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United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q/A
[X] Amendment to quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period ended SEPTEMBER
30, 1998.
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from to .
Commission file number 000-23926
GEOWORKS CORPORATION
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(Exact name of registrant as specified in its charter)
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DELAWARE 94-2920371
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
960 ATLANTIC AVENUE, ALAMEDA, CALIFORNIA 94501
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(Address of principal executive offices) (Zip code)
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510-814-1660
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of the latest practicable date:
COMMON STOCK, .001 PAR VALUE PER SHARE: 16,106,856 SHARES AS OF NOVEMBER 30,
1998
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GEOWORKS
INDEX
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Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 2
Signature 3
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ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
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10.05 Software Supply Agreement, dated October 26, 1993,
between Geoworks and Embarc Communication Services, Inc.
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27.1 Financial Data Schedule (previously filed)
### Confidential treatment requested as to portions thereof.
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b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended September
30, 1998.
2
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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, thereunto duly authorized.
Date: January 5, 1999
GEOWORKS CORPORATION
by: /s/ Daniel L. Sicotte
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Daniel L. Sicotte
Treasurer
(Duly Authorized Officer)
3
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GEOWORKS
EXHIBITS
TABLE OF CONTENTS
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Sequential
Exhibit No. Description Page Number
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10.05 Software Supply Agreement, dated October 26, 1993,
between Geoworks and Embarc Communication Services, Inc.
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27.1 Financial Data Schedule (previously filed)
### Confidential treatment requested as to portions thereof
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EXHIBIT 10.05
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CONFIDENTIAL
TREATMENT REQUESTED
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Redacted Form of Agreement
SOFTWARE SUPPLY AGREEMENT
This Agreement, effective as of October 26, 1993, is made between GEOWORKS
with offices at 2150 Shattuck Avenue, PH, Berkeley, CA 94704 (hereinafter called
"GEOWORKS") and EMBARC COMMUNICATION SERVICES, INC., a subsidiary of Motorola,
Inc., with an office at 1500 Gateway Boulevard, Boynton Beach, FL 33426-8292
(hereinafter called "EMBARC").
WHEREAS, EMBARC desires GEOWORKS to develop a computer software using the
GEOWORKS operating system ("GEOS(R)") for providing a graphical environment and
for interfacing EMBARC Devices with Target Machines;
WHEREAS, GEOWORKS agrees to and is capable of developing the computer
software, data and other ancillary items and ancillary services, as specified in
Exhibit A hereto (hereafter referred to as "the Products").
NOW THEREFORE, in consideration of the promises and mutual covenants
hereafter set forth, and for other good and valuable consideration, the parties
hereb agree as follows:
1.0 DEFINITION
1.1 "EMBARC Devices" means a data receiver and storage device including,
but not limited to, the NewsCard.
1.2 "Target Machines" means the Third Party Platforms including but not
limited to the Casio Z7000, Tandy ZPDA, AST Research Grid 2390. Upon mutual
agreement as to the specification and schedule, other third party Target
Machines shall be included such as the Sharp PT 9000.
1.3 "Products" means the computer software, including GEOWORKS proprietary
software which produces a graphical environment ("GEOS(R)" version 2.0 Object
libraries), and documentation, as described in Exhibit A, and modified to
EMBARC's specifications including any improvements, enhancements, Fix Release or
Revision prepared by GEOWORKS in accordance with this Agreement.
1.4 "Application" means the computer software developed or to be developed
by GEOWORKS which will operate under GEOS to provide, among other things, a
graphical environment of and interface between the EMBARC Devices and the Target
Machines.
1.5 "Confidential Information" means (i) the Specifications, the Products,
the EMBARC-Owned Software, intellectual property rights, and any trade secrets
relating to any of the foregoing, including but not limited to any information
relating to either party's product
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plans, designs, cost, prices, names, finances, marketing plans, business
opportunities, personnel, research, development or know-how; (ii) any
information designated by the disclosing party as confidential in writing, model
form, graphics, or information in other tangible forms or, if disclosed orally,
designated as confidential at the time of disclosure and reduced to writing and
designated as confidential in the writing within thirty days (30) days; and
(iii) the terms, conditions and existence of this Agreement; provided, however
that "Confidential Information" will not include information that: (a) is, or
becomes, publicly known through no wrongful act on the receiving party's part;
(b) is, at the time of disclosure under this Agreement, already known to the
receiving party without restriction on disclosure; (c) is, or subsequently
becomes, rightfully and without breach of this Agreement, in the receiving
party's possession without any obligation restricting disclosure; (d) is
independently developed by the receiving party without breach of this Agreement;
(e) is furnished to a third party by the disclosing party without a similar
restriction on the third party's rights; (f) is required to be disclosed by law
or applicable legal process 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; or (g) is explicitly authorized for release by written
authorization of the disclosing party.
1.6 "Deliverables" means the deliverables described in Exhibit A attached
hereto and incorporated herein.
1.7 "Specifications" means the Products' specification set forth in
Exhibit B attached hereto and incorporated herein as may be modified from time
to time by EMBARC in accordance with Section 3.0, including all documents
referenced in those Specifications plus the Specification for other mutual
agreed upon Target Machines.
1.8 "Errors" means any defects in the Products that cause it not to
operate in conformance with the Specifications, or unreliable, the existence of
which can be verified by both Parties. In the case of compatibility problems,
the term "Errors," and GEOWORKS' liability hereunder with respect to such
Errors, is limited to a failure to operate compatibly with hardware and software
embodiments of the Target Machines or EMBARC Devices as they exist at the time
of Acceptance.
1.9 "EMBARC Service" means the EMBARC Wireless Information Services
provided by EMBARC or other services offered by EMBARC to end users of the
EMBARC Device, including:
i) ###
ii) ###; and
iii) ###
1.10 "Commercial Service Activation(ed)" means the day when the shipped
EMBARC Device is activated and is capable of receiving and continues being
capable of receiving the EMBARC Service, however, Commercial Service activation
shall not include those activations for purposes of test, trial, demonstration,
or evaluation or Commercial Service activation to other than the EMBARC Service.
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1.11 Critical Problem" means a problem that results in lost or destroyed
data, renders the Product substantially inoperable, causes a Product feature
failure that cannot be avoided by alternate methods or which otherwise causes a
shutdown of the essential operations that are dependent on the Product.
1.12 Object Code" means a software application program of the Product,
machine executable form.
1.13 "Source Code" means the Object Code expressed in a higher level
programming language understandable by humans and including explanatory
commentary of program operation.
1.14 "Fix Release" means a modification of the Product that incorporates
Object Code corrections.
1.15 "Major Problem" means a Product problem which causes a Product feature
failure that can be avoided by alternate methods by the end user.
1.16 "Minor Problem" means a problem which causes only minor inconvenience
to the end user including, but not limited to, misspelled error messages and
documentation errors.
1.17 "Revision" means subsequent releases of the Product which contain
substantial new features (including but not limited to significant new functions
and/or substantial performance improvements over the latest prior Revision or
first release of the Product) and which may incorporates Object Code corrections
or Fix Release.
1.18 "Packaging Materials" means the GEOWORKS end-user registration cards,
promotional materials, and software end user license agreements with limitations
of liability.
2.0 SOFTWARE DEVELOPMENT SERVICES
2.1 On the terms and conditions set forth in this Agreement, GEOWORKS
agrees to perform the Products development services which are directed towards
the development and completion of the Products according to Specifications and
Project Plan attached hereto as Exhibits B and E, respectively, and incorporated
herein. EMBARC and GEOWORKS intend this to be a service contract and the
Products to be a custom computer software developed to EMBARC's special order.
2.2 The Products will be designed to operate with and integrate the EMBARC
Devices and the Target Machines.
3.0 CHANGE TO SPECIFICATIONS
3.1 GEOWORKS acknowledges that EMBARC will have the continuing right to
modify the Specifications upon agreement with GEOWORKS prior to EMBARC's final
acceptance of the Products, however, such agreement will not be unreasonably
withheld.
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EMBARC agrees to pay reasonable nonrecurring engineering cost for any suggested
change or modification not contemplated by the parties and if such change or
modification includes non trivial development (generally understood to be any
###.
4.0 DELIVERABLES
As more fully described in the attached Exhibit A, GEOWORKS will deliver to
EMBARC the Functional Specifications, Z-E Card version 1.0 and GEOS version 2.0
Object Code libraries, and Product Test Specifications.
5.0 DELIVERY AND ACCEPTANCE
5.1 Delivery. Delivery will occur when GEOWORKS delivers the complete and
tested Deliverables to EMBARC Project Manager or any other EMBARC's designated
person accompanied by a written statement from GEOWORKS listing the items
delivered and stating that they are ready for EMBARC's acceptance testing.
Delivery of computer software may be via electronic transmission or via another
medium as agreed by the parties.
5.2 Testing. EMBARC will examine and test each Deliverables upon delivery
for Error(s). Within ### after Delivery, EMBARC will provide GEOWORKS with
written acceptance of such Deliverables or a statement of Error(s). If EMBARC
provides GEOWORKS with a statement of Error(s), GEOWORKS will forthwith use its
best efforts to correct the Error(s) within ###. Within ### of redelivery,
EMBARC will provide GEOWORKS with a written acceptance or another statement of
Error(s) and GEOWORKS will forthwith use its best efforts to again correct the
Error(s) within ###. This procedure will be repeated until EMBARC accepts the
Deliverables or rejects the Deliverables due to Error(s).
5.3 Acceptance. Deliverables will be deemed accepted ("Acceptance") on the
earliest to occur of the following:
(a) EMBARC providing a written acceptance;
(b) EMBARC's failure to provide a statement of Error(s) within the
time periods set forth in Section 5.2 (Testing);
(c) EMBARC's release of the Products in the EMBARC Devices intended
for Commercial Service, excluding any release for tests, trials, demonstrations,
or evaluations; or
(d) the first Commercial Service Activation of an EMBARC Device.
5.4 Notwithstanding Sections 5.1, 5.2 and 5.3, the period for acceptance
may be extended by mutual written agreement between the parties.
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6.0 INTELLECTUAL PROPERTY AND GRANT OF LICENSE
6.1 The copyright, the title, and interest in and to the Products
developed pursuant to this Agreement shall belong to GEOWORKS.
6.2 The intellectual property rights including patent rights, copyrights,
trade secret rights, and other proprietary rights in and to the EMBARC Devices,
EMBARC Confidential Information and the Specifications shall belong to EMBARC so
far as it relates to or includes the EMBARC's intellectual property rights.
6.3 The intellectual property developed and identified by GEOWORKS as
belonging to GEOWORKS shall be and remain the exclusive property of GEOWORKS.
Notwithstanding Section 6.1, any intellectual property rights including patent
rights, copyrights, trade secret rights, and other proprietary rights in and to
the Application belonging to EMBARC shall be and remain the exclusive property
of EMBARC and nothing herein shall be construed as granting GEOWORKS a license
to use, transfer, reproduce, make or have made EMBARC's intellectual property.
The foregoing shall be subject to Section 7.4 (Cross License). However, GEOWORKS
shall be free to utilize for any purpose whatsoever, in the course of its
business, any technical knowledge, skill or expertise of a generic nature
acquired by GEOWORKS in the performance of the Agreement so long at they do not
use EMBARC's CONFIDENTIAL INFORMATION or infringe EMBARC's intellectual
property.
7.0 GRANT OF LICENSE
GEOWORKS hereby grants to EMBARC and Motorola, Inc. under its copyright,
patents and trade secrets in and to the following:
7.1 Distribution: a worldwide, ###, non-transferable, and nonexclusive
license to display, perform, distribute, to sell, and to lease the Products and
Application embedded in or with the EMBARC Devices and the right to sublicense
to third parties the use of the Products as the EMBARC Devices so distributed by
EMBARC.
7.2 Reproduction: a worldwide, ###, non-exclusive license to make and to
embed exact or specific copies of the Products and Application in the EMBARC
Devices and to grant to third party(ies) a sublicense to make and embed exact or
specific copies of the Products and Application in connection with and for the
production for EMBARC of the EMBARC Devices.
7.3 Trademarks: a worldwide, ###, non-exclusive, non-transferable license,
for the term of this Agreement, to use GEOWORKS' trademarks and logos associated
with the GEOWORKS Products, as identified in Exhibit F, solely for the purpose
of marketing and distributing the EMBARC Device having GEOWORKS Products
embedded therein.
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7.4 Cross-License
7.4(a) Background. The Parties agree to negotiate in good faith for a
license from EMBARC and Motorola to GEOWORKS of any intellectual property rights
which EMBARC and/or Motorola may have in the Application.
7.4(b) Intent. The Parties agree that the intent of the license is to
enable GEOWORKS to license the Application to third parties, including third
parties who may be competitors of EMBARC, free of any claim by EMBARC or
Motorola of infringement of proprietary rights. The Parties further agree that
the intellectual property rights are restricted to the Application and not to
any other EMBARC technology such as contained in it's central operations, or
Motorola's NewsCard.
7.4(c) Negotiation. The Parties agree to negotiate promptly,
diligently and in good faith to establish the term, conditions and scope of the
license, consistent with the foregoing statements of background and intent.
EMBARC agrees to obtain the participation of Motorola as a Licensor in the
license agreement.
7.4(d) ###. The license will require ### to pay to ### a ### for ###
by ### from the ### of the ### to ### not to exceed the ### ###.
7.4(e) No Admissions. Nothing in this Software Supply Agreement shall
constitute an admission by either party of the other party's disputed assertions
regarding the ownership of intellectual property rights in and to the
Application.
7.5 No Implied License. There is no implied licenses under this Agreement
and any rights not expressly granted to one party hereunder are reserved by the
other party.
7.6 GEOWORKS shall provide the Products and Application free and clear of
all liens, encumbrances, licenses and or sublicenses whatsoever.
8.0 ADVERTISING, TRADEMARKS USAGES/PROTECTION AND PUBLICITY
8.1 GEOWORKS Proprietary Notices. As a condition to the licenses granted
to EMBARC, EMBARC shall reproduce and include GEOWORKS' proprietary notices in
the form, manner and location established in Exhibit F.
8.2 GEOWORKS' Logo. GEOWORKS' logo, as shown in Exhibit F, will appear (1)
on the outer package containing each EMBARC Device (e.g., by means of a stick-on
label); (2) on the EMBARC Devices' Manual; (3) on a mutually acceptable screen
display; and (4) a mutually agreed location on the exterior surface of each
EMBARC Device.
8.3 Materials Packed with the EMBARC Device. Each EMBARC Device shall be
packaged to include the Packaging Materials provided by GEOWORKS, provided that
EMBARC may use at its discretion its own end user license agreement for the
embedded Products, subject to the prior review and approval of GEOWORKS, such
approval not to be unreasonable withheld. EMBARC will have the right to
preapprove the GEOWORKS' Packaging Materials to be included with the EMBARC
Device, such approval not to be unreasonably withheld or delayed (EMBARC to
reply to GEOWORKS within ### days).
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8.4 Acknowledgment of EMBARC. GEOWORKS may be entitled to use EMBARC's
name and the trade name of EMBARC's EMBARC Devices in GEOWORKS promotional
literature and marketing materials upon GEOWORKS' receipt of prior approval from
EMBARC, such approval not to be unreasonably withheld. EMBARC shall review
(within ### days) any such requests made by GEOWORKS under this section.
8.5 End User Registration Data. If EMBARC approves the materials provided
by GEOWORKS, EMBARC will mail, at GEOWORKS expense, the approved material to the
end-users of the GEOWORKS' Products, such approval by EMBARC not to be
unreasonable withheld.
9.0 ROYALTY
9.1 Royalty Payments. EMBARC will make Royalty Payments in accordance with
Schedule C.
9.2 No Second Royalty Payment. If any EMBARC Devices and/or Target
Machines are returned, GEOWORKS will receive no additional royalty by virtue of
any repair or replacement of the returned EMBARC Device and/or Target Machine.
9.3 Records. EMBARC shall maintain complete and correct records for three
(3) years establishing the number of Commercial Service Activated EMBARC Devices
and Royalty Payments according to Schedule C.
9.4 Credit Against Earned Royalty. EMBARC shall be entitled to a credit
against actual royalty earned by GEOWORKS in accordance with Schedule C.
9.5 EMBARC and GEOWORKS agree that ###. The Royalty payments will be made
on a quarterly basis ("Payment Period"). The accrued Royalty payments will
become due within ninety (90) days of such Payment Period. The quarterly period
comprises the first quarter ###, second quarter ###, third quarter ### and
fourth quarter ### of each year, and all Product Royalty payments will accrue
within its respective quarter.
9.6 Audits. At reasonable times during the terms of this Agreement for the
time period of Section 9.3, an independent third party representative using
acceptable accounting rules, acceptable to EMBARC, and upon reasonable notice,
but in no event less than thirty (30) days notice, and during EMBARC's normal
business hours, shall have the right to conduct an audit of the records of
Section 9.3 to verify the Royalty Payments. EMBARC shall pay any overdue
payments revealed by such audit which are verifiable by EMBARC, together with
interest thereon at a rate of 1.5% per month from the due date until paid. Such
audit shall not be conducted for more than once per year. GEOWORKS may, within
twelve month of the
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expiration or termination of this Agreement, elect to conduct an audit for any
period within the one (1) year period preceding such expiration or termination
that has not already been audited. In the event that such audit reveals an
overpayment to GEOWORKS, GEOWORKS shall reimburse EMBARC for such overpayment,
### thereon at the ### from the ### until ###.
10. SUPPORT
10.1 Customer support.
10.1(a) EMBARC will provide first level customer support to its
customers.
10.1(b) GEOWORKS will provide second level support to EMBARC. GEOWORKS
further agrees to provide, ### to EMBARC on-going support and maintenance for
the Product pursuant to this Section 10.
10.2 Training. GEOWORKS shall provide, at a mutual agreed time, ###
knowledgeable instructor, ### to EMBARC other than ###, at a site designated by
EMBARC, for ### to train EMBARC personnel on the operation GEOWORKS' Products to
enable EMBARC's personnel to become familiar with the operation of the GEOWORKS'
Products.
10.3 Subject to this Section 10 GEOWORKS agrees:
a) to have trained support personnel with working knowledge of the
Product available for telephone consultation with EMBARC's support personnel.
b) to respond to a CRITICAL PROBLEM within ### such that, through
GEOWORKS' good faith best efforts, the Critical Problem is either corrected or
GEOWORKS provides a reasonable way to resolve the Critical Problem, provided
that if the Critical Problem is of a complexity that it may not be capable of
being corrected within such ### period, GEOWORKS shall not be in default
hereunder if it had informed EMBARC of the nature of the Critical Problem within
the ### period and has proceeded diligently and in good faith to correct such
Critical Problem;
c) to respond to a Major Problem within one (1) week such that,
through GEOWORKS' good faith best efforts, the Major Problem is either corrected
or GEOWORKS provides a reasonable way to resolve the Major Problem, GEOWORKS
shall not be in default hereunder if it had informed EMBARC of the nature of the
Major Problem within the one (1) week period and has proceeded diligently and in
good faith to correct such Major Problem; and
d) to correct a Minor Problem in the next Fix Release or Revision of
the Product; and
10.4 GEOWORKS' obligations under Section 10.3 are conditioned upon EMBARC:
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a) giving timely notice of Product problems to GEOWORKS' support
personnel, such notice to be confirmed via written notice (per Section 18.8)
within ten (10) business days;
b) using good faith efforts to convey an accurate description of the
problem, to provide potential reasons causing the problem if known, and to
create an appropriate environment, including providing reasonable technical
assistance where appropriate, for allowing GEOWORKS to inquire further about the
nature of the problem; and
c) based upon Section 10.4b, reasonably classifying a problem
reported to GEOWORKS as a Critical Problem, Major Problem or Minor Problem.
10.5 Critical Problems will be handled as follows:
Upon EMBARC's and GEOWORKS' reasonable assessment, GEOWORKS will provide to
EMBARC, support personnel with a working knowledge of the Product and
appropriate test equipment at a location jointly agreed to by EMBARC and
GEOWORKS to resolve Critical Problems.
10.6 GEOWORKS, within ### of resolving a Critical Problem, will provide to
EMBARC, ###, a Fix Release.
10.7 The parties agree to supply the other party with a current and ongoing
exchange of information relative to any problem encountered by customers
pertaining to the Product. The parties understand and agree that the right and
duty to exchange information is to be broadly construed, and encompasses
situations that do not call for a party's response under Sections 10.3,10.4, and
10.5.
11.0. REVISIONS AND REPLACEMENT PRODUCTS
11.1 During the term of this Agreement, if GEOWORKS develops a new
Revision, whether or not at EMBARC's request, ###. However, if GEOWORKS develops
a new Revision to the operating system, GEOWORKS will offer same to EMBARC, ###.
If EMBARC still desires to obtain such new Revision despite the engineering
efforts, ### to EMBARC for GEOWORKS to make such Revision compatible with the
EMBARC Device.
11.2 GEOWORKS shall deliver the new Revision to EMBARC, ###, within thirty
(30) days of its release in accordance with Section 5 (Delivery).
11.3 GEOWORKS shall provide EMBARC with ### notice prior to public
announcement regarding Revisions.
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11.4 GEOWORKS agrees to provide reasonable support for prior versions for
not less than ### after any Fix Releases, or Revisions.
12.0 WARRANTIES AND INDEMNIFICATION
12.1 Warranties. With respect to all subject matter, including the
GEOWORKS-Owned software, ideas, inventions, creations, works, processes, designs
and methods, that GEOWORKS will disclose or use in its performance of the
Services or the granting of any rights under this Agreement, GEOWORKS warrants
that it has the right to make such disclosure, use and grant without liability
to others. GEOWORKS further warrants that: (i) the Products will be
substantially Error-free, the remedy for breach of this warranty shall be the
Error correction set forth in Section 10; (ii) the Products is or will be
original with GEOWORKS or the holder of licensed rights; (iii) the Products does
not and will not infringe any patent rights, copyrights, mask work rights, trade
secret rights or other proprietary rights of others; (iv) GEOWORKS will be the
sole and exclusive owner of the Products and any Derivative Works prepared by
GEOWORKS pursuant to this Agreement and the rights granted to EMBARC in this
Agreement; (v) GEOWORKS has not previously granted and will not grant any rights
in the Products or its Derivative Works to any third party that are inconsistent
with the rights granted to EMBARC herein; (vi) GEOWORKS has full power to enter
into this Agreement, to carry out its obligations under this Agreement and to
grant the rights granted to EMBARC; and (vii) to GEOWORKS' knowledge, the
Products provided under this Agreement does not infringe or violate any United
States or foreign patent, copyright, trademark, trade secret or other
proprietary right of a third party.
12.2. GEOWORKS further warrants to EMBARC that the Software or its
operation or use will be Error-free, the remedy for breach of this warranty
shall be the Error correction set forth in Section 10.
12.3. EMBARC hereby warrants that EMBARC owns all right, title and interest
in and to the EMBARC Devices, and in and to the EMBARC Service, or has obtained
or will obtain the right to market the EMBARC Devices and EMBARC Service, or any
portion thereof from third parties who do own the EMBARC Devices and EMBARC
Service, or any portion thereof.
12.4 GEOWORKS Infringement Indemnity and Duty to Correct.
(a) GEOWORKS Infringement Indemnity. GEOWORKS will, at its expense
and at EMBARC's request, defend any claim or action brought against EMBARC and
EMBARC's subsidiaries, affiliates, directors, officers, employees, agents and
independent contractors, to the extent that it is based on a claim that the
Products provided under this Agreement infringes or violates any United States
or foreign countries patents, copyright, trademark, trade secret or other
proprietary right of a third party, and GEOWORKS will indemnify and hold EMBARC
harmless from and against any costs, damages and fees reasonably incurred by
EMBARC, including but not limited to fees of attorneys and other professionals,
that are attributable to such claim or
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action; provided that: (i) EMBARC gives GEOWORKS reasonably prompt notice in
writing of any such claim or action and permits GEOWORKS, through counsel of its
choice, to answer the charge of infringement and defend such claim or action;
and (ii) EMBARC provides GEOWORKS information, assistance and authority, at
GEOWORKS' expense, to enable GEOWORKS to defend such claim or action. GEOWORKS
may not settle any claim or action on EMBARC's behalf without EMBARC's written
permission and in the event EMBARC and GEOWORKS agree to settle a claim or
action, GEOWORKS agrees not to disclose the settlement nor to permit the party
claiming infringement to disclose the settlement without first obtaining
EMBARC's written permission which will not be unreasonably withheld. This
indemnity does not extend to any suit based upon infringement of any patents,
copyright, trademark, trade secret or other proprietary right of a third party
by the combination of GEOWORKS Products and with the EMBARC Devices if such
infringement would have been avoided by the use of the GEOWORKS Products alone.
(b) Duty to Correct. If the Products become or is likely to become
the subject of a claim or action covered by Section 12.4(a), GEOWORKS will, at
GEOWORKS' option and expense: (i) procure for EMBARC the past right to make, use
and sell and the future right to continue to make, use and sell the Products;
(ii) replace or modify the Products to make such non-infringing, provided that
the same function is performed by the replacement or modified Products to
EMBARC's satisfaction, the cost and all ancillary cost associated with
recalling, modifying and replacing the Products shall be borne by GEOWORKS; or
(iii) if the past and future rights to continue to make, use and sell cannot be
procured or the Products cannot be replaced or modified at reasonable expense,
reimburse EMBARC for any unearned portion of the Royalty Advance paid under this
Agreement.
12.5 Disclaimer of Warranties. EXCEPT AS SET FORTH IN THIS SECTION 12, ALL
WARRANTIES WITH RESPECT TO THE LICENSED SOFTWARE INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY EXCLUDED.
13.0 LIMITATION OF LIABILITY
EXCEPT AS PROVIDED FOR EACH PARTY'S INDEMNITY OBLIGATIONS WITH RESPECT TO
THIRD PARTY CLAIMS UNDER SECTIONS 12.4(a) and 12.5 AND 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 LOSS OF ANTICIPATED PROFITS ARISING FROM ANY
PERFORMANCE OF THIS AGREEMENT BY SUCH PARTY EVEN IF NOTICE WAS GIVEN OF THE
POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
DAMAGES IN EXCESS OF THE AMOUNT PAID BY EMBARC TO GEOWORKS UNDER THIS AGREEMENT.
14.0 CONFIDENTIALITY
Each party will protect the other's Confidential Information from
unauthorized dissemination and use with the same degree of care that each party
uses to protect its own like
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information, but in no event less than reasonable care. Neither party will use
the other's Confidential Information for purposes other that those necessary to
directly further the purposes of this Agreement. Neither party will disclose to
third party the existence of this Agreement.
15.0 TERM
This Agreement will commence on October 26, 1993 and will continue for five
(5) years. Thereafter, it will be automatically renewed for a three (3) year
term, provided however, that either party may terminate this Agreement at any
time during the three (3) year renewal term on six (6) months written notice
pursuant to section 18.8 prior to termination.
16.0 TERMINATION
16.1 Termination for Cause By Party. Either party shall have the right to
terminate this Agreement immediately upon written notice to the other party if:
(a) the other party is in material breach of any warranty, term,
conditions, covenants of, or obligations under this Agreement other than those
contained in Section 14.0 and fails to cure that breach within thirty (30) days
after thirty (30) days of receiving written notice of the breach; or
(b) other party is in material breach of any warranty, term,
condition, covenant, or obligation under section 14.0; or
(c) the other party: (i) becomes insolvent; (ii) fails to pay its
debts or perform its obligations in the ordinary course of business as they
mature; (iii) admits in writing its solvency or inability to pay its debts or
perform its obligation as they mature; or (iv) becomes the subject of any
voluntary or involuntary proceeding in bankruptcy, liquidation, dissolution,
receivership, attachment, or composition of general assignment for benefit of
creditors that is not dismissed with prejudice within thirty (30) days after the
institution of such proceeding.
Termination under subsection (a) above will become effective
automatically upon expiration of the cure period in the absence of a cure or a
written agreement to the contrary signed by a duly authorized EMBARC personnel.
Termination under subsections (b) and (c) will become effective immediately upon
written notice of termination at any time after the specified event or the
failure of the specified proceedings to be timely dismissed.
16.2 Effect of Termination. Upon any termination of this Agreement, each
party immediately will return to the other party its Confidential Information
provided thereto or will confirm in writing the destruction of the Confidential
Information. Also upon termination of this Agreement, each party will be
released from all obligations and liabilities to the other occurring or arising
after the date of such termination, except that any of the provisions of
Sections 1.0, 6.0, 7.4, 9.0,10.0,14.0, 16.2, 16.3,16.4, 17.3(a) and 18.0 will
survive termination of Ws Agreement. Termination will not relieve GEOWORKS and
EMBARC from any liability arising from any breach of this Agreement. Neither
party will be liable to the other for damages of any sort solely as a result of
terminating this Agreement in accordance with its terms and termination of this
Agreement will be without prejudice to any other right or remedy of either
party.
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16.3 Termination Payments. In the case of termination of this Agreement due
to GEOWORKS' uncured material breach, GEOWORKS shall reimburse EMBARC for any
unearned portion of the Royalty Advance paid under this Agreement. In the case
of termination by GEOWORKS because of an uncured material breach by EMBARC prior
to Acceptance under Section 16.1, GEOWORKS will be entitled to retain the
Royalty Advance already paid or payable to GEOWORKS pursuant to the terms of
this Agreement.
16.4 Rights after Termination. If the Agreement is not terminated due to a
material breach by EMBARC, EMBARC shall have the right to continue to distribute
its on-hand inventory of EMBARC Devices in accordance with the terms and
conditions of this Agreement for a period of ### following such termination or
expiration subject to section 9.0 (Royalities).
17.0 SOURCE CODE ESCROW
17.1 Appointment of Agent. The parties appoint Data Securities
International (DSI) as an escrow agent, and agree to execute an Escrow Agreement
substantially in the form of Exhibit G attached hereto.
17.2 Deposit. Upon EMBARC's Acceptance of the Products, and within ten (10)
days of EMBARC's acceptance of each Fix Release, or Revision thereto, GEOWORKS
will deliver to the escrow agent the most current copy of the Source Code of the
Products and all definition libraries and utilities necessary for the creation
of an executable program. If third Party(ies) hardware and/or Software is needed
to edit, debug, modify, or compile the programs, GEOWORKS shall identify and
deposit such identification of hardware and/or software of the third party
herewith.
17.3 Release. The escrow agent shall deliver the Source Code deposit and
all definition libraries and utilities necessary for the creation of an
executable program to EMBARC upon: (i) GEOWORKS or a successor in interest to
GEOWORKS by merger, by operation of law, assignment purchase or otherwise, by
finding of a court or arbitrator, ceases to provide maintenance and support for
the Software generally after written notice from EMBARC, and that the delivery
of the Source Code is thereby made necessary; or (ii) any one or more of the
following circumstances occurs, uncorrected for more than thirty (30) days;
entry of an order for relief under Title 11 of the United States Code; the
making by Licensor of a general assignment for the benefit of creditors; the
appointment of a general receiver or trustee in bankruptcy of Licensor's
business or property; the bankruptcy or liquidation or Licensor's express
written decision not to continue to support or maintain the Software.
17.3 (a) Upon release of the Source Code to EMBARC and Motorola, Inc.,
EMBARC and Motorola, Inc. shall have and GEOWORKS hereby grants a nonexclusive,
worldwide, perpetual, license to use in order to correct Error(s), to modify, to
reproduce, to merge or to translate the Source Code for EMBARC's use pursuant to
this Agreement.
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EMBARC and Motorola, Inc. agree to pay ### as liquidated payment to a
trustee in bankruptcy or receiver to expedite the release of the Source Code to
EMBARC and Motorola, Inc. EMBARC and Motorola, Inc. shall treat the Source Code
as confidential, and shall protect the Source Code from disclosure in the same
manner and with the same level of care with which EMBARC or Motorola, Inc.
protect confidential information concerning their proprietary products from
disclosure.
18.0 GENERAL
18.1 Force Majeure. Neither party shall be liable for any delay in meeting
or for failure to meet it's obligations under the Agreement due to any cause
outside its reasonable control including, without limitation, strikes or
lockouts, Acts of God or of the public enemy, war, riot, malicious acts of
damage, fire, acts of governmental authority, failure of the electricity supply,
failure or delay on the part of any subcontractors beyond its reasonable
control, or the non-availability or shortage of materials. The delayed party's
time for performance or cure under this Section 18.1 will be extended for a
period equal to the duration of the cause or sixty (60) days, whichever is less.
18.2 Independent Contractor. In performing the Agreement, GEOWORKS is
acting as an independent contractor and not as an employee or agent of EMBARC or
joint ventures of EMBARC. Each party agrees that it has no authority hereunder
to assume or create any obligation or responsibility, express or implied, on
behalf of, or in the name of, the other party. The parties will not represent to
the contrary, either expressly, implicitly, by appearance or otherwise.
18.3 Insurance. GEOWORKS will maintain insurance to protect itself from
claims: (i) by GEOWORKS' employees, agents, and subcontractors under workers'
compensation and state disability acts; (ii) for damages because of bodily
injury, sickness, disease or death of its employees or of any other person that
arise out of any negligent act or omission or willful misconduct of GEOWORKS or
GEOWORKS' employees, agents or subcontractors; and (iii) for damages because of
injury to or destruction of tangible property including loss of use resulting
therefrom that arise out of any negligent act or omission of GEOWORKS or
GEOWORKS' employees, agents or subcontractors. GEOWORKS will insure all EMBARC's
property in its possession or control, including but not limited to, any loaned
equipment, against all loss and damage and will reimburse EMBARC for any such
loss or damage.
18.4 Assignment. Neither party may assign or delegate its obligations under
this Agreement either in whole or in part, without the prior written consent of
the other party. Any attempted assignment in violation of the provisions of this
Section 18.5 will be voidable by the other party.
18.5 Applicable Law. This Agreement will be governed and construed in
accordance with the laws of the United States and the State of Florida.
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18.6 Severability. If, for any reason, a court of competent jurisdiction
finds any provision of this Agreement, or portion thereof, to be unenforceable,
that provision of the Agreement will be enforced to the maximum extent
permissible so as to effect the intent of the parties, and the remainder of this
Agreement will continue in full force and effect.
18.7 Notices and Other Communications. All notices required or permitted
under this Agreement will be in writing, will reference this Agreement and will
be deemed given when: (i) delivered personally; (ii) five (5) days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid; or (iii) one (1) day after deposit with a commercial overnight carrier
specifying next day delivery, with written verification of receipt. All
communications will be sent to the addresses set forth below to or such other
address as may be designated by a party by giving written notice to the other
party pursuant to this Section 18.8.
Notices to GEOWORKS
For the attention of: Mr. Gordon E. Mayer
President and C.O.O.
Geoworks
cc: Jordan Breslow
At: 2150 Shattuck Avenue
Suite PH
Berkeley, CA 94704
Notices to EMBARC
For the attention of: Mr. Rick Kane; or the
General Manager of EMBARC
At: Motorola, Inc.
1500 Gateway Boulevard
Boynton Beach, FL 33426-8292
18.8 No Waiver. Failure by either party to enforce any provision of this
Agreement will not be deemed a waiver of future enforcement of that or any other
provision.
18.9 No Rights in Third Parties. This Agreement is made for the benefit of
GEOWORKS and EMBARC and their respective subsidiaries and affiliates, if any,
and not for the benefit of any third parties except the grant to EMBARC to
license third party(ies) to use the Products.
18.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but which collectively
will constitute one and the same instrument.
18.11 Headings and References. The headings and captions used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
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18.12 Construction. This Agreement has been negotiated by the parties and
their respective counsels. This Agreement will be interpreted fairly in
accordance with its terms and without any strict construction in favor of or
against either party.
18.13 Trademark Use. Neither party shall be permitted to use, without the
other party's prior written consent, any trademarks, service marks, trade names,
logos or other commercial or product designations, for any purpose, including,
but not limited to, use in connection with the product or its promotions,
advertisements or exhibitions; provided, however, that upon EMBARC's final
acceptance or commercial release of the Product, GEOWORKS may indicate in
promotional materials that EMBARC is a client or a customer of EMBARC.
18.14 Complete Agreement. This Agreement, including all Exhibits,
constitutes the entire Agreement between the parties with respect to the subject
matter hereof, and supersedes and replaces all prior or contemporaneous
understandings or agreements, written or oral, regarding such subject matter. No
amendment to or modification of this Agreement will be binding unless in writing
and signed by a duly authorized representative of both parties.
18.15 Compliance With U.S. Export Laws. The parties agree never to export
directly or indirectly, either its proprietary products, technical data, or
software as the case may be, licensed or furnished to either party pursuant to
the Agreement to any country outside the United States which export may be in
violation of Section 379.4 of the Export Administration Regulations, or any
other U.S. Export Control Law or Regulation.
18.16 Overhead Accounts. In order to provide familiarity with the EMBARC
Service, EMBARC will make up to ### EMBARC Devices available to GEOWORKS'
full-time employees to purchase ###. EMBARC will provide the basic service ###
to the GEOWORKS' employees who purchased the EMBARC devices. EMBARC will also
provide up to a maximum of ### complementary promotional accounts to GEOWORKS
executives for the basic service including the information service ### per user
per month. The EMBARC Devices and services provided to GEOWORKS and its GEOWORKS
employees shall not be included in the calculation of royalty payment to be paid
to GEOWORKS.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives:
GEOWORKS EMBARC
By /s/ Gordon E. Mayer and By /s/ Janiece S. Webb
--------------------------------- ------------------------------
Title President and C.O.O. Title Corp V.P. & G.M.
------------------------------ -------------------------------
Signed Gordon E. Mayer Signed Janiece S. Webb
----------------------------- ------------------------------
Date 1/27/94 Date 1/25/94
------------------------------- --------------------------------
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SCHEDULE A
Deliverables
The Products are:
1. Functional Specification
2. Periodic status reports and reviews
3. Z-E Card version 1.0 and GEOS version 2.0 Object Code libraries (beta
version)
4. Z-E Card version 1.0 and GEOS version 2.0 Object code (final version)
5. User Guide Review
6. Product Test Specification
7. Fixed Releases or Revisions of items 2, 3, and 4 for the Sharp Target
Machine indicated above.
8. Warranty releases and Fixed Release or Revisions.
The definition of the Z-E Card version 1.0 and GEOS version 2.0 Object Code
libraries are as specified in Zoomer EMBARC Project Specification, November
8,1993 attached hereto as Exhibit B and incorporated herein.
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SCHEDULE B
Specifications
see attached dated 11/8/93
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###
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###
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###
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###
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###
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###
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###
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###
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SCHEDULE C
Royalty
Royalty Advance. EMBARC will pay to GEOWORKS a Royalty Advance of ###. The
### of the Royalty Advance will be paid according to the following schedule and
upon the occurrence of the each events:
Signing of the Letter of Intent ###
Delivery of Beta Software ###
Acceptance of Products ###
EMBARC will pay the ### of the royalty advance over a period of ### from
the first Commercial Service Activation of an accepted Product embedded in the
EMBARC Devices according to the following schedule:
At the end of the ### period: ###
At the end of the ### period: ###
At the end of the ### period: ###
Credit Against Royalty Advance. EMBARC shall be entitled to a credit
against any actual royalty amount due to GEOWORKS of ### of the Royalty Advance
paid by EMBARC. EMBARC will apply such Royalty Advance credit to all Royal
Payments as they become due. Within ninety (90) days after the end of each
Payment Period, as defined in this Exhibit C, EMBARC will pay to GEOWORKS the
actual Royalty payment only to the extent that the amount of Royalty payment due
exceeds the amount of Royalty Advances which have been paid and have not been
recovered as Royalties due as of the end of said Payment Period.
Royalty Fee Motorola will remit to GEOWORKS a quarterly payment with a
report showing how the Royalty Payment was calculated. The per-EMBARC Device fee
("Royalty Payment") will be made up of three (3) components to be disbursed to
GEOWORKS within ninety (90) days of the end of each Payment Period. EMBARC and
GEOWORKS agree that there will be no Royalty Payments due to GEOWORKS for any
EMBARC Devices used for the following purposes:
i) ###;
ii) ###;
iii) ###; or
iv) ###.
1. Product Royalty
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The Product Royalty fee is ### per-EMBARC Device sold after receipt by EMBARC of
funds from user(s) or resale agent(s), less any returns.
2. Service Royalty Fee
The service royalty fee is calculated as ### of EMBARC's collected revenue
on the ###, plus ### of EMBARC's collected revenue on ### services for each
EMBARC Device Commercial Service Activated with the EMBARC Service
Activated during the term of this Agreement.
3. Messaging Royalty Fee
The Messaging Royalty Fee is calculated as ### of the revenue generated by
EMBARC from messaging to/from the EMBARC Devices. Due to the lack of a
mechanical system to make this calculation, EMBARC will conduct an audit at
the end of the first six months of the most current month's messaging
revenue from all Z-E card in commercial service, determine the total
messaging amount for that month, and calculate the Messaging Royalty Fee
due as ### of that amount. This monthly Messaging Royalty Fee will apply
monthly until the next audit period, and will be due with the quarterly
Royalty Payment. This procedure will continue until an automated method is
available and another procedure is agreed to by both parities.
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SCHEDULE D
SOURCE CODE ESCROW RIDER
RIDER made this 26 day of October, 1993 by and between GEOWORKS with
offices at 2150 Shattuck Avenue, Berkeley, California 94704 ("Licensor") and
EMBARC COMMUNICATION SERVICES, INC. and Motorola, Inc. ("Licensees") to the
Software License Agreement between the Licensee and Licensor dated Oct. 26, 1993
("Software Supply Agreement").
1. Priority. In the event of any conflict or inconsistency between the
provisions of this Rider and those contained in the Software Supply Agreement,
the provisions of this Rider shall prevail and govern.
2. Source Code Escrow. Within thirty (30) days after the final acceptance
date, Licensor, at Licensor's cost, agrees to place the Source Code of the
Software Program and all definition libraries and utilities necessary for the
creation of an executable program into escrow with the third party Escrow Agent,
upon Licensee's written consent to the choice of Escrow Agent, such consent will
not be unreasonably withheld. Such Source Code of the Software Program and all
definition libraries and utilities necessary for the creation of an executable
program shall be updated by Licensor within ten (10) days after a new Software
release (Fix Release or Revision) has been issued to the Licensees. The escrow
agent shall deliver the Source Code deposit and all definition libraries and
utilities necessary for the creation of an executable program to EMBARC upon:
(i) GEOWORKS or a successor in interest to GEOWORKS by merger, by operation of
law, assignment purchase or otherwise, by finding of a court or arbitrator,
ceases to provide maintenance and support for the Software generally after
written notice from EMBARC, and that the delivery of the Source Code is thereby
made necessary; or (ii) any one or more of the following circumstances occurs,
uncorrected for more than thirty (30) days; entry of an order for relief under
Title 11 of the United States Code; the making by Licensor of a general
assignment for the benefit of creditors; the appointment of a general receiver
or trustee in bankruptcy of Licensor's business or property; the bankruptcy or
liquidation or Licensor's express written decision not to continue to support or
maintain the Software. The occurrence of the described events shall not
constitute an escrow release condition if, within said thirty (30) day period,
Licensor (including its receiver or trustee in bankruptcy) provides willingness
to fulfill all of its maintenance and support obligations. If the Source Code of
the Software is released to Licensees, Licensees agree to keep it confidential
in the same manner in which Licensees keep its confidential information, but in
no case less than reasonable care.
3.0 Release. Upon release of the Source Code to Licensees, Licensees shall
have and Licensor hereby grants a non-exclusive, worldwide, perpetual, license
to use, to correct Errors, to modify, to reproduce, merge or translate the
Source Code for Licensees' use pursuant to this Agreement. Licensees agree to
pay a sum not exceeding ### as liquidated payment to a trustee in bankruptcy or
receiver to expedite the release of the Source Code to Licensees. Licensees
shall
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treat the Source Code as confidential, and shall protect the Source Code from
disclosure in the same manner and with the same level of care with which
Licensees protect confidential information concerning their proprietary products
from disclosure.
Licensees and Licensor have read and agree to the terms and conditions on the
Rider. This Rider shall be effective when executed by Licensor.
GEOWORKS EMBARC Communication Services, Inc.
By /s/ Gordon E. Mayer and By /s/ Janiece S. Webb
------------------------------ ----------------------------------
Title President and COO Title Corp V.P. & G.M.
-------------------------- -----------------------------------
Date 1/27/94 Date 1/25/94
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SCHEDULE E
Project Plan
The following schedule has been established for the Z-E Card Version 1.0 and
the GEOS Object libraries:
Contract Award
----------
Beta version delivered to Motorola
----------
Final version delivered to Motorola
----------
Beta version for Sharp
----------
Final version for Sharp
----------
Other milestones to be mutually defined and agreed upon.
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SCHEDULE F
Geoworks Logo and Proprietary Notice
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GEOWORKS TRADEMARKS, LOGOS AND PROPRIETARY MARKINGS
[To be amended by GEOWORKS from time to time during the term of this Agreement.]
1. TRADEMARKS
GEOS (R)
GEOWORKS (R)
2. LOGO
[see attached]
3. PROPRIETARY MARKINGS
For screen, packaging and documentation:
Geoworks(R) application software and GEOS(R) operating system software
copyright (C)1990-1993 Geoworks. All rights reserved. Patent pending.
Geoworks(R) and GEOS(R) are Registered Trademarks of Geoworks in the
United of America and other countries.
LOGO [See attached]
GEOWORKS - EMBARC
SOFTWARE SUPPLY AGREEMENT Page 21 CONFIDENTIAL MOTOLIC3.N16
<PAGE> 35
LOGO
[GRAPHIC OMITTED]
[OBJECT OMITTED]
