Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Pre-Effective Amendment to Registration Statement 205 1.01M
(General Form)
2: EX-1.1 Underwriting Agreement 21 109K
3: EX-5.1 Opinion re: Legality 1 10K
5: EX-10.23 Material Contract 43 138K
6: EX-10.24 Material Contract 12 48K
7: EX-10.25 Material Contract 50 175K
8: EX-10.26 Material Contract 16 55K
9: EX-10.27 Material Contract 11 32K
10: EX-10.28 Material Contract 49 191K
11: EX-10.29 Material Contract 10 44K
12: EX-10.30 Material Contract 11 47K
4: EX-10.3A Material Contract 1 9K
13: EX-21.1 Subsidiaries of the Registrant 1 7K
14: EX-23.2 Consent of Experts or Counsel 1 7K
15: EX-23.3 Consent of Experts or Counsel 1 7K
16: EX-23.4 Consent of Experts or Counsel 1 7K
17: EX-23.5 Consent of Experts or Counsel 1 8K
18: EX-23.6 Consent of Experts or Counsel 1 7K
19: EX-23.7 Consent of Experts or Counsel 1 7K
20: EX-27.1 Financial Data Schedule (Pre-XBRL) 2 14K
LINEO, INC.
SAMSUNG ELECTRO-MECHANICS CO., LTD.
SAMSUNG VENTURE INVESTMENT CORPORATION
LISTECH LIMITED
----------------------------
SHAREHOLDERS AGREEMENT
WITH RESPECT TO
LISTECH LIMITED
---------------------------
DATED AS OF SEPTEMBER 22, 2000
TABLE OF CONTENTS
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Page
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ARTICLE 1. DEFINITIONS............................................................................................1
ARTICLE 2. ORGANIZATION; SUBSCRIPTION; GOVERNANCE.................................................................4
2.1. Organization.........................................................................................4
2.2. Subscription.........................................................................................4
2.3. Company Documents; Shares; Shareholders Meetings.....................................................4
2.4. Board of Directors...................................................................................5
2.5. Officers of the Company..............................................................................8
2.6. Confidentiality......................................................................................9
ARTICLE 3. RESTRICTIONS ON TRANSFER..............................................................................10
3.1. General.............................................................................................10
3.2. Right of First Refusal..............................................................................10
3.3. Legends.............................................................................................11
3.4. Rights of Future Holders and Transferees............................................................12
3.5. Liquidated Damages..................................................................................12
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS........................................................12
4.1. Representations and Warranties of Shareholders......................................................12
4.2. Representations and Warranties of Samsung...........................................................13
4.3. Representations and Warranties of Lineo.............................................................13
ARTICLE 5. BUSINESS PLAN AND CAPITAL CONTRIBUTIONS...............................................................13
5.1. Business Plan.......................................................................................13
5.2. No Further Capital Contributions....................................................................14
5.3. Dividend Policy.....................................................................................14
ARTICLE 6. OTHER AGREEMENTS OF THE COMPANY AND THE SHAREHOLDERS..................................................14
6.1. Accession of the Company............................................................................14
6.2. Agreements of the Company...........................................................................14
6.3. Management Reports; Access and Information..........................................................15
6.4. Governmental Approvals..............................................................................15
6.5. New Shareholders....................................................................................16
6.6. IPO.................................................................................................16
6.7. *
ARTICLE 7. DEADLOCK..............................................................................................16
ARTICLE 8. TERM, EXPIRATION AND TERMINATION OF THE AGREEMENT.....................................................17
8.1. Term; Expiration....................................................................................17
8.2. Termination of the Agreement........................................................................17
ARTICLE 9. ARBITRATION...........................................................................................18
9.1. Dispute Resolution..................................................................................18
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*MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT,
AND SUCH MATERIAL HAS BEEN FILED SEPARATELY WITH THE SEC.
9.2. Specific Performance................................................................................18
ARTICLE 10. MISCELLANEOUS........................................................................................18
10.1. Assignment, Etc.....................................................................................19
10.2. Notices.............................................................................................19
10.3. Costs and Expenses..................................................................................20
10.4. No Waiver...........................................................................................20
10.5. Amendment...........................................................................................20
10.6. Third Parties.......................................................................................20
10.7. Headings............................................................................................20
10.8. Governing Law.......................................................................................20
10.9. Entire Agreement....................................................................................20
10.10. Invalidity..........................................................................................21
10.11. Counterparts........................................................................................21
10.12. Language............................................................................................21
10.13. Further Assurances..................................................................................21
10.14. Conflicts...........................................................................................21
-ii-
SHAREHOLDERS AGREEMENT
This SHAREHOLDERS AGREEMENT, dated as of September 22, 2000 (this "AGREEMENT"),
is entered into among
(1) Lineo, Inc., a Delaware corporation ("LINEO");
(2) Samsung Electro-Mechanics Co., Ltd., a Korean corporation ("SEMCO"); and
(3) Samsung Venture Investment Corporation, a Korean corporation ("SVIC"; SEMCO
and SVIC are herein jointly and severally referred to as "SAMSUNG").
Lineo and Samsung, together with their permitted transferees and assigns and any
permitted successors to their interest in any Shares, are hereinafter referred
to collectively as the "SHAREHOLDERS" and individually as a "SHAREHOLDER".
R E C I T A L S:
A. Samsung and Lineo have agreed to form Listech Limited, a Korean corporation
(the "COMPANY") as a joint venture in order to combine their experience,
technological and management expertise, and financial commitment and
resources for purposes of developing and selling various products of
embedded and/or realtime application including Linux (based on Lineo's
software products), RTOS and embedded software worldwide;
B. The Company will be established to serve as the joint venture company for
the purposes described above;
C. The Shareholders and the Company believe that it is in their best interest
and in the best interest of the Company to set forth in this Agreement
certain agreements with respect to the management of the Company and the
voting of the Shares and to impose certain restrictions on any disposition
of the Shares;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS
As used in this Agreement, the following terms have the respective meanings
set forth below or set forth in the respective paragraphs or Sections referred
to with respect to such terms, and such definitions shall be applicable to the
singular and plural forms of such terms.
"AFFILIATE" means, with respect to any specified Person, any other Person
controlling, controlled by, or under common control with, such specified Person.
For purposes hereof, "control" means, with respect to any Person, the power to
elect a majority of members to the board of directors, management committee or
other managing body of such Person or to direct the management or affairs of any
Person, whether through the ownership of equity or other
SHAREHOLDERS AGREEMENT PAGE 2
rights, by contract or arrangement or otherwise. A wholly-owned Affiliate means,
with respect to any person, any direct or indirect wholly-owned subsidiary of
such person, or any direct or indirect wholly-owned subsidiary of any parent
company that wholly-owns such person. Any company which is deemed to be a member
of the Samsung Group under the regulations of the Korean Fair Trade Commission
shall be deemed to be an Affiliate of SEMCO and SVIC.
"ANNUAL BUSINESS PLAN" has the meaning specified in Section 5.1(b).
"AOI" means the AOI of the Company, in the form to be agreed by the
Shareholders under Section 2.1, as adopted and amended from time to time by
agreement of the Shareholders.
"BOARD OF DIRECTORS" means the board of directors of the Company.
"BUSINESS DAY" means, in any specified location, any day other than a
Saturday or Sunday or other day on which banks in such location are required or
authorized by law or regulation to be closed.
"BUSINESS PLAN" has the meaning specified in Section 5.1(b).
"COMPANY" has the meaning specified in the first paragraph of this
Agreement.
"COMPANY BUSINESS" means business and operations of the Company as
contemplated by, and in accordance with, the current Business Plan in effect.
"COMPETING BUSINESS" means the development and marketing of embedded
software solutions for device manufacturers and other original equipment
manufacturers (OEMs).
"EFFECTIVE DATE" of this Agreement means the date on which all of the
following have occurred: (i) this Agreement has been executed and delivered by
each of Lineo, SEMCO and SVIC; and (ii) this Agreement has been approved by the
board of directors of each of Lineo, SEMCO and SVIC.
"FIELD OF ACTIVITY" means the purpose and scope of business of the Company
as defined in the AOI which shall consist of the development and sale of various
products of embedded and/or realtime application including Linux (based on
Lineo's software products), RTOS and embedded software, distribution and sale of
such products and/or third party products and maintenance thereof in the
worldwide market.
"GOVERNMENTAL AUTHORITY" means any central, regional, provincial, municipal
or other governmental authority, including any executive, legislative or
judicial branch thereof and any agency, department, commission, bureau or
instrumentality thereof.
"GROUP COMPANY" means the Company and any Subsidiary of the Company.
"INITIAL BUSINESS PLAN" has the meaning specified in Section 5.1(a).
"IPO" means, with respect to the Company, the first sale, whether primary,
secondary, or a combination of both, of its shares pursuant to a public offering
on the Korea Stock Exchange, the Korean Securities Dealers Quotation System
(Kosdaq), or another recognized securities
SHAREHOLDERS AGREEMENT PAGE 3
exchange outside Korea, where "public offering" means any widely dispersed,
underwritten offering open to the public on any such exchange.
"KOREA" means the Republic of Korea.
"KRW" means the lawful currency of Korea.
"LICENSE AGREEMENT" means a license agreement to be entered into by Lineo
as licensor and the Company as licensee. The current form of the License
Agreement is attached hereto as Exhibit 1. The parties will negotiate a final
License Agreement according to the Schedule attached hereto as Exhibit 2.
"LIEN" means any lien, charge, pledge, encumbrance, security interest,
mortgage, title retention or other similar agreement or arrangement.
"LINEO" has the meaning attributed thereto in the first paragraph of this
Agreement.
"PERSON" means any natural person, corporation, partnership, joint venture,
trust, association or other legal entity.
"REORGANIZATION" means any increase, consolidation and division, conversion
into stock or re-conversion of stock into shares, subdivision, capitalization,
cancellation or redemption of any shares in a Group Company or any purchase by a
Group Company of its own shares or any alteration of any of the rights of any of
the share capital of a Group Company or any amalgamation or reconstruction
affecting its share capital or any compromise or arrangement with creditors
(including a "workout" procedure with creditors in Korea).
"SAMSUNG" has the meaning attributed thereto in the first paragraph of this
Agreement.
"SHAREHOLDER" has the meaning attributed thereto in the first paragraph of
this Agreement; except where the context otherwise requires, a reference to a
Shareholder herein shall be deemed to refer to SEMCO and SVIC, jointly and
severally, on the one hand, or to Lineo, on the other, together with any
permitted transferees of Shares by SEMCO and SVIC, jointly and severally, on the
one hand, or permitted transferees of Shares by Lineo, on the other. The term
"Shareholder" shall not include holders of Shares (other than permitted
transferees of the Shareholders) who acquire such Shares after the acquisition
by the Shareholders of Shares under Article 2.
"SHARES" means, at any time, the ordinary shares of the Company issued and
outstanding at such time.
"SUBSIDIARY" means any Person directly or indirectly owned or controlled by
the Company. For purposes hereof, the term "control" means, with respect to any
Person, the power to elect a majority of members to the board of directors,
management committee or other managing body of such Person or to direct the
management or affairs of any Person, whether through the ownership of equity
shares or securities or other rights, by contract or arrangement or otherwise.
SHAREHOLDERS AGREEMENT PAGE 4
"US DOLLARS" or "US$" means United States dollars, the lawful currency of
the United States of America.
ARTICLE 2. ORGANIZATION; SUBSCRIPTION; GOVERNANCE
2.1. ORGANIZATION
As promptly as practicable following the Effective Date, the Shareholders
shall agree upon the AOI of the Company in a manner consistent with the terms of
this Agreement and shall cause the Company to be formed in accordance with
Korean law and to adopt the AOI. Immediately after its formation, the
Shareholders shall cause the Company to execute and become a party to this
Agreement.
2.2. SUBSCRIPTION
(a) Based on the respective representations, warranties and agreements of
the parties set forth below, each of Lineo and Samsung hereby subscribes for and
purchases the following Shares, to be issued within five Business Days after the
organization of the Company for the consideration specified below:
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Initial Share Subscription
Shareholder No. of Shares. Percentage Price
----------- -------------- -------------- ----------------------------
Lineo 240,000 57.14% W5,000/share(W1,200,000,000)
SEMCO 90,000 21.43% W5,000/share (W450,000,000)
SVIC 90,000 21.43% W5,000/share (W450,000,000)
(b) Lineo's payment of the subscription price for the Shares shall take
place in accordance with the schedule attached hereto as Exhibit 2. The Schedule
includes a form of purchase order, which the parties shall cause the Company to
execute upon formation of the Company. The first payment due under the purchase
order shall be made in accordance with the purchase order included as part of
Exhibit 2.
2.3. COMPANY DOCUMENTS; SHARES; SHAREHOLDERS MEETINGS
(a) The Company shall call regular meetings of Shareholders in the manner
provided in the AOI, but not less frequently than once each year. Notices of the
date and agenda for each regular meeting of Shareholders shall be provided by
the Company to each Shareholder at least 15 days prior to such meeting. Special
meetings of Shareholders may be called by the Chairman of the Company or any
Shareholder by notice thereof to the Shareholders delivered at least 10 days
prior to such meeting.
(b) A quorum of Shareholders shall be constituted for any meeting of the
Shareholders by the presence thereat (in person or by proxy) by Shareholders
holding two-thirds of all issued and outstanding Shares.
SHAREHOLDERS AGREEMENT PAGE 5
(c) To the extent permitted by applicable law, Shareholders and their
proxies may participate in any meeting of Shareholders by telephone, video
conferencing or other means by which all participants may speak and hear each
other, and any Shareholder so participating shall be deemed to be present at any
such meeting for all purposes.
(d) Notice of any meeting of Shareholders shall be properly given if
delivered to the address or in the manner specified below in Section 10.2 or at
such other address specified by such Shareholder for notices from time to time
pursuant to Section 10.2.
2.4. BOARD OF DIRECTORS
(a) The Board of Directors shall consist of five members.
(b) Subject to Section 2.4(c), three directors shall be nominated by Lineo
and two directors shall be nominated by Samsung. Lineo and Samsung shall
nominate each of their respective directors within 10 days of the date of this
Agreement. After the Closing, the respective rights of the Shareholders with
respect to the election of directors shall be governed by the AOI and the
provisions of this Section 2.4.
(c) If at any time Lineo, on the one hand, or Samsung, on the other, shall
own less than 10% of the outstanding Shares, (i) such Shareholder shall cause
its nominees to the Board of Directors to resign, and (ii) all members of the
Board of Directors shall be elected by the majority vote of the outstanding
Shares present at a meeting of Shareholders at which a quorum is present or by
unanimous written consent.
(d) Upon the death, resignation or incapacity of any director, the
Shareholder who nominated such director pursuant to Section 2.4(b) shall be
entitled to nominate his replacement to the Board of Directors, and all of the
Shareholders shall vote all Shares owned by them in favor of the appointment of
such nominee to the Board of Directors in order to fill the vacancy created by
such death, resignation or incapacity. Any director shall be removed from office
upon motion by the Shareholder that nominated him as of right pursuant to
Section 2.4(b), and the vacancy on the Board of Directors so created by such
removal shall be filled by a nominee nominated by such Shareholder. No director
appointed by any Shareholder as of right pursuant to Section 2.4(b) shall be
removed from the Board of Directors unless the nominating Shareholder consents
to such removal. Notwithstanding anything to the contrary contained in this
Section 2.4, if at any time the total number of Shares owned by a Shareholder
together is less than 10% of the outstanding Shares, the directors nominated by
such Shareholder shall be removed from office upon motion by the other
Shareholder and the vacancy on the Board of Directors created by such removal
shall be filled by a nominee of the other Shareholder.
(e) The persons nominated to the Board of Directors in accordance with this
Section 2.4 shall be elected to the Board of Directors by the Shareholders, and
each Shareholder agrees to vote all Shares owned by it in favor of the election
of the persons so nominated. Upon a motion to remove any director in accordance
with Section 2.4(d), each Shareholder agrees to vote all Shares owned by it to
effect removal of such directors.
(f) Regular meetings of the Board of Directors shall be called by the
Chairman or President of the Company not less frequently than six times each
year during the first year of operation of the Company and not less than four
times each year thereafter.
SHAREHOLDERS AGREEMENT PAGE 6
(g) The Board of Directors shall manage the business of Company and may
exercise all powers normally exercised by a Board of Directors, except for such
powers as are required to be exercised by Shareholders, all in accordance with
the AOI and applicable law. All actions by the Board of Directors shall require
the affirmative vote of a majority of the members of Board of Directors present
at a meeting at which a quorum is present, except for such actions as to which a
super-majority vote is required pursuant to Section 2.4(k), the AOI or
applicable law. A quorum of the Board of Directors must include at least one
member nominated by Lineo and one member nominated by Samsung.
(h) The Company shall form an Executive Committee for review and decision
of on-going business matters on a timely fashion. The Executive Committee of the
Board of Directors shall consist of the President/Chief Executive Officer and
one of the directors nominated by Lineo. The Executive Committee shall have the
authority to make any decisions, by unanimous consent of the members, to the
extent permitted by the AOI and applicable law, of such matters as may be
delegated to it from time to time by resolution of the Board of Directors,
including the following:
(i) Establishment of policies and/or regulations regarding personnel
management, administration and operation of the Company;
(ii) Approval of any contract to which the Company is a party involving
an amount in excess of W100,000,000 but less than W500,000,000
during the term of the contract, and any other contract with a
term of one year or more and less than three years;
(iii) Preparation of a plan for compensation, including salaries,
bonuses and incentive compensation to be received by the employees
of the Company, other than directors and officers;
(iv) The establishment or modification of the Company's proposed annual
budget for consideration by the Board of Directors;
(v) The recommendation to the Board of Directors of appropriate
bookkeeping and accounting policies, including the selection of
the Company's outside auditor; and
(vi) Except for the License Agreement, entry by the Company into any
agreement with any Shareholder or any Affiliate of any Shareholder
with respect to any transaction less than W1,000,000 per occasion,
and less than W1,000,000,000 in annual aggregate, in the ordinary
course of the Company's business.
Regular meetings of the Executive Committee may be held at such time and place
as shall from time to time be fixed by the Executive Committee and no notice
thereof shall be required, provided that both members are in attendance.
(i) To the extent now or hereafter permitted by applicable law, directors
may participate in any meeting of the Board of Directors by telephone or video
conferencing, and any director so participating shall be deemed to be present at
any such meeting for all purposes.
SHAREHOLDERS AGREEMENT PAGE 7
(j) Notices of all meetings of the Board of Directors shall be properly
given if delivered to directors at least five Business Days prior to such
scheduled meeting date by courier or facsimile. Any notice to any director
nominated by any Shareholder shall be properly given if sent to such Shareholder
at the address specified in Section 9.2 or at such other address specified by
such Shareholder for notices or to such address as such director shall specify
in writing to the Company from time to time.
(k) ACTIONS REQUIRING SUPER-MAJORITY CONSENT: Notwithstanding anything
contained in the AOI or elsewhere in this Agreement to the contrary, the Company
shall not take any of the following actions without obtaining the consent of at
least four directors:
(i) Adoption of the Business Plan and any material modifications
thereto or entering into any business outside of the Field of
Activity;
(ii) Any lending, borrowing, guarantee or creation of any financial
obligation, whether secured or not, upon all or any part of the
assets of the Company, exceeding W800,000,000;
(iii) Acquisition, mortgage, pledge, sale, assignment, transfer or other
disposition of any property of the Company having a fair market
value in excess of W800,000,000 (other than the sale of products
and services in the ordinary course of business) or any interest
of the Company (regardless of value) in the legal or beneficial
ownership of any other corporation or enterprise;
(iv) Any capital expenditure in excess of W800,000,000;
(v) Approval of any investment in or any loan to any other persons or
entities;
(vi) Issuance, repurchase or redemption of any equity or debt
securities or instruments issued by the Company;
(vii) Recommendation to the shareholders of any increase or decrease in
the authorized capital of the Company;
(viii) Increase or reduction of the capital of the Company including
issuance of new stock by transferring legal reserves into paid-in
capital, stock splits, or issuance of any debentures or
convertible debentures;
(ix) Merger into or with, or acquisition of all or a portion of the
business of, any other person or entity, or transfer in any one
transaction or series of transactions all or a substantial portion
of the Company's business or assets;
(x) Dissolution, liquidation, or entering into any reorganization,
composition or voluntary bankruptcy proceedings;
(xi) Fixing the compensation of the directors and officers of the
Company, including bonuses;
SHAREHOLDERS AGREEMENT PAGE 8
(xii) Approval of the execution of any contract which has a term of
three years or more, or which involves an amount of W800,000,000
or more during the term of the contract;
(xiii) Recommendation to the shareholders any change in the AOI;
(xiv) Approval of transactions of the Company with any Director; or
(xv) Approval of transactions of the Company with any Shareholder
(other than pursuant to the License Agreement) in excess of the
levels set forth in Section 2.4(h)(vi).
2.5. OFFICERS OF THE COMPANY
(a) Subject to Section 2.5(c), the officers of the Company shall be
appointed from time to time by the majority vote of those present at any meeting
of the Board of Directors duly called and held at which a quorum is present or
by the unanimous written consent of the Board of Directors.
(b) Each officer shall have the powers and fulfill the duties assigned to
such office by the Board of Directors and otherwise prescribed therefor in the
AOI of the Company. Nothing in this Section 2.5 shall limit the right of the
Board of Directors to determine or to amend from time to time the duties of any
officer or member of senior management of the Company or any Subsidiary.
(c) From time to time during the term of this Agreement, Lineo shall have
the right to nominate, remove and renominate from time to time individuals to
occupy the offices of Chairman Representative Director and Chief Financial
Officer or Executive Vice President, and Samsung shall have the right to
nominate, remove and renominate from time to time individuals to occupy the
offices of President/Chief Executive Officer Representative Director and Chief
Technical Officer of the Company, and each Shareholder shall vote, or shall
cause its nominees to the Board of Directors to vote, in favor of the
appointment of any such individuals so nominated, removed or renominated.
(d) The Shareholders agree that, from the date of this Agreement until the
first regular meeting of the Board of Directors or unanimous consent of the
Board of Directors in lieu of a meeting, in either case, at which officers are
appointed, each of the following positions shall be appointed for the respective
office set forth below, by the parties set forth below, with such appointments
to occur within 10 days of the date of this Agreement:
OFFICE
------
Chairman/Representative Director (Lineo)
President/CEO/Representative Director (Samsung)
Chief Financial Officer or Executive Vice President (Lineo)
Chief Technical Officer (Samsung)
Each of the foregoing persons shall perform the functions and duties normally
associated with such office or as otherwise specified by the Board of Directors.
The execution, delivery and
SHAREHOLDERS AGREEMENT PAGE 9
performance by the Company of this Agreement and the License Agreement is hereby
approved, and any of the officers of the Company specified above is hereby
authorized to execute and deliver this Agreement and the License Agreement on
behalf of the Company.
2.6. CONFIDENTIALITY
(a) At all times during the term of this Agreement, each Shareholder shall
keep, and shall cause, its agents and representatives (collectively the
"REPRESENTATIVES" of such Shareholder) to keep, all Confidential Information
strictly confidential and will not, directly or indirectly, disclose, use or
exploit such information for any purpose other than the good faith management of
the business and affairs of the Company and the Subsidiaries. As used herein,
"CONFIDENTIAL INFORMATION" means any information, documents or data in any form
that may contain non-public information relating to the Company, any Subsidiary,
any Shareholder or any Affiliate of any Shareholder or the business affairs
thereof, including technical information, data, processes and methodologies,
trade secrets, market analyses, pricing information, customer lists, research,
software, general know-how, designs and commercial and other proprietary or
confidential information or data and any financial results or information;
PROVIDED, HOWEVER, that "CONFIDENTIAL INFORMATION" does not include information
that is within the public domain (other than as a result of a breach of
obligations of Confidentiality), or information that was known by a party prior
to the disclosure thereof by the Company or a Subsidiary so long as such party
can provide reasonably satisfactory evidence of such prior knowledge. The
parties acknowledge that certain Confidential Information may be contained in,
or disclosed pursuant to, applications for Governmental Approvals. The parties
agree that the Company may make such disclosures to the extent the Company
reasonably determines such disclosure to be beneficial to the conduct or
objectives of the Company Business; PROVIDED, HOWEVER, that the Company shall,
to the extent permitted and practicable, use its best endeavors to cause such
Confidential Information to be treated confidentially.
(b) Except for disclosure by a Shareholder to such Shareholder's
accountants, tax advisers and employees who have a need to know such
information, no Shareholder shall disclose or shall permit any of its
Representatives to disclose any Confidential Information to any person or
entity, and any disclosure by a Shareholder of any Confidential Information to
any accountant, tax adviser or employee will be made only after such persons
have been advised of the confidential nature of such information and have agreed
to maintain its confidentiality.
(c) Nothing in this Agreement shall prevent any party from disclosing any
Confidential Information (i) to the extent required by law, rule or regulation
(including the regulations of and agreements with securities regulatory
authority or any stock exchange on which the securities of such party or its
Affiliates may be listed), (ii) as necessary in connection with any arbitration
proceeding or legal action between the parties, or (iii) as reasonably necessary
to effect a sale of its interest in the Company in accordance with the terms of
this Agreement; PROVIDED, HOWEVER, that, in the case of any disclosure pursuant
to clause (iii), the party seeking to disclose such information shall inform the
Company and the other Shareholders thereof and shall obtain from the party to
whom such disclosure is proposed to be made a confidentiality agreement in form
and substance reasonably prescribed by the Board of Directors.
SHAREHOLDERS AGREEMENT PAGE 10
(d) Neither the Shareholders nor the Company shall issue a press release or
other public announcement of the transactions or relationship contemplated
hereby or the investment by any party in the Company or the Company Business
without the consent of the other parties, which consent shall not be
unreasonably withheld or delayed. Each party shall cooperate with respect to the
content of any such press release or public announcement and coordinate the
release or dissemination thereof with the other parties.
ARTICLE 3. RESTRICTIONS ON TRANSFER
3.1. GENERAL
(a) The Shareholders agree that during the term of this Agreement, no
Shareholder shall sell, exchange, assign, transfer, pledge, hypothecate or
otherwise encumber or permit to be encumbered, give or otherwise dispose of,
whether any such disposition shall be voluntary or involuntary or come about or
be effected by operation of law or pursuant to or in compliance with any
judgment, order, rule or regulation of any administrative body (any of said acts
being hereinafter referred to as "DISPOSED OF" or as a "DISPOSITION") any of the
Shares now or hereafter owned by such Shareholder, except in accordance with the
provisions of this Agreement, and the Company agrees that it will not transfer
or recognize any disposition of Shares except in compliance with this Agreement.
Notwithstanding anything to the contrary in this Agreement, no Shareholder shall
dispose of any Shares to any Person engaged in, or having any ownership interest
in, a Competing Business.
(b) A Shareholder (the "TRANSFEROR") may transfer any Shares owned by it to
any wholly-owned Affiliate of such Transferor; PROVIDED, HOWEVER that (i) upon
and after such transfer, the Transferor shall remain liable to cause the
transferee Affiliate to perform and observe all of the agreements of the
Transferor under this Agreement; (ii) the Transferor shall be deemed to have
retained the right to re-acquire the Shares so transferred to such transferee
Affiliate without consideration, which right shall be deemed automatically
exercised upon any divestiture by such Transferor of a controlling interest in
such transferee Affiliate; and (iii) such transferee Affiliate shall, at the
time of such transfer, furnish a written agreement to and for the benefit of
each of the parties to this Agreement pursuant to which such transferee
acknowledges and agrees to the provisions of this clause.
(c) During the period from the Effective Date until the completion of the
IPO of the Company, no Shareholder shall dispose of any Shares without the prior
written consent of the other Shareholder, except to an Affiliate pursuant to
Section 3.1(b).
3.2. RIGHT OF FIRST REFUSAL
(a) Subject to Sections 3.1(a), 3.1(b), 3.1(c) and 3.2(e), if prior to the
IPO of Shares of the Company either Shareholder or any permitted transferee
thereof (herein, the "OFFEROR") agrees upon or enters into a BONA FIDE
arrangement with a third party (a "THIRD PARTY PURCHASER") to sell or make any
other disposition (not including a prohibited pledge, hypothecation or other
encumbrance) to such Third Party Purchaser all or a portion of the Shares of
such Offeror, then the Offeror shall first offer such Shares (the "OFFERED
SHARES") to the other Shareholder (the "OFFEREE"). Such offer shall be made by
written notice (the "OFFER NOTICE")
SHAREHOLDERS AGREEMENT PAGE 11
delivered to the Offeree and specifying the number of Offered Shares, the
offering price per share offered to and agreed upon by the Third Party Purchaser
and the Offeror and any other terms and conditions of such offer that were
agreed upon by the Third Party Purchaser and the Offeror. If any part of the
price contemplated to be paid by the Third Party Purchaser to purchase the
Offered Shares consists of property or assets other than cash, then the Offer
Notice shall also set forth such Offeror's good faith and reasonable estimate of
the cash value of such consideration and the manner by which such estimate was
determined.
(b) The Offeree shall have the right (a "RIGHT OF FIRST REFUSAL") to accept
such offer and to purchase (itself or through an Affiliate) all, but not less
than all, of such Offered Shares at the price and upon the terms and conditions
set forth in such Offer Notice.
(c) Within 30 days after its receipt of the Offer Notice (the "NOTICE
PERIOD"), the Offeree shall respond to the Offeror by giving the Offeror written
notice (a "REPLY NOTICE") specifying whether the Offeree intends or declines to
exercise the Right of First Refusal. If the Offeree specifies in its Reply
Notice that it intends to exercise the Right of First Refusal (an "ACCEPTANCE
NOTICE"), then a binding agreement for the sale and purchase of the Offered
Shares at the cash price (including the cash value of any property as estimated
reasonably and in good faith pursuant to the last sentence of Section 3.2(a))
and on the terms and conditions set forth in the Offer Notice shall
automatically be deemed to exist between the Offeror and the Offeree, and such
sale and purchase shall be consummated no later than 30 calendar days after the
delivery of such Acceptance Notice (the "COMPLETION DATE").
(d) If the Offeree has not delivered a Reply Notice to the Offeror or if,
because of the actions or inactions of the Offeree, the purchase and sale has
not occurred within the 30-day period contemplated by clause (c) above, then the
Offeree shall be deemed to have waived its Right of First Refusal and the
Offeror shall have the right to sell the Offered Shares to the Third Party
Purchaser upon the terms and conditions set forth in the Offer Notice; PROVIDED
that such sale and purchase is consummated (i) within 15 days following the last
day of the Notice Period or, (ii) if a Completion Date has been determined,
within 15 days following such Completion Date.
(e) Notwithstanding the foregoing, (i) the disposition of Shares by a
Shareholder to an Affiliate pursuant to Section 3.1(b) shall not be subject to
the Right of First Refusal of the other Shareholder hereunder, and (ii) a
Shareholder shall not have a Right of First Refusal in respect of a Change in
Control Transaction (as defined in Section 3.3).
(f) In connection with any such disposition of Shares pursuant to this
Section 3.2, the disposing Shareholder or such Affiliate shall deliver to the
other Shareholder a true and complete copy of all agreements relating to such
transaction in order to enable the other Shareholder to verify compliance with
this Section 3.2. The other Shareholder shall treat such agreements and their
contents as Confidential Information.
3.3. LEGENDS
Each certificate representing Shares shall have endorsed on it the
following legend, in Korean and English:
SHAREHOLDERS AGREEMENT PAGE 12
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES LAWS OF ANY COUNTRY.
THE SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THE SHARES
REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY, AND SUCH SHARES
ARE SUBJECT TO THE PROVISIONS OF, THE SHAREHOLDERS AGREEMENT DATED
AS OF SEPTEMBER 22, 2000, A COPY OF WHICH IS ON FILE AT THE OFFICE
OF THE COMPANY AND THE PROVISIONS OF WHICH ARE INCORPORATED HEREIN
BY REFERENCE.
3.4. RIGHTS OF FUTURE HOLDERS AND TRANSFEREES
Automatically upon the transfer of Shares or upon the occurrence of any
other permitted transfer or issuance of Shares hereunder, the purchaser or
acquirer of such Shares shall become a "Shareholder" within the meaning of this
Agreement, and shall become entitled to the rights and benefits, and subject to
the terms, conditions and restrictions set forth in this Agreement. Any such
purchaser or acquirer of Shares (including any Affiliate of any Shareholder that
acquires any Shares) and the transferor Shareholder thereof shall be required,
as a condition precedent to such transfer, to execute and deliver a joinder
agreement in such form as shall be prescribed by the Board of Directors of the
Company pursuant to which (i) such purchaser or acquirer agrees to assume and to
be bound by all of the obligations and terms of this Agreement, and (ii) the
transferor Shareholder agrees to remain liable for any actions or events
occurring prior to the date of transfer and to indemnify the Company for any
costs or taxes relating to such transfer.
3.5. LIQUIDATED DAMAGES
If a Shareholder makes a disposition of shares in violation of the
provisions of this Article 3, such Shareholder shall pay to the other
Shareholder, on demand, as liquidated damages and not as a penalty, an amount
equal to the greater of (i) 50% of the price at which such shares were sold and
(ii) 200% of the net asset value of such shares based on the most recent
available audited financial statement of the Company. The non-breaching
Shareholder may in its discretion in addition to exercising its rights under
this Article 3 treat such sale as a material breach hereof, terminate this
Agreement and pursue such party's remedies under Article 9. The Shareholders
acknowledge that it will be difficult or impossible to ascertain the precise
amount of damages resulting from a default under this Article 3, and agree that
the amount set forth herein represents a fair and reasonable estimate thereof
and constitutes liquidated damages and not a penalty.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
4.1. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Each of SEM, SVIC and Lineo hereby represents and warrants as follows:
(a) It is a legal entity duly organized and validly existing and in good
standing under the laws of the jurisdiction of its organization, as set forth
with respect to such party in the
SHAREHOLDERS AGREEMENT PAGE 13
opening paragraphs of this Agreement. It has all necessary power and authority
to own all of its properties and assets and to carry on its businesses as now
conducted.
(b) The execution, delivery and performance of this Agreement by it do not
and will not violate any provisions of any contract, court order, arbitration,
award, law or regulation, to which it is subject.
(c) All corporate and governmental authorizations, approvals and consents
necessary for the execution, delivery and performance by it of this Agreement
have been given or made, except for the following:
(d) This Agreement has been duly executed and delivered by it and
constitutes the valid and legally binding agreement of such Shareholder,
enforceable against it in accordance with its terms.
4.2. REPRESENTATIONS AND WARRANTIES OF SAMSUNG
Each of SEM and SVIC hereby represents and warrants that no approvals,
consents or authorizations from, or registration or filing with, notice to, or
license, permit or certification from, any governmental authorities of or within
Korea are required in connection with the entering into and performance of this
Agreement and the License Agreement by the Shareholders or the Company, or are
advisable in order to obtain tax benefits for the Company or the Shareholders,
except for the approvals that are routinely granted by the Korean governmental
authorities including the approvals provided in Section 6.4.
4.3. REPRESENTATIONS AND WARRANTIES OF LINEO
Lineo hereby represents and warrants that no approvals, consents or
authorizations from, or registration or filing with, notice to, or license,
permit or certification from, any governmental authorities of or within the
United States are required in connection with the entering into and performance
of this Agreement and the License Agreement by the Shareholders or the Company,
except for licenses with respect to the export of certain technology under the
License Agreement from the Bureau of Export Administration of the Department of
Commerce all of which have been obtained by Lineo.
ARTICLE 5. BUSINESS PLAN AND CAPITAL CONTRIBUTIONS
5.1. BUSINESS PLAN
(a) Lineo and Samsung have jointly prepared and agreed upon a preliminary
business plan setting forth the agreed purposes of the Company, a preliminary
revenue plan and other related matters. Within 60 days after the formation of
the Company, the Company shall produce a business plan covering the current
fiscal year (the "INITIAL BUSINESS PLAN"), including a budget for such period
(with detailed revenue and expense plan and employee growth targets), projected
sources and uses of cash for such period (including the nature, amount and
timing of any capital contributions or financing required for such period), and
a strategic analysis of the Company
SHAREHOLDERS AGREEMENT PAGE 14
Business. Lineo and Samsung shall cooperate as appropriate with each other and
with the Company in conducting the Company Business in accordance with the
Initial Business Plan during such period, as modified from time to time by the
agreement of the Shareholders.
(b) Each of Lineo and Samsung shall cooperate diligently and in good faith
with the Company in the preparation of a business plan covering each fiscal year
of the Company commencing with the Commercial Operations Commencement Date (each
such business plan is called an "ANNUAL BUSINESS PLAN" and each of the Initial
Business Plan and any Annual Business Plan is referred to as a "BUSINESS PLAN").
Each Business Plan shall include a budget for the period covered thereby, the
projected sources and uses of cash for such period (including the nature, amount
and timing of any capital contributions or financing required for such period),
a strategic analysis of the Company Business and such other matters as the
Shareholders or the Board of Directors shall specify. If the Board of Directors
unanimously approves any Business Plan, then the Company shall endeavor to
conduct the Company Business in accordance therewith for the period covered
thereby.
5.2. NO FURTHER CAPITAL CONTRIBUTIONS
No Shareholder shall have any obligation to provide additional capital
contributions or other financial accommodations to the Company. The parties
intend that the Company be self-funding after the initial capital contributions
hereunder.
5.3. DIVIDEND POLICY
The Shareholders agree that prior to the IPO of Shares of the Company, the
Company shall not declare any dividends without the consent of all Shareholders,
and shall retain all profits for use in expansion and development of the Company
until the profitibility and the expansion of the Company is assured by the
parties and after that time, the Company may declare and pay dividends;
provided, however, that if such IPO has not occurred by the fifth anniversary of
the date of this Agreement, the Company shall declare dividends to the maximum
extent permitted by law (after statutory reserves) unless the parties to this
Agreement otherwise agree.
ARTICLE 6. OTHER AGREEMENTS OF THE COMPANY AND THE
SHAREHOLDERS
6.1. ACCESSION OF THE COMPANY
The Shareholders shall cause the Company to execute and become a party to
this Agreement.
6.2. AGREEMENTS OF THE COMPANY
The Company agrees as follows:
(a) It will not register any transfer of Shares owned by any Shareholder
without requiring reasonably satisfactory proof of the compliance of such
transfer with the terms and
SHAREHOLDERS AGREEMENT PAGE 15
restrictions in this Agreement, and any such evidence shall be reasonably
satisfactory to all of the Shareholders.
(b) It will keep on file at its registered office a copy of this Agreement
which will be made available to any Shareholder for inspection upon request.
(c) It will not issue any Shares in bearer form.
(d) The fiscal year shall end on December 31 of each year, and its
financial accounts shall be kept in accordance with generally accepted
accounting principles as in effect from time to time in Korea, and will be
audited annually.
(e) The Company shall use its best efforts to sell the products of Lineo in
preference to those of competitors of Lineo in all cases in which Lineo products
are available.
6.3. MANAGEMENT REPORTS; ACCESS AND INFORMATION
(a) Not less frequently than once each fiscal quarter of the Company,
senior management of the Company shall present to the Shareholders regular
reports on the management and results of the Company Business, including any
design, installation or construction of the network, and any marketing, sales
and financial results.
(b) Subject to Section 2.8, the Shareholders shall cause the Company and
any Subsidiary:
(i) to take all necessary action to allow each Shareholder the right
to reasonable access during normal business hours to the senior
management, properties, books and records of the Company and any
Subsidiary for purposes of enabling such Shareholder to prepare
its tax returns or financial information or for any other
legitimate purpose;
(ii) to prepare and deliver to any Shareholder such financial or other
information concerning the business of the Company and any
Subsidiary as such Shareholder may reasonably request; and
(iii) to furnish as promptly as practicable to any Shareholder, upon
request, such information and assistance as is reasonably
necessary for the preparation or filing of such Shareholder's tax
returns, the making of any election related to taxes, the
preparation for any audit by any tax authority, and the
prosecution or defense of any claim, suit or proceeding relating
to any tax return.
6.4. GOVERNMENTAL APPROVALS
As soon as possible, but no later than 45 days following the execution and
delivery of this Agreement, Samsung and Lineo shall submit to the appropriate
Governmental Authorities a request for approval of the transactions contemplated
by this Agreement. Samsung shall work diligently and shall use all commercially
reasonable efforts to procure such approval as soon as
SHAREHOLDERS AGREEMENT PAGE 16
possible following such submission, and Lineo shall provide such cooperation as
may be necessary.
6.5. NEW SHAREHOLDERS
Within six months after the Effective Date, Samsung and Lineo agree to use
reasonable efforts (i) to identify a strategic investor for the purchase of
Shares in an amount up to 90,000 Shares, on terms and conditions acceptable to
Samsung and Lineo, and (ii) to issue up to 90,000 Shares to employees of the
Company and others approved by Samsung and Lineo in the form of options or sale
of shares on terms approved by Samsung and Lineo. Such strategic Investor and
any employees or others obtaining Shares shall agree, as a condition thereof, to
be bound by the provisions of Section 2.4 (election of nominees of Samsung and
Lineo to the Board of Directors), Section 2.6 (confidentiality), Article 3
(restrictions on transfer), Section 6.4 (non-competition), Article 8 (dispute
resolution) and Article 9 (miscellaneous), in an agreement acceptable to Samsung
and Lineo.
6.6. IPO
The parties agree to cooperate with a view to effecting the IPO of the
Company's shares at such time as valuation, timing and structure of such IPO
will tend to maximize returns to the Shareholders. It is understood and agreed
that it may be necessary or advisable to modify certain provisions of this
Agreement upon or prior to such IPO, including provisions relating to the
appointment of directors, in order to comply with applicable regulations or to
meet market conditions. The parties agree to discuss such matters in good faith
at such time.
6.7. *
ARTICLE 7. DEADLOCK
7.1 DEADLOCK DECLARATION
If the necessary super-majority under Section 2.4(k) has not been obtained
with respect to any matter set forth in such Section 2.4(k) for more than 60
days from the date of the second notice of a Board meeting at which such matter
was raised, either of the Shareholders may refer such matter (a "DEADLOCK") for
negotiation under this Article by notice to the other Shareholder (a "DEADLOCK
REFERENCE"). Upon receiving the Deadlock Reference, the Shareholders shall
negotiate in good faith in an effort to resolve the Deadlock within 45 days
after receipt of such Deadlock Reference, including meetings at the senior level
of management (executive vice
*MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT,
AND SUCH MATERIAL HAS BEEN FILED SEPARATELY WITH THE SEC.
SHAREHOLDERS AGREEMENT PAGE 17
president level or equivalent) to negotiate with respect to the matter. If after
such 45 day period the Shareholders have not resolved the Deadlock, either
Shareholder (the "SERVING PARTY") shall have the right to give a notice (the
"FINAL DECLARATION OF DEADLOCK") to the other (the "RECEIVING PARTY") specifying
its final terms regarding the pending matter. Such Final Declaration of Deadlock
may be given by a Shareholder only if such Shareholder reasonably concludes, and
sets forth in the Final Declaration of Deadlock the reason for such conclusion,
that the continued ordinary operations and viability of the Company are likely
to be materially adversely affected by virtue of the inability of the
Shareholders to agree on the issues as to which the Deadlock has arisen.
7.2 REVIEW PERIOD
(a) Upon receiving the Final Declaration of Deadlock, the parties shall
negotiate for a thirty (30) day period in an attempt to resolve the Deadlock by
buying all of the shares of the other party. In the event that negotiation
fails, the Receiving Party shall have a review period of thirty (30) days (the
"Review Period"), during which the Receiving Party shall have options to provide
the Serving Party with a notice of the Receiving Party's agreement to all (but
not less than all) the terms of the Serving Party regarding the pending matter
described in the Final Declaration of Deadlock whereby the Deadlock shall be
deemed to be resolved on those terms.
(b) If the Receiving Party does not provide the Serving Party with a notice
as described in Section 7.2(a) whereupon the Representative Director appointed
by the Serving Party shall take all steps required in order to liquidate the
Company in an orderly fashion, and the Receiving Party shall cause the
Representative Director and other directors appointed by it to cooperate in such
liquidation. The Serving Party shall provide full information with respect to
the steps taken for such liquidation. Upon the liquidation of the Company, this
Agreement shall terminate as provided in Section 8.2(ii).
ARTICLE 8. TERM, EXPIRATION AND TERMINATION OF THE AGREEMENT
8.1. TERM; EXPIRATION
This Agreement shall become effective automatically upon the Effective
Date, and shall expire on the latest date permitted by applicable law.
8.2. TERMINATION OF THE AGREEMENT
(a) This Agreement shall terminate and be of no further force and effect
upon the occurrence of any of the following events:
(i) upon the mutual agreement of the Shareholders;
(ii) upon the dissolution, liquidation, or winding up of the Company;
(iii) at such time as either Lineo, on the one hand, or Samsung, on the
other, owns less than 10% of the Shares;
SHAREHOLDERS AGREEMENT PAGE 18
(iv) by either Shareholder if all approvals of Korean Governmental
Authorities required for this Agreement shall not have been
obtained within 90 days after the Effective Date; or
(v) a material breach of obligations under this Agreement by any
party, including without limitation Lineo's obligations under
Section 6.7.
(b) Termination under this Article shall not relieve any Shareholder of any
obligation or liability accrued hereunder prior to such termination or which
arises by reason of such termination.
(c) The obligations of the Shareholders in Section 2.6 (confidentiality)
and in Articles 9 and 10 shall survive the expiration or any termination of this
Agreement.
ARTICLE 9. ARBITRATION
9.1. DISPUTE RESOLUTION
(a) Any claim, dispute, difference or controversy arising under or with
respect to this Agreement, other than a claim for specific enforcement or other
injunctive relief, shall be resolved by arbitration before a panel of three
arbitrators under the Rules of Conciliation and Arbitration of the International
Chamber of Commerce. All arbitration proceedings shall be conducted in the
English language and shall take place in Singapore. The determination of the
arbitrators shall be final and may be enforced in any court of competent
jurisdiction. The arbitrators shall be empowered to issue a decree of specific
performance pursuant to Section 9.2.
(b) All costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the prevailing party in connection with any claim asserted
in any arbitration proceeding commenced pursuant to this Section shall be borne
by the party against whom the award is made.
9.2. SPECIFIC PERFORMANCE
The parties hereby acknowledge that it is impossible to measure in money
the damages which will accrue to any party hereto by reason of a failure of any
other party hereto to perform any of its obligations provided for in this
Agreement. The parties hereto will be irreparably damaged in the event that this
Agreement is not specifically enforced, and in any suit, action or proceeding
commenced pursuant to this Agreement an aggrieved party shall be entitled to a
decree of specific performance to enforce the terms hereof. Such remedy,
however, shall be cumulative and not exclusive and shall be in addition to any
other remedy which any party shall have hereunder.
ARTICLE 10. MISCELLANEOUS
10.1. ASSIGNMENT, ETC.
SHAREHOLDERS AGREEMENT PAGE 19
This Agreement (a) may not be assigned by any of the parties (other than an
assignment by a Shareholder to an Affiliate of such Shareholder in connection
with a transfer of Shares to such Affiliate under Section 3.1(b)) without the
prior written consent of all other parties hereto, (b) shall be binding upon and
shall inure to the benefit of the successors and permitted assigns of each of
the parties, and (c) shall be binding upon any transferee who has received any
Shares in accordance with the provisions of this Agreement. Any purported
assignment of this Agreement or transfer or purported transfer of Shares owned
by the Shareholders in violation of the provisions of this Agreement shall be
null and void and of no force or effect.
10.2. NOTICES
All notices, consents, requests and other communications provided for in,
or effected under, this Agreement shall be in writing and shall be delivered as
follows: (i) delivered by hand; (ii) mailed, first class postage prepaid, return
receipt requested; (iii) sent by overnight courier; or (iv) sent by facsimile
transmission (with confirmation of transmission), addressed as follows:
(a) if to Lineo:
390 South 400 West
Lindon, UT 84042
Tel: 801-426-5001
Fax: 801-426-6166
Attention: President and CEO
(b) if to Samsung:
Samsung Electro-Mechanics Co., Ltd.
314, Maitan-3Dong, Paldal-Gu, Suwon
Kyunggi-Do, Korea, 442-743
Tel: 82-31-210-5215
Fax: 82-31-210-6363
Attention: Legal Affairs
Samsung Venture Investment Company
15th Floor, Samsung Main Bldg.
250, 2-Ka, Taepyung-Ro, Chung-Ku,
Seoul, Korea 100-742
Tel: 82-2-728-4892
Fax: 82-2-728-4898
Attention: Legal Affairs
(c) if to the Company:
Notice shall be provided to all parties until the Company provides written
notice to all parties of the proper notice address and phone numbers;
SHAREHOLDERS AGREEMENT PAGE 20
or, in either case or in the case of any other Shareholder, at such other
address as the Shareholder to receive such communication may hereafter designate
by notice given as provided herein to the other Shareholders. All notices shall
be deemed effective upon receipt.
10.3. COSTS AND EXPENSES
Each Shareholder shall bear its own costs and expenses in connection with
the preparation, negotiation, execution and performance of this Agreement. The
actual out-of-pocket cost to form Company shall be reimbursed by Company to
Shareholders promptly after the formation and expenses incurred by Company after
formation shall be paid by Company.
10.4. NO WAIVER
The failure of any of the parties hereto to insist upon strict adherence to
any provision of this Agreement on any occasion shall not be considered a waiver
of any right, nor shall it deprive that party of the right thereafter to insist
upon strict adherence to that provision or any other provisions of this
Agreement.
10.5. AMENDMENT
Any waiver, alteration, or modification of any of the provisions of this
Agreement shall not be binding unless in writing and signed by a duly authorized
officer of the Company and a duly authorized representative of each of the other
parties hereto.
10.6. THIRD PARTIES
Nothing contained in this Agreement, either expressed or implied, is
intended to confer any rights or remedies upon any person or entity other than
the parties hereto, and their respective successors and permitted transferees
and assigns.
10.7. HEADINGS
The headings in this Agreement are inserted for convenience only and shall
not affect the interpretation hereof.
10.8. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with, the
laws of the Republic of Korea, without regard to principles of conflicts of law
thereunder.
10.9. ENTIRE AGREEMENT
This Agreement constitutes the full and complete understanding among the
parties with respect to the subject matter of this Agreement, and neither the
correspondence, or any letter of intent or other documents exchanged prior to or
in connection with the signing of this Agreement with respect to the subject
matter of this Agreement, nor any statements, warranties, representations or
agreements, whether oral or written, made with respect to the subject matter of
SHAREHOLDERS AGREEMENT PAGE 21
this Agreement, during negotiations or otherwise, shall be binding on any party,
unless expressly incorporated in this Agreement.
10.10. INVALIDITY
If any one or more of the provisions, or portions of any provision, of this
Agreement shall be held to be invalid, illegal or unenforceable, then the
validity, legality or enforceability of the remaining provisions or parts
thereof shall not in any way be affected or impaired thereby.
10.11. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument.
10.12. LANGUAGE
(a) This Agreement is being executed and delivered in English, and, in
the case of any inconsistency between the terms of the English language
version of this Agreement and any translation hereof, the English language
version hereof shall govern and control.
(b) All meetings of the Shareholders or of the Board of Directors shall be
conducted in English or, if conducted in Korean, shall be simultaneously
translated into English. All materials provided to Shareholders and directors
shall be in the English language or in the Korean language accompanied by an
English translation.
10.13. FURTHER ASSURANCES
The parties hereto shall do and execute, or cause to be done and executed,
all such further acts, deeds, documents and things as may be necessary to give
full effect to the terms of this Agreement, including without limitation voting
or refraining from voting any shares held by them or under their direct or
indirect control, and use reasonable efforts to procure that any director or
directors appointed by them or any party under their direct or indirect control
votes or refrains from voting so as to give full effect to this Agreement and
its Annexes.
10.14. CONFLICTS
In the event of any conflict or inconsistency between the terms of this
Agreement and the terms of the AOI of the Company or any Subsidiary, the terms
of this Agreement shall prevail.
SHAREHOLDERS AGREEMENT PAGE 22
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.
LINEO, INC.
By /s/ Bryan Sparks
Name Bryan Sparks
Title President & CEO
SAMSUNG ELECTRO-MECHANICS CO., LTD.
By /s/ Park Young Won
Name Park Young Won
Title Executive Director
SAMSUNG VENTURE INVESTMENT CORPORATION
By /s/ Jae Ham Lee
Name Lee, Jae Ham
Title CEO
In consideration of the representations, warranties, covenants and others terms
contained in this Agreement, Listech Limited hereby agrees to become a party to
this Agreement, and shall be bound by and otherwise subject to this Agreement to
the same extent as if originally a party hereto.
LISTECH LIMITED
By
Name
Title
Date ___________________, 2000
SHAREHOLDERS AGREEMENT PAGE 23
EXHIBIT 1
LICENSE AGREEMENT WITH LISTECH LTD.
LINEO, INC.
LICENSE AGREEMENT WITH LISTECH LTD.
NO.__________________
This License Agreement (this "Agreement") between Lineo, Inc. ("Lineo") and the
Licensee identified below ("Licensee"), entered as of the Effective Date
identified in Schedule A, governs Licensee's licensed rights to use, reproduce,
market, distribute, and sell software and related products and documentation
proprietary to Lineo, and consists of the following:
THIS SIGNATURE PAGE
SCHEDULE A - SCOPE, GENERAL TERMS AND LICENSE FEES
EXHIBIT 1 - LIST OF LICENSED PRODUCTS, PRICES
EXHIBIT 2 - INITIAL LICENSE PURCHASE ORDER
EXHIBIT 3 - STANDARD LICENSE PURCHASE ORDER
SCHEDULE B - STANDARD TERMS AND CONDITIONS
EXHIBIT 1 - TRADEMARK USAGE POLICY
EXHIBIT 2 - END USER LICENSE
SCHEDULE C - LICENSED MARKS
1. LINEO ADDRESS AND CONTACT: Lineo, Inc.
Attention: Legal
390 South 400 West
Lindon, UT 84042, U.S.A.
Voice: 1-801-426-5001
Fax: 1-801-426-6166
2. LICENSEE ADDRESS AND CONTACT: Listech Ltd.
c/o Samsung Electro-Mechanics Co., Ltd.
Attention: Planning Department
314, Maetan-3 Dong, Paldal-Gu, Suwon
Kyunggi-Do, Korea, 442-743
Voice: 82-331-210-6639
Fax: 82-331-210-5965
By signing below, the parties acknowledge their agreement with the terms and
conditions of this Agreement, and each signatory represents and certifies that
he or she is authorized to sign on behalf of his or her respective party and
bind it to all of the terms and conditions of this Agreement:
LINEO, INC. LISTECH LTD.
By: ______________________________ By: __________________________________
Printed Name: _____________________ Printed Name: _________________________
Title: ____________________________ Title: ________________________________
Date: September 22, 2000 Date: September 22, 2000
LINEO, INC.
LICENSE AGREEMENT
SCHEDULE A
SCOPE, GENERAL TERMS AND LICENSE FEES
1. EFFECTIVE DATE: September 22, 2000
2. LICENSED PRODUCTS
The Licensed Products are each of the products identified in Exhibit 1 to
this Schedule A.
3. TERRITORY
Territory is worldwide.
4. LICENSE TERM
The initial term of this Agreement shall expire 12 months from the
effective date. The Agreement will be renewable on 30 days notice and the
mutual consent of Licensee and Lineo for successive 12-month terms.
5. FEES AND PAYMENT; PURCHASE ORDERS
The current fees and payment terms are as set forth in Exhibit 2 (Initial
License Purchase Order) and Exhibit 3 (Standard License Purchase Order) to
this Schedule A. The fees for the Licensed Products are subject to change
without notice, subject to the most favored licensee provisions below.
6. MOST FAVORED LICENSEE
If Lineo hereafter grants a subsequent license to the Licensed Products to
any Korean company, Lineo shall if requested by Licensee modify this
Agreement to the extent necessary in order to provide to Licensee the same
terms including, without limitation, fees and payment terms, scope of
transferred rights, cross licenses, duration of the agreement, and other
licensor or licensee obligations, as those granted to such subsequent
Korean licensees.
7. INITIAL LICENSE PURCHASE ORDER
Licensee has agreed to purchase $1,080,000.00 in Licensed Products upon
funding by Lineo and Samsung of their initial capital contributions to
Licensee under the Shareholders Agreement dated September 22, 2000. This
initial order to Lineo, which shall be governed by different payment terms
from those that govern standard purchase orders from Licensee to Lineo, is
set forth as Exhibit 3 to this Schedule A, and shall become binding on
Licensee simultaneously with the funding by Lineo of its capital
contributions.
8. MODIFICATION OF FEES AND PAYMENT TERMS; ASSIGNMENT OF SALES ADVISOR
On a case-by-case basis, at the request of Licensee, Lineo may consider
modification of the fees and payment terms applicable to Licensed Products,
including volume and other discounts, when deemed appropriate to secure
substantial business. To facilitate such procedures, Lineo may assign a
sales advisor (the "ADVISOR") to assist and advise Licensee, with the
corporate authority to make modifications to fees and payment terms
applicable to Licensed Products. The Advisor will be
License Agreement Page 2 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
based in the United States but will be expected to travel to Korea as
appropriate, and Licensee agrees to use reasonable efforts to utilize his
or her expertise by bringing him or her to meetings with customers and
involving him or her to the maximum extent in Licensee's sales activities
while in Korea, subject to any other commitments he or she may have. Lineo
will absorb all travel and other costs of the Advisor unless otherwise
agreed.
License Agreement Page 3 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
EXHIBIT 1 TO SCHEDULE A
LIST OF LICENSED PRODUCTS
EMBEDIX SDK
EMBEDIX LINUX*
EMBEDIX BROWSER*
EMBEDIX HIGH AVAILABILITY
* DENOTES SPECIFIED LICENSED PRODUCT AS TO WHICH THE CREATION OF DERIVATIVE
WORKS IS AUTHORIZED.
EXHIBIT 2 TO SCHEDULE A
INITIAL LICENSE PURCHASE ORDER
[ATTACHED TO SHAREHOLDER AGREEMENT OF SEPTEMBER 22, 2000]
EXHIBIT 3 TO SCHEDULE A
FORM OF STANDARD LICENSE PURCHASE ORDER
[TO COME]
License Agreement Page 4 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
LINEO, INC.
LICENSE AGREEMENT
SCHEDULE B
STANDARD TERMS AND CONDITIONS
The following standard terms and conditions apply:
1. DEFINITIONS. For purposes of this Agreement, the following definitions
apply to the respective terms:
a. AGREEMENT means this Agreement, consisting of the Signature Page,
Schedules A through C, Exhibits 1, 2 and 3 to Schedule A, Exhibits 1
and 2 to this Schedule B, and any additional documents attached and
initialed by the parties.
b. The terms BUY, PURCHASE, SALE, SELL and other similar terms, when used
in connection with the distribution of the Licensed Products, shall
mean the granting of a license or sublicense and shall not be deemed
for any purpose to mean a transfer of title or other rights of
ownership in the Licensed Products, other than the rights specifically
set out in this Agreement or in applicable End User License
Agreements.
c. CONFIDENTIAL INFORMATION means all business, marketing and technical
information of each party considered by each to be trade secrets or
otherwise valuable proprietary information, designated or marked as
such by either. Confidential Information shall not include information
that (i) is now or later becomes generally known to the computer
industry (other than as a result of a breach of this Agreement); (ii)
is independently developed by the receiving party; or (iii) the
receiving party lawfully obtains from any third party without
restrictions on use or disclosure.
d. DERIVATIVE WORKS means a revision, modification, translation,
reproduction in other form or medium, abridgment, condensation or
expansion of a Licensed Product or Documentation or any other form in
which a Licensed Product or Documentation may be recast, transferred,
or adapted and which, if prepared without the consent of Lineo, would
be an infringement of Lineo's copyright.
e. DOCUMENTATION means those software user manuals, reference manuals and
installation guides, or portions thereof (if any), which are
distributed in conjunction with the Licensed Products identified in
Exhibit 1 to Schedule A.
f. END USER means an entity that acquires the Licensed Product for
Internal Use.
g. INTERNAL USE means use for purposes that do not directly produce
revenue for the user.
h. LICENSED PRODUCTS means the Licensed Products identified in Exhibit 1
to Schedule A, including updates thereof (if any). Lineo reserves the
right at any time to make changes to any Licensed Product, including
without limitation changes required (i) for security or (ii) to
facilitate performance in accordance with specifications.
i. LINEO MARKS means Lineo's trademarks, trade names, service marks,
logos, designations and insignias, as well as any third-party marks
licensed to Lineo with rights of sublicense, including without
limitation there set out in Schedule C.
j. OEM means an original equipment manufacturer of an OEM Product.
License Agreement Page 5 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
k. OEM PRODUCT refers to the specific hardware and software manufactured
or produced by an OEM with which any Licensed Product is to be bundled
or integrated to create a single product offering, and which is then
sold to a third party without a separate charge or license for such
Licensed Products.
l. SPECIFIED LICENSED PRODUCT means a Licensed Product identified on
Exhibit 1 to Schedule A as authorized for modification and the
creation of Derivative Works therefrom.
2. CONTRACT RESPONSIBILITIES: Subject to the terms and conditions of this
Agreement, the parties have the following respective contractual
responsibilities:
a. LINEO'S RESPONSIBILITIES: Lineo shall:
1) Grant Licensee the rights and licenses to the Licensed Products
as set forth in Section 3 hereof;
2) Warrant the Licensed Products as set forth in Section 7 hereof;
and
3) Indemnify Licensee as set forth in Section 8(a) hereof.
b. LICENSEE'S RESPONSIBILITIES: Licensee shall:
1) Market, sell and distribute units of the Licensed Products within
the Territory identified in Schedule A;
2) Provide services to customers, including providing engineering
services to ensure that the Licensed Products are compatible with
customers' devices;
3) Make all payments to Lineo as set forth in Schedule A and Section
4 hereof;
4) Protect Lineo's proprietary rights in the Licensed Products as
set forth in Section 5 hereof;
5) Provide, or cause to be provided by its OEM sublicensees, an
appropriate End User License Agreement to End Users, as set forth
in Sections 5(b) and 7(b) hereof;
6) Indemnify Lineo as set forth in Section 8(b) hereof; and
7) Perform all other obligations required of Licensee under this
Agreement.
3. GRANT OF LICENSES. Subject to the terms and conditions of this Agreement
and for the term hereof, Lineo hereby grants to Licensee the following
rights and licenses:
a. LICENSED PRODUCTS AND DOCUMENTATION. Lineo hereby grants to Licensee
and its wholly-owned subsidiaries a nonexclusive and nontransferable
right and license to (i) use the Licensed Products for Internal Use
only, (ii) market, sell and distribute copies of the Licensed
Products, with copies of the Documentation, to OEMs and (iii) to
modify the Specified Licensed Products and to create Derivative Works
solely of the Specified Licensed Products for the purposed of
developing, enhancing and supporting such Specified Licensed Products
for embedding in products of OEMs.
b. TRADEMARKS. Lineo hereby grants to Licensee the nonexclusive,
nontransferable right and license to use and display Lineo Marks
identified in Schedule E, solely in connection with and only to the
extent reasonably necessary for the marketing, distribution and
License Agreement Page 6 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
support of the Licensed Products during the term of this Agreement,
provided that any such use and display shall comply with Lineo's then
current trademark usage policies. A copy of Lineo's current trademark
policy is attached as Exhibit 1 to this Schedule B. Upon expiration or
termination of this Agreement, Licensee agrees to cease all display,
advertising and use of any and all Lineo Marks. In the case of bundled
products, Licensee agrees not to alter, erase or overprint any notice
provided by Lineo and not to attach any additional trademarks without
the prior written consent of Lineo (not to be unreasonably withheld as
respects bundled products) or affix any Lineo Marks to any
non-Licensed Products. Licensee recognizes Lineo's rights to Lineo
Marks and the goodwill attaching to Lineo Marks. Licensee agrees not
to use, employ or attempt to register any trademarks or trade names
that are confusingly similar to Lineo Marks.
c. THIRD PARTY LICENSE. If all or any part of the Licensed Products
delivered to Licensee has been licensed to Lineo by a third party
software supplier then, notwithstanding anything to the contrary
contained in this Agreement, Licensee is granted a sublicense to the
third party software subject to the same terms and conditions as those
contained in the agreement between Lineo and such third party software
supplier. Lineo reserves the right to substitute any third party
software in the Licensed Products.
d. GENERAL PUBLIC LICENSE. Certain components of certain Licensed
Products are components licensed under the GNU General Public License
(version 2), which Lineo supports. Licensee may obtain a copy of the
GNU General Public License at www.gnudocs.com/GNU/COPYING. Lineo will
provide source code for any of the components of those Licensed
Products licensed under the GNU General Public License. To obtain such
source code, send email to embedix-support@lineo.com.
e. SUBLICENSE AGREEMENTS. Licensee may grant OEMs within the Territory
identified in Schedule A the sublicensed rights to (i) use Licensed
Products for Internal Use only, and (ii) market, sell and distribute
copies of the Licensed Products bundled with or integrated in OEM
Products to End Users, provided that such activities are governed by
written sublicenses consistent with the terms of this Agreement, and
no less restrictive than the licenses granted herein, in a form to be
approved by Lineo. Licensee assumes responsibility for the actions of,
and its agreements with, its OEM sublicensees and for the compliance
of such OEMs with the terms and restrictions of this Agreement
relating to the Licensed Products, including, but not limited to,
those terms and restrictions set forth in Sections 3, 5, 6 and 7
hereof, and the provision of applicable End User License Agreements to
End Users set forth in Sections 5(b) and 7(b) hereof. To that end,
Licensee shall take prompt and commercially reasonable action at its
expense to remedy any breach by its OEM sublicensees of duties imposed
by this Agreement and to obtain all other appropriate relief and
shall, in addition, immediately notify Lineo in writing of the breach
and corrective action taken. The execution of these duties by Licensee
shall not preclude Lineo from also taking corrective action, for which
purposes it will be deemed to be an intended third-party beneficiary
of all of Licensee's agreements with OEMs dealing with Licensed
Products. Licensee's obligations to enforce any relevant sublicense
and to protect the interest of Lineo shall survive expiration or
termination of this Agreement.
f. DERIVATIVE WORKS.
1) Licensee hereby irrevocably assigns to Lineo all right, title,
and interest in and to all Derivative Works created by it,
whether or not authorized by Lineo, and agrees to provide such
documents and other assistance as Lineo may request in order to
perfect its rights in such Derivative Works, and to provide Lineo
on request with source codes and all other information with
respect to such Derivative Works.
License Agreement Page 7 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
2) With respect to Derivative Works created by Licensee from
Specified Licensed Products, Lineo agrees that it will not during
the term of this Agreement market, sell or distribute such
Derivative Works, or grant a license to any third party to
market, sell or distribute such Derivative Works, without paying
compensation to Licensee on terms to be agreed hereafter from
time to time.
3) Notwithstanding that the Licensed Products may embody Derivative
Works created by Licensee, Licensee shall continue to be liable
to pay Lineo the prices and fees for the Licensed Products set
forth in Exhibit 1 to Schedule A without any modification or
setoff.
4) If Licensor wishes to create Derivative Works for purposes of
developing a new product not constituting a Licensed Product,
then prior to beginning such development it shall consult with
Lineo as to the terms and conditions, including fees, on which
such new product may be developed, used, marketed, sold or
distributed by either party during the term of this Agreement. If
the parties are unable to agree on such terms and conditions,
Licensee shall not create such Derivative Works.
g. PRODUCT TAMPERING.
1) Except for Specified Licensed Products and related Documentation,
Licensee shall have no rights directly or indirectly to modify
Licensed Products or the Documentation, or any portion thereof,
or to prepare any other form of Derivative Works for such
Licensed Products.
2) Licensee shall have no rights directly or indirectly to
de-compile, reverse engineer, reverse compile or perform any
similar type of operation on the Licensed Products (including
Specified Licensed Products) or the Documentation, or any portion
thereof.
g. LIMITATIONS. Notwithstanding any of the foregoing, distribution of the
Licensed Products in any country where the proprietary rights of Lineo
and its third-party licensors in the Licensed Products would not be
recognized or would not be protected under the laws of such country is
prohibited.
h. RESERVATION OF RIGHTS. Lineo reserves all rights not expressly granted
under this Agreement, including, but not limited to, the rights to
market, sell and distribute the Licensed Products to OEMs and End
Users directly or indirectly through its distribution channels.
4. PRICING AND PAYMENT
a. PRICING AND LICENSE FEES. Licensee shall pay to Lineo the License Fees
set out in Schedule A as required therein. Prices are exclusive of all
applicable taxes. Licensee agrees to pay all taxes associated with the
marketing, sublicensing, distribution and transfer of all Licensed
Products, including but not limited to sales, use, excise, added value
and similar taxes and all customs, duties or governmental impositions,
but excluding (i) taxes on Lineo's net income and (ii) the withholding
tax, if any, imposed upon such payments (as royalties) by the Republic
of Korea (or other jurisdiction, if any). Licensee shall pay to the
relevant tax authorities, and deduct from the payments due to Lineo
hereunder, such withholding tax, if any, imposed upon such payments at
the lowest rate permitted with respect to royalties by the treaty on
the avoidance of double-taxation between the United States of America
and the Republic of Korea (or other jurisdiction). Licensee shall
provide Lineo with evidence, in the form of original tax receipts
issued by the relevant tax authorities, proving payment of such
withholding tax, and shall deliver to
License Agreement Page 8 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
Lineo any certificates or other documents reasonably requested by
Lineo to claim as a credit or a deduction against any foreign income
or profits taxes any withholding taxes which Licensee shall have
withheld. No taxes or other deductions (other than withholding tax on
royalties) shall be withheld from any payment hereunder, and if any
such withholding is required Licensee shall pay such additional amount
as may be required so that Licensee shall receive the amount it would
have received had no such withholding been required. Licensee shall
use its best efforts in assisting Lineo to lawfully minimize such
taxes (including the use of offshore sales subsidiaries for sales
outside Korea).
b. PAYMENT AND REPORTING. License fees will accrue in the applicable
corresponding quantity upon distribution by Licensee of a copy of a
Licensed Product in any form to an OEM or End User. Licensee shall pay
Lineo License Fees accrued during each calendar month, together with
any other fees accruing over the same period, within 30 days following
the date of invoice for such month. Payment shall be accompanied by a
written report detailing the quantity, type, customer name, and
destination of all Licensed Products shipped by Licensee in the prior
month and showing calculation of all fees payable thereon. All
payments shall be made in U.S. dollars (i) at Lineo's address as
indicated in this Agreement or at such other address as Lineo may from
time to time indicate by proper notice hereunder or (ii) by wire
transfer to a bank and account number to be designated by Lineo.
c. INTEREST. Interest shall accrue on any unpaid payment or payment
balance at an annual rate of 12% per annum, or, if lower, at the
highest lawful rate, calculated from the date the payment is due to
the date it is received by Lineo. Arrearage in excess of $5,000 not
paid within 10 days of written demand following the date payment is
due shall be grounds for Lineo's termination of this Agreement at
Lineo's option.
d. REPORTING. Licensee shall, within 30 days after the end of each
calendar quarter during the term of this Agreement, prepare a report
summarizing the number and type Licensed Products distributed during
such quarter. Licensee shall also maintain complete and accurate
accounting records, in accordance with sound accounting practices, to
support and document Licensed Products distributed in connection with
this Agreement. Such records shall be retained for a period of at
least 2 years after the year to which they pertain.
e. RECORDS EXAMINATIONS. Licensee agrees to allow Lineo to examine
Licensee's records to test Licensee's compliance with this Agreement.
Any examination will be conducted only by a firm of certified public
accountants selected by Lineo, and will occur during regular business
hours at Licensee's offices and will not interfere unreasonably with
Licensee's business activities. Examinations will be made no more
frequently than annually, and Lineo will give Licensee 15 business
days or more prior written notice of the date of the examination and
the name of Lineo's authorized representative who will be conducting
the examination. The audit will be conducted at Lineo's expense unless
the results of such audit establish that inaccuracies in the annual
reports have resulted in underpayment to Lineo of more than 5% of the
amount due in any year, in which case Licensee shall pay all amounts
determined to be due and shall bear the expenses of the audit. All
information obtained by the accountants conducting the audit will be
maintained as confidential. The accountants will give Licensee and
Lineo an examination report containing only the information necessary
to indicate compliance or non-compliance with this Agreement.
5. LINEO'S INTELLECTUAL PROPERTY RIGHTS
a. ACKNOWLEDGMENT OF LINEO'S RIGHTS. For purposes of this Agreement, and
with the exception only of those elements (if any) of the Licensed
Products specifically identified
License Agreement Page 9 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
and designated by Lineo as third-party software, Licensee acknowledges
and confirms Lineo's exclusive worldwide rights, including copyright
in, and the validity of the Licensed Products (including, without
limitation, all input/output and report formats, screen displays, menu
features and overall structure, sequence and organization) and in
Lineo Marks. Licensee agrees not to challenge or otherwise to
interfere with the use and ownership by Lineo of the Licensed Products
or any of the intellectual property rights associated with the
Licensed Products or Lineo Marks (hereinafter referred to collectively
as "Lineo Intellectual Property"). Licensee also shall not permit any
personnel to remove any proprietary or other legends or restrictive
notices contained or included in any materials supplied or approved by
Lineo, and Licensee shall not permit any personnel to copy or modify
or reverse-engineer any materials, including the Licensed Products
provided by Lineo, except as and to the extent specifically permitted
under this Agreement. Title to every copy of a Licensed Product is
vested and shall remain in Lineo, or, as applicable, in such third
party from whom Lineo holds rights of license and distribution, and
title does not pass with any license under this Agreement.
b. END USER LICENSE AGREEMENTS. Licensee agrees to exercise commercially
reasonable efforts to ensure that each End User receiving a Licensed
Product through Licensee's OEM sublicensees understands, and agrees to
be bound by, an appropriate End User License Agreement that is no less
restrictive in its application to the Licensed Product than the
then-current form of Lineo's End User License Agreement, the most
current version of which is attached as Exhibit 2 to this Exhibit B.
c. LICENSEE'S WAIVER OF RIGHTS. Licensee further acknowledges that it has
no rights of any kind anywhere in the world in any Lineo Intellectual
Property other than those limited rights granted by this Agreement.
Accordingly, Licensee waives (a) all claims of any right by Licensee
in any Lineo Intellectual Property and (b) the right, if any, to file
or own in its own name or in that of any designee, any application for
registration of any trademark, copyright, patent, industrial design,
trade secret or other intellectual property which forms part of Lineo
Intellectual Property, or to own any registration or patent resulting
therefrom. In the event Licensee, in any jurisdiction of the world,
files such an application or obtains such a patent or registration in
violation of this section, such application, registration or patent
shall be deemed held in trust by Licensee for Lineo and shall be
assigned by Licensee to Lineo without conditions and upon demand by
Lineo.
d. PRESERVATION AND SECURITY OF PROPRIETARY INFORMATION. Licensee shall
not sell, assign, lease, license, transfer or otherwise disclose the
Licensed Products except as expressly authorized by this Agreement.
Licensee shall safeguard any and all copies of the Licensed Products
against unauthorized disclosure, reproduction or tampering, and shall
assist Lineo in the enforcement of Lineo's rights in the event of
unauthorized disclosure by any person under Licensee's control or
service. Licensee shall also ensure that Lineo's copyright, trademark
and patent notices, which may from time to time be updated, are
prominently displayed on all copies of products and documentation
containing the Licensed Products. Licensee shall not remove or obscure
any copyright, trademark, patent or other proprietary rights notice
already present on any of the Licensed Products or Documentation. The
notice of Lineo's intellectual property rights in each Licensed
Product shall read as follows: "Licensed Software(C)Lineo,
Inc.1999-2000, all rights reserved."
e. GOODWILL. To protect and preserve the reputation and goodwill of Lineo
and of the Licensed Products, Licensee shall (1) avoid deceptive,
misleading or unethical practices that are or might be detrimental to
Lineo, the Licensed Products or the public, including any
disparagement of Lineo or the Licensed Products; (2) make no false or
misleading representations with regard to Lineo or the Licensed
Product; (3) refrain from publishing or employing any misleading or
deceptive advertising material reflecting upon Lineo or the Licensed
Products; (4) refrain from making any representations, warranties or
License Agreement Page 10 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
guarantees with respect to the specifications, features or
capabilities of the Licensed Program that are inconsistent with the
Documentation and marketing literature distributed by Lineo, including
all warranties and disclaimers contained in such literature; (5) not
distribute for any purpose any marketing materials, packaging or other
material bearing Lineo Marks which have not been first approved by
Lineo; and (6) enter into agreements for marketing and distribution of
the Licensed Products only with such OEMs who have agreed to be bound
by the foregoing terms as part of the applicable sublicense agreement.
f. THIRD-PARTY REQUIREMENTS. In the event that Lineo is required by a
third party software supplier to cease and to cause its Licensees and
OEMs to cease use, reproduction and distribution of a particular
version of the Licensed Products, Licensee agrees to comply herewith.
6. CONFIDENTIAL INFORMATION
a. OBLIGATIONS. Each party (the "receiving party") acknowledges and
agrees that any Confidential Information provided to the receiving
party by the other party (the "disclosing party") hereunder
constitutes the confidential and proprietary information of the
disclosing party, and that the receiving party's protection thereof is
essential to this Agreement and a condition to the receiving party's
use and possession thereof. The receiving party shall retain in strict
confidence and not disclose to any third party (except as authorized
by this Agreement) without the disclosing party's express written
consent, any and all such Confidential Information. Licensee
acknowledges and agrees that the Licensed Products are confidential
and proprietary information of Lineo.
b. EXCEPTIONS. The receiving party shall be relieved of this obligation
of confidentiality to the extent any Confidential Information:
(i) was in the public domain at the time it was disclosed or has
become in the public domain through no fault of the
receiving party;
(ii) was known to the receiving party, without restriction, at
the time of disclosure as shown by the files of the
receiving party in existence at the time of disclosure (the
burden of proof of such knowledge being on the receiving
party);
(iii) is disclosed by the receiving party with the prior written
approval of the disclosing party;
(iv) the receiving party can prove was independently developed by
the receiving party without any use of the disclosing
party's confidential information and by employees or other
agents of the receiving party who have not had access to any
of the disclosing party's confidential information; or
(v) becomes known to the receiving party, without restriction,
from a source other than the disclosing party without breach
of this Agreement by the receiving party and otherwise not
in violation of the disclosing party's rights.
7. LIMITED WARRANTIES
a. LIMITED WARRANTY. Lineo warrants and represents to Licensee that (i)
the Licensed Products are either owned or properly licensed by Lineo
or are in the public domain and the use thereof by Licensee, its
representatives, OEM sublicensees or dealers will not infringe any
U.S. patent, U.S. copyright or U.S. trademark; provided, however, that
Licensee's obligations under Sections 7(d) and 8(a) shall be
Licensee's sole remedy for any breach of this warranty; (ii) that for
a period of 90 days from the date of delivery of Licensed Products,
the media on which the Licensed Products are furnished will, under
License Agreement Page 11 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
normal use, be free from defects in materials and workmanship, failing
which Lineo's sole obligation will be to replace the media; and (iii)
Lineo has the full power to enter into this Agreement, to carry out
its obligations under this Agreement and to grant the rights and
licenses granted to Licensee in this Agreement.
b. END USER WARRANTY. If it is necessary for Licensee or an OEM to
provide any warranty with respect to the Licensed Products to any End
User, such warranty shall be limited to the warranties for software in
the End User License Agreement set forth as Exhibit 3 to this Schedule
B. Licensee is responsible for providing, or causing to be provided by
its OEM sublicensees, a copy of the applicable End User License
Agreement to End Users for their review at the time of acquisition or
installation. Lineo does not warrant non-Licensed Products, which are
provided by Lineo on an "AS IS" basis. Any warranty service for
non-Licensed Products will be provided by the manufacturer of the
products in accordance with the applicable manufacturer's warranty.
c. EXCLUSION OF WARRANTIES. EXCEPT AS SET FORTH IN THIS SECTION 7, LINEO
EXPRESSLY DISCLAIMS AND EXCLUDES ALL WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE OR
NON-INFRINGEMENT (EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7(a)(i)),
AND ANY WARRANTIES AS TO THE SUITABILITY OR MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE (EXCEPT AS EXPRESSLY SET FORTH IN SECTION
7(a)(ii)). IN NO EVENT SHALL LINEO BE LIABLE FOR ANY LOST OR
ANTICIPATED PROFITS, OR ANY INCIDENTAL, EXEMPLARY, SPECIAL OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), REGARDLESS OF WHETHER
LINEO WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE WARRANTY IN
THIS SECTION 7 SHALL NOT APPLY IF THE ERROR(S) ARE CAUSED BY ANY
PROGRAMMING NOT CREATED BY LINEO, OR BY ANY REPAIRS, MODIFICATIONS OR
ENHANCEMENT NOT MADE BY LINEO.
d. LIMITATION OF LIABILITY. Lineo's liability for direct damages to
Licensee for any cause whatsoever, and regardless of the form of
action, shall not exceed the amount received by Lineo from Licensee
during the previous 12 months for the Licensed Products giving rise to
such claim.
8. INDEMNIFICATION
a. BY LINEO. Lineo agrees to defend Licensee and, to the extent of
payments made by Licensee under this Agreement as set forth in Section
7(d), to indemnify and hold Licensee harmless from any and all
third-party claims, actions, demands, and related damages,
liabilities, costs and expenses resulting from charges or allegations
that a Licensed Product or Lineo Mark appropriately used, sold or
distributed by Licensee infringes any U.S. patent, U.S. trademark, or
U.S. copyright of any third party.
Licensee shall permit Lineo to replace or modify any Licensed Products
affected so as to avoid infringement or to procure the right for
Licensee to continue use and marketing of such items. If neither
alternative is possible or commercially reasonable, the infringing
items shall be returned to Lineo, whose sole liability shall be to
refund amounts paid by Licensee for the affected copies of the
Licensed Products. Lineo shall have no liability for infringement
based on (a) use, sale or distribution of other than the current
release of the Licensed Products, or (b) modification of the Licensed
Products by any party other than Lineo, or the combination or use of
the Licensed Products with any other computer program, equipment,
product, device, item or process not furnished by Lineo, if such
infringement would have been avoided by the use of the Licensed
Products alone and in their current unmodified form, or (c) other acts
of Licensee or its OEM sublicensees.
License Agreement Page 12 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
THE ABOVE STATES THE ENTIRE LIABILITY OF LINEO WITH RESPECT TO
INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS OR ANY OTHER FORM OF
INTELLECTUAL PROPERTY RIGHT BY ANY PRODUCT SUPPLIED BY LINEO.
b. BY LICENSEE. Licensee agrees to indemnify, defend and hold Lineo
harmless from and against any and all third-party claims, actions,
demands, and related damages, liabilities, costs and expenses arising
or resulting from, or related to, use, marketing, sale, distribution,
modification, or other activities by Licensee or its OEM sublicensees
under this Agreement or otherwise respecting the Licensed Products.
c. GENERAL CONDITIONS TO INDEMNITY RIGHTS. The forgoing rights and
obligations of indemnity are conditioned on (i) prompt written
notification from the indemnified party to the indemnifying party of
the claim for which indemnity is sought; (ii) sole control in the
indemnifying party of the defense of any action and all negotiations
for settlement and compromise; and (iii) cooperation and assistance
from the party seeking indemnification, including disclosure of
information and authority necessary to perform the above. The
indemnified party shall be responsible for the costs and fees of its
own counsel if it desires to have separate legal representation in any
such action.
9. TERM AND TERMINATION
a. TERM AND EXTENSIONS. The initial term hereof shall be as provided in
Schedule A. Unless earlier terminated for breach as provided herein,
or unless either party notifies the other in writing, not later than
30 days prior to expiration of the initial term, of its intention to
terminate the Agreement upon said expiration, this Agreement shall
automatically renew at the end of the initial term for successive
twelve month terms. Either party may notify the other in writing of
its intention to terminate this Agreement not later than 30 days prior
to the expiration of any successive term.
b. TERMINATION FOR CAUSE. Either party may terminate this Agreement for
the breach by the other party of a material term. The terminating
party will first give the other party written notice of the breach and
30 days in which to cure the alleged breach. If a cure is not achieved
during the cure period, then the non-breaching party may terminate
this Agreement upon written notice.
c. TERMINATION BY LINEO. Notwithstanding Section 9(b) hereof, Lineo may
terminate this Agreement if Licensee fails to meet its payment
obligations under this Agreement and this failure continues for 10
days following receipt of written notice and demand from Lineo.
d. INSOLVENCY, ASSIGNMENT, OR BANKRUPTCY. Either party may, at its
option, immediately terminate this Agreement upon written notice to
the other party if the other party (i) admits in writing its inability
to pay its debts generally as they become due; (ii) fails to make
payment on any promissory note; (iii) makes a general assignment for
the benefit of creditors or, in the case of a Korean entity, becomes
the subject of a "workout"; (iv) institutes proceedings to be
adjudicated a voluntary bankrupt, or consents to the filing of a
petition of bankruptcy against it; (v) is adjudicated by a court of
competent jurisdiction as being bankrupt or insolvent; (vi) seeks
reorganization under any bankruptcy act or consents to the filing of a
petition seeking such reorganization; or (vii) is the subject of a
decree by a court of competent jurisdiction appointing a receiver,
liquidator, trustee or assignee in bankruptcy or in insolvency
covering all or substantially all of such party's property or
providing for the liquidation of such party's property or business
affairs.
e. ACCELERATION OF PAYMENT. Upon termination of this Agreement by Lineo
under Section 9(a), 9(b) or 9(c) hereof, the due dates of all
outstanding invoices to Licensee for
License Agreement Page 13 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
Licensed Products will automatically be accelerated so that they
become due and payable on the effective date of termination, even if
longer terms had been previously granted or allowed.
f. EFFECT OF TERMINATION ON OBLIGATIONS. Upon termination of this
Agreement for any reason, Licensee shall (i) immediately cease all use
and reproduction of the Licensed Products and shall cease use and
distribution of all copies previously made; (ii) within 30 days after
termination of this Agreement, either deliver to Lineo or destroy all
copies of Licensed Products and Documentation in Licensee's possession
or under its control, and furnish to Lineo an affidavit signed by an
officer of Licensee certifying that, to the best of its knowledge,
such delivery or destruction has been fully effected. Notwithstanding
the foregoing, and provided Licensee fulfills its obligations
specified in this Agreement with respect to such items, Licensee may
continue to use and retain copies of the Licensed Products and
Documentation to the extent, but only to the extent, necessary to
support and maintain Licensed Products rightfully directly or
indirectly distributed to OEMs and End Users by Licensee prior to
termination of this Agreement; provided, however, that if any periodic
fees or other payments would be payable by Licensee to Lineo in
connection with any such Licensed Products (including without
limitation Embedix SDK) if this Agreement had not terminated, such
fees and other payments shall continue to be due and owing hereunder,
and all other provisions of this Agreement shall remain in effect with
respect to such Licensed Products so long as any amount remains
payable hereunder. Termination of this Agreement shall not affect
rights of OEMs or End Users receiving any Licensed Product bundled
with or integrated in an OEM Product prior to the date of termination,
provided, however, that Lineo shall have received payment of License
Fees and other fees owing from Licensee therefor.
g. SURVIVAL OF TERMS. Termination of this Agreement shall not relieve
either party of any obligations arising under this Agreement prior to
the date of termination. Any provisions of this Agreement that by
their nature extend beyond the termination of this Agreement,
including specifically obligations owing under Sections 4, 5 and 7
hereof, will survive and remain in effect until all obligations are
satisfied. Confidentiality provisions shall remain in effect until the
Confidential Information is no longer confidential.
10. GENERAL PROVISIONS
a. PUBLIC ANNOUNCEMENTS AND PROMOTIONAL MATERIALS. Lineo and Licensee
shall cooperate with each other either to issue a joint press release
and/or to enable each party to issue and post to its web site an
announcement concerning the entering into of this Agreement, provided
that each party must approve any such press announcement prior to its
release. Any subsequent announcement or release shall be subject to
approval by both parties prior to publication of such release. Lineo
shall have the right to use Licensee's name as a customer reference.
b. FORCE MAJEURE. If either party is prevented from performing any
portion of this Agreement (except the payment of money) by causes
beyond its control, including labor disputes, civil commotion, war,
governmental regulations or controls, casualty, inability to obtain
materials or services or acts of God, such defaulting party will be
excused from performance for the period of the delay and for a
reasonable time thereafter.
c. DISPUTE RESOLUTION. Any claim, dispute, difference or controversy
arising under or with respect to this Agreement, other than a claim
for specific enforcement or other injunctive relief, shall be resolved
by arbitration before a panel of three arbitrators under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce.
All arbitration proceedings shall be conducted in the English language
and shall take place in Singapore. The determination of the
arbitrators shall be final and may be enforced in any court of
competent jurisdiction. The arbitrators shall be empowered to issue a
decree of
License Agreement Page 14 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
specific performance pursuant to Section 10(d). All costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the
prevailing party in connection with any claim asserted in any
arbitration proceeding commenced pursuant to this Section shall be
borne by the party against whom the award is made.
d. SPECIFIC PERFORMANCE. The parties hereby acknowledge that it is
impossible to measure in money the damages which will accrue to any
party hereto by reason of a failure of any other party hereto to
perform any of its obligations provided for in this Agreement. The
parties hereto will be irreparably damaged in the event that this
Agreement is not specifically enforced, and in any suit, action or
proceeding commenced pursuant to this Agreement an aggrieved party
shall be entitled to a decree of specific performance to enforce the
terms hereof. Such remedy, however, shall be cumulative and not
exclusive and shall be in addition to any other remedy which any party
shall have hereunder.
e. LIMITATION OF ACTIONS. No action arising or resulting from this
Agreement, regardless of its form, may be brought by either party more
than two years after termination of this Agreement.
f. THIRD PARTY CLAIMS. Neither party shall be liable for any claim by the
other based on any third party claim, except as stated in Section 7 of
this Agreement.
g. JURISDICTION. This Agreement will in all respects be governed by and
construed in accordance with the laws of the State of New York of the
United States of America, and will not be construed in accordance with
or governed by the United Nations Convention for International Sales
of Goods.
h. ATTORNEYS' FEES. If either Lineo or Licensee employs attorneys to
enforce any rights arising out of or relating to this Agreement, the
prevailing party shall be entitled to recover reasonable costs and
attorneys' fees.
i. WAIVER. No waiver of any right or remedy on one occasion by either
party will be deemed a waiver of that right or remedy on any other
occasion.
j. SUPERIOR AGREEMENT. This Agreement will not be supplemented or
modified by any course of dealing or usage of trade. Variance from or
addition to the terms and conditions of this Agreement in any written
notification or purchase order from Licensee will be of no effect,
except for such variation otherwise expressly provided for in this
Agreement and for such variation as may be agreed to by the parties in
writing by express reference to this Section 10(j). This Agreement may
be amended or modified only by a writing signed by each party.
k. ASSIGNMENT. This Agreement is not assignable by Licensee, in whole or
in part, without Lineo's prior written consent. Lineo will not
unreasonably withhold consent to an assignment of this Agreement or
any part of this Agreement to a parent, subsidiary or affiliate of
Licensee, provided that such entity is at least as capable as Licensee
of satisfying Licensee's responsibilities hereunder. Any attempted
assignment without Lineo's written consent will be null and void.
l. NOTICE. Unless otherwise agreed to by the parties, all notices
required under this Agreement (except those relating to product
pricing, changes and upgrades) will be deemed effective when received
and made in writing to the address indicated on the Signature Page (or
such other address as either party may notify to the other party), to
the attention of the person designated as the responsible
representative or to that person's successor, by (i) registered mail
or certified mail, return receipt requested, commercial courier, (iii)
overnight mail, or (iv) telephone facsimile transfer.
License Agreement Page 15 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
m. SEVERABILITY. If any term, provision, covenant or condition of this
Agreement is held invalid or unenforceable for any reason, the
remainder of the provisions will continue in full force and effect as
if this Agreement had been executed with the invalid portion
eliminated. The parties further agree to substitute for the invalid
provision a valid provision that most closely approximates the intent
and economic effect of the invalid provision.
n. INDEPENDENT CONTRACTORS. Each party acknowledges that the parties to
this Agreement are independent contractors and that it will not,
except in accordance with this Agreement, represent itself as an agent
or legal representative of the other.
o. COMPLIANCE WITH LAWS. Licensee represents and warrants that it shall
comply at its own expense with all applicable laws, rules and
regulations of governmental bodies and agencies, including all laws,
rules and regulations affecting or governing exports, in its
performance under this Agreement.
p. HEADINGS. The headings provided in this Agreement are for convenience
only and will not be used in interpreting or construing this
Agreement.
q. SCOPE OF AGREEMENT. Each of the parties hereto acknowledges that it
has read this Agreement, understands it and agrees to be bound by its
terms. The parties further agree that this Agreement is the complete
and exclusive statement of agreement regarding the subject matter and
supersedes all proposals (oral or written), understandings,
representations, conditions, warranties, covenants and all other
communications between the parties relating thereto. This Agreement
may be amended only by a writing that refers specifically to this
Agreement and is signed by both parties.
* * * END OF STANDARD TERMS AND CONDITIONS * * *
License Agreement Page 16 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
EXHIBIT 1 TO SCHEDULE B
TRADEMARK USAGE POLICY
[TO COME]
License Agreement Page 17 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
EXHIBIT 2 TO SCHEDULE B
CURRENT FORM OF END USER LICENSE AGREEMENT
LINEO END USER LICENSE AGREEMENT
IMPORTANT-READ CAREFULLY:
You have acquired an item ("Device") that includes software licensed to [OEM
Name] ("Company") by Lineo, Inc. ("Lineo"). This Lineo End User License
Agreement ("EULA") is a legal agreement between you (either an individual or a
single entity) and Lineo, Inc. ("Lineo") for the installed software product of
Lineo origin, as well as associated media, printed materials, and "online" or
electronic documentation ("Software"). Any product provided along with the
Software that is associated with a separate end user license agreement is
licensed to you under the terms of that license agreement. By installing,
copying, downloading, accessing, or otherwise using the Software, you agree to
be bound by the terms of this EULA. If you do not agree to the terms of this
EULA, do not use or install the Software. If you have purchased the Software,
promptly return the Software and all accompanying materials with proof of
purchase for a refund.
SOFTWARE LICENSE
The Software is protected by copyright laws and international copyright
treaties, as well as other intellectual property laws and treaties. The Software
is licensed, not sold.
1. GRANT OF LICENSE. This EULA grants you the following rights: You may
install and use the Software on a single CPU.
2. OTHER RIGHTS AND LIMITATIONS
- LIMITATIONS ON REVERSE ENGINEERING, DECOMPILATION, AND DISASSEMBLY.
You may not reverse engineer, decompile, or disassemble the Software,
except and only to the extent that such activity is expressly
permitted by applicable law notwithstanding this limitation.
- RENTAL. You may not rent, lease, sell, sublicense, or lend the
Software.
- TRANSFER. You may permanently transfer rights under this EULA only as
part of a permanent sale or transfer of the Device, and only if the
recipient agrees to this EULA.
- RESERVATION OF RIGHTS. Lineo reserves all rights not expressly granted
under this EULA.
3. COPYRIGHT. Lineo and its suppliers retain all ownership of the Software and
all copies thereof, provided, however, that certain components of the
Software are components licensed under the GNU General Public License
(version 2), which Lineo supports. You may obtain a copy of the GNU General
Public License at www.gnudocs.com/GNU/COPYING. Lineo will provide source
code for any of the components of the Software licensed under the GNU
General Public License. To obtain such source code, send email to
embedix-support@lineo.com. You may make up to ten copies of electronic
documentation accompanying the Software for each license you have acquired
for the Software. If you make copies, you must include all applicable
copyright notices and other proprietary rights legends that come with the
Software.
4. EXPORT. You agree that you will not export or re-export the Software, any
part thereof, or any process or service that is the direct product of the
Software (the foregoing collectively referred to as the "Restricted
Components"), to any country, person or entity subject to U.S. export
restrictions. You specifically agree not to export or re-export any of the
Restricted Components (i) to any country to which the U.S. has embargoed or
restricted the export of goods or services, which currently include, but
are not necessarily limited to Cuba, Iran, Iraq, Libya, North Korea, Sudan,
Syria, and the Federal Republic of Yugoslavia (including Serbia, but not
Montenegro), or
License Agreement Page 18 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
to any national of any such country, wherever located, who intends to
transmit or transport the Restricted Components back to such country; (ii)
to any person or entity who you know or have reason to know will utilize
the Restricted Components in the design, development, or production of
nuclear, chemical or biological weapons; or (iii) to any person or entity
who has been prohibited from participating in U.S. export transactions by
any federal agency of the U.S. Government. You warrant and represent that
neither the Bureau of Export Administration of the U.S. Commerce Department
nor any other U.S. federal agency has suspended, revoked, or denied your
export privileges.
5. GOVERNING LAW AND ATTORNEYS' FEES. This EULA is governed by the laws of the
State of Utah, USA, excluding its conflict of laws rules, and specifically
excludes the United Nations Convention on Contracts for the International
Sale of Goods. If you acquired this Software in a country outside of the
United States, that country's laws may apply. In any action or suit to
enforce any right or remedy under this EULA or to interpret any provision
of this EULA, the prevailing party will be entitled to recover its costs,
including reasonable attorneys' fees.
6. ENTIRE AGREEMENT. This EULA constitutes the entire agreement between you
and Lineo with respect to the Software, and replaces all other agreements
or representations, whether written or oral. The terms of this EULA cannot
be modified by any terms in any printed forms used by the parties in
performing the EULA, and can only be modified by express written consent of
both parties. If any part of this EULA is held to be unenforceable as
written, it will be enforced to the maximum extent allowed by applicable
law, and will not affect the enforceability of any other part.
Should you have any questions concerning this EULA, or if you desire to contact
Lineo for any reason, please contact the Lineo representative serving your
company, or send email to: embedix-support@lineo.com.
THE FOLLOWING DISCLAIMER OF WARRANTY AND LIMITATION OF LIABILITY IS INCORPORATED
INTO THIS EULA BY REFERENCE.
NOT FAULT TOLERANT. THE SOFTWARE IS NOT FAULT TOLERANT. COMPANY HAS
INDEPENDENTLY DETERMINED HOW TO USE THE SOFTWARE IN THE DEVICE, AND LINEO HAS
RELIED UPON COMPANY TO CONDUCT SUFFICIENT TESTING TO DETERMINE THAT THE SOFTWARE
IS SUITABLE FOR SUCH USE.
NO WARRANTIES FOR THE SOFTWARE. THE SOFTWARE IS PROVIDED "AS IS" AND WITH ALL
FAULTS. THE ENTIRE RISK AS TO SATISFACTORY QUALITY, PERFORMANCE, ACCURACY, AND
EFFORT (INCLUDING LACK OF NEGLIGENCE) IS WITH YOU. ALSO, THERE IS NO WARRANTY
AGAINST INTERFERENCE WITH YOUR ENJOYMENT OF THE SOFTWARE OR AGAINST
INFRINGEMENT. IF YOU HAVE RECEIVED ANY WARRANTIES REGARDING THE DEVICE OR THE
SOFTWARE, THOSE WARRANTIES DO NOT ORIGINATE FROM, AND ARE NOT BINDING ON, LINEO.
NO LIABILITY FOR CERTAIN DAMAGES. EXCEPT AS PROHIBITED BY LAW, LINEO SHALL HAVE
NO LIABILITY FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL, OR INCIDENTAL DAMAGES
ARISING FROM OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THE SOFTWARE. THIS
LIMITATION SHALL APPLY EVEN IF ANY REMEDY FAILS OF ITS ESSENTIAL PURPOSE. IN NO
EVENT SHALL LINEO BE LIABLE FOR ANY AMOUNT IN EXCESS OF THE LICENSE FEE PAID BY
COMPANY TO LINEO UNDER THIS EULA.
License Agreement Page 19 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
SCHEDULE C
LICENSED MARKS
Lineo
Embedix
Embedix Linux
Embedix SDK
Embedix Browser
uCLinux
License Agreement Page 20 of 20 Lineo, Inc., 390 South 400 West, Lindon, Utah
Joint Venture Pricing Schedule D Do not redistribute or publish.
Lineo, Inc.
CONFIDENTIAL INFORMATION
EXHIBIT 1 TO SCHEDULE A
LINEO/SAMSUNG JOINT VENTURE
390 S 400 West
Lindon, Utah, 84042, USA
Tel: (801)426-5001
Fax: (801)426-6166
--------------------------------------------------------------------------------
LINEO/SAMSUNG JOINT VENTURE PRICING- BASED ON ANNUAL COMMITMENTS
--------------------------------------------------------------------------------
Minimum Licenses 1-3 Million 3-10 Million
Embedix LINUX LIST PRICE * *
RESELLER * *
JOINT VENTURE * *
Embedix BROWSER LIST PRICE * *
RESELLER * *
JOINT VENTURE * *
*INCLUDES EMBEDIX OS.
--------------------------------------------------------------------------------
Minimum Licenses 1 copy 5 pack Site License
(must buy single copy first)
Embedix SDK LIST PRICE * * *
RESELLER * * *
JOINT VENTURE * * *
TERMS
--------------------------------------------------------------------------------
The "Joint Venture" noted in the price sheet refers to the Distributor; they are
the same entity, and the terms of the Agreement apply equally, regardless of
which name is used. Volume pricing for Embedix is derived on a commitment to
annual volumes. All Distributor pricing listed above is for products without
support. Maintenance (i.e., upgrades) is included in the Joint Venture price for
Embedix SDK, but not for Embedix Linux or Embedix Browser. Except where noted
below, terms for the initial order and for ongoing orders are the same. Pricing,
taxes, duties, and shipping terms for both the initial order and ongoing
purchase orders are noted below under "Pricing, Taxes and Duties" and
"Shipping".
TERMS FOR INITIAL ORDER: As set forth in Initial Purchase Order.
STANDARD TERMS (FOR ONGOING SALES): Distributor will purchase 25% of contracted
volume, payable upon receipt of purchase order. Further payment of royalties
will occur on a quarterly basis reported at the beginning of each new calendar
quarter. Terms of NET 30 will be extended to Distributor. Payment terms shall be
dictated by the Distribution Agreement between the Distributor and Lineo. (Note:
These standard terms do not apply to the initial purchase order of $1,080,000.00
USD.) Payment for product shall be made in US dollars by credit cards, company
check, or wire transfer to the following account:
[Enlarge/Download Table]
BANK First Security Bank of Utah, Provo, Utah USA SWIFT # FSBUUS55 REMITTED BY: (company name)
ACCOUNT NUMBER 033-00093-66 ROUTE # 124000012 INVOICE OR PO#: (must be included)
--------------------------------------------------------------------------------
PRICING, TAXES AND DUTIES
--------------------------------------------------------------------------------
The price or royalty fee of Lineo's products shall be set forth in Lineo's price
list in effect when Lineo accepts an order, less any applicable discounts.
Lineo's price list is subject to change without notice. Prices do not include
freight, insurance, custom's duties, or other similar charges. Unless otherwise
provided, the amount of any present or future sales, revenue, excise, use or
other taxes, fees, or charges of any nature imposed by a public authority
(local, state, nations or other) applicable to the product or its manufacture,
use or sale, will be added to the purchase price and paid by Distributor.
--------------------------------------------------------------------------------
SHIPPING
--------------------------------------------------------------------------------
All Lineo product is F.O.B., Utah, USA, unless otherwise specified. Title passes
to Distributor when product is delivered to carrier. In all cases, risk of loss
or damage to any product in transit shall fall upon Distributor. Lineo shall not
be responsible for any such claims with carrier. All shipments are sent UPS
Ground (US shipments) or UPS International (overseas shipments) unless an
alternate method of shipping is requested by Distributor.
--------------------------------------------------------------------------------
*MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT,
AND SUCH MATERIAL HAS BEEN FILED SEPARATELY WITH THE SEC.
EXHIBIT 2
SCHEDULE AND INITIAL PURCHASE ORDER
[Download Table]
Finalize Shareholders Agreement, License Agreement & September 21, 2000
Articles of Incorporation
Signing Ceremony - Shareholders Agreement September 22, 2000
Lineo Investment September 26, 2000
Signing - License Agreement October 2, 2000
Payment of initial order - Initial Licenses October 25, 2000
PURCHASE ORDER
[Enlarge/Download Table]
------------------------------------------------------------------------------------------------------------
BILL TO: PURCHASE ORDER
Listech Ltd. DATE: October 4, 2000
C/o Samsung Electro-Mechanics Co.,
Attention: Planning Department AUTHORIZED BY:
314, Maetan-3 Dong, Paldal-Gu, Suwon
Kyunggi-Do, Korea, 442-743 SHIP VIA:
Voice: 82-331-210-6639
Fax: 82-331-210-5965
ISSUED TO: Lineo, Inc. SHIP TO ATTN.:
390 South 400 West
Lindon, UT 84042
USA
TELEPHONE NUMBER: (801) 426-5001 SHIP BY (DATE):
------------------------------------------------------------------------------------------------------------
QUANTITY DESCRIPTION UNIT PRICE EXTENSION PRICE
Embedix Linux / Embedix Browser / Per Price 1,080,000.00
Embedix SDK Schedule
attached to
form of License
Agreement
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS: SUBTOTAL $1,080,000.00
TAX $0.00
FREIGHT $0.00
TOTAL DOLLAR VALUE $1,080,000.00
------------------------------------------------------------------------------------------------------------
TERMS: All product in this order shall be non-refundable and non-returnable. Payment of this initial order
will be made as follows: *
*
*
*
------------------------------------------------------------------------------------------------------------
SIGNED: DATE:
------------------------------------------------------------------------------------------------------------
*MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT,
AND SUCH MATERIAL HAS BEEN FILED SEPARATELY WITH THE SEC.
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 10/25/00 | | 48 | | | | | None on these Dates |
| Filed on: | | 10/13/00 |
| | 10/4/00 | | 49 |
| | 10/2/00 | | 48 |
| | 9/26/00 | | 48 |
| | 9/22/00 | | 1 | | 48 |
| | 9/21/00 | | 48 |
| List all Filings |
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