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Exhibit 10.30
GEOWORKS - MYTURN
STOCK TRANSFER AND TECHNOLOGY LICENSE AGREEMENT
This Agreement is entered and effective as of December 22, 1999 (the "Effective
Date"), by and among GEOWORKS CORPORATION, a Delaware corporation ("GEOWORKS"),
and Compu-XXXX, Inc., dba XXXXXX.xxx, a Delaware corporation ("Compu-XXXX"), and
GPC Acquisition Corp., a Delaware corporation that is a wholly-owned subsidiary
of Compu-XXXX ("GPC"; sometimes Compu-XXXX and GPC are collectively referred to
herein as "MYTURN").
RECITALS
1. MYTURN is entering into an Asset Purchase Agreement (the "APA"), of
even date herewith, for the purchase of certain tangible and intangible assets
and the assumption of certain liabilities of GLOBAL PC, Inc., a California
corporation ("GLOBAL"). Compu-XXXX agrees to guarantee all debts and obligations
of GPC due, owing, and pertaining to GEOWORKS;
2. MYTURN desires to license certain technology from GEOWORKS (the
"Licensed Technology") and develop and market a low cost personal computer
("MYTURN PC Device");
3. GEOWORKS is the developer, publisher, and sole worldwide licensor of
a proprietary graphical operating system and environment ("GEOS") and a set of
applications running on top of GEOS ("Applications");
4. GEOWORKS is willing to grant to MYTURN the right to embed GEOS and
the Applications into MYTURN PC Devices; and
5. With GEOWORKS' consent, GLOBAL has developed certain enhancements to
GEOS and the Applications ("Enhancements"), which GLOBAL will transfer to MYTURN
in conjunction with the APA;
NOW THEREFORE, in consideration of these presents and for such other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
AGREEMENT
1.1 DEFINITIONS.
1.1a "AUTHORIZED PERSONNEL" means employees of Compu-XXXX, GPC, or GLOBAL
who are authorized by GEOWORKS and Compu-XXXX or GPC to have access
to the source code to the Licensed Technology.
1.1b "DERIVATIVE WORK" means (i) for material subject to copyright
protection, any work that is based upon any of the Licensed
Technology, such as a revision, modification, translation,
abridgment, condensation, expansion, collection, compilation or any
other form in which such pre-existing work may be recast,
transformed or adapted; (ii) for patentable or patented materials,
any adaptation, subset, addition, improvement or combination of the
Licensed Technology; and (iii) for material subject to trade secret
protection, any new material, information or data relating to and
derived from the Licensed Technology.
1.1c "DISTRIBUTOR OF MYTURN" means any person or entity to whom MYTURN or
any Affiliate grants the right to distribute MYTURN PC De-
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vices. The term "Distributor of MYTURN" does not include OEMs of
MYTURN.
1.1d "EMBEDDED" means reproduced in solid state media (e.g., Read Only
Memory (ROM)) in a hardware device, and physically integrated into
the device.
1.1e "END USER" means any person or entity that acquires a copy of a
MYTURN PC Device for its own use, and not for resale.
1.1f "INITIAL LICENSE FEE -- CASH" means a non-refundable license fee of
$541,083.56, payable in the manner set forth hereinbelow.
1.1g "INTELLECTUAL PROPERTY RIGHTS" means patents, design patents, and
designs (whether or not capable of registration), chip topography
rights and other like protection, copyrights, trademarks, and any
other form of statutory protection of any kind, and applications for
any of the foregoing respectively, all moral rights, including
rights of paternity and integrity, Confidential Information,
know-how and trade secrets.
1.1h "LICENSED TECHNOLOGY" means the GEOWORKS software, software
development tools, and documentation described in Exhibit A.
1.1i "LICENSEE OF GEOWORKS" means (i) any licensee to whom GEOWORKS has,
on or before March 31, 1999, granted a right to reproduce and/or
distribute copies of the Licensed Technology, and (ii) any licensee
to whom GEOWORKS, following the Effective Date of this Agreement,
grants a right to manufacture and distribute any products based on
the Licensed Technology, but excluding a MYTURN PC Device.
1.1j "MANUFACTURER OF MYTURN" means any person or entity to whom MYTURN
or any Affiliate grants the right to manufacture units of MYTURN PC
Devices in accordance with this Agreement.
1.1k "MYTURN PC DEVICE(S)" means low-cost, general-purpose personal
computers for the domestic and international markets, built on the
Intel x86 microprocessor architecture, or similar architecture, in
which the Licensed Technology is Embedded. MYTURN PC Devices shall
not be capable of or include wireless data transfer or voice
reception or transmission other than an IrDA connection for keyboard
input, mouse, track ball or pointing stick; have a physical PC
keyboard and mouse; and have either no monitor (for use with
television), a CRT of at least 14" diagonal, or an LCD of at least
10" diagonal. If mutually agreed in writing by the Parties during
the initial term of this Agreement, a MYTURN PC Device may have a
CRT or LCD of less than 10" diagonal.
1.1l "MYTURN PRODUCT SHIPMENT" means a shipment of a unit of any MYTURN
PC Device by MYTURN, or by a Manufacturer of MYTURN or OEM of
MYTURN, to a Distributor, End User or other customer.
1.1m "OEM OF MYTURN" means any person or entity to whom MYTURN or any
Affiliate grants the right to manufacture and distribute MYTURN PC
Devices, or any devices, which contain copies of the Licensed
Technology Embedded therein.
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1.1n "PARTY" AND "PARTIES" means GEOWORKS, Compu-XXXX, and GPC.
"AFFILIATE" means any person or entity in any form of business
relationship with either or both of Compu-XXXX or GPC, including
GLOBAL; and any subsidiaries of, or successors to, Compu-XXXX, GPC,
GLOBAL and their respective affiliates.
1.1o "SHARES" shall mean up to 320,000 shares of the common stock of
Compu-XXXX, or any successor entity, issuable to GEOWORKS pursuant
to Section 3.6 of this Agreement.
1.1p "THIRD PARTY TECHNOLOGY" means software, hardware, documentation or
other technologies that are licensed to GEOWORKS by third parties
and sub-licensed to MYTURN under this Agreement.
1.1q "WARRANT" shall mean the warrant for 250,000 shares of common stock
of Compu-XXXX issued to GEOWORKS pursuant to Section 7.1(b) of this
Agreement.
1.2 WARRANT. This Agreement has the following Appendix that is incorporated
herein and forms an integral part herein:
Appendix 1 -- Form of Warrant for the purchase of up to 250,000 shares of
Compu-XXXX Common Stock to be issued to GEOWORKS, attached hereto.
1.3 REPRESENTATIONS AND WARRANTIES OF MYTURN.
MYTURN hereby represents and warrants to GEOWORKS as of the date of this
Agreement as follows:
1.3a ORGANIZATION. Each of Compu-XXXX and GPC is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware. To the extent required by laws, each of Compu-XXXX and
GPC shall promptly qualify as a foreign corporation to transact business
in the State of California. Each of Compu-XXXX and GPC has all requisite
corporate power and authority to own, operate and lease its property and
to carry on its respective business as now being conducted and as
contemplated by the provisions of the APA and this Agreement. Each of
Compu-XXXX and GPC is duly qualified as a foreign corporation to do
business and is in good standing in each jurisdiction in which the
character of properties occupied, owned or held under lease by such
entities, or the nature of the conduct of their respective business, makes
such qualification necessary, except where the failure to be so qualified
would not have a material adverse effect on the business, operations,
assets, liabilities or condition (financial or otherwise) of MYTURN, taken
as a whole.
1.3b VALID ISSUANCE OF WARRANTS AND COMMON STOCK. The Warrants, when
granted and delivered in accordance with this Agreement, will be duly
authorized, validly issued, fully paid, non-assessable, and issued in
compliance with all applicable federal and state securities laws. The
shares of Common Stock underlying the Warrants (the "Warrant Shares"),
when issued and delivered in accordance with this Agreement, will be duly
authorized, validly issued, fully paid, non-assessable, free of
pre-emptive rights, and issued in compliance with all applicable federal
and state securities laws. The Warrant Shares have been reserved pursuant
to a resolution of the Board of Directors of Compu-XXXX. As a condition
precedent to any obligation of GEOWORKS under this Agreement,
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Compu-XXXX will deliver a certified copy of said board resolution to
GEOWORKS, together with a signed original of this Agreement.
1.3c AUTHORITY; NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(i) Each of Compu-XXXX and GPC has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement have been duly authorized by the respective Boards of Directors
of Compu-XXXX and GPC. As a condition precedent to any obligation of
GEOWORKS under this Agreement, a certified copy of each said resolution
has been delivered to GEOWORKS together with a signed original of this
Agreement. All necessary corporate action required by this Agreement on
the part of each of Compu-XXXX and GPC has been secured and is complete.
This Agreement has been duly executed and delivered by each of Compu-XXXX
and GPC, and constitutes the valid and binding obligation of each of
Compu-XXXX and GPC, enforceable in accordance with its terms, except to
the extent that enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting the
enforcement of creditors' rights generally and by general principles of
equity.
(ii) The execution and delivery by each of Compu-XXXX and GPC of this
Agreement does not, and consummation of the transactions contemplated by
this Agreement will not, (i) conflict with, or result in any violation or
breach of any provision of, the respective Certificate of Incorporation or
Bylaws of either of Compu-XXXX or GPC, (ii) result in any violation or
breach of, or constitute (with or without notice or lapse of time, or
both) a default (or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any material benefit) under, any
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, contract or other agreement, instrument or obligation to
which either of Compu-XXXX or GPC is a party or by which any of its
respective properties or assets may be bound, or (iii) to the best
knowledge of each of Compu-XXXX and GPC, conflict or violate any permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to either or both of Compu-XXXX
or GPC or any of their respective properties or assets, except in the case
of any such conflicts, violations, defaults, terminations, cancellations
or accelerations which would not have a material adverse effect on
Compu-XXXX and its subsidiaries, taken as a whole.
(iii) No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or other governmental authority or instrumentality ("Governmental Entity")
is required by or with respect to each of Compu-XXXX and GPC in connection
with the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby, except for such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal and state securities laws.
1.3D COMMISSION FILINGS; THE NASDAQ STOCK MARKET SMALLCAP LISTING.
(i) Compu-XXXX has filed with the Securities and Exchange Commission
(the "Commission") all forms, reports and documents required to be
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filed with the Commission by Compu-XXXX pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), since January 1,
1999 (collectively, the "Compu-XXXX Commission Reports"). Each of the
Compu-XXXX Commission Reports (i) complies in all material respects with
the applicable requirements of the Exchange Act, (ii) at the time of
filing with the commission, did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and (iii)
no amendment to any of the Compu-XXXX Commission Reports is required to
correct any statement of a material fact or omission to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading as a result of any subsequent events
related to either or both of Compu-XXXX or GPC.
(ii) The shares of Compu-XXXX Common Stock are listed on The Nasdaq Stock
Market SmallCap.
1.3e CORPORATE CHARTERS. Each of Compu-XXXX and GPC has furnished to the
Purchaser true and complete copies of their respective Certificates of
Incorporation and Bylaws as currently in effect, including all amendments
thereto.
1.3f STOCKHOLDERS' CONSENTS. No consent or approval of the stockholders
of either or both of Compu-XXXX and GPC is required or necessary for such
parties to enter into this Agreement or to consummate the transactions
contemplated hereby. If any such stockholder consent shall have been
required, written proof thereof shall be delivered to GEOWORKS immediately
prior to the Effective Date.
1.3g IRREVOCABLE INSTRUCTIONS TO ISSUE WARRANT. MYTURN has delivered to
its counsel and transfer agent, as applicable, irrevocable instructions to
issue the Warrant to GEOWORKS within three business days of the Effective
Date.
1.4 REPRESENTATIONS AND WARRANTIES OF GEOWORKS.
GEOWORKS hereby represents and warrants to MYTURN as of the date of this
Agreement as follows:
1.4a AUTHORITY. GEOWORKS has all requisite legal and corporate power to
enter into this Agreement and to perform its obligations under the terms
of, or contemplated by, this Agreement.
1.4b AUTHORIZATION. All corporate action on the part of GEOWORKS
necessary for the purchase of the Warrant and the performance of GEOWORKS'
obligations hereunder has been taken. This Agreement, when executed and
delivered by GEOWORKS, will constitute a valid and legally binding
obligation of GEOWORKS, enforceable in accordance with its terms, except
to the extent that enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting the
enforcement of creditors' rights generally and by general principles of
equity.
1.4c PURCHASE OF WARRANT AND WARRANT SHARES ENTIRELY FOR OWN ACCOUNT. The
Warrant and the Warrant Shares will be acquired for investment for
GEOWORKS' own account, not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof, and GEOWORKS has no
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present intention of selling, granting any participation in, or otherwise
distributing the same, although it is free to formulate such an intention
in the future after the expiration of any applicable holding period under
the federal and state securities laws and regulations promulgated thereto.
Any future disposition of the Warrant or the Warrant Shares will occur in
compliance with all applicable federal and state securities laws and
regulations.
1.4d INVESTMENT EXPERIENCE. GEOWORKS is an "accredited investor" as
defined in Rule 501(a) under the Securities Act of 1933, as amended (the
"Securities Act"). GEOWORKS is or will become prior to the Effective Date,
aware of MYTURN's business affairs and financial condition and has been
provided access to and has acquired sufficient information about MYTURN,
including a review of the Compu-XXXX Commission Reports, to reach an
informed and knowledgeable decision to acquire the Warrant. GEOWORKS has
such business and financial experience as is required to give it the
capacity to protect its own interests in connection with the purchase of
the Warrant, and GEOWORKS acknowledges there is presently no public market
for the Warrant. GEOWORKS is not a "broker" or a "dealer" as defined in
the Exchange Act.
1.4e RESTRICTED AND UNRESTRICTED SECURITIES. GEOWORKS understands that
the Warrant and the Warrant Shares are characterized as "restricted
securities" under applicable U.S. federal and state securities laws,
inasmuch as they are being, or will be, acquired from Compu-XXXX in a
transaction not involving a public offering and that, pursuant to these
laws and applicable regulations, GEOWORKS must hold the Warrant, and, upon
the execution thereof, the Warrant Shares indefinitely unless they are
registered with the Commission and qualified by state authorities, or an
exemption from such registration and qualification requirements is
available. GEOWORKS understands that the Shares, if, when, and as issued,
are not intended to be restricted securities and, as such, its
representations and warranties set forth above are not applicable to the
Shares.
1.4f LEGENDS. GEOWORKS understands that the Warrant, the Warrant Shares,
and the Deficient Shares and the Deficient Penalty Shares (as those terms
are defined in Section 3.6, below) will bear a legend substantially
similar to the following:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE LAW, AND NO
INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED UNLESS (a) THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING ANY SUCH TRANSACTION INVOLVING THESE
SECURITIES OR (b) THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL,
ACCEPTABLE TO THE COMPANY, FOR THE HOLDER OF THESE SECURITIES STATING THAT
SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR THE COMPANY OTHERWISE
SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.
1.5 COVENANT OF MYTURN.
1.5a LISTING OF COMPU-DAWN'S SECURITIES ON THE NASDAQ STOCK MARKET
SMALLCAP. Upon the Warrant Shares becoming publicly tradable pursuant to
the registration requirements of applicable U.S. securities laws or
exemptions therefrom, Compu-XXXX, or its successor, shall take all
rea-
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sonable action to list the Warrant Shares, the Shares, the Deficient
Shares, and the Deficient Penalty Shares on The Nasdaq Stock Market
SmallCap.
2. TECHNOLOGY LICENSE.
2.1 TECHNOLOGY LICENSE AND EXHIBITS. This Agreement includes a Technology
License and the following Exhibits that are incorporated herein and form
an integral part hereof:
Exhibit A Identification of the Licensed Technology and Third
Party Technology. This Exhibit is a description of all
Licensed Technology licensed to MYTURN on a conditional,
exclusive basis under this Agreement, as well as the
Third Party Technology made available to MYTURN.
Exhibit B Development and Support Services.
Exhibit C Commercial Terms. This Exhibit specifies royalties,
NRE, additional equity, and other commercial terms of
this Agreement.
Exhibit D Form of End User License Agreement.
2.2 MODIFICATION AND INTERPRETATION OF EXHIBITS. The Exhibits shall be kept
up-to-date and modifications and additions thereto shall be executed as
and effective only upon mutual agreement evidenced in writing and signed
by authorized officers of the Parties. All Exhibits shall be subject to
the terms and conditions of this Agreement, unless otherwise provided in
any such Exhibit. In the event of a conflict between the terms of an
Exhibit and the terms of this Agreement, the terms of each Exhibit shall
be given effect only for the subject matter covered by that Exhibit.
2.3 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto state the entire
agreement between the Parties and supersede all prior communications,
written or oral, between the Parties. No terms in any purchase order or
other forms shall modify the terms of this Agreement, even if such
purchase order or other forms are accepted by either Party.
2.4 SEVERABILITY. If any provision contained in this Agreement is determined
to be invalid or unenforceable, in whole or in part, the remaining
provisions and any partially enforceable provision will, nevertheless, be
binding and enforceable, and the Parties agree to substitute for the
invalid provision a valid provision which most closely approximates the
intent and economic effect of the invalid provision.
2.5 WRITING. No amendment or modification of this Agreement, including the
exhibits, may be made except by an instrument in writing signed by
authorized officers of the Parties
3. GRANT OF CONDITIONAL LICENSES; CONDITIONS AND REMEDIES. Subject to Section
3.5 (Reserved Rights), GEOWORKS grants the following conditional licenses to
MYTURN:
3.1 LICENSE FEE. The License Fee shall consist of an Initial License Fee--
Cash, the Warrant, and the royalty payments set forth in Exhibit C.
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3.2 REPRODUCTION.
3.2a a non-transferable (except as provided in Section 16.1
(Assignment)), conditional exclusive worldwide license to reproduce copies
of the object code of the Licensed Technology, and of the object code of
Derivative Works, Embedded in MYTURN PC Devices, and, with consent of
GEOWORKS, the right to sub-license such reproduction rights to
Manufacturers of MYTURN and to OEMs of MYTURN, all such sub-licenses to be
in writing and subject to the terms, conditions and limitations of this
Agreement; and
3.2b a non-transferable (except as provided in Section 16.1
(Assignment)), and conditional exclusive worldwide license to reproduce
copies of the object code and source code of the Licensed Technology and
of Derivative Works, for internal use only by MYTURN in carrying out its
rights and obligations under this Agreement.
3.3 MODIFICATION; DERIVATIVE WORKS. a conditional exclusive, non-transferable
(except as provided in Section 16.1 (Assignment)), worldwide license to
modify the source code to the Licensed Technology, and to create
Derivative Works; provided that any warranty against infringement,
indemnity obligation, or maintenance or support obligation given by
GEOWORKS under the provisions of this Agreement shall not apply to
modifications or Derivative Works made by or for MYTURN, or to portions of
the Licensed Technology affected by such modifications or Derivative
Works. For purposes of this Modification license, GEOWORKS grants to
MYTURN a non-exclusive, non-transferable (except as provided in Section
16.1 (Assignment)) conditional internal license to use the software
development tools and documentation included in the Licensed Technology.
3.4 DISTRIBUTION.
3.4a a non-transferable (except as provided in Section 16.1
(Assignment)), conditional worldwide license to distribute the Licensed
Technology and Derivative Works, Embedded in MYTURN PC Devices, in object
code form only, and, with consent of GEOWORKS, the right to sublicense
such distribution rights to OEMs of MYTURN, Manufacturers of MYTURN and
Distributors of MYTURN, all such sublicenses to be in writing and subject
to the terms, conditions and limitations of this Agreement. MYTURN and its
sublicensees will distribute the Licensed Technology and Derivative Works
to End-Users only under the terms of an End User license substantially in
the forms provided as Exhibit D.
3.4b GEOWORKS shall grant to MYTURN the right to distribute the software
development tools and documentation included within the Licensed
Technology, upon mutual agreement as to commercial terms and conditions of
the proposed distribution arrangement.
3.5 RESERVED RIGHTS.
3.5a MYTURN may not distribute, or authorize its Distributors to
distribute, Licensed Technology or Derivative Works in any form that is
not Embedded; provided, however, that MYTURN may distribute software
upgrades to the Licensed Technology and/or to Derivative Works to its
customers on diskettes, CD-ROM, or other media, and such upgrades may be
loaded into memory in the MYTURN PC Device.
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3.5b MYTURN's rights hereunder shall be subject to rights granted by
GEOWORKS to Licensees of GEOWORKS.
3.5c GEOWORKS reserves to itself and its licensees the exclusive right to
manufacture and distribute the Licensed Technology in all devices other
than MYTURN PC Devices.
3.6 EXCLUSIVITY.
3.6a Subject to Section 3.5 (Reserved Rights) and Section 3.6(b)
(Conditions of Exclusivity), and provided that MYTURN is in full
compliance with all payment obligations, provisions, terms, and conditions
in this Agreement, the rights granted to MYTURN in Sections 3.1
(Reproduction) and 3.3 (Distribution) shall be conditionally granted to
MYTURN, and not to any PC device competitors of MYTURN, during the term of
this Agreement.
3.6b Conditions of Exclusivity. The rights granted to MYTURN in Sections
3.1 (Reproduction) and 3.3 (Distribution) are conditional. If MYTURN
timely makes all payments in accordance with their terms, including
GEOWORKS' deferral of remedies terms, and complies with all other terms
and conditions in this Agreement, meets all the performance requirements
set forth hereinbelow, and timely makes all the royalty payments set forth
in Exhibit C, MYTURN shall obtain conditional rights, subject to meeting
said performance requirements continuously and making said royalty
payments. With respect to royalty payments due based on units shipped
under the performance requirements set forth below, and only such royalty
payments, MYTURN may also maintain conditional rights by paying to
GEOWORKS, no later than the last day of each applicable period, a cash
amount equal to the number of units (cash equivalent) by which it is short
of the performance requirements set forth below, multiplied by the minimum
royalty for North American, International, and School units as set forth
in Exhibit C. Royalties are due, payable and fully earned by GEOWORKS upon
shipment by MYTURN.
3.6c Performance Requirements:
# # #
3.7 REMEDIES.
3.7a MYTURN agrees to perform all obligations herein, comply with all
terms and conditions herein, timely pay all money due GEOWORKS as
indicated herein, and timely pay all per unit royalties for the Licensed
Technology as indicated herein. If MYTURN defaults in respect of its
performance of any or all of its requirements set forth in this Agreement,
then, without the requirement of notice, GEOWORKS will be entitled to
exercise any and all of its legal and equitable remedies, including those
outlined in this Section 3.7.
3.7b In addition to all other remedies herein arising from any breach of
any provision in this Agreement (including the Recitals), in the event
MYTURN fails to meet any of the payment obligations, terms, or conditions
of this Agreement, or fails to meet the shipment and/or payment
performance requirements in this Agreement, and said failure remains
uncured for a net total cure period of sixty (60) calendar days, then,
without the requirement of notice, the conditional exclusive li-
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cense to the Licensed Technology granted herein shall immediately become
non-exclusive.
Separately, and in addition the licenses granted herein becoming
non-exclusive, if MYTURN fails to pay in full the Initial License Fee --
Cash due GEOWORKS on or before March 30, 2000 (or the subsequent due dates
set forth immediately below), or within two days of the date on which
Compu-XXXX, or any of its affiliates or subsidiaries, shall have received
any funds or financing from any source in excess of $3,000,000 prior to
March 28, 2000, then, in order to continue the use of the Licensed
Technology, MYTURN shall be obligated to deliver to GEOWORKS as separate
consideration for its agreement to defer (i) collection action, (ii)
termination of MYTURN's rights to the Licensed Technology and the
Enhancements, and (iii) acquisition of all Derivative Works on an
exclusive basis, the following:
(i) 80,000 of the Shares on March 31, 2000, or such earlier,
analogous date if Compu-XXXX, or any of its affiliates or
subsidiaries, shall have failed to pay the Initial License Fee
-- Cash in full within two days of its receipt of any funds or
financing from any source in excess of $3,000,000 prior to
March 28, 2000;
(ii) an additional 80,000 of the Shares, if the Initial License Fee
-- Cash is still unpaid on April 29, 2000, which additional
Shares shall be delivered on April 30, 2000, or such earlier,
appropriate date if Compu-XXXX, or any of its affiliates or
subsidiaries, shall have failed to pay the Initial License Fee
-- Cash in full within two days of its receipt of any funds or
financing from any source in excess of $3,000,000 prior to
March 28, 2000;
(iii) an additional 80,000 of the Shares, if the Initial License Fee
-- Cash is still unpaid on May 29, 2000, which additional
Shares shall be delivered on May 30, 2000, or such earlier,
appropriate date if Compu-XXXX, or any of its affiliates or
subsidiaries, shall have failed to pay the Initial License Fee
-- Cash in full within two days of its receipt of any funds or
financing from any source in excess of $3,000,000 prior to
March 28, 2000; and
(iv) an additional 80,000 of the Shares, if the Initial License Fee
-- Cash is still unpaid on June 29, 2000, which additional
Shares shall be delivered on June 30, 2000, or such earlier,
appropriate date if Compu-XXXX, or any of its affiliates or
subsidiaries, shall have failed to pay the Initial License Fee
-- Cash in full within two days of its receipt of any funds or
financing from any source in excess of $3,000,000 prior to
March 28, 2000.
If any of the Shares, upon their issuance, shall not be registered
with the Commission and unrestricted, and freely-tradable, then
Compu-XXXX, or any successor entity, if applicable (the "Deficient
Shares"), shall immediately issue and addition quantity of shares of its
common stock equivalent to 10% of the number of such Deficient Shares (the
"Deficient Penalty Shares"). In addition, all of the registration rights
granted to GEOWORKS in respect of the Warrant Shares
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shall also attach to the Deficient Shares and to the Deficient Penalty
Shares.
Notwithstanding the issuance of the Shares (and, if applicable, the
Deficient Shares and the Deficient Penalty Shares), and separately, and in
addition to all other remedies available to GEOWORKS, if, as of July 1,
2000, or such earlier, appropriate date if Compu-XXXX, or any of its
affiliates or subsidiaries, shall have failed to pay the Initial License
Fee -- Cash in full within two days of its receipt of any funds or
financing from any source in excess of $3,000,000 prior to March 28, 2000,
MYTURN has failed to pay the Initial License Fee -- Cash in full,
including interest due to GEOWORKS, then, in addition to continuing to
remain liable to GEOWORKS for all said money, and without requirement of
notice, all of MYTURN's rights in and to the Licensed Technology shall
cease immediately and the Enhancements and all Derivative Works shall
immediately become the sole property of GEOWORKS.
Not later than January 10, 2000, and on the 10th day of each month
thereafter, MYTURN shall deliver the source code for the Enhancements and
all Derivative Works then extant on a CD-ROM to an escrow agent reasonably
acceptable to Compu-XXXX and GEOWORKS for safekeeping. The terms of such
escrow shall provide, among other items, that the escrow agent shall
deliver such CD-ROMs to GEOWORKS at the time it is entitled thereto
pursuant to the terms hereof, or shall deliver such CD-ROMs to MYTURN at
the time it is entitled thereto pursuant to the terms hereof. In no event
shall GEOWORKS be entitled to utilize such source code information except
as permitted in accordance with the terms and conditions of this Agreement
and pursuant to the transactions contemplated hereby.
4. MANUFACTURERS AND OEMS. Each Manufacturer of MYTURN and each OEM of MYTURN
that is granted sublicense rights under Section 3 (GRANT OF LICENSES) must agree
in writing:
4.1a to accept that no ownership rights to the Licensed Technology or to
Derivative Works are transferred to the Manufacturer or OEM;
4.1b to include on all copies of the Licensed Technology and Derivative
Works, and on all related packaging, manuals and promotional materials,
all proprietary, copyright, trade secret and other notices in accordance
with Section 8.1 (Acknowledgment of GEOWORKS) hereof;
4.1c not to decompile or reverse engineer the Licensed Technology or
Derivative Works;
4.1d to keep records showing the number of copies of the Licensed
Technology and Derivative Works manufactured, and the number of copies
distributed;
4.1e to furnish to MYTURN, within 30 days from the end of each calendar
quarter, a signed statement showing the number of copies so made and the
number of copies so distributed, and to allow MYTURN or GEOWORKS to have
such statements examined and audited by an independent auditor to the
extent necessary to verify such statements, subject to the audit
conditions set forth in Section 7.7 (Audits); and
12
4.1f to be bound by the provisions of this agreement, and to permit
GEOWORKS to enforce such provisions against such Manufacturers, provided
that the appointment of Manufacturers and OEMs by MYTURN shall not in any
respect create any relationship between GEOWORKS and such persons.
5. INTELLECTUAL PROPERTY RIGHTS.
5.1 THE LICENSED TECHNOLOGY. GEOWORKS and its licensors are and shall remain
the sole owners of all Intellectual Property Rights in and to the Licensed
Technology.
5.2 THE MYTURN PC DEVICES. MYTURN is and shall remain the owner of all
Intellectual Property Rights in and to the MYTURN PC Devices (excluding
the Licensed Technology, and excluding any Derivative Works owned by
GEOWORKS as set forth below).
5.3 DERIVATIVE WORKS.
5.3a GEOWORKS shall own the Intellectual Property Rights in and to any
Derivative Works made by GEOWORKS during the course of this Agreement.
Derivative Works made by GEOWORKS pursuant to this Agreement at the
request of MYTURN shall automatically be included within the licenses
granted in Section 3 (GRANT OF LICENSES) of this Agreement. Other
Derivative Works made by GEOWORKS during the term of this Agreement shall
be treated as set forth in Section 6 (UPDATED AND NEW LICENSED
TECHNOLOGY).
5.3b MYTURN shall conditionally own the Intellectual Property Rights in
and to any Derivative Works made by MYTURN during the course of this
Agreement or made for MYTURN by third parties other than GEOWORKS
(hereafter referred to as "made by or for MYTURN").
5.3c MYTURN's Intellectual Property Rights in Derivative Works shall not
extend to the underlying Licensed Technology or underlying Derivative
Works owned by GEOWORKS, as set forth above, but only to the modifications
thereto made by or for MYTURN.
5.3d GEOWORKS may independently develop and own the Intellectual Property
Rights to Derivative Works that are functionally equivalent to those made
by or for MYTURN, provided that it does so without copying the source code
to any MYTURN-owned Derivative Works. For this purpose, the Parties
understand that MYTURN may provide GEOWORKS with access to the source code
to the MYTURN-owned Derivative Works, so that GEOWORKS may assist MYTURN
in its development activities. The Parties agree that GEOWORKS'
development of equivalent GEOWORKS-owned Derivative Works shall be
considered "independent" despite such access.
5.3e Where the contributions of GEOWORKS and MYTURN to the creation of a
Derivative Work are so interlinked that it is not possible to determine
separate ownership, then each of the Parties shall have an undivided
one-half ownership interest in any Intellectual Property Rights therein;
provided however, that such jointly-owned Intellectual Property Rights
shall not extend to the underlying Licensed Technology or underlying
Derivative Works owned by either Party, as set forth above, but only to
the modifications thereto made jointly.
13
5.3f Each Party shall take all actions and execute all documents that are
necessary to assign to the other its one-half ownership interest in any
jointly-owned Intellectual Property Rights. Neither Party shall be
required to obtain the consent of, or account to, the other Party for the
exploitation of the rights covered by any such jointly-owned Intellectual
Property Rights, except that neither Party shall have the authority to
grant an exclusive license under any such rights without the prior written
consent of the other Party.
5.3g For purposes of this Section 5.3 (DERIVATIVE WORKS), a Party shall
be considered to have "made" or made a "contribution" to a Derivative Work
by substantially participating in the design and coding of the software.
MYTURN accepts that no jointly owned Intellectual Property Rights is
created merely because MYTURN supplies to GEOWORKS a specification of
features which GEOWORKS then creates.
6. UPDATED AND NEW LICENSED TECHNOLOGY. Upon mutual agreement as to terms and
conditions, GEOWORKS may create updates and upgrades to the Licensed Technology
during the term of this Agreement. Further, the licenses granted in Section 3
(GRANT OF LICENSES) shall, at MYTURN's election, extend to all updates and
revisions to the Licensed Technology that GEOWORKS generally releases to all of
its OEM customers, if and when such updates are released by GEOWORKS.
7. PAYMENTS.
7.1 INITIAL LICENSE FEE. MYTURN agrees to pay GEOWORKS the non-refundable
Initial License Fee -- Cash of $541,083.56, of which $35,000 shall be paid
upon execution of this Agreement and the balance shall be paid not later
than the dates set forth in this Agreement, with interest accruing on the
unpaid Initial License Fee -- Cash at the rate of 10% per annum.
The Initial License Fee -- Cash, including interest accrued thereon, shall
be payable in full by MYTURN to GEOWORKS not later than two days after
Compu-XXXX, or any of its affiliates or subsidiaries, receives any funds
or financing from any source in excess of $3,000,000 prior to March 28,
2000. If Compu-XXXX, or any of its affiliates or subsidiaries, shall not
have received any funds or financing from any source in excess of
$3,000,000 prior to March 28, 2000, the Initial License Fee -- Cash, and
interest accrued thereon, shall be payable in full not later than March
30, 2000, subject to the deferrals by GEOWORKS of the exercise of its
remedies in accordance with the terms of Section 3.7b, above, the Initial
License Fee -- Cash, and interest accrued thereon, shall be payable in
full not later than March 30, 2000.
Compu-XXXX shall xxxxx to GEOWORKS the Warrant for the purchase of 250,000
shares of Compu-DAWN's Common Stock at the market price on the day this
Agreement is executed.
7.2 ROYALTY PAYMENTS. MYTURN agrees to pay to GEOWORKS the royalty payments
set forth in Exhibit C. Royalty payments are due and payable within thirty
(30) days after the calendar quarter in which any MYTURN PC Device Product
Shipment occurs.
7.3 NOT FOR RESALE UNITS. MYTURN will not incur any royalty payments (except
for reimbursement to GEOWORKS for third-party technologies as identified
in Exhibit C) for a limited number of promotional, "not for
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resale" units of MYTURN PC Devices, not to exceed 20 units, provided free
of charge to End Users or to MYTURN Distributors, or for units used by
MYTURN solely for demonstration purposes and/or for customer support;
provided, however, that a royalty payment will become due if and when
MYTURN receives a payment or other compensation for any such units or uses
such units for internal use other than as set forth in this Section.
7.4 CURRENCY. All payments under this Agreement are to be made in U.S.
Dollars.
7.5 RECORDS. MYTURN shall maintain complete and accurate records of all MYTURN
PC Device Product Shipments and records identifying the amount of
royalties and other payments due hereunder.
7.6 REPORTS. No later than thirty (30) days after the end of each calendar
quarter, MYTURN shall send to GEOWORKS a report detailing for such
quarter:
7.6a The number of units of MYTURN PC Device Product Shipment, including
a breakdown as applicable by MYTURN PC Device and Product, version and
country; and
7.6b A detailed account of all royalty and other amounts due and the
basis for calculation.
7.7 AUDITS. During the term of this Agreement and for twelve (12) months after
the expiration or any termination of this Agreement, an independent
third-party representative of GEOWORKS, reasonably acceptable to MYTURN,
upon reasonable notice and during MYTURN's normal business hours, shall
have the right to conduct an audit of the relevant portions of MYTURN's
books of account to verify compliance with this Agreement. MYTURN shall
immediately pay any overdue payments revealed by such audit(s), together
with interest thereon at the rate of 1.5% per month (or the maximum
permitted by applicable law, if less) from the due date until paid. Except
as set forth below, such audit(s) may be conducted no more than once in
any six-month period. GEOWORKS shall bear the costs of the audit;
provided, however, if the audit reveals overdue payments in excess of five
percent (5%) of the total royalty payable for any six-month period, MYTURN
shall pay the costs of such audit and for each such audit GEOWORKS shall
have the right to conduct another audit during the same six-month period.
All information obtained by GEOWORKS' independent third party
representative during any such audit shall be treated as Confidential
Information as defined in Section 14 (Nondisclosure and Restricted Use).
7.8 INTEREST. MYTURN shall pay GEOWORKS interest at the rate of 1.5% per
month, or the maximum rate allowed by law, whichever is less, on any
payments that are overdue by more than thirty (30) days, which interest
shall be applied from the date said sum was originally first due until the
date the entire payment and applicable interest is due.
8. ADVERTISING, TRADEMARK USAGE/PROTECTION AND PUBLICITY.
8.1 TRADEMARK, COPYRIGHT, AND PROPRIETARY MARKINGS. MYTURN acknowledges that
GEOWORKS is the sole owner and sole worldwide licensor of GEOS and the
Applications. MYTURN will not lay claim, or make or advertise any claim to
ownership or licensing capacity to GEOS or the Applications in
15
any publication or communication. Any time MYTURN uses the GEOS name or
xxxx it will be identified with the registered trademark and copyright
marks, and with credit and reference to GEOWORKS as sole owner and
licensor appearing on the same page in typeface and font no smaller than
10 point. Any press release or presentation referring to or pertaining to
GEOWORKS or GEOS in any way shall be sent to the office of General Counsel
of GEOWORKS for review and prior written approval in advance of any
distribution, use, or release. MYTURN agrees not to alter or remove any of
GEOWORKS' proprietary notices on copies of Licensed Technology without
GEOWORKS' prior written permission.
8.2 ACKNOWLEDGMENTS. Each Party shall be entitled to use the other Party's
name and the name of its products in promotional literature and marketing
materials, upon receipt of prior approval from the other Party, such
approval not to be unreasonably withheld or delayed. Such approval may be
given only by the office of General Counsel of GEOWORKS. Each Party shall
promptly review (within five (5) business days) all such requests made
under this Subsection.
8.3 PUBLIC RELATIONS. Upon first commercial launch of a MYTURN PC Device, and
at other reasonable times upon mutual agreement of the Parties, each Party
will create and issue a mutually agreeable press release, printed on its
own letterhead, announcing the Parties' relationship as established by
this Agreement.
9. GEOWORKS' INDEMNITIES.
9.1 INDEMNITY. GEOWORKS will indemnify, defend, and hold harmless MYTURN
against, and pay any resulting awards and settlements arising from, any
claim, demand, suit or action to the extent it alleges that the Licensed
Technology as supplied by GEOWORKS infringes upon any United States patent
issued as of the Effective Date of this Agreement, (or, with respect to
updates, as of the date that any update is supplied to MYTURN by
GEOWORKS), or any copyright or trade secret of any third party, provided
that (1) MYTURN promptly informs GEOWORKS in writing of any such claim,
demand, action or suit, (2) GEOWORKS is given control over the defense
thereof and MYTURN cooperates in the defense, at GEOWORKS' expense, and
(3) MYTURN will not agree to the settlement of any such claim, demand,
action or suit prior to a final judgment thereon without the prior written
consent of GEOWORKS, which consent will not be unreasonably withheld.
MYTURN shall have the right to select its own counsel to participate in
any such defense, at MYTURN's expense. GEOWORKS' indemnity obligations do
not apply to (1) modifications to the Licensed Technology specified by
MYTURN, (2) modifications made to the Licensed Technology by anyone other
than GEOWORKS, (3) use of a superseded version of the GEOWORKS Licensed
Technology after release of an update by GEOWORKS in accordance with
Section 6 hereof, (4) use of a superseded infringing version of the
Licensed Technology by MYTURN after release of a non-infringing version by
GEOWORKS in accordance with Section 9.2 hereof (GEOWORKS' Options), and
(5) any use or combination of the Licensed Technology with any technology,
software or hardware not supplied by GEOWORKS, if such alleged
infringement would be avoided by use of the Licensed Technology alone or
with other technology, software or hardware.
9.2 RESPONSE TO INFRINGEMENT CLAIM. If a claim, demand, suit or action
alleging infringement is brought, or if GEOWORKS reasonably believes one
may be brought (based upon the opinion of independent counsel), XX-
00
OWORKS shall have the option at its expense to (1) modify the Licensed
Technology to avoid the allegation of infringement, (2) obtain for MYTURN
a license to continue reproducing and distributing the Licensed
Technology, or (3) if neither (1) nor (2) is reasonably practicable in
GEOWORKS' discretion, terminate this Agreement as to the affected Licensed
Technology, as to a portion thereof, or as to a specific MYTURN Product or
Products, upon written notice.
9.3 LIMITATIONS. This Section 9 (GEOWORKS' INDEMNITIES) sets forth GEOWORKS'
entire liability to MYTURN for any actual or alleged infringement or
misappropriation of any third party's intellectual property rights arising
out of the Licensed Technology. In no event shall GEOWORKS' aggregate
liability to defend and indemnify under Section 9 (GEOWORKS' INDEMNITIES)
exceed an amount equal to the lesser of (a) the total of all amounts that
have been paid by MYTURN to GEOWORKS under this Agreement, plus the fair
market value of any equity of MYTURN granted to GEOWORKS pursuant to this
Agreement, or (b) two times the total of all amounts that have been paid
by MYTURN to GEOWORKS under this Agreement, not including the value of
such equity. The foregoing amounts and value shall be determined as of the
date that the infringement claim is finally settled or, if there is no
settlement, as of the date that a final decision is made by a court or
arbitrator in the infringement action.
10. MYTURN'S INDEMNITIES.
10.1 INDEMNITY. MYTURN and its Affiliates will defend GEOWORKS against, and pay
any resulting awards and settlements arising from any claim, demand, suit
or action to the extent it alleges that a MYTURN PC Device or any
modification to the Licensed Technology made by or for MYTURN infringes
upon any United States patent issued as of the Effective Date of this
Agreement, or any copyright or trade secret of any third party provided
that (1) GEOWORKS promptly informs MYTURN in writing of any such claim,
demand, action or suit, (2) MYTURN is given control over the defense
thereof and GEOWORKS cooperates in the defense at MYTURN's expense, and
(3) GEOWORKS will not agree to the settlement of any such claim, demand,
action or suit prior to a final judgment thereon without the written
consent of MYTURN, which consent will not be unreasonably withheld.
GEOWORKS shall have the right to select its own counsel to participate in
any such defense at GEOWORKS' expense. MYTURN's indemnity obligations do
not apply to (1) modifications to a MYTURN PC Device specified by
GEOWORKS, and (2) any use or combination of a MYTURN PC Device with any
technology, software or hardware not supplied by MYTURN, if such alleged
infringement would be avoided by use of such MYTURN PC Device alone or
with other technology, software or hardware.
10.2 LIMITATIONS. This Section 10 (MYTURN'S INDEMNITIES) sets forth MYTURN's
entire liability to GEOWORKS for any actual or alleged infringement or
misappropriation of any third party's intellectual property rights arising
out of a MYTURN PC Device. In no event shall MYTURN's aggregate liability
to defend and indemnify under Section 10 (MYTURN'S INDEMNITIES) exceed an
amount equal to the lesser of (a) the total of all amounts to be paid by
MYTURN to GEOWORKS under this Agreement, plus the fair market value of any
equity of MYTURN granted to GEOWORKS pursuant to this Agreement, or (b)
two times the total of all amounts to be paid by MYTURN to GEOWORKS under
this Agreement, not including the value of such equity. The foregoing
amounts and value shall be determined as of the date that the infringement
claim is finally settled or, if there is no settlement,
17
as of the date that a final decision is made by a court or arbitrator in
the infringement action.
11. COMBINATION CLAIMS. Any infringement claim arising solely out of the use
or combination of the Licensed Technology with any MYTURN technology or
product shall be defended cooperatively by both Parties, and the cost of
such defense and any settlements or liabilities shall be shared equitably
by the Parties. If the Parties cannot agree as to the equitable
arrangement, then the settlements or liabilities shall be shared pursuant
to the determination by the arbitrator (or court, if the claim was filed
in a court by a third party) of each Party's percentage of fault.
12. WARRANTIES.
12.1 DISCLAIMER OF EXPRESS WARRANTIES. Subject to Section 9 (GEOWORKS'
INDEMNITIES), all Licensed Technology, Third Party Technology,
Confidential Information and other products or technologies provided by
GEOWORKS are provided "AS IS," without a warranty of any kind. NO REQUEST
FOR PROPOSAL, PROPOSAL, CORRESPONDENCE, ADVERTISEMENT, BID OR VERBAL
REPRESENTATION CONCERNING THE LICENSED TECHNOLOGY, THIRD PARTY TECHNOLOGY,
GEOWORKS CONFIDENTIAL INFORMATION, OR SERVICES PROVIDED BY GEOWORKS UNDER
THIS AGREEMENT SHALL CONSTITUTE A WARRANTY OR GUARANTY.
12.2 DISCLAIMER OF IMPLIED WARRANTIES. SUBJECT TO SECTION 9 (GEOWORKS'
INDEMNITIES), TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL IMPLIED
WARRANTIES WITH RESPECT TO THE LICENSED TECHNOLOGY, INCLUDING BUT NOT
LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE HEREBY EXCLUDED.
12.3 LIMITED WARRANTY FOR THIRD PARTY TECHNOLOGY. WITH RESPECT TO ANY THIRD
PARTY TECHNOLOGY, GEOWORKS WILL PASS THROUGH TO MYTURN ANY WARRANTY THAT
GEOWORKS IS AUTHORIZED BY ITS SUPPLIER SO TO PASS THROUGH. GEOWORKS
EXTENDS NO OTHER WARRANTY, STATUTORY, EXPRESS, IMPLIED OR ARISING FROM A
COURSE OF DEALING, USAGE OR TRADE PRACTICE, REGARDING ANY HARDWARE,
SOFTWARE, CONTENT OR SERVICES PURCHASED OR LICENSED BY MYTURN FROM THIRD
PARTIES, EVEN IF SUCH ITEMS WERE SELECTED OR RECOMMENDED FOR MYTURN BY
GEOWORKS. ALL WARRANTIES, IF ANY, ARE PROVIDED SOLELY BY THE THIRD PARTY
PROVIDERS.
13. TERM OF AGREEMENT AND TERMINATION.
13.1 TERM. This Agreement shall begin on the Effective Date. The initial term
of the Agreement will expire on December 31, 2004, and may be extended by
mutual agreement if MYTURN has met the Conditions of Exclusivity set forth
in Section 3.5 (3.5(b)) (Conditions of Exclusivity). Thereafter, the
Agreement will be eligible for renewal for successive one-year terms
provided that MYTURN meets performance requirements to be determined by
mutual agreement.
13.2 TERMINATION FOR BREACH (LIMITED CURE PERIOD). Each Party shall have the
right to terminate this Agreement upon written notice to the other Party
that other Party is in breach of any material term of this Agreement. Any
notice of termination shall indicate the first date of the breach and
calculate 60 days forward as the effective date of the termination.
Accordingly, the Parties agree that the breaching party has only 60 days
from the breach to cure.
18
13.3 BANKRUPTCY. Each Party shall have the right to terminate this Agreement
immediately upon written notice in the event that the other Party becomes
insolvent, files for any form of bankruptcy, makes any assignment for the
benefit of creditors, or ceases to conduct business (other than in
connection with an assignment permitted under Section 16.1 (Assignment)).
Each Party acknowledges that if it is a debtor-in-possession or if a
trustee in bankruptcy in a case under the United States Bankruptcy Code
rejects this Agreement or any agreement supplementary hereto, the other
Party may elect to retain its rights under this Agreement and/or any
supplementary agreement as provided in Section 365(n) of the Bankruptcy
Code. Upon written request of the other Party to the bankrupt Party or the
Bankruptcy Trustee, the bankrupt Party or such Bankruptcy Trustee shall
not interfere with the rights of the other Party as provided in this
Agreement and any supplementary agreement.
13.4 TERMINATION FOR MYTURN BREACH (LIMITED CURE PERIOD). If the Agreement is
terminated due to breach by MYTURN, all the following shall occur and
apply: (1) MYTURN shall immediately discontinue the manufacture and
distribution of MYTURN PC Devices and all use, copying, embedding and
production of any additional copies of the Licensed Technology, and will
cause any third parties who obtained from it the right to manufacture
units of MYTURN PC Devices to do likewise; (2) any such termination or
expiration shall not affect any End User's rights to use MYTURN PC Device
units and shall further not affect the right of any non-affiliated third
party who purchased units of MYTURN PC Devices from MYTURN to sell such
units to its customers; (3) immediately upon termination, MYTURN shall
return all copies of the Licensed Technology, including without limitation
all master diskettes and tapes, and user manuals. MYTURN may retain only
such copies of the Licensed Technology as it may reasonably require for
its internal use in providing continued first level customer support to
its End-User customers; (4) each Party shall destroy or return to the
other all Confidential Information provided by the other Party, except
that each Party may retain one copy for archival purposes only, as a
record of the confidential disclosures made to it under this Agreement;
(5) within thirty (30) days of such termination or expiration MYTURN shall
pay to GEOWORKS any and all sums due under this Agreement; and (6) within
thirty (30) days of such termination or expiration, MYTURN shall confirm
in writing to GEOWORKS that all of the foregoing have occurred or been
completed.
14. NONDISCLOSURE AND RESTRICTED USE.
14.1 CONFIDENTIAL INFORMATION. In the course of performing this Agreement, each
Party (the "Disclosing Party") may disclose to the other Party ("the
Receiving Party") trade secrets and confidential and proprietary
information of the Disclosing Party, clearly marked or, in the case of
verbal communications, clearly confirmed in writing as "CONFIDENTIAL" or
any other similar legend ("Confidential Information"). Such Confidential
Information includes without limitation the terms and conditions of this
Agreement, technical and/or internal specifications of the Disclosing
Party's products, non-public marketing plans, future products and other
non-public business information, the trade secrets and technology embodied
in the Licensed Technology, the trade secrets and technology embodied in
any MYTURN Product, each Party's sales data, customer lists and other
non-public information. All Confidential Information shall remain the sole
property of the Disclosing Party and the Receiving Party shall have no
interest in or right to such Confi-
19
dential Information except as expressly set forth in this Agreement. Both
Parties agree that all Confidential Information of the other Party shall
be held in strict confidence, will not be disseminated or disclosed to any
third party and will not be used by the Receiving Party for any purpose
other than performing its rights under this Agreement without the express
written consent of the Disclosing Party for three (3) years from the date
of disclosure (five (5) years for technical information). Both Parties
agree to use at least the degree of diligence to protect the other Party's
Confidential Information as a reasonably prudent technology company would
normally use to protect any of its own trade secrets and other
confidential information. The provisions of this Section shall not apply
to any information or materials:
14.1a which are in the public domain at the time of disclosure to the
Receiving Party or which thereafter enter the public domain through no
action or inaction by the Receiving Party or its employees; or
14.1b which the Receiving Party can establish and document were in the
possession of, or known by, the Receiving Party prior to its receipt from
the Disclosing Party; or
14.1c which are rightfully disclosed to the Receiving Party by another
person not in violation of the proprietary or other rights of the
Disclosing Party, or any other person or entity; or
14.1d which are shown by written record to have been independently
developed by the Receiving Party, provided that the persons developing the
same have not had access to the Confidential Information furnished to the
Receiving Party by the Disclosing Party hereunder; or
14.1e which are required to be disclosed pursuant to law, provided,
however, that a minimum of ten (10) days written notice shall be provided
by the Party intending to disclose in order to permit the other Party to
take such action as it deems appropriate to prevent or limit such
disclosure.
14.2 RESTRICTED USE. Without prejudice to the generality of the foregoing, each
Party agrees not to use any of the Confidential Information or Licensed
Technology of the other Party for any use or purposes except those
expressly specified herein.
14.3 LICENSED TECHNOLOGY SOURCE CODE RESTRICTIONS.
14.3a MYTURN acknowledges that GEOWORKS considers the Licensed Technology
source code to be Confidential Information and to contain proprietary and
trade secret information of GEOWORKS. MYTURN agrees not to provide,
disclose, reproduce in any form, or give access to such source code to any
third party or employee other than the Authorized Personnel. MYTURN agrees
that Authorized Personnel shall be informed of and abide by the terms and
conditions of this Agreement.
14.3b MYTURN shall hold the source code in strict confidence. MYTURN shall
investigate all unauthorized attempts to gain access to the source code of
which it becomes aware, and immediately notify GEOWORKS concerning any
breach of source code confidentiality, whether or not such breach was
inadvertent.
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14.3c The source code shall be placed on secure computer systems located
at MYTURN's principal place of business. MYTURN shall implement sufficient
security procedures to limit access to the source code to Authorized
Personnel. The secure computer systems area or room shall be available for
inspection by GEOWORKS.
14.3d MYTURN agrees to take all reasonable precautions and to implement
procedures to minimize the risk of theft or unauthorized copying of the
source code, and to take appropriate action by instruction, agreement, or
otherwise with the Authorized Personnel.
15. LIMITATION OF LIABILITY. REGARDLESS OF WHETHER ANY REMEDY SET FORTH HEREIN
FAILS OF ITS ESSENTIAL PURPOSE, NEITHER PARTY TO THIS AGREEMENT SHALL BE
LIABLE TO THE OTHER PARTY FOR INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES
OR THE LOSS OF ANTICIPATED PROFITS ARISING FROM ANY PERFORMANCE OR BREACH
OF THIS AGREEMENT BY SUCH PARTY EVEN IF NOTICE IS GIVEN OF THE POSSIBILITY
OF SUCH DAMAGES.
16. GENERAL.
16.1 ASSIGNMENT. This Agreement may be not be assigned in whole or in part by
MYTURN, except to a direct subsidiary of Compu-XXXX, the equity and voting
control of which subsidiary shall be not less than 80% in favor of
Compu-XXXX, without the prior written consent of GEOWORKS, which may
withhold or delay consent in its sole, reasonable discretion. GEOWORKS may
assign this Agreement in its sole discretion without any consent from
MYTURN.
16.2 GOVERNING LAW. This Agreement will be governed and interpreted in
accordance with the laws of the state of California, except for that body
of law pertaining to conflicts of law, but excluding the Convention on
Contracts for the International Sale of Goods. All disputes arising in
connection with this Agreement shall, unless amicably settled by the
parties, be finally settled by arbitration under the commercial
arbitration rules of the American Arbitration Association by a panel of
three (3) arbitrators appointed in accordance with such Rules. The place
of arbitration shall be, unless otherwise agreed between the parties, the
county in which the respondent resides and the city in which the
respondent has its principal place of business. Judgment upon the award
rendered may be entered in any Court having jurisdiction or application
may be made to such Court for a judicial acceptance of the award and an
order of enforcement, as the case may be. Notwithstanding the foregoing,
either party may request injunctions, seizure orders, writs of attachment,
and other extraordinary remedies from any court having jurisdiction in the
case of an actual or threatened infringement of such party's patents,
copyrights, trademarks, trade secrets or other intellectual property
rights by the other party. The filing of a proceeding for such
extraordinary remedies shall not constitute a waiver by the filing party
of the right to compel arbitration of all demands for other remedies.
16.3 INDEPENDENT CONTRACTORS. Each Party will be deemed to have the status of
an independent contractor towards the other Party, and nothing in this
Agreement will be deemed to place the Parties in the relationship of
employer-employee, principal-agent, partners or joint venturers.
21
16.4 WAIVER. The failure of either Party to enforce any provision of this
Agreement shall not be deemed a waiver of that or any other provision of
this Agreement.
16.5 FORCE MAJEURE. Neither Party will be deemed in default of this Agreement
to the extent that performance of its obligations is delayed or prevented
by reason of any act of God, fire, natural disaster, accident, act of
government, or any other cause beyond the control of such Party ("Force
Majeure"), provided that such Party gives the other Party written notice
thereof promptly and uses its good faith efforts to cure the breach. In
the event of such a Force Majeure, the time for performance or cure will
be extended for a period equal to the duration of the Force Majeure but
not in excess of six (6) months.
16.6 NOTICES. Notices to either Party shall be in writing and shall be deemed
delivered when served in person, one business day after being transmitted
by fax, or two business days after being dispatched by an internationally
recognized express courier service, and delivered to the addresses set
forth at the beginning of this Agreement. A Party may change its address
for purposes of receiving notices by giving notice of the change to the
other Party.
16.7 SURVIVAL. The rights and obligations under Sections 5 (Intellectual
Property Rights), 7 (PAYMENTS), 9 (GEOWORKS' INDEMNITIES), 10 (MYTURN'S
INDEMNITIES), 11 (COMBINATION CLAIMS), 12.1 (Disclaimer of Express
Warranties), 12.2 (Disclaimer Of Implied Warranties), 14 (NONDISCLOSURE
AND RESTRICTED USE), 15 (LIMITATION OF LIABILITY), and 16 (GENERAL) shall
survive the expiration and any termination of this Agreement.
16.8 EXPORT. MYTURN agrees that MYTURN will not knowingly export or reexport
the Licensed Technology, directly or indirectly, to any country to the
extent export to such country at the time of export requires an export
license or other governmental approval, without first obtaining such
license or approval.
16.9 # # #
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.
GEOWORKS CORPORATION MYTURN, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxx
----------------------------------- -----------------------------------
--------------------------------------
Signature
--------------------------------------
Print Name
GPC ACQUISITION CORP.
By: /s/ Xxxx Xxxxx
-----------------------------------
--------------------------------------
Signature
--------------------------------------
Print Name
22
EXHIBIT A
IDENTIFICATION OF THE LICENSED TECHNOLOGY
AND THIRD PARTY TECHNOLOGY
Operating System
The double-byte version of GEOS 3.0 operating system, in source code and object
code form
(English language, single-byte and double-byte, with included drivers)
Applications
Ensemble Application suite, in source code and object code form (English
language, single-byte & double-byte)
For purposes of this Agreement, the term "Ensemble Applications" means
GeoBrowser, GeoCalc, GeoWrite, Calculator, Clock, GeoManager, GeoPlanner,
Scrapbook, Preferences, Solitaire, GeoBanner, GeoComm, GeoDex, GeoDraw, GeoFile,
and Text File Editor
The object code and source code to games for the GEOS 3.0 operating system
developed by or for Geoworks and which are owned by Geoworks (separate list to
be identified by the Parties).
(Third Party Technology is included only to the extent and only for the time
period that GEOWORKS' current in-bound licenses provide. Additional rights and
additional time periods are to be obtained directly from the Third Party
Technology suppliers by MYTURN. GIF and TIFF file formats are not warranted and
not subject to indemnification by GEOWORKS under this Agreement unless MYTURN
obtains a license to LZW compression from Unisys).
Note: all application names are to be changed.
All existing Ensemble help files are also included.
Tools
Software developers kit and LEGOS tool set (Object Code, Sample source code
Files)
(Licensed to MYTURN for internal use only, and not for distribution or resale
except upon mutual agreement and commercial terms, including all terms and
conditions governing same.).
The source code to the tools listed herein for MYTURN's internal use only.
GEOWORKS also grants MYTURN a limited right to distribute the object code
version of the GEOWORKS Software Developers Kit (SDK) under the terms and
conditions of the GEOWORKS SDK License Agreement applicable at the time of
distribution. GEOWORKS will provide MYTURN with available GEOWORKS-created
localization materials to assist MYTURN in developing localized versions of the
Licensed Technology.
23
Documentation
English-language
End User documentation in electronic form
Third Party Technologies (object code)
DOS
Datalight ROM-based disk operating system Version 5.0, and updates
provided by Datalight (for sale only with bundled with GEOS; may not be
sold separate from GEOS)
Fonts: URW fonts and rasterizer, for use with the GEOWORKS Ensemble
Application Suite only. Not to be sold as a separate wholesale or retail
product. MYTURN will pay GEOWORKS $###. per copy shipped to End Users
and ### of all Software Revenues when shipped to OEMS.
PPP Stack: The GEOWORKS Point-to-Point protocol product. MYTURN will pay
GEOWORKS $### per MYTURN Product Shipment.
Classs 1 Fax Drivers: Class 1 fax drivers for use with GEOS 3.0 only. Not
to be sold as a separate wholesale or retail product. MYTURN will pay
GEOWORKS $### per MYTURN Product Shipment that includes this driver.
24
EXHIBIT B
DEVELOPMENT AND SUPPORT SERVICES
1. CUSTOMER SUPPORT
1.1 FIRST LEVEL CUSTOMER SUPPORT
MYTURN (directly or through its Distributors) shall provide customer
support for End Users who acquire MYTURN Devices and Product units.
In the event that End Users first call GEOWORKS directly for
technical support, GEOWORKS may refer such customers to MYTURN.
1.2 SECOND LEVEL CUSTOMER SUPPORT
GEOWORKS shall not be required to provide Second Level Customer
Support to MYTURN.
2. EXCLUSIVE PROVIDER SUPPORT
During the term of the Agreement, GEOWORKS shall be the exclusive provider
of support to all applicable parties concerning the Licensed Technology. In
consideration for the Fees set forth in Exhibit B to this Agreement, subject to
availability, GEOWORKS will offer to provide MYTURN with development, consulting
and support services, if requested by MYTURN in the following:
2.1 DEVELOPMENT ASSISTANCE
GEOWORKS will provide reasonable technical assistance to MYTURN in
connection with MYTURN'S development activities using the Licensed
Technology. GEOWORKS and MYTURN will create a written, mutually
agreeable specification for any modifications or extensions to the
Licensed Technology to be created by GEOWORKS.
2.2 ASSISTANCE WITH DEVELOPMENT ENVIRONMENT
GEOWORKS will provide reasonable assistance to MYTURN personnel in
the use of the software development environment and other tools.
2.3 ERROR INVESTIGATIONRE
GEOWORKS will provide reasonable assistance to MYTURN in connection
with the identification and correction of errors in the Licensed
Technology.
25
2.4 ON-SITE SUPPORT
GEOWORKS will primarily provide its support services from GEOWORKS'
place of business. Upon reasonable (approximately two weeks) advance
notice, the GEOWORKS Support Engineers will provide support services
at MYTURN's place of business, for a maximum period of one (1) week
for any given on-site visit and a maximum of two (2) weeks per
calendar quarter. The amount of on-site support in a given quarter
may be extended by mutual agreement. All travel and living expenses
for such on-site service will be paid by MYTURN.
2.5 PERSONNEL; PRIMARY CONTACT; EMPLOYEE NON-SOLICITATION
MYTURN shall at all times ensure that its personnel are properly
trained in the operation and use of the Licensed Technology. MYTURN
will designate one (1) person properly trained in the use of the
Licensed Technology to serve as MYTURN's primary contact with
GEOWORKS for support services. MYTURN shall provide written notice
to GEOWORKS giving the name and contact information for such
designated persons. During any Term of this Agreement, any one year
thereafter, MYTURN agrees not to solicit any GEOWORKS employee or
consultant without the prior written consent of GEOWORKS.
2.6 ACCESS
MYTURN shall provide GEOWORKS a direct Internet connection, FTP
capabilities and other capabilities, as appropriate, to remotely
perform any support services.
2.7 NO WARRANTIES
The intent of GEOWORKS' services in support of this Agreement is to
provide assistance to MYTURN, leading to MYTURN's self-sufficiency
in dealing with the source code. This Agreement does not create a
warranty of any kind. GEOWORKS DISCLAIMS ALL WARRANTIES, STATUTORY,
EXPRESS, IMPLIED OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE
PRACTICE, WITH RESPECT TO THE LICENSED TECHNOLOGY AND SERVICES
PROVIDED UNDER THIS EXHIBIT, INCLUDING BUT NOT LIMITED TO, ANY
WARRANTY OF DESIGN, MERCHANTABILITY OR FITNESS.
2.8 CONDITIONS NOT COVERED
GEOWORKS will render reasonable technical assistance and
consultation, but shall not be responsible for: (i) maintaining or
supporting modifications made by MYTURN or portions of the Licensed
Technology affected by MYTURN modifications; (ii) problems caused by
the improper use of the Licensed Technology by MYTURN; (iii)
maintaining hardware, software, or documentation provided to MYTURN
by third parties; or (iv) correcting problems caused by conditions
beyond its reasonable control.
3. TERM AND TERMINATION OF SUPPORT SERVICES
3.1 TERM
This term of any development and support services under this Exhibit
B shall be the same as the term of the Agreement, as set
26
forth in Section 13 (TERM OF AGREEMENT AND TERMINATION) of the
Agreement, except as set forth below.
3.2 EARLY TERMINATION
If MYTURN has not delivered the Licensed Technology and a MYTURN PC
Device to the manufacturing process by December 31, 2000, then
GEOWORKS may terminate any commitment to provide development and
support services under this Exhibit B by written notice to MYTURN.
27
EXHIBIT C
COMMERCIAL TERMS
4. ROYALTIES
MYTURN will pay GEOWORKS the following royalty for each MYTURN Device or MYTURN
Product Shipment ###.
5. THIRD PARTY TECHNOLOGY FEES
A. MYTURN shall enter into licensing agreements directly with the suppliers
for any Third Party Technologies needed in conjunction with the Licensed
Technology, except as specifically listed in paragraph B, below. MYTURN shall
provide evidence of such licensing agreements prior to the delivery by GEOWORKS
to MYTURN of any portions of he Licensed Technology for which such licenses are
required. This includes:
spell checker
thesaurus
compression PPP protocol
fax drivers
Text and graphics import/export formats
Other TBD
Any additional third party technologies which GEOWORKS may hereafter
license.
B. For the third-party technologies listed below, MYTURN shall, in addition
to the Royalties payable above, reimburse GEOWORKS its royalties and fees, until
such time as GEOWORKS has satisfied its royalty obligations to its licensors, as
follows:
Datalight DOS $### (until Datalight contract is
paid-up)
Other TBD Direct cost to GEOWORKS plus 10%
Note: As a condition MYTURN's obligation to reimburse GEOWORKS for third party
technology fees or obligations, GEOWORKS shall provide MYTURN with written
evidence of such obligations or fees.
Note: Third Party Technology is included in the Licensed Technology only to the
extent and only for the time period that GEOWORKS' current in-bound
licenses provide. Additional rights and additional time periods are to be
obtained directly from the Third Party Technology suppliers by MYTUR. GIF
and TIFF file formats are not warranted and not subject to indemnification
by GEOWORKS under this Agreement unless MYTURN obtains a license to LZW
compression from Unisys.
6. DISCOUNT, SUPPORT AND PROMOTIONAL UNITS
28
6.1 DISCOUNT UNITS
GEOWORKS may purchase units of each MYTURN PC Device at MYTURN's
cost, excluding any royalty due GEOWORKS.
6.2 SUPPORT AND PROMOTIONAL UNITS
For purposes of support and promotion, MYTURN will deliver ten (10)
units of each MYTURN PC Device to GEOWORKS at no charge.
7. NRE
MYTURN will pay GEOWORKS for any development and support services under Exhibit
B as follows:
7.1 TRAVEL
All reasonable travel and living expenses for all on-site support
and training will paid by MYTURN
7.2 SERVICES
Development and support services will be billed on a Time and
Materials basis.
Time will be billed in minimum one-day increments, at the following
rates, subject to adjustment upon each anniversary of the Effective
Date of this Agreement:
###
Materials will include reimbursement by MYTURN to GEOWORKS for all
direct and out-of-pocket expenses reasonably incurred by GEOWORKS in
providing its development and support services, including but not
limited to, telephone line charges and additional hardware and
software purchases required to support MYTURN.
7.3 INVOICES AND PAYMENTS
An advance deposit equal to two (2) months' estimated fees will be
due upon the start of any development and support services provided
by GEOWORKS. GEOWORKS will invoice MYTURN monthly for development,
training and support activities. Invoices are payable within ten
(10) days.
8. DISTRIBUTION OF GEOWORKS FOLLOW-ON PRODUCTS
In the event that GEOWORKS publishes any products that are intended to operate
in conjunction with a MYTURN PC Device ("follow-on products"), MYTURN agrees
that if MYTURN has established channels for the distribution of its own or
third-party follow-on products, MYTURN shall, upon GEOWORKS' request, distribute
such GEOWORKS follow-on products through such distribution channels. The
commercial terms and conditions of such distribution shall be established by
mutual agreement, but GEOWORKS shall at all times be entitled to the most
favorable terms and conditions that MYTURN has extended to any third party.
9. RIGHT OF FIRST REFUSAL FOR DEVELOPMENT
29
If MYTURN wishes to have developed any applications or follow-on products for a
MYTURN PC Device, MYTURN will give GEOWORKS the first right of refusal to create
such products for MYTURN, provided that GEOWORKS agrees to do so on commercially
reasonable terms and conditions, which are no less favorable than MYTURN may
obtain from a third party. Unless otherwise agreed by the Parties, the Parties
intend that such products will be owned by GEOWORKS and licensed to MYTURN.
30
EXHIBIT D
FORMS OF END USER LICENSE AGREEMENT
IMPORTANT: READ THIS NOTICE BEFORE USING THE SOFTWARE
GEOWORKS Software License Agreement
This is a legal agreement between you (the end user), GEOWORKS Corporation
("GEOWORKS") and MYTURN PC, or Compu-Xxxx dba MYTURN, or any successor to
Compu-Xxxx or MYTURN thereto. Please read it.
Your MYTURN PC Device contains software created by GEOWORKS. The GEOWORKS(R)
software program (the "SOFTWARE") is licensed by GEOWORKS and MYTURN PC to the
original customer and any subsequent transferee of the MYTURN PC Device for use
only on the terms set forth here.
GEOWORKS AND MYTURN PC ARE WILLING TO LICENSE THE SOFTWARE TO YOU ONLY UPON THE
CONDITION THAT YOU ACCEPT ALL THE TERMS CONTAINED IN THIS END USER LICENSE
AGREEMENT. PLEASE READ THE TERMS CAREFULLY BEFORE USING THE MYTURN PC DEVICE, AS
USING THE DEVICE WILL INDICATE THAT YOU ACCEPT THE TERMS. IF YOU DO NOT AGREE TO
THESE TERMS, THEN GEOWORKS AND MYTURN ARE UNWILLING TO LICENSE THE SOFTWARE TO
YOU, IN WHICH EVENT YOU SHOULD RETURN THE MYTURN PC DEVICE IN ITS ORIGINAL
PACKAGING WITH PROOF OF PURCHASE TO THE DEALER FROM WHICH IT WAS ACQUIRED WITHIN
THIRTY (30) DAYS OF PURCHASE FOR A FULL REFUND.
GRANT OF LICENSE: GEOWORKS and MYTURN PC grant you the right to use the software
on the MYTURN PC Device.
COPYRIGHT: The SOFTWARE is owned by GEOWORKS or its suppliers and is protected
by United States copyright laws and international treaty provisions. You may not
copy the SOFTWARE or the written materials accompanying the SOFTWARE.
OTHER RESTRICTIONS: You may not rent or lease the SOFTWARE, but you may transfer
the SOFTWARE and accompanying written materials on a permanent basis provided
you retain no copies. You may not reverse engineer, decompile, disassemble, or
create derivative works from the SOFTWARE.
U.S. GOVERNMENT RESTRICTED RIGHTS: The U.S. Government acknowledges GEOWORKS'
representation that the SOFTWARE and its documentation were developed at private
expense and no part of them is in the public domain. The SOFTWARE is "Restricted
Computer Software" as that term is defined in Clause 52.227-19 (FAR) and is
"Commercial Computer Software" as that term is defined in Subpart 227.471
(DFARS).
RESTRICTED RIGHTS LEGEND
If this product is acquired under the terms of a government contract, use,
duplication, and disclosure are subject to the terms of this license
agreement and the following restrictions: subdivision (c)(1)(ii) of the
Rights in Technical Data and Computer Software clause at 252.227-7013 (DOD
contracts); subdivisions (a) through (d) of 52.227-19 (Civilian agency
contract); and the applicable ADP Schedule Contract (GSA contract).
31
EXPORT LAW ASSURANCES: You agree that neither the SOFTWARE nor any direct
product thereof is being or will be acquired, shipped, transferred or
re-exported, directly or indirectly, into any country prohibited by the United
States Export Administration Act and the regulations thereunder.
LIMITED MONEY-BACK WARRANTY: To the original purchaser only, MYTURN PC provides
the following warranties for purchases made in the United States of America or
Canada. IF YOU ARE NOT SATISFIED WITH THE SOFTWARE FOR ANY REASON, YOU MAY
RETURN THE COMPLETE PRODUCT, WITHIN THIRTY (30) DAYS FROM THE DATE OF RECEIPT
FOR A FULL REFUND. Return the product directly to the U.S. or foreign dealer you
purchased it from. If you are unable to return the product to your dealer,
please call MYTURN PC at XXX-XXX-XXXX to obtain an authorization number to
accompany the returned product. Please do not return products to MYTURN PC
directly without first calling, as MYTURN PC will refuse acceptance of packages
that do not have a Return Authorization number written on the outside.
MYTURN PC also warrants that, within the first ninety (90) days from the date of
receipt, the media on which the software is furnished and the accompanying
documentation will remain free from defects in materials and construction with
normal use. In the case of a defect, so long as the defect did not result from
misuse, abuse, or accident, MYTURN PC at its option will repair or replace the
defective item and return it to you by pre-paid post.
MYTURN PC and GEOWORKS do not warrant that the SOFTWARE will meet your
requirements, that operation of the SOFTWARE will be uninterrupted or
error-free, or that all SOFTWARE errors will be corrected.
THE ABOVE WARRANTIES ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, WHETHER
EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN
BY GEOWORKS OR MYTURN PC, THEIR EMPLOYEES, DISTRIBUTORS, DEALERS OR AGENTS SHALL
INCREASE THE SCOPE OF THE ABOVE WARRANTIES OR CREATE ANY NEW WARRANTIES. SOME
STATES AND COUNTRIES DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE
ABOVE EXCLUSION MAY NOT APPLY TO YOU. IN THAT EVENT, ANY IMPLIED WARRANTIES ARE
LIMITED IN DURATION TO SIXTY (60) DAYS FROM THE DATE OF DELIVERY OF THE
SOFTWARE. THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS. YOU MAY HAVE OTHER
RIGHTS, WHICH VARY FROM STATE TO STATE AND COUNTRY TO COUNTRY.
LIMITATION OF LIABILITY: REGARDLESS OF WHETHER ANY REMEDY SET FORTH IN THE
LIMITED WARRANTY FAILS OF ITS ESSENTIAL PURPOSE, IN NO EVENT WILL GEOWORKS OR
MYTURN PC BE LIABLE TO YOU FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT OR SIMILAR
DAMAGES, INCLUDING ANY LOST PROFITS OR LOST DATA ARISING OUT OF THE USE OR
INABILITY TO USE THE SOFTWARE OR ANY DATA SUPPLIED THEREWITH. THIS IS TRUE EVEN
IF GEOWORKS OR MYTURN PC HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN
NO CASE SHALL THE LIABILITY OF GEOWORKS OR MYTURN PC EXCEED THE PURCHASE PRICE
PAID FOR THE SOFTWARE.
SOME STATES AND COUNTRIES DO NOT ALLOW THE LIMITATION OR EXCLUSION OF LIABILITY
FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE LIMITATION OF LIABILITY
MAY NOT APPLY TO YOU.
GENERAL: This Agreement will be governed by the laws of the State of California,
U.S.A., except for that body of law dealing with conflict of laws.
Should you have any questions concerning this Agreement, or if you desire to
contact GEOWORKS for any reason, please write to us at: GEOWORKS END USER
LICENSING, 000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000-0000, U.S.A.
32
Appendix 1
VOID AFTER 5:00 P.M., JACKSONVILLE, FLORIDA TIME, ON DECEMBER 21, 2004
NEITHER THIS WARRANT NOR THE WARRANT STOCK (AS HEREINAFTER DEFINED) HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THIS
WARRANT AND THE WARRANT STOCK MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE
ACT. THIS LEGEND SHALL BE ENDORSED UPON ANY WARRANT ISSUED IN EXCHANGE FOR THIS
WARRANT.
COMPU-XXXX, INC.
(INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE)
December 22, 1999
FOR VALUE RECEIVED, COMPU-XXXX, INC., a Delaware corporation (the
"Company"), hereby certifies that Geoworks, Inc. (the "Holder") is entitled,
subject to the provisions of this Warrant, to purchase from the Company up to
250,000 Common Shares of the Company at a price of Four Dollars and Fifty Cents
($4.50) per share (the "Exercise Price") during the period commencing on the
date hereof and expiring at 5:00 P.M., Jacksonville, Florida time, on December
21, 2004 (the "Exercise Period").
The number of Common Shares to be received upon the exercise of this
Warrant may be adjusted from time to time as hereinafter set forth. The Common
Shares deliverable upon such exercise, and as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Stock".
The Holder agrees with the Company that this Warrant is issued, and all
the rights hereunder shall be held subject to, all of the conditions,
limitations and provisions set forth herein.
1. EXERCISE OF WARRANT.
1.1 Method of Exercise. This Warrant may be exercised by its
presentation and surrender to the Company at its principal office, by 5:00 P.M.,
Jacksonville, Florida time, during the Exercise Period, with the Warrant
Exercise Form attached hereto duly executed and, at the discretion of the
Holder, either (a) accompanied by payment (either in cash or by certified or
official bank check, payable to the order of the Company) of the Exercise Price
for the number of shares specified in such Warrant Exercise Form with
"Alternative No. 1" initialed on such Warrant Exercise Form by the Holder, or
(b) effectuated by a net issue exercise as provided in Section 1.2 hereof. If
this Warrant should be exercised in part only, the Company shall, upon surrender
of this Warrant for cancellation, execute and deliver a new Warrant evidencing
the rights of the Holder thereof to purchase the balance of the shares
purchasable hereunder.
1.2 Net Issue Exercise.
33
9.1
(a) IN LIEU OF EXERCISING THIS WARRANT PURSUANT TO SECTION 1.1(A)
ABOVE, THE HOLDER MAY ELECT TO RECEIVE A NUMBER OF COMMON SHARES
EQUAL TO THE VALUE (AS DETERMINED BELOW) OF THIS WARRANT (OR THE
PORTION THEREOF BEING CANCELED), TO THE EXTENT EXERCISABLE, BY
SURRENDER OF THIS WARRANT AT THE PRINCIPAL OFFICE OF THE COMPANY IN
THE SAME MANNER AS PROVIDED IN SECTION 1.1, TOGETHER WITH THE
WARRANT EXERCISE FORM IN WHICH "ALTERNATIVE NO. 2" IS INITIALED BY
THE HOLDER. IN SUCH EVENT, THE COMPANY SHALL ISSUE TO THE HOLDER A
NUMBER OF COMMON SHARES COMPUTED USING THE FOLLOWING FORMULA:
X = Y (A-B)
-------
A
Where X = the number of Common Shares to be issued to the Holder
Y = the number of Common Shares subject to this Warrant (or
the portion thereof being canceled)
A = the fair market value of one share of the Company's common
stock.
B = the Exercise Price (as adjusted to the date of such
calculation)
9.2
(b) FOR PURPOSES OF THIS SECTION 1.2, THE FAIR MARKET VALUE OF THE
COMPANY'S COMMON STOCK SHALL MEAN:
9.2(a)
(i) The average of the closing bid and asked prices of the
Company's common stock quoted in the over-the-counter market summary or the
closing price quoted on any exchange on which such common stock is listed,
whichever is applicable, as published in the Western Edition of The Wall Street
Journal for the ten trading days prior to the date of determination of fair
market value; or
9.2(b)
(ii) If the Company's common stock is not traded
over-the-counter or on an exchange, the fair market value of such common stock
per share shall mean the price per share as determined reasonably and in good
faith by the Company's board of directors. Receipt and formal acknowledgment by
a duly authorized representative of the holder of the Common Shares issued upon
exercise of this Warrant by the Holder shall be conclusively deemed to be an
acknowledgment and acceptance of any such fair market value determination by the
Company's board of directors as the final and binding determination of such
value for purposes of this Warrant.
2. RESERVATION OF SHARES. The Company will at all times reserve for
issuance and delivery upon exercise of this Warrant all Common Shares or other
shares of capital stock of the Company (and other securities and property) from
time to time receivable upon exercise of this Warrant.
3. FRACTIONAL SHARES. The Company shall not be required to issue
certificates representing fractions of Common Shares, nor shall it be required
to issue scrip or pay cash in lieu of fractional interests, it being
34
the intent of the Company and the Holder that all fractional interests shall be
eliminated.
4. EXCHANGE OR ASSIGNMENT OF WARRANT. This Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and surrender
hereof to the Company for other Warrants of different denominations, entitling
the Holder to purchase in the aggregate the same number of Common Shares
purchasable hereunder. Subject to the provisions of this Warrant and the receipt
by the Company of any required representations and agreements, upon surrender of
this Warrant to the Company with the Warrant Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax, the Company shall,
without additional charge, execute and deliver a new Warrant in the name of the
assignee named in such instrument of assignment and this Warrant shall promptly
be canceled.
5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder of the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.
6. ANTI-DILUTION PROVISIONS.
6.1 ADJUSTMENTS FOR STOCK DIVIDENDS; COMBINATIONS, ETC. (a) In
case the Company shall do any of the following (an "Event"):
(i) declare a dividend or other distribution on its Common
Shares payable in Common Shares of the Company,
(ii) subdivide the outstanding Common Shares pursuant to a
stock split or otherwise,
(iii) combine the outstanding Common Shares into a smaller
number of shares pursuant to a reverse split or otherwise, or
(iv) reclassify or otherwise change its Common Shares,
then the Exercise Price in effect at the time of the record date for such
dividend or other distribution or of the effective date of such subdivision,
combination, reclassification or other change shall be changed to a price
determined by dividing (a) the product of the number of Common Shares
outstanding immediately prior to such Event, multiplied by the Exercise Price in
effect immediately prior to such Event by (b) the number of Common Shares
outstanding immediately after such Event. Each such adjustment of the Exercise
Price shall be calculated to the nearest cent. No such adjustment shall be made
in an amount less than one cent ($.01), but any such amount shall be carried
forward and shall be given effect in connection with the next subsequent
adjustment. Such adjustment shall be made successively whenever any Event listed
above shall occur.
(b) Whenever the Exercise Price is adjusted as set forth in
Section 6.1 (whether or not the Company then or thereafter elects to issue
additional Warrants in substitution for an adjustment in the number of shares of
Warrant Stock), the number of shares of Warrant Stock specified in each Warrant
which the Holder may purchase shall be adjusted, to the nearest full share, by
multiplying such number of shares of Warrant Stock immediately prior to such
adjustment by a fraction, of which the numerator shall be the Exercise Price
immediately prior to such adjustment and the denominator shall be the Exercise
Price immediately thereafter.
35
6.2 ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION OR MERGER. In
case of any reorganization of the Company (or any other corporation, the
securities of which are at the time receivable on the exercise of this Warrant)
after the date hereof or in case after such date the Company (or any such other
corporation) shall consolidate with or merge with or into another corporation or
entity, then, and in each such case, the Holder of this Warrant upon the
exercise thereof as provided in Section l at any time after the consummation of
such reorganization, consolidation or merger, shall be entitled to receive, in
lieu of the securities and property receivable upon the exercise of this Warrant
prior to such consummation, the securities or property to which such Holder
would have been entitled upon such consummation if such Holder had exercised
this Warrant immediately prior thereto, all subject to further adjustment as
provided in Section 6.l; in each such case, the terms of this Warrant shall be
applicable to the securities or property receivable upon the exercise of this
Warrant after such consummation.
7. INVESTMENT REPRESENTATIONS.
In connection with the acquisition of the Warrants by the Holder
from the Company, and the issuance of such Warrants by the Company to the
Holder, the Holder does hereby represent and warrant to the Company as follows:
(a) ACQUISITION FOR ACCOUNT. The Holder represents and warrants
that the Warrants acquired by it are being acquired for its
own account, for investment purposes and not with a view to
any distribution within the meaning of the Securities Act of
1933, as amended (the "Securities Act"). The Holder will not
sell, assign, mortgage, pledge, hypothecate, transfer or
otherwise dispose of any of the Warrants unless (i) a
registration statement under the Securities Act with respect
thereto is in effect and the prospectus included therein meets
the requirements of Section 10 of the Securities Act, or (ii)
the Company has received a written opinion of its counsel
that, after an investigation of the relevant facts, such
counsel is of the opinion that such proposed sale, assignment,
mortgage, pledge, hypothecation, transfer or disposition does
not require registration under the Securities Act or any state
securities law.
(b) NO REGISTRATION. The Holder understands that the issuance of
the Warrants is not being registered under the Securities Act
and the Warrants must be held indefinitely unless they are
subsequently registered thereunder or an exemption from such
registration is available.
(c) INVESTOR STATUS. The Holder represents and warrants further
that (i) it is either an "accredited investor," as such term
is defined in Rule 501(a) promulgated under the Securities
Act, or, either alone or with its purchaser representative,
has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks
of the acquisition of the Warrants; (ii) it is able to bear
the economic risks of an investment in the Warrants,
including, without limitation, the risk of the loss of part or
all of its investment and the inability to sell or transfer
the Warrants for an indefinite period
36
of time; (iii) it has adequate financial means of providing
for current needs and contingencies and has no need for
liquidity in its investment in the Warrants; and (iv) it does
not have an overall commitment to investments which are not
readily marketable that is excessive in proportion to net
worth and an investment in the Warrants will not cause such
overall commitment to become excessive.
(d) REVIEW OF MATERIAL. The Holder has reviewed the Company's
reports, statements and information filed by the Company with
the Securities and Exchange Commission since January 1, 1999
and has been afforded the opportunity to obtain such
information regarding the Company as it has reasonably
requested to evaluate the merits and risks of the Holder's
investment in the Warrants. No oral or written representations
have been made or oral information furnished to the Holder or
its advisers in connection with the investment in the
Warrants.
8. RESTRICTIONS ON EXERCISE.
8.1 INVESTMENT INTENT. Unless, prior to the exercise of the
Warrant, the issuance of the Warrant Stock has been registered with the
Securities and Exchange Commission pursuant to the Act, the notice of exercise
shall be accompanied by a representation of the Holder to the Company to the
effect that such shares are being acquired for investment and not with a view to
the distribution thereof, and such other representations and documentation as
may be required by the Company, unless in the opinion of counsel to the Company
such representations or other documentation are not necessary to comply with
such Act.
8.2 LISTING; QUALIFICATION. The Company shall not be obligated to
deliver any shares of Warrant Stock until they have been listed on each
securities exchange or other self-regulatory body on which the Company's Common
Shares may then be listed or until there has been qualification under or
compliance with such federal or state laws, rules or regulations as the Company
may deem applicable. The Company shall use reasonable efforts to obtain such
listing, qualification and compliance.
9. RESTRICTIONS ON TRANSFER.
9.1 TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. Neither
this Warrant nor any Warrant Stock may be sold, assigned, transferred or
otherwise disposed of except as follows: (1) to a person who, in the opinion of
counsel satisfactory to the Company, is a person to whom this Warrant or the
Warrant Stock may legally be transferred without registration and without the
delivery of a current prospectus under the Act with respect thereto and then
only against receipt of an agreement of such person to comply with the
provisions of this Section 9 with respect to any resale, assignment, transfer or
other disposition of such securities; or (2) to any person upon delivery of a
prospectus then meeting the requirements of the Act relating to such securities
and the offering thereof for such sale, assignment, transfer or disposition.
9.2 LEGEND. Subject to the terms hereof, upon exercise of this
Warrant and the issuance of the Warrant Stock, all certificates representing
such Warrant Stock shall bear on the face or reverse thereof substantially the
following legend:
37
"The Common Shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
sold, offered for sale, assigned, transferred or otherwise disposed of
unless registered pursuant to the provisions of that Act or such
disposition is otherwise in compliance with an available exemption from
such registration."
10. LOST, STOLEN OR DESTROYED WARRANTS. In the event that the Holder
notifies the Company that this Warrant has been lost, stolen or destroyed and
either (a) provides a letter, in form satisfactory to the Company, to the effect
that it will indemnify the Company from any loss incurred by it in connection
therewith, and/or (b) provides an indemnity bond in such amount as is reasonably
required by the Company, the Company having the option of electing either (a) or
(b) or both, the Company may, in its sole discretion, accept such letter and/or
indemnity bond in lieu of the surrender of this Warrant as required by Section 1
hereof.
11. APPLICABLE LAW. This Warrant is issued under, and shall for all
purposes be governed by and construed in accordance with, the laws of the State
of Delaware, excluding choice of law principles thereof.
[Rest of page intentionally left blank. Signature page follows]
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.
COMPU-XXXX, INC.
By: /s/ Xxxx Xxxxx
-----------------------------------
AGREED TO:
GEOWORKS CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
38
COMPU-XXXX, INC.
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within Warrant
dated ________________ to the extent of purchasing _____ Common Shares of
Compu-XXXX, Inc. (subject to the net issue exercise provisions pursuant to
Section 1.2 thereof if applicable) The undersigned hereby makes a payment as
follows (complete and initial as applicable):
Alternative 1: $_____ in payment therefor. Initial: ____.
Alternative 2: The Holder is effectuating a net issue exercise pursuant to
Section 1.2 of the Warrant. Initial: ____.
Name of Holder
Signature of Holder
or Authorized Representative
Signature, if jointly held
Name and Title of Authorized
Representative
Address of Holder
Social Security
or Tax Identification Number
Date
39
COMPU-XXXX, INC.
WARRANT ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________________________________ hereby
sells, assigns and transfers unto
Name
(Please typewrite or print name of assignee in block letters)
Address
the right to purchase Common Shares of Compu-XXXX, Inc. represented by this
Warrant dated ___________________ to the extent of __________ shares and does
hereby irrevocably constitute and appoint ___________________ attorney to
transfer the same on the books of the Company with full power of substitution in
the premises.
Name of Holder
Signature of Holder or
Authorized Representative
Signature, if jointly held
Name and Title of Authorized
Representative
Date
Signature(s) guaranteed:
40
STOCK TRANSFER AND TECHNOLOGY RIGHTS AGREEMENT
BETWEEN
COMPU-XXXX, INC. D/B/A XXXXXX.XXX
GPC ACQUISITION CORP.
AND
GEOWORKS CORPORATION
DATED
DECEMBER 22, 1999
APPENDIX 2
REGISTRATION RIGHTS
(a) MYTURN Obligations.
i. Registration.
A. If at any time after the date hereof Compu-XXXX, Inc. d/b/a
XxXxxx.xxx ("MYTURN") shall file with the Securities and
Exchange Commission (the "SEC") a registration statement (a
"Piggy-back Registration Statement") under the Securities Act
relating to an offering for its own account or the account of
others under the Securities Act of any of its equity
securities (other than on Form S-4 or Form S-8 or their then
equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business
or equity securities issuable in connection with stock option
or other employee benefit plans), MYTURN shall send to
GEOWORKS written notice of such determination and, if within
fifteen (15) days after the date of such notice, GEOWORKS
shall so request in writing, MYTURN shall include in such
Piggy-Back Registration Statement all or any part of the
common shares underlying the Warrants (the "Registrable
Securities") GEOWORKS requests to be registered, except that
if, in connection with any underwritten public offering, the
managing underwriter(s) thereof shall impose a limitation on
the number of Registrable Securities which may be included in
the Piggy-Back Registration Statement (the "Underwriter
Cutback") because, in such underwriter(s)' judgment, marketing
or other factors dictate such limitation is necessary to
facilitate public distribution, then MYTURN shall be obligated
to include in such Piggy-Back Registration Statement only such
limited portion of the as the underwriter shall permit
(limited to zero if necessary), provided however that in the
event of an Underwriter Cutback, MYTURN shall include the
Registrable Securities in such Piggyback Registration
Statement prior to including therein any securities issued by
MYTURN in a private placement in connection with that certain
Asset Purchase Agreement dated July 30, 1999, as amended
41
on September 24, 1999, September 26, 1999, November 23, 1999
and December 22, 1999 between MYTURN, GPC Acquisition Corp.,
GlobalPC, Inc., Xxxx Xxxxxxx and Xxxxx Xxxxxxxxx.
B. The provisions of Section (a)(i)(A) notwithstanding, if MYTURN
has not previously filed one or more Piggy-back Registration
Statements covering the resale of all of the Registrable
Securities then, if MYTURN receives a request from GEOWORKS,
MYTURN shall on no more than two (2) occasions in each
calendar year, commencing on May 15, 2000, prepare and file
with the SEC a registration statement (a "Mandatory
Registration Statement" and singly and collectively with any
Piggyback Registration Statement(s) sometimes referred to as
the "Registration Statement") covering the resale of the
Registrable Securities. MYTURN may register the resale of any
other of its securities on any such Mandatory Registration
Statement. MYTURN shall use reasonable best efforts to cause
the Mandatory Registration Statement to become effective as
soon as is practicable after the filing thereof, but in no
event later than the one hundredth and twentieth (120th) day
following the date of the filing thereof, provided however,
that in no event shall MYTURN be required to file a Mandatory
Registration Statement if it is undertaking an underwritten
public offering which has not closed, and in such case, the
date that MYTURN is required to file the Mandatory
Registration Statement hereunder shall be extended until the
thirtieth (30th) day after the underwritten offering is closed
and the distribution of the securities in such underwritten
public offering is complete.
C. If an offering in connection with which GEOWORKS is entitled
to registration under this Section 5(a)(i) is an underwritten
offering, then GEOWORKS shall, unless otherwise agreed by
MYTURN, offer and sell such Registrable Securities in an
underwritten offering using the same underwriter or
underwriters and on the same terms and conditions as other
like securities included in such underwritten offering.
ii. Amendments and Supplements; Maintain Effectiveness. MYTURN shall
prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration
Statement effective at all times for a period of six (6) months
following the effective date thereof (the "Registration Period"),
except during any Disclosure Delay Period (as defined in Section
(a)(iii), and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities covered by the Registration Statement until such time as
all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by GEOWORKS as
set forth in the Registration Statement.
iii. Disclosure Delay Period. If, at any time prior to the expiration of
the Registration Period, in the good faith reasonable judgment of
MYTURN's Board of Directors, the disposition of Registrable
Securities would require the premature disclosure of material
42
non-public information which may reasonably be expected to have an
adverse effect on MYTURN, then MYTURN shall not be required to
maintain the effectiveness of or amend or supplement the
Registration Statement for a period (a "Disclosure Delay Period")
expiring upon the earlier to occur of (A) the date on which such
material information is disclosed to the public or ceases to be
material or (B) subject to Section (a)(iv) hereof, up to sixty (60)
calendar days after the date on which MYTURN provides a notice to
GEOWORKS under Section (a)(iv) hereof stating that the failure to
disclose such non-public information causes the prospectus included
in the Registration Statement, as then in effect, to include an
untrue statement of a material fact or to omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading.
iv. Notice of Disclosure Delay Period. MYTURN will give prompt written
notice, to each GEOWORKS of each Disclosure Delay Period. Each
GEOWORKS agrees that, upon receipt of such notice prior to such
GEOWORKS disposition of all such Registrable Securities will
forthwith discontinue disposition of such Registrable Securities
pursuant to the Registration Statement, and will not deliver any
prospectus forming a part thereof in connection with any sale of
such Registrable Securities until the expiration of such Disclosure
Delay Period. Notwithstanding anything in this Appendix to the
contrary, there shall not be more than an aggregate of One Hundred
Twenty (120) calendar days in any twelve (12) month period during
which MYTURN is in a Disclosure Delay Period.
v. Copies of Filings and Correspondence. MYTURN shall furnish to
GEOWORKS (A) promptly after the same is prepared and publicly
distributed, filed with the SEC, or received by MYTURN, one copy of
the Registration Statement and any amendment thereto, each
preliminary prospectus and prospectus and each amendment or
supplement thereto, and each item of correspondence from the SEC or
the staff of the SEC which comments upon or requests information
relating to GEOWORKS and/or the Registrable Securities (including,
without limitation, the resale and plan of distribution hereof), in
each case relating to such Registration Statement (other than any
portion, if any, thereof which contains information for which MYTURN
has sought confidential treatment), (B) on the date of effectiveness
of the Registration Statement or any amendment thereto, a notice
stating that the Registration Statement or amendment has been
declared effective, and (C) such number of copies of a prospectus,
including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as GEOWORKS may
reasonably request in order to facilitate the disposition of the
Common Shares by GEOWORKS.
vi. Blue Sky. MYTURN shall use its best efforts to (A) register and
qualify the Registrable Securities covered by the Registration
Statement under such other securities or "blue sky" laws of such
jurisdictions in the United States as GEOWORKS of a majority of the
Registrable Securities reasonably request, (B) prepare and file in
those jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications
as may be necessary to maintain the effectiveness thereof during the
Registration Pe-
43
riod, (C) take such other actions as may be necessary to maintain
such registrations and qualifications in effect at all times during
the Registration Period, and (D) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for
sale in such jurisdictions; provided, however, that MYTURN shall not
be required in connection therewith or as a condition thereto to (A)
qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section (a)(vi), (B)
subject itself to general taxation in any such jurisdiction, (C)
file a general consent to service of process in any such
jurisdiction, (D) provide any undertakings that cause MYTURN undue
expense or burden, or (E) make any change in its charter or bylaws,
which in each case the Board of Directors of MYTURN determines to be
contrary to the best interests of MYTURN and its stockholders.
vii. Events Affecting Prospectus. As promptly as practicable after
becoming aware of such event, MYTURN shall notify GEOWORKS of the
happening of any event, of which MYTURN has knowledge, as a result
of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and if such
Registration Statement is supplemented or amended to correct such
untrue statement or omission, to deliver such number as such
GEOWORKS may reasonably request.
viii. Notification of Amendment or Supplement. MYTURN shall, as promptly
as practical after becoming aware of such event described in Section
(a)(vii), notify GEOWORKS of the issuance of such order and the
resolution thereof (and if such Registration Statement is
supplemented or amended, deliver such number of copies of such
supplement or amendment to such GEOWORKS as they may reasonably
request).
ix. Review by GEOWORKS' Counsel. MYTURN shall permit a single firm of
counsel designated by GEOWORKS holding a majority of the Registrable
Securities to review the Registration Statement and all amendments
and supplements thereto a reasonable period of time prior to their
filing with the SEC.
x. GEOWORKS' Due Diligence; Confidentiality of MYTURN Information.
MYTURN shall make available for inspection by (A) GEOWORKS, (B) one
firm of attorneys and one firm of accountants or other agents
retained by GEOWORKS (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and
properties of MYTURN (collectively, the "Records"), as shall be
reasonably deemed necessary by each Inspector to enable each
Inspector to exercise its due diligence responsibility, and cause
MYTURN's officers, directors and employees to supply all information
which GEOWORKS holding a majority of the Registrable Securities may
reasonably request for purposes of such due diligence; provided,
however, that each Inspector shall hold in confidence and shall not
make any disclosure (except to GEOWORKS) of any record or other
information which MYTURN determines in good faith to be
confidential, and of which determination the Inspector so notified,
unless (A) the disclosure of such records is necessary to avoid or
correct a misstatement or omission in any Registration Statement,
(B) the release of such records is ordered pursuant to a subpoena or
other order from a court or government body of competent
jurisdiction, or (C) the information in
44
such records has been made generally available to the public other
than by disclosure in violation of this or any other agreement.
MYTURN shall not be required to disclose any confidential
information in such records to any Inspector until and unless such
Inspector shall have entered into a confidentiality agreements with
MYTURN with respect thereto, substantially in the form of this
Section (a)(x). GEOWORKS agrees that it shall, upon learning that
disclosure of such records is sought in or by a court or
governmental body of competent jurisdiction or through other means,
give prompt notice to MYTURN and allow MYTURN, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, the records deemed confidential. Nothing
herein shall be deemed to limit GEOWORKS=s ability to sell Common
Shares in a manner which is otherwise consistent with applicable
laws and regulations.
xi. Confidentiality of GEOWORKS's Information. MYTURN shall hold in
confidence and not make any disclosure of information concerning any
GEOWORKS provided to MYTURN unless (A) disclosure of such
information is necessary to comply with federal or state securities
laws, (B) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement,
(C) the release of such information is ordered pursuant to a
subpoena or other order from a court or governmental body of
competent jurisdiction, (D) such information has been made generally
available to the public other than by disclosure in violation of
this or any other agreement, or (E) GEOWORKS consents to the form
and content of any such disclosure. MYTURN agrees that it shall,
upon learning that disclosure of such information concerning
GEOWORKS is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to
GEOWORKS prior to making such disclosure, and allow GEOWORKS, at its
expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, such information.
xii. Compliance with Laws. MYTURN shall comply with all applicable laws
related to a Registration Statement and offering and sale of
securities and all applicable rules and regulations of governmental
authorities in connection therewith (including, without limitation,
the Securities Act and the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC.)
(b) Obligations of GEOWORKS. In connection with a registration of the
Registable Securities GEOWORKS shall have the following obligations:
i. GEOWORKS's Information. It shall be a condition precedent to the
obligations of MYTURN to complete the registration pursuant to this
Appendix that GEOWORKS shall furnish to MYTURN such information
regarding itself, the Registrable Securities and the intended method
of disposition of the as shall be required to effect the
registration of such Registrable Securities and shall execute such
documents in connection with such registration as MYTURN may
reasonably request. At least five (5) business days prior to the
first anticipated filing date of the Registration Statement, MYTURN
shall notify GEOWORKS of the information MYTURN requires from
GEOWORKS.
45
ii. Cooperation. GEOWORKS agrees to cooperate with MYTURN as requested
by MYTURN in connection with the preparation and filing of the
Registration Statement hereunder, unless such GEOWORKS does not
include any of his, hers or its Registrable Securities in the
Registration Statement.
iii. Underwritten Offering. In the event GEOWORKS determines to engage
the services of an underwriter, GEOWORKS agrees to enter into and
perform its obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing
underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities.
iv No Disposition of Registable Securities. GEOWORKS agrees that, upon
receipt of any notice from MYTURN of the happening of any event of
the kind described in Sections (a)(vii) or (a)(viii), GEOWORKS will
immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering the resale of such
Registrable Securities until GEOWORKS's receipt of the copies of the
supplemented or amended prospectus contemplated by Sections (a)(vii)
or (a)(viii) and, if so directed by MYTURN, GEOWORKS shall deliver
to MYTURN or destroy (and deliver to MYTURN a certificate of
destruction) all copies in possession, of the prospectus covering
such Registrable Securities current at the time of receipt of such
notice.
v. Method of Underwritten Distribution. Each GEOWORKS may not
participate in any underwritten distribution of the Registrable
Securities unless GEOWORKS (A) agrees to sell the Registrable
Securities on the basis provided in any underwriting arrangements in
usual and customary form entered into by MYTURN, (B) completes, in a
manner reasonably acceptable to MYTURN, and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms
of such underwriting arrangements, and (C) agrees to pay its pro
rata share of all underwriting discounts and commissions and any
expenses in excess of those payable by MYTURN pursuant to this
Appendix (c) below.
(c) Expenses of Registration. All reasonable expenses, other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications, relating to (A) two (2) Piggyback
Registration Statements, and (B) two (2) Mandatory Registration Statements per
calendar year, pursuant to this Appendix, except that if a portion of the
Registrable Securities are not permitted to be included in two (2) Piggyback
Registration Statements by an underwriter as provided in Section (a)(i), then
relating to the least number of Piggyback Registration Statements which will
cover the resale of all the Registrable Securities, including all registration,
listing and qualifications fees, printers and accounting fees, the fees and
disbursements of counsel for MYTURN hereof, shall be borne by MYTURN.
(d) Indemnification. In the event any Registrable Securities are
included for resale in a Registration Statement under this Agreement:
46
i. Compu-XXXX Indemnification. To the extent permitted by law,
Compu-XXXX will indemnify, hold harmless and defend (A) GEOWORKS and
(B) the directors, officers, partners, members, employees, agents
and each person who controls GEOWORKS within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, if any,
(each, an "Indemnified Person"), against any joint or several
losses, claims, damages, liabilities or expenses (collectively,
together with actions, proceedings or inquiries by any regulatory or
self-regulatory organization, whether commenced or threatened, in
respect thereof, "Claims") to which any of them may become subject
insofar as such Claims arise out of or are based upon: (A) any
untrue statement or alleged untrue statement of a material fact in a
Registration Statement or the omission or alleged omission to state
therein a material fact required to be stated or necessary to make
the statements therein not misleading, (B) any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as
amended or supplemented, if MYTURN files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (C) any violation
or alleged violation by MYTURN of the Securities Act, the Exchange
Act, any other applicable securities law, including, without
limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Common Shares (the
matters in the foregoing clauses (A) through (C) being,
collectively, "Violations"). Subject to the restrictions set forth
in Section (d)(iii) with respect to the number of legal counsel,
MYTURN shall reimburse GEOWORKS and each other Indemnified Person,
promptly as such expenses are incurred and are due and payable, for
any reasonable legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section (d)(i): (A)
shall not apply to a Claim arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information
furnished in writing to MYTURN by such Indemnified Person expressly
for use in the Registration Statement or any such amendment thereof
or supplement thereto; (B) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the
prior written consent of MYTURN; and (C) with respect to any
preliminary prospectus, shall not inure to the benefit of any
Indemnified Person if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a
timely basis in the prospectus, as then amended or supplemented, if
such corrected prospectus was timely made available by MYTURN
pursuant to Section (a)(v) hereof, and the Indemnified Person was
promptly advised in writing not to use the incorrect prospectus
prior to the use giving rise to a Violation and such Indemnified
Person, notwithstanding such advice, used it. Such indemnity shall
remain in full force and effect regardless of any investigation made
by or on behalf of the Indemnified Person and shall survive the
transfer of the Registrable Securities by GEOWORKS.
47
ii. GEOWORKS Indemnification. In connection with any Registration
Statement in which GEOWORKS is participating, GEOWORKS agrees to
indemnify, hold harmless and defend, to the same extent and in the
same manner set forth in Section (d)(i), MYTURN, each of its
directors, each of its officers who signs the Registration
Statement, its employees, agents and each person, if any, who
controls MYTURN within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and any other stockholder
selling securities pursuant to the Registration Statement or any of
its directors or officers or any person who controls such
stockholder within the meaning of the Securities Act or the Exchange
Act (collectively and together with an Indemnified Person, an
"Indemnified Party"), against any Claim to which any of them may
become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such Claim arises out of or is based upon any
Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with
written information furnished to MYTURN by GEOWORKS expressly for
use in connection with such Registration Statement, and subject to
Section (d)(iii), GEOWORKS will reimburse any legal or other
expenses (promptly as such expenses are incurred and are due and
payable) reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that
the indemnity agreement contained in this Section (d)(ii) shall not
apply to amounts paid in settlement of any Claim if such settlement
is effected without the prior written consent of GEOWORKS, which
consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made
by or on behalf of such Indemnified Party and shall survive the
transfer of the Registrable Securities by GEOWORKS.
iii. Procedure. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section (d) of notice of the
commencement of any action (including any governmental action), such
Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to made against any indemnifying party under this Section
(d), deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party
so desires, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided,
however, that such indemnifying party shall not be entitled to
assume such defense and an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the reasonable
fees and expenses to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the indemnifying party,
the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential conflicts of interest between such
Indemnified Person or Indemnified Party and any other party
represented by such counsel in such proceeding or the actual or
potential defendants in, or targets of, any such action include both
the Indemnified Person or the Indemnified Party and the indemnifying
party and any such Indemnified Person or Indemnified Party
reasonably determines that there may be legal defenses available to
such Indemnified Person or Indemnified Party which are different
from or in addition to those available to such indemnifying party.
The indemni-
48
fying party shall pay for only one separate legal counsel for the
Indemnified Persons or the Indemnified Parties, as applicable, and
such legal counsel shall be selected by GEOWORKS, if GEOWORKS or any
Indemnified Person is entitled to indemnification hereunder, or by
MYTURN, if MYTURN or an Indemnified Party is entitled to
indemnification hereunder, as applicable. The failure to deliver
written notice to the indemnifying party within a reasonable time of
the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section (d), except to the extent that
the indemnifying party is actually prejudiced in its ability to
defend such action. The indemnification required by this Section (d)
shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as such expense, loss,
damage or liability is incurred and is due and payable.
(e) Contribution. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section (d) to the fullest extent permitted by law; provided,
however, that no contribution shall be made under circumstances where the
indemnifying party would not have been liable for indemnification under the
fault standards set forth in Section (d).
(f) Exemption from Registration. The provisions of Section (a) through
(e) notwithstanding, MYTURN shall have no obligation to register the resale of
the Registrable Securities to the extent the Registrable Securities may be
resold without registration without violating Section 5 of the Securities Act of
1933, as amended (the "Securities Act") pursuant to Rule 144 promulgated
thereunder or any other exemption or exception from registration under the
Securities Act.
COMPU-XXXX, INC.
D/B/A XXXXXX.XXX
By: /s/ Xxxx Xxxxx
-----------------------------------
GPC ACQUISITION CORP.
By: /s/ Xxxx Xxxxx
-----------------------------------
GEOWORKS CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
