Agreement.
(3) Each party agrees not to knowingly solicit for employment or
employ the employees of the other party during the term hereof and for a period
of 12 months after termination of this Agreement without the written consent
of the other party to the extent consistent with applicable state and fcderal
law, provided, however, that nothing contained herein shall prohibit the
employment by one party of an employee of the other party where the employment
opportunity was called to the attention of that employee by means of
advertising in the mass media not specifically targeted at the employees of one
party by the other.
E. Assignment or Transfer.
No rights or obligations hereunder may be assigned or transferred, in
whole or in part, by either party without the prior written consent of the
other, which consent may not be unreasonably withheld or delayed.
F. Parties' Status.
Each party is an independent contractor of the other. Neither party is
authorized to act as an agent for, or legal representative of, the other party
nor shall either party have authority to assume or create any obligation on
behalf of, in the name of, or binding upon, the other party. Without limiting
the generality of the foregoing, neither shall represent itself as an agent of
the other.
G. Severability.
If any party of this Agreement is for any reason declared invalid by
court order or by order of any regulatory agency, the order shall not affect
the validity of any remaining portion, which shall remain in force and effect
as if this Agreement had been executed with the invalid portion eliminated, and
it is the intention of the parties that they would have executed the remaining
portion of this Agreement without including any part or portion which may, for
any reason be declared invalid.
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H. Non-Conflict.
Each party represents and warrants that no obligation provided for
herein is in conflict with any other contractual obligation of it with any
third party.
1. Binding Effect.
This Agreement and the rights and obligations of the parties herein
shall inure to the benefit of and be binding upon any successor or assignee and
any subsidiary, affiliate, agent, reseller, or related entity.
WITNESS OUR SIGNATURES:
VOICE POWERED TECHNOLOGY MOBILECOMM NATIONWIDE
INTERNATIONAL, INC. OPERATIONS, INC.
By: /s/ [SIG] By: /s/ [SIG]
------------------------------ --------------------------
Title: Vice President Title: Vice President
--------------------------- -----------------------
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MOBILECOMM/MOBILEMEDIA
VOICE PAGER/ORGANIZER
EXHIBIT A
PRODUCT DEFINITION
PAGER FEATURE SET:
MESSAGE TYPES Numeric messages.
NUMBER OF MESSAGES STORED Stores up to 24 numeric messages in memory.
MESSAGE LENGTH Messages can be up to 24 digits in length.
LOCKED MESSAGES A maximum of 16 messages can be locked in
memory at any one time.
ERASING MESSAGES User can erase messages "individually" or can
erase "all" read messages.
CALLER ANNOUNCE FEATURE Announces, in the users voice, the name
of person who sent the message if
that person's name is included in
the organizers phone directory.
CUSTOM VOICE ANNOUNCE MESSAGES Program up to a total of 10
fixed or time stamped voice
announce messages.
Fixed messages
o User can program voice message such as
"call home." When the
selected code (up to 4
digits) is received by the
Pager/Organizer, the product
will announce "call home" in
the users voice.
Time stamped messages
o Caller can program voice messages with
time stamps. For example,
the person sending the paging
message can send a coded
message with a time stamped
requesting the user call the
office at a specified time,
for example "call office" at
"3:00 PM."
AUDIO PLAYBACK OF MESSAGES User can individually select audio
playback of any message.
MEMO'S ATTACHED TO MESSAGES Memo's can be attached to any message.
REMINDER TIMES ATTACHED TO MESSAGES Messages can be time stamped
by voice to remind the user
to call back at a later time.
ALARMS/VIBRATORS Audio alarm or vibrator feature can be
selected by button operation.
PAGER SECTION ON/OFF Pager section can be turned on or off by
the user to conserve battery life.
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MOBILECOMM/MOBILEMEDIA
VOICE PAGER/ORGANIZER
EXHIBIT A
PRODUCT DEFINITION
ORGANIZER FEATURE SET:
MEMO PAD Stores up to 40 voice memos.
REMINDERS Stores up to 40 reminders and
timed stamped messages.
Program reminders up to a year
in advance by voice.
CALENDAR Review by voice, reminders and time
stamped messages programmed for any
specific day.
PHONE DIRECTORY Stores up to 80 names in 4
directories. Each name in the phone
directory can have up to 4 phone
numbers included for a total
of 320 phone numbers.
TOTAL RECORD TIME Maximum record time is 3.5 minutes.
ENCLOSURE DESIGN 5200 Voice Organizer enclosure modified
in the rear for the paging hardware.
BATTERY LIFE 30 days minimum.
CAP CODES Preset at the factory.
Cap code number to be placed on label
on back of unit. Four cap
codes only will be used.
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MOBILECOMM/MOBILEMEDIA
VOICE PAGER/ORGANIZER
EXHIBIT A
PRODUCT DEFINITION
PAGING RECEIVER SPECIFICATIONS:
FREQUENCY OF OPERATION 000-000 XXx
XXXXXXXX POCSAG
BAUD RATE 1200 Baud or 2400 Baud
RF INPUT PAGING SENSITIVITY - 125 dBm, 4.8
KHz Deviation, 1200 BPS
ADJACENT CHANNEL SELECTIVITY 65 dB Minimum,
(20 KHz Spacing)
SPURIOUS IMMUNITY 50 dB Minimum
IMAGE REJECTION 60 dB Minimum
INTERMODULATION IMMUNITY 55 dB Minimum
BLOCKING IMMUNITY 75 dB Minimum
AFC COMPENSATION RANGE +/- 10 KHz Minimum for -3 dB
Sensitivity Change
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MOBILECOMM/MOBILEMEDIA
VOICE PAGER/ORGANIZER
EXHIBIT B
PRODUCT DEVELOPMENT SCHEDULE
Finalize product definition November 1995
Provide MobileComm with 2 models for CES January 1996
Complete product development March 1996
Provide 12 prototype units to MobileComm for March 1996
Alpha testing (functional and specification
verification)
Alpha testing by MobileComm complete in 4 weeks April 1996
Begin production July 1996
Begin shipments to MobileComm August 1996
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EXHIBIT C
MOBILECOMM/VPTI
VOICE ACTIVATED PAGER/ORGANIZER
PROPOSED BUSINESS RELATIONSHIP
BACKGROUND
o MobileComm and VPTI are planning to jointly introduce (i.e. commence
initial shipments) a voice activated Pager/Organizer in the United States
beginning September 1996.
o The companies have agreed on a product specification for the
Pager/Organizer that includes both the ...
o Product definition (Exhibit "A"); and
o Product features (Exhibit "B")
o MobileCommm has indicated that the specifications provided by VPTI for the
Pager/Organizer appear to be acceptable.
o Preliminary testing by MobileComm of the proposed RF front end in
conjunction with the VOICE OrganizerTM indicates that the Pager/Organizer
product performance is technically acceptable,
o The two companies now desire to enter a business relationship relating to
the joint marketing of the Pager/Organizer.
o Further, it is the intention of the two companies to follow the
introduction of the POCSAG protocol voice activated Pager/Organizer with a
FLEX protocol product providing a similar feature set within 12 months
after the initial product launch. Toward achieving this goal, VPTI will
actively negotiate with Motorola (and others) to gain a license to permit
it to employ the FLEX protocol in this product.
November 9, 1995
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EXHIBIT C
PROPOSED INDIVIDUAL COMPANY RESPONSIBILITIES
The roles proposed for each Company, and its respective commitments are
described below:
VPTI ROLE/COMMITMENTS
o The development of the Pager/Organizer product to mutually agreed
specifications, at VPTI's sole expense, with the development scheduled to
be completed within nine (9) months following a signed agreement between
the companies to proceed (Exhibit "C").
o The delivery of completed units to MobileCOMM, to agreed product
specifications, on specified dates, and in accordance with the financial
proposal attached hereto.
o The sale of the product to MobileComm on an exclusive basis in the United
States through August 31, 1997, except that:
o In the event MobileComm purchases 125% of the minimum annual purchase as
set forth in the Proposed Financial Arrangements, the period of
exclusivity will be extended an additional sixty (60) days to October 31,
1997.
o Should MobileComm fail to purchase the agreed quantity of units in any
quarter as set forth in the Proposed Financial Arrangements, the exclusive
sale arrangement will terminate thirty (30) days following the close of
that quarter; and
o VPTI will retain the right to market the product through its marketing
channels.
o VPTI shall offer MobileComm paging service to its purchasers of the
Pager/Organizer product through August 31, 1997, or a period equal to
thirty (30) days beyond the termination of the exclusive product sale
arrangement with MobileComm, whichever occurs earlier. Thereafter, the
paging service agreement with MobileComm would continue on an annual
basis, except that VPTI could exercise its right to terminate at any time
on ninety (90) days written notice.
o The providing of a 90 day warranty from date of customer purchase for
parts and labor and one (1) year warranty for parts only, during which
time defective units will be repaired or replaced by VPTI at VPTI's option
at no charge for parts to MobileComm or its customers. For units returned
which are out of warranty (i.e., beyond the ninety (90) day or one (1)
year warranty period), a labor charge will apply to all claims processed.
November 9, 1995
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EXHIBIT C
MOBILECOMM ROLE/COMMITMENTS
o The agreement to the product specifications.
o The testing, technical evaluation and approval of the Pager/Organizer
product that is developed by VPTI at an agreed time in advance of the
scheduled completion of the development, in accordance with mutually
agreed upon test procedures.
o The providing of a purchase order for a minimum number of units to be
purchased from VPTL
o The payment of certain sums, in the event of a failure to purchase an
agreed minimum number of units by certain dates from VPTI.
o The release of non-cancelable purchase orders for specified quantities of
the product, which are not to exceed the amount of the buffer stock
maintained by VPTI for MobileComm, 30 days in advance of each planned
shipment date.
o The marketing and distribution of the product through MobileComm's retail
and other distribution channels.
o The processing of VPTI generated customer subscribers to the MobileComm
paging service, with agreed processing and residual fees to be paid to
VPTI in accordance with the financial proposal attached hereto.
o The payment of agreed processing and residual fees to VPTI on all customer
subscriptions generated by MobileComm resulting from the sales of the
Pager/Organizer.
PROPOSED FINANCIAL ARRANGEMENTS
VPTI will agree to bear all costs involved in the development,
tooling, manufacturing and start up of the Pager/Organizer.
MobileComm will commit to the minimum annual purchase of
40,000-Pager/Organizer units, at a unit price of $108 each, totaling
$4,320,000.
Thereafter, the purchase price to MobileComm shall be reduced as
follows...
Cumulative Number of Units Unit Price
-------------------------- ----------
40,001 - 100,000 $105
100,001 - 250,000 $101
Over 250,000 $98
Pricing is predicated on current key component quotes and is subject to
revision.
November 9, 1995
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EXHIBIT C
o MobileComm will issue an initial non-cancelable purchase order equal to not
less than 5,000 units on satisfactory completion of Alpha testing but no
later than eight (8) weeks from submission of prototype samples (assuming
compliance with agreed specifications) for deliveries commencing ninety (90)
days from the date of such purchase order.
o To Support MobileComm sales requirements, VPTI will, on an ongoing basis,
maintain a buffer stock of units, commencing with the initial shipment,
equal to the initial purchase order for delivery within a thirty (30) day
period. Orders placed by MobileComm against such buffer stock cannot exceed
the amount of the initial order in any ninety-day period. All other orders
must be placed on a ninety (90) day basis.
o In the event that MobileComm purchases fewer than the number of
Pager/Organizer units by the dates specified below, then MobileComm will
pay the following sums to VPTI
Cumulative In Event of
Number of Units Non-Performance
to be Purchased Sums to be
Timing by Mobilecomm Paid VPTI
Eight (8) weeks following
the submission of prototypes 0 to 5,000 unit is $200,000
Thereafter following the
Initial order of units . . .
13, weeks 5,001 to 15,000 $150,000
26 weeks 15,001 to 25,000 $100,000
39 weeks 25,001 to 40,000 $50,000
52 weeks over 40,000 units
o VPTI will credit MobileComm for returned product not to exceed 15% (fifteen
percent) of units shipped to MobileComm, by VPTI in the immediately
preceding three (3) month period from the date the return of such product is
authorized by VPTI.
o MobileComm will pay to VPTI on all pagers sold by VPTI a $15 processing
fee, in addition to a five percent (5%) residual fee on the base air time
rate, beginning on day 61 following the sign-on date.
o MobileComm will pay to VPTI on all Pager/Organizers sold by MobileComm
during such time as MobileComm is the exclusive service provider for the
Pager/Organizer, a $5 per unit processing fee. In addition, MobileComm will
pay to VPTI a three percent (3%) residual on base air time rates beginning
on day 91 following the sign-on date.
Residual fees paid to VPTI will continue throughout the life of the
subscription, even after the exclusive agreement between the companies
expires.
November 9, 1995
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EXHIBIT C
o VPTI's right to receive the three and five (3% and 5%) percent residuals on
all units sold will cease in the event VPTI elects to utilize a service
provider other than MobileComm during the period of exclusivity to provide
paging services for the Pager/Organizer. Notwithstanding the foregoing,
VPTI's right to receive such three and five (3% and 5%) percent residual shall
continue in the event that VPTI's use of such other service provider is due to
a retailer imposing another service provider upon VPTI as a pre-condition to
purchasing units of the Pager/Organizer. If VPTI is advised of such a
pre-condition by a retailer, VPTI agrees to notify MobileComm, in writing, of
such restriction immediately in order to permit MobileComm to attempt to
obtain rights to provide paging services to customers of such retailer.
November 9, 1995
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