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Exhibit 10.27
AMENDMENT #1
TO GEOWORKS-MELCO TECHNOLOGY LICENSE AGREEMENT
This Amendment #1 to the Geoworks-MELCO Technology License Agreement concluded
on November 12, 1997, is made and effective the 25th day of March, 1999
("EFFECTIVE DATE") by and between Geoworks Corporation, a Delaware corporation
whose principal address is 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 XXX
("GEOWORKS"), and Mitsubishi Electric Corporation, a corporation duly organized
and existing under the laws of Japan, having its principal office at 0-0-0,
Xxxxxxxxxx, Xxxxxxx-xx, Xxxxx 000-0000, Xxxxx ("MELCO").
WHEREAS
(A) MELCO is a developer, manufacturer and distributor of computer and
consumer electronics equipment, radio communication equipment and
wireless and circuit-switched handset equipment.
(B) Geoworks is a developer, manufacturer, distributor, and publisher of
computer software technologies.
(C) Geoworks now wishes to grant to MELCO ### so that MELCO can undertake
independent development of certain devices based upon the Geoworks
software.
(D) Geoworks and MELCO now wish to amend certain financial, licensing and
other terms of their agreement.
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1. TECHNOLOGY LICENSE AGREEMENT
The Parties agree that all the terms and conditions of the Technology
License Agreement signed on November 12, 1997 (hereafter "Agreement"),
including the definitions of terms and expressions in said Agreement,
shall remain in full force and effect with the exception to those terms
and conditions amended or added herein. The Parties agree to amend the
following accordingly numbered sections of the Agreement to the
following effect:
1.1 Exhibits
Exhibits X-0, X-0, etc.
Sub-Section (3) of Exhibits X-0, X-0 etc. in Section 1.1 is hereby
deleted in its entirety.
1.3 Entire Agreement
Section 1.3 is hereby amended as follows:
"Entire Agreement
This Amendment #1 to the Technology License Agreement signed on November
12, 1997, the Technology License Agreement and the Exhibits to these
documents state the entire agreement between the Parties and supersede
all prior communications, written or oral, between the Parties regarding
this subject matter. No terms in any purchase order or other forms shall
apply, even if such purchase order or other forms are accepted by either
Party. No amendment or modification of the Agreement or this Amendment
may be made except by an instrument in writing signed by both Parties."
2. DEFINITIONS
2.4 Licensed Technology
Section 2.4 is hereby amended as follows:
###
2.6 Product
Section 2.6 is hereby amended as follows: "(i) a MELCO product as
defined in Exhibit A-1, (ii) products developed by MELCO or its
Affiliates for projects involving
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2.10 Territory
Section 2.10 is hereby amended as follows:
###
2.12 Derivative Works
A new section 2.12 is hereby added to the Agreement as follows:
"2.12 Derivative Works
works which are based upon one or more pre-existing works, such as
revisions, modifications, translations, abridgments, condensations,
expansions, collections, compilations or any other form(s) in which such
pre-existing works may be recast, transformed or adapted, and which, in
the absence of this Agreement or other authorization by the owner of the
pre-existing work, would constitute copyright infringement of the
pre-existing work."
2.13 Intellectual Property Rights
A new section 2.13 is hereby added to the Agreement as follows:
"2.13 Intellectual Property Rights
### arising under statutory or common law, including (i) patents; (ii)
design patents; (iii) rights associated with works of authorship
including copyrights, copyright registrations and copyright
applications; (iv) rights relating to the protection of trade secrets
and confidential information; (v) and divisions, continuations,
renewals, reissues and extensions of the foregoing (as and to the extent
applicable) now existing, hereafter filed, issued or acquired."
3. GRANT OF LICENSES
The first paragraph of Section 3 is hereby amended as follows: "Subject
to all the terms and conditions herein, Geoworks hereby grants to MELCO
and its Affiliates, under and to the extent of Geoworks' or Geoworks'
licensors' Intellectual Property Rights, the following:"
3.1 Distribution
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Section 3.1 is hereby amended by adding the words, "use, copy and"
before the word, "distribute" on the second (2nd) line.
3.2 Reproduction
Section 3.2 is hereby deleted in its entirety.
3.3 Internal Use
Section 3.3 is hereby deleted in its entirety.
3.4 Trademarks
Section 3.4 is hereby deleted in its entirety.
3.5 Private Labeling
Section 3.5(a) is hereby amended as follows:
"Manufacturing: all such Private Labeled Product units must be
manufactured by MELCO, its Affiliates or a subcontractor of MELCO or its
Affiliates; and "
3.6 No Implied Licenses
Section 3.6 is hereby amended by replacing the words "Except as
expressly provided above" in the third line with the words, "Except as
expressly provided hereunder" and by replacing the words "in accordance
with" in the last sentence of this Section 3.6 with the words,
"permitted by".
3.7 Modifications
###
3.8 ###
Section 3.8 is hereby added to the Agreement as follows:
### as follows:"
3.8.1 ###
###
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3.8.2 Development Rights:
subject to Exhibit F, a non-exclusive, non-transferable license to use,
copy, prepare Derivative Works, modify or, pursuant to the terms of this
Agreement have a subcontractor use, copy, prepare Derivative Works or
modify, ###
3.8.3 Object Code Distribution:
a non-exclusive, non-transferable license to distribute, make, use,
sell, lend, import, dispose or exhibit including the license to have
distributed, made, used, sold, lent, imported, disposed or exhibited
object code versions of the Embedded Licensed Technology in Products in
the Territory, in accordance with Section 3 of the Agreement. Unless
otherwise expressly provided herein, MELCO and its Affiliates shall have
###.
3.8.4 No Sublicense
MELCO and its Affiliates may not sublicense, assign, or otherwise
transfer ### rights set forth in this Amendment #1 unless otherwise
agreed by the Parties in writing.
4. PROPRIETARY RIGHTS
4.5 Geoworks' Retained Rights
Section 4.5 is hereby amended by capitalizing the phrase Intellectual
Property Rights in the second line.
4.6 MELCO Modifications
Section 4.6 of the Agreement is hereby amended by modifying the first
sentence as follows: "MELCO shall own all rights, title and interests to
modifications ### made by MELCO as Derivative Works", and the rest of
this Section shall remain unchanged.
4.8 Representation
Section 4.8 is hereby added to this Agreement as follows:
"4.8 Representation
"Geoworks represents and warrants ###
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except the Third Party Technology, it represents it has the right to
sublicense the Third Party Technology defined in Exhibit E, that it has
the power and right to enter into this Agreement and that it has the
right to grant the licenses set forth herein."
5. DELIVERY OF THE LICENSED TECHNOLOGY AND ACCEPTANCE
The following section is hereby added to the Agreement as follows:
5.11 ###
###
6. ###
###
7. PAYMENTS
7.1 Royalty Prepayments and Payments
Section 7.1 is hereby amended as follows:
"7.1 One-Time Payment
MELCO agrees to pay to Geoworks the sum ### for the rights granted in
Sections 3.1-3.7 of the Agreement, including the distribution of the
Embedded Licensed Technology in object code form with Products except
Other Products pursuant to the terms of the Agreement as amended herein
in lieu of paying Geoworks royalties based upon Product Shipment.
Geoworks shall credit MELCO with all fees previously paid to Geoworks by
MELCO as prepaid royalties under the original Section 2.1 of Exhibit A-1
toward such paid-up license fee and MELCO shall continue paying Geoworks
the remaining quarterly installments ### pursuant to Section 2.1 of
Exhibit A-1 until such ### is paid in full. As a result of such ### fee,
MELCO shall have no obligation to pay any royalty including royalty per
Product Shipment in the future, except for royalties due pursuant to
Section 7.12 herein. ### fee shall not constitute an advance and, except
as otherwise stated, shall not be credited towards royalties,
development fees or other payments owed by MELCO to Geoworks under the
Agreement."
7.6 Records
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Section 7.6 is hereby amended by inserting the words, "for Other
Products" after the word, "royalties" on the second (2nd) line.
7.7 Reports
Section 7.7(a) regarding royalty reports is hereby amended by changing
the word "Product" on the third (3rd) line to "Other Products".
Section 7.7(b) is hereby amended by capitalizing the phrase
Intellectual Property Rights on the fourth (4th) line.
7.8 Audit
Section 7.8 is hereby amended by inserting the word "Other" before the
word "Product" on the third (3rd) line.
7.9 Third Party Manufacturers
Section 7.9 is hereby deleted in its entirety.
7.10 ###
Section 7.10 is hereby added to the Agreement as follows:
"Within forty-five (45) days after the date of MELCO's receipt of the
invoice referenced in Section 5.11 and the components set forth in ###
and the installation and compilation of the V243 ###, MELCO shall pay to
Geoworks ### in consideration for ### .
Upon completion of Phase 2 of the General Training Session set forth in
Exhibit G, ### shall become nonrefundable, and upon completion of Phase
2 of the High Level Training Series ### shall become nonrefundable.
If within five (5) years after the execution of this Amendment #1,
Geoworks ###. MELCO shall have the right to have an independent
third-party representative of MELCO, reasonably acceptable to Geoworks,
upon reasonable notice and during Geoworks' normal business hours,
conduct an audit to verify Geoworks' compliance with this provision of
the Agreement."
7.11 Fees for Training
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Section 7.11 is hereby added to the Agreement as follows:
"MELCO shall pay ### for the training set forth in Exhibit G, in which
Geoworks will invoice MELCO on a monthly basis. MELCO will thereafter
pay Geoworks the amount due on the invoice within forty-five (45) days
after the date of the invoice."
7.12 Royalty Payment for Other Products
Section 7.12 is hereby added to the Agreement as follows:
"Before MELCO distributes object code versions of the Embedded Licensed
Technology in Other Products in the Territory in accordance with Section
3.8.3, MELCO and Geoworks will negotiate a royalty to be paid to
Geoworks by MELCO for Product Shipments of Other Products."
8. MANUFACTURING RESPONSIBILITIES
Section 8 is hereby deleted in its entirety.
9. GEOWORKS' INDEMNITIES
Section 9 is hereby amended by replacing all references to the words
"Licensed Technology" with the words," Licensed Technology except the
Third Party Technology."
9.1 Indemnity
Section 9.1 is hereby amended by replacing the words, beginning on line
13 of this Section 9.1, "(b) Geoworks is given control over the defense
thereof and MELCO cooperates in the defense, at Geoworks' expense" with
the following: "(b) Geoworks is given control over the defense thereof
and MELCO cooperates in the defense, at Geoworks' expense, provided
that, Geoworks shall (i) notify and consult with MELCO about the
settlement of any such claim, demand, action or suit prior to a final
judgement without the breach of any confidentiality obligations; (ii)
make commercially reasonable efforts to minimize payments to third
parties for such infringement,; and (iii) defend MELCO, it Affiliates,
and substantially through MELCO or its Affiliates defend customers of
MELCO and its Affiliates in accordance with the decision of such
consultation."
10. MELCO'S INDEMNITIES
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Section 10 is hereby amended by replacing all references to the words
"Licensed Technology" with the words, "Licensed Technology except the
Third Party Technology."
11. COMBINATION CLAIMS
Section 11 is hereby amended by replacing all references to the words
"Licensed Technology" with the words,"Licensed Technology except the
Third Party Technology."
12. WARRANTIES
Section 12 is hereby amended by replacing all references to the words
"Licensed Technology" (except the words used as the heading of Section
12.4) with the words, "Licensed Technology except the Third Party
Technology."
12.1 Disclaimer of Express Warranties
The first sentence of Section 12.1 is hereby amended by replacing the
words "Except as expressly provided below in Section 12.4 (Licensed
Technology Performance Warranty)" with the words, "Except as expressly
provided under this Agreement."
13.1 Term
Section 13.1 is hereby amended by deleting the words "for as long as
any Project Exhibit is in effect" in the third line.
13.2 Termination for Breach
The last sentence of this Section 13.2 is hereby amended by adding the
following words to the end of this sentence, "unless otherwise provided
herein."
13.4(b) Other Termination or Expiration
The last part of the first sentence of Section 13.4(b) is hereby amended
as follows: "subject to the continued obligation to pay royalties for
Product Shipments of Other Products as set forth in the applicable
Project Exhibit(s)".
14. CONFIDENTIAL INFORMATION
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The fourth (4th) sentence of this Section 14, beginning on line 17 of
the Agreement, is hereby amended as follows: "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 ten (10) years from the date of
disclosure, ### provided, however, that each Party may disclose
necessary portions of the Confidential Information to independent
contractors who agree in writing to be bound by confidentiality
restrictions equivalent to those set forth in this Agreement and who
agree in writing not to claim any ownership rights in the Confidential
Information or in the Confidential Information included in a work
product which may be derived from their access to such Confidential
Information."
15. LIMITATION OF LIABILITY
Paragraph (3) of Section 15 is hereby amended as follows: "In no event
shall Geoworks' aggregate liability to defend and indemnify under
Section 9 (Geoworks' Indemnities), exceed an amount equal to ###. In no
event shall MELCO's aggregate liability to defend and indemnify under
Section 10 (MELCO's Indemnities) exceed an amount equal to ###. In the
case of a claim under Section 9 (Geoworks' Indemnities), Geoworks shall
pay such aggregate liability as follows: One third shall be paid by
Geoworks on or before the sixtieth (60th) business day following the
date of final settlement or final decision. The balance shall be a
credit in favor of MELCO, which MELCO may apply against non-recurring
engineering expenses. The foregoing limitation of each Party's aggregate
liability under Section 9 (Geoworks' Indemnities) or Section 10 (MELCO's
Indemnities) shall not apply in the case of damages or liabilities
attributable to a wilful infringement." The remaining paragraphs within
this Section 15 shall remain unchanged.
16. GENERAL
16.1 Assignment
Section 16.1 of the Agreement is hereby amended by adding the following
language after the word "assets" on the 6th line: "or in the event a
third party acquires all the rights and obligations to Geoworks' GEOS-SC
operating system business and agrees in
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writing, which writing shall be directed and provided to MELCO, to
continue to meet the obligations under this Agreement. Geoworks shall
remain liable for completion of the training set forth in Exhibit G in
the event such assignment is effective prior to the completion of the
training and such third party does not agree to complete such training.
The assigning Party shall give notice to the other Party as soon as the
assignment may be disclosed without breach of confidentiality
obligations". The rest of this Section 16.1 shall remain unchanged.
16.9 Survival
Section 16.9 of the Agreement is hereby amended by limiting the survival
of Section 9 (GEOWORKS' INDEMNITIES) and Section 10 (MELCO'S
INDEMNITIES) to the earlier of six (6) years from the first commercial
Product Shipment of the V291/321 Product or eight (8) years from the
Effective Date of this Amendment #1.
Exhibit A-1 THE MELCO V243 PRODUCT
Section 2.1 of Exhibit A-1 (Non-Refundable Prepaid Royalties) is hereby
amended by deleting the last sentence of this Section 2.1 in its
entirety.
Section 2.3 of Exhibit A-1 (Royalties) is hereby deleted in its
entirety.
Section 4 of Exhibit A-1 ("TERM OF AGREEMENT AS TO THE V243 PROJECT") is
hereby amended by deleting the second sentence beginning with the words,
"The Parties agree to meet . . ."
Exhibit B ADDRESSES FOR NOTICES
Geoworks' Electronic Mail is hereby amended by substituting
"xxxx@xxxxxxxx.xxx" for "xxx@xxxxxxxx.xxx" and "xxxxxx@xxxxxxxx.xxx" for
"xxxxxx@xxxxxxxx.xxx".
Geoworks' Notice Recipient is hereby amended by substituting "Xxxx
Xxxxxxxxx" for "Xxxxxx X. Xxxxxxx" and "Xxxxx X. Xxxxxxxx, Geoworks
General Counsel, 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000" for
"Jordan X. Xxxxxxx".
Geoworks' Officer For Approvals is hereby amended by substituting "Xxxx
Xxxxxxxxx" for "Xxxxxx X. Xxxxxxx".
Exhibit D COOPERATIVE MARKETING is hereby deleted in its entirety.
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IN WITNESS WHEREOF, the Parties have executed this Amendment # 1 to the
Technology License Agreement in Alameda, California as of the Effective Date.
MITSUBISHI ELECTRIC GEOWORKS CORPORATION
CORPORATION
/s/Xxxxxxx Xxxxx /s/ Xxxx Xxxxxxxxx
---------------------------- ----------------------------------
Xxxxxxx Xxxxx Xxxx Xxxxxxxxx
Section Manager Vice President, Sales and Business
Section B Development
EXHIBITS TO BE ADDED TO THE AGREEMENT:
Exhibit E IDENTIFICATION OF ###
Exhibit F GEOWORKS' GUIDELINES FOR PRESERVING THE CONFIDENTIALITY OF ###
EXHIBIT G TRAINING
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EXHIBIT E
IDENTIFICATION OF ###
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EXHIBIT F
GEOWORKS' GUIDELINES FOR PRESERVING
THE CONFIDENTIALITY OF ###
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EXHIBIT G
TRAINING
TECHNOLOGY TRANSITION COST ESTIMATE
--------------------------------------------------------------------------------
Overview
This document details the cost estimate of the ###
Technology Transition Training Program
The training program consists of the following elements:
o General Training Session to be held in Japan.
o High Level Training Series to be held in Japan and the US.
o Installation of ###.
GENERAL TRAINING SESSION
Phase 1
o 1 week preparation (x2 engineers = 2w)
o 1 week training session in Japan (x2 engineers = 2w)
o 2 flights
o 2 weeks co-location expense
Phase 2
o 2 weeks preparation (x2 engineers = 4w)
o 3 week training session in Japan (x2 engineers = 6w)
o 2 flights
o 6 weeks co-location expense
HIGH LEVEL TRAINING SERIES
Phase 1
o 3 weeks preparation (x2 engineers = 6w)
o 12 weeks intensive training in the US(x4 engineers = 48w)
Phase 2
o A series of alternating co-locations which include:
o 4 weeks preparation (x2 engineers = 8w)
o 13 weeks of training in the US (x2 engineers = 26w)
o 12 weeks training in Japan (x2 engineers = 24w)
o 8 flights
o 24 weeks co-location expense
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EXHIBIT G (CONT.)
SOURCE CODE INSTALLATION AND CONFIGURATION
This is the estimate to ###
1 week installation (x1 engineer = 1w)
o 3 weeks configuration support (x1 engineer = 3w)
o 4 weeks co-location expense
Total Estimated Costs
The total estimated costs from Geoworks are as follows:
Total Engineering time: ###
Total Flights: ###
Total co-location expense: ###
Grand Total (Geoworks only) = ###
Additional Costs to Melco
###
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