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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 16, 1997
TEKNOWLEDGE CORPORATION
(Exact Name of registrant as specified in its charter)
Delaware 0-14793 94-2760916
(State or other jurisdiction Commission (I.R.S. Employer
of incorporation) File Number Identification No.)
1810 Embarcadero Road, Palo Alto, California 94303
(Address of principal executive offices)
(415) 424-0500
Registrant's telephone number
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Item 5. Other Events
On May 15, 1997, Teknowledge Corporation (the "Company") and Trilogy
Development Group, Inc. ("Trilogy") agreed to a settlement of all outstanding
lawsuits and debts between the companies. On May 19, 1997, in consideration of
the settlement agreement, the United States District Court for the Northern
District of California vacated its previous summary judgment against the
Company. The Settlement Agreement, License Agreement, and Mutual Release (the
"Agreement") specifies that Teknowledge immediately grant to Trilogy a
non-exclusive, royalty-free license to its United States Patent 4,591,983 in
exchange for 2,338,969 shares of Company stock, which the Company valued at
$1,000,000, and $400,000 in cash. The Agreement also provided for the transfer
of certain proxy rights to the Company and other consideration, including the
orderly disposal of Trilogy's remaining stock ownership of approximately 900,000
shares in open market transactions through May 14, 1998.
The transaction will be recorded as other income, net of legal fees. As a
result, the Company will record an additional $1,100,000 or $.04 per common
share in income for the second quarter ending June 30, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
TEKNOWLEDGE CORPORATION
(Registrant)
DATE: June 16, 1997
/s/ Dennis A. Bugbee
Dennis A. Bugbee
Director of Finance,
Treasurer and Secretary
(Principal Financial and
Accounting Officer)
