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 cer tain 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 valu able 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.
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1.1b "Derivative Work" means (i) for material subjec 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 Devices. 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
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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.
1.1n "Party" and "Parties" means GEOWORKS, Compu-DAW 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 registered, unrestricted,
non-dilutive, freely-tradeable 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, 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
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
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
reasonable 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 include a Technology
License and the following Exhibits that are incorporated herein and form an
integral part hereof:
Exhibit A Identification of the License 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 Initia License Fee --
Cash, the Warrant, and the royalty payments set forth in Exhibit C.
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.
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:
First commercial MYTURN PC Device Product Shipment December 31, 2000;
At least 25,000 royalty-bearing units of MYTURN PC Devices shipped by
December 31, 2000;
At least 450,000 cumulative total royalty-bearing units of MYTURN PC
Devices shipped by December 31, 2001;
At least 850,000 cumulative total royalty-bearing units of MYTURN PC
Devices shipped by December 31, 2002;
At least 1,600,000 cumulative total royalty-bearing units of MYTURN PC
Devices shipped by December 31, 2003; and
At least 2,600,000 cumulative total royalty-bearing units of MYTURN PC
Devices shipped by December 31, 2004.
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 license 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 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
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.
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.
6.1 Initial License Fee. MYTURN agrees to pay GEOWORKS the non-refundable
Initial License Fee 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 grant 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.
6.2 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.
6.3 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 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.
6.4 Currency. All payments under this Agreement are to be made in U.S. Dollars.
6.5 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.
6.6 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.
6.7 Audits. During the term of this Agreement and for twelv (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).
6.8 Interest. MYTURN shall pay GEOWORKS interest at the rat 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 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 th 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), GEOWORKS 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) set 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) set 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, 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.
11.1 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.
11.2 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.
11.3 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.
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 Confidential 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.
13.2 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.
13.3 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.
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.
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 ForceMajeure. 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 Rental Payments. Upon execution of this Agreement, MYTURN will begin paying
all monthly rent ($11,600)and expenses due for space and facilities costs
used by GLOBAL at the GEOWORKS facility in Alameda, California.
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 X. Theale
--- -------------------- ----------------------
Signature Signature
/s/ Xxxxxx X. Xxxxxx Rudt C. Theale
-------------------- --------------
Print Name Print Name
Chief Operating Officer President
----------------------- ---------
Title Title
GPC ACQUISITION CORP.
By: /s/ Xxxx X. Theale
--- ------------------
Signature
Xxxx X. Theale
--------------
Print Name
President
---------------------------------
Title
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.
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 1.25% of all Software Revenues when shipped to OEMS.
PPP Stack: The GEOWORKS Point-to-Point protocol product. MYTURN will
pay GEOWORKS $.50 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 $.50 per MYTURN Product Shipment that includes this
driver.
PAGE 4
EXHIBIT B
DEVELOPMENT AND SUPPORT SERVICES
CUSTOMER SUPPORT
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.
0.1 Second Level Customer Support
GEOWORKS shall not be required to provide Second Level Customer
Support to MYTURN.
1. 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:
1.1 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.
1.2 Assistance With Development Environment
GEOWORKS will provide reasonable assistance to MYTURN personnel in the
use of the software development environment and other tools.
1.3 Error Investigation
GEOWORKS will provide reasonable assistance to MYTURN in connection
with the identification and correction of errors in the Licensed
Technology.
1.4 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.
1.5 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.
1.6 Access
MYTURN shall provide GEOWORKS a direct Internet connection, FTP
capabilities and other capabilities, as appropriate, to remotely
perform any support services.
1.7 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.
1.8 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.
2. TERM AND TERMINATION OF SUPPORT SERVICES
2.1 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 forth in
Section 13 (TERM OF AGREEMENT AND TERMINATION) of the Agreement,
except as set forth below.
2.2 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.
PAGE 1
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).
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.
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